HMA Weekly Roundup

Arizona

Arizona Submits Section 1115 Demonstration Amendment for Medicaid Work Requirements, Lifetime Coverage Limits. The Centers for Medicare & Medicaid Services (CMS) announced on April 10, 2025, that Arizona has submitted a request to amend its Section 1115 Arizona Health Care Cost Containment System (AHCCCS) demonstration to implement Medicaid work requirements, a five-year lifetime coverage limit for certain adults, and cost-sharing requirements to discourage non-emergency use of emergency services. The program would require adults aged 19 to 55 to engage in at least 20 hours per week of employment, education, or job training to maintain coverage. Public comments will be accepted through May 9, 2025.

Arkansas

Arkansas Legislature Advances Bill to Increase ARHOME Medicaid Expansion MLR, Add Work Requirements. Arkansas Senate Bill 527 to increase the Arkansas Health and Opportunity for Me (ARHOME) Medicaid expansion program Medicaid loss ratio (MLR) was passed by the Legislature on April 15, 2025, and delivered to the Governor for consideration. The bill proposes amendments to improve the program’s fiscal sustainability and healthcare outcomes. Key provisions include increasing the medical loss ratio to ensure more funds are directed toward patient care, mandating that insurers seek and remit pharmacy rebates to the state, and authorizing the Governor to request a federal waiver to implement work requirements for Medicaid beneficiaries.

Arkansas Senate Passes Bill to Ban PBM Pharmacy Ownership. STAT News reported on April 10, 2025, that Arkansas Senate has passed a House Bill 1150 which prohibits pharmacy benefit managers (PBMs) from owning or operating retail and mail-order pharmacies within the state. The legislation aims to address perceived conflicts of interest and pricing practices linked to PBMs that lawmakers say harm independent pharmacies and consumers. The bill is now awaiting action by Governor Sarah Sanders.

Senate Committee Blocks Postpartum Medicaid Extension. The Arkansas Advocate reported on April 9, 2025, that the Arkansas Senate Public Health Committee voted down House Bill 1004, which would have extended postpartum Medicaid coverage from 60 days to 12 months for women not already covered under the state’s Medicaid expansion. Although the bill passed the House with bipartisan support, it failed in the Senate Committee amid concerns over cost and duplication of services. The state Department of Human Services (DHS) opposed the measure, estimating a state cost of $2.4 million.

California

California Governor Signs $2.8 Billion Bill to Close Medi-Cal Gap, Maintain Coverage Through June. The Associated Press reported on April 14, 2025, that California Governor Gavin Newsom signed a bill allocating $2.8 billion to close a budget gap in Medi-Cal and maintain coverage through June for 15 million low-income residents, including undocumented immigrants. The funding is part of a broader effort to address a $6.2 billion shortfall driven by higher-than-expected costs from expanding Medi-Cal eligibility, after state officials underestimated enrollment and faced rising pharmacy and elderly care expenses. To date, California has borrowed the maximum allowed from its general fund to keep the program afloat. State officials warn the current situation is unsustainable and are weighing cost-cutting measures for the next fiscal year, including possible changes to enrollment policies.

Connecticut

Connecticut Faces Civil Lawsuit Challenging HUSKY C Income Limits for Disabled Beneficiaries. CT Insider reported on April 11, 2025, that a civil rights lawsuit was filed against the Connecticut Department of Social Services, alleging that the state’s Medicaid eligibility rules discriminate against people with disabilities. The suit, filed with the Hartford judicial district, argues that disabled residents are unfairly restricted to the HUSKY C plan for the aged, blind, or disabled, which has stricter income and asset limits than HUSKY D, Medicaid for low-income adults without dependent children, effectively denying them access to Medicaid. The plaintiffs claim this violates the state Constitution’s equal protection clause and seek to raise HUSKY C income limits to match those of HUSKY D.

District of Columbia

Amerigroup DC, DC Connected Care Network Launch Medicaid VBA. Amerigroup DC and the DC Connected Care Network (DC CCN) announced on April 10, 2025, that they have launched Washington, D.C.’s first Medicaid Value-Based Agreement (VBA). This three-year partnership includes seven Federally Qualified Health Centers (FQHCs) and is designed to improve healthcare equity, quality, and efficiency for Medicaid enrollees. The VBA links provider payments to performance on health outcomes, with shared financial risk and a focus on preventive care, chronic disease management, and data-driven decision-making.

Florida

Florida House Committee Advances Bill to Expand Medicaid Access for Medically Fragile Children. Florida Politics reported on April 16, 2025, that the Florida House Health and Human Services Committee unanimously passed House Bill 1529, which seeks to expand Medicaid access to families caring for medically fragile children. The bill, sponsored by Representative Chase Tramont (R-Port Orange), would make changes to the Home Health Aides for Medically Fragile Children (HHAMFC) program—which allows family members to be reimbursed by Medicaid if they are a home health aide to an eligible relative—by disregarding any income a family makes from the program when determining their Medicaid eligibility. As the program stands, families being reimbursed by HHAMFC are likely to make too much money to qualify for Medicaid.

Florida Legislators Consider Bill to Transition Agency Oversight for the Children’s Medical Services Program. Florida Health News reported on April 10, 2025, that state legislators are considering legislation that would transfer oversight of the Children’s Medical Services program from the Florida Department of Health (DOH) to the Agency for Health Care Administration (AHCA). House Bill 1085 seeks to streamline services for the medically complex children that the program services, according to bill sponsor Representative Vanessa Oliver (R-Punta Gorda). It would also expand home health services and reduce administrative personnel from 50 at the DOH to four at AHCA. The bill is on the House Health Care Budget Subcommittee calendar.

Florida MCO Pays Out $67 Million PBM Settlement to AHCA, Hope Florida. Politico reported on April 9, 2025, that Medicaid managed care organization (MCO), Centene, paid $57 million to the Florida Agency for Health Care Administration and $10 million to the Hope Florida Foundation as part of a $67 million out-of-court settlement over a lawsuit claiming the insurer’s pharmacy benefit manager (PBM) had failed to pay out savings made through prescription drug rebates. Hope Florida, led by First Lady Casey DeSantis, is a program meant to help Floridians become more financially independent and depart from publicly-funded programs such as Medicaid through access to community-based services. State lawmakers have raised concerns that the $10 million payment to Hope Florida was not legal and should have been deposited into a state bank account.

Indiana

Indiana Governor Signs Multiple Executive Orders Aligned with Make America Healthy Again Initiative. Fierce Healthcare reported on April 16, 2025, that Indiana Governor Mike Braun has signed nine executive orders at a “Make Indiana Healthy Again” press conference, which aim to align the state with the Trump administration’s Make America Healthy Again initiative. One order seeks to bolster the state’s Medicaid program integrity and reduce costs by directing the state to submit a report to the Centers for Medicare & Medicaid Services (CMS) on improper payments by October 2025, to no longer accept certain eligibility information without verification before enrollment unless federally required, and to review eligibility information more frequently. Other executive orders focused on food-related and prevention initiatives, which would impose stricter work and eligibility requirements from the Supplemental Nutrition Assistance Program (SNAP), remove candy and soft drinks from SNAP, prompt evaluations of food dyes and diet-related chronic diseases, and increase direct-to-consumer food.

Iowa

Iowa Submits Section 1115 Demonstration Application to Impose Medicaid Expansion Work Requirements. The Iowa Capital Dispatch reported on April 15, 2025, that Iowa has submitted a Section 1115 demonstration application to the Centers for Medicare & Medicaid Services (CMS) to require most able-bodied adults enrolled in the state’s Medicaid expansion program to work at least 100 hours per month to maintain coverage in the Iowa Health and Wellness Plan (IHAWP). If the federal government rejects the waiver, state legislation mandates that the entire IHAWP program be terminated. The proposal could impact up to 142,000 Iowans, with an estimated 32,000 likely to lose coverage. Public hearings on the waiver are scheduled for April 23 and April 29.

Kansas

Kansas Legislature Overrides Veto to Reform Medicaid Contracting Process. The Kansas Reflector reported on April 11, 2025, that the Kansas Legislature overrode Governor Laura Kelly’s veto on House Bill 2284, which imposes new requirements on how the state conducts Medicaid managed care procurements. The bill requires the executive branch to preserve all procurement records, adopt formal tiebreaking procedures, and increase transparency with the Legislature throughout the bidding process. It also establishes a new appeals process led by a legislative panel, replacing the current system where bid protests are reviewed solely through the courts. The bill was introduced after Aetna Better Health of Kansas lost its bid to remain a KanCare managed care organization and unsuccessfully challenged the process, citing destroyed scoring records and a lack of transparency.

Nevada

Nevada to Split Department of Health and Human Services; Releases Fiscal 2026-27 Budget Priorities. The Nevada Department of Health and Human Services Division of Health Care Financing and Policy released in April 2025 its budget priorities for the 2026-27 budget biennium, including reorganizing the Department of Health and Human Services to create the Nevada Health Authority and the Department of Human Services. The Nevada Health Authority will house the Medicaid program, along with the state health care purchasing unit, the healthcare workforce unit, the consumer health and access unit, and public employee benefits. Meanwhile, the Department of Human Services will focus on social, aging, children/family, and public health services. The new authority, which must be approved by the state legislature, is meant to strengthen the state’s purchasing power related to health insurance and improve member services. The biennium budget supports funding for improving access to care by strengthening the healthcare workforce, strengthening the behavioral healthcare system, adding adult dental coverage to Medicaid, and modernizing the Medicaid enrollment and eligibility systems.

New York

New York CDPAP Home Care Program Still Has 30,000 Recipients Yet to Re-enroll. Crain’s New York reported on April 15, 2025, that approximately 30,000 recipients have yet to re-enroll in New York’s Consumer Directed Personal Assistance Program (CDPAP) with the state’s new administrator, Public Partnerships LLC (PPL), potentially disrupting essential home care services for these individuals. Approximately 190,000 individuals have already enrolled. The state previously implemented a one-month grace period to assist consumers experiencing difficulties with the registration process and a proposed delay is waiting to be finalized by a federal judge to push the transition to June 6.

North Carolina

North Carolina Lawmakers Advance Medicaid Work Requirement Bills. The Carolina Journal reported on April 10, 2025, that North Carolina lawmakers in both chambers have advanced legislation that seeks to add work requirements to the Medicaid program. Senate Bill 403, sponsored by Senator Ralph Hise (R-Mitchell), and House Bill 491, sponsored by Representative Donny Lambeth (R-Forsyth), would direct the state Department of Health and Human Services to apply for a waiver to implement Medicaid work requirements for expansion beneficiaries. Both bills were approved by their respective health committees.

Oregon

Oregon Submits Extension Request for SUD Section 1115 Demonstration. The Centers for Medicare & Medicaid Services announced on April 10, 2025, that Oregon has a submitted a request to extend its Oregon Health Plan Substance Use Disorder (SUD) Section 1115 Demonstration though March 31, 2031. The application requests to keep all currently approved authorities and seeks to add authority to provide contingency management incentives as a medical intervention for eligible beneficiaries to help motivate enrollees to meet their treatment goals. The current demonstration is approved through March 31, 2026. Public comments will be accepted until May 9, 2025.

Oregon Completes Medicaid Unwinding; 83 Percent Maintain Benefits. The Oregon Health Authority (OHA) announced on April 10, 2025, that the state completed its post-pandemic Medicaid eligibility redeterminations at the end of February, with 83 percent of enrollees maintaining benefits, according to an analysis of the state’s Public Health Emergency Unwinding Project. Oregon disenrolled 247,104 individuals between April 1, 2023, and February 28, 2025. OHA renewed coverage for 1,169,042 individuals and reduced benefits for 40,563. Most of the beneficiaries with reduced coverage were removed from the full Oregon Health Plan but are able to continue in Medicare Savings Programs.

Wisconsin

Wisconsin Bill Proposing Stricter Medicaid Eligibility Requirements Stalls After Hearing. The Wisconsin Examiner reported on April 16, 2025, that Wisconsin Assembly Bill 163, which proposes more frequent and stricter Medicaid eligibility reviews, is currently on hold after facing opposition at a recent public hearing. The bill would require eligibility redeterminations every six months, prohibit automatic renewals, restrict pre-filled information on forms, and impose a six-month enrollment lockout for beneficiaries who fail to report changes affecting eligibility. The bill remains in the Assembly Committee on Public Benefit Reform while amendments are considered, including one that would exempt individuals with developmental disabilities from certain provisions.

National

Trump Signs Executive Order on Drug Price Negotiations, Hospital Payments. STAT News reported on April 15, 2025, that President Donald Trump signed an executive order meant to lower prescription drug prices, increase transparency with pharmacy benefit managers, and limit outpatient Medicare payments to hospitals. The order directs the U.S. Department of Health and Human Services Secretary Robert F. Kennedy Jr. to:

• Guide Medicare drug price negotiations for 2026–2028 under the Inflation Reduction Act
• Develop a payment model to improve Medicare’s value on high-cost drugs
• Survey hospital acquisition costs to reduce outpatient drug reimbursement
• Ensure health centers pass 340B discounts on insulin and epinephrine to eligible patients
• Recommend ways to strengthen the pharmaceutical supply chain
• Align timelines for small molecule and biologic drug negotiations
• Consider rules to prevent Medicare payment policies from driving patients to higher-cost facilities

Separately, OMB, HHS, and other departments must provide the president with recommendations to ensure drug manufacturers pay accurate Medicaid drug rebates, to promote innovative Medicaid drug payment methodologies, to link drug payments to the value they give, and to support states in lowering prescription drug spending. In addition, it directs the Food and Drug Administration to work with states to improve the process of applying for the Canadian drug importation program and streamline the approval of generic drugs and biosimilars.

CMS Releases FY 2026 SNF Payment Proposed Rule with 2.8 Percent Rate Increase. The Centers for Medicare & Medicaid Services (CMS) released on April 11, 2025, a proposed rule for the FY 2026 Skilled Nursing Facility Prospective Payment System (SNF PPS), which includes a 2.8 percent net payment increase ($720 million) and updated ICD-10 code mappings under the Patient-Driven Payment Model (PDPM). The rule proposes updates to the SNF Value-Based Purchasing (VBP) Program, including the removal of the health equity adjustment, addition of a new reconsideration process, and a change in scoring methodology for low-volume facilities. For the SNF Quality Reporting Program, CMS proposes removing four standardized patient assessment data elements (SPADEs) related to social determinants of health (SDOH) to reduce burden.

CMS Releases FY 2026 Hospice Wage Index, Payment Rate Update Proposed Rule With 2.4 Percent Rate Increase. The Centers for Medicare & Medicaid Services (CMS) released on April 11, 2025, the Fiscal 2026 Hospice Wage Index and Payment Rate Updated Proposed Rule, which recommends a 2.4 percent, or $695 million, increase to hospice reimbursement rates. The rule also seeks to clarify hospice payment regulations as to who may recommend admission to hospice care to align with certification regulations and the Conditions of Participation, and that hospice face-to-face encounter attestation must include a clinician’s signature and date. CMS is also releasing two requests for information (RFIs) regarding the Hospice Quality Reporting Program (HQRP) to gain input on future measures on the topics of interoperability, nutrition, and well-being, and on advancing digital quality measurement.

CMS Recommends 2.6 Percent Rate Increase in FY 2026 Inpatient Rehabilitation Facility PPS Proposed Rule. The Centers for Medicare & Medicaid Services (CMS) released on April 11, 2025, the Fiscal Year 2026 Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) Proposed Rule, which recommends a 2.6 percent rate increase worth an estimated $295 million. The rule proposes to remove two measures from the IRF Quality Reporting Program—the COVID-19 Vaccination Coverage among Healthcare Personnel measure and the COVID-19 Vaccine: Percent of Patients/Residents Who Are Up to Date measure—and remove four Social Determinant of Health (SDOH) standardized patient assessment data elements. The rule also seeks to amend the reconsideration policy. In addition, CMS is releasing four requests for information (RFIs) regarding IRFs. The RFIs seek feedback on potential future measures on the topics of interoperability, nutrition, delirium, and well-being; possible revisions to the IRF-Patient Assessment Instrument; possible revisions to the data submission deadlines for assessment data; and advancing digital quality measurement.

CMS Releases FY 2026 Medicare Inpatient Psychiatric Facility PPS Proposed Rule, Recommends 2.4 Percent Rate Increase. The Centers for Medicare & Medicaid Services (CMS) released on April 11, 2025, the Fiscal Year 2026 Medicare Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) and Quality Reporting Updates Proposed Rule reccomending a 2.4 percent reimbursement rate increase for IPFs. The proposed rule updates facility-level adjustment factors, and also updates the Extraordinary Circumstances Exception policy and quality measures in the IPF Quality Reporting Program. The updates would modify the IPF Emergency Department Visit Measure reporting period and remove four reporting measures from payment determinations: Facility Commitment to Health Equity; COVID–19 Vaccination Coverage among Health Care Personnel; Screening for Social Drivers of Health; and Screen Positive Rate for Social Drivers of Health. CMS is also issuing three requests for information regarding the IPFQR program seeking input on a potential future star rating system, future measure concepts on the topics of well-being and nutrition, and the potential usage of Fast Healthcare Interoperability Resources standards for IPFs reporting patient assessment data to CMS.

CMS Issues RFI on Potential Changes to Medicare Regulations. The Centers for Medicare & Medicaid Services (CMS) released on April 11, 2025, a request for information (RFI) “Unleashing Prosperity Through Deregulation of the Medicare Program,” potential changes to Medicare regulations in response to President Trump’s Executive Order 14192. The RFI seeks stakeholder input on ways to reduce regulatory burden and streamline Medicare rules without compromising care quality or program integrity. CMS is requesting feedback on how to simplify or eliminate duplicative administrative, documentation, and reporting requirements, including those related to Conditions of Participation, quality programs, and value-based payment models. The agency also seeks suggestions to align Medicare policies with industry standards and reduce overlap with Medicaid and private insurance requirements. Responses are due by June 10, 2025.

Trump Administration Launches Investigation Into Pharmaceutical Imports. STAT News reported on April 14, 2025, that the U.S. Department of Commerce has launched an investigation into how the importation of pharmaceuticals may threaten national security. The investigation will look at current and projected pharmaceutical demand, whether domestic production can meet the demand, foreign supply chains, and the associated risks of having a concentration of imports with a small number of suppliers. The notice of the investigation comes after President Donald Trump indicated that he would impose tariffs on pharmaceutical imports.

Hospitals Sue HHS Over Denied Medicare Disproportionate Share Hospital Payments. Modern Healthcare reported on April 14, 2025, that almost 150 hospitals have filed three lawsuits against the U.S. Department of Health and Human Services (HHS) over claims its Provider Reimbursement Review Board wrongfully denied appeals for disproportionate share hospital (DSH) payments. The lawsuits, representing providers from over 25 states, claim that the Centers for Medicare & Medicaid Services (CMS) should take into account all Medicare, Medicare Advantage, and Social Security Supplemental Security Income (SSI) beneficiaries when calculating DSH payments. CMS currently calculates DSH payments based only on the number of fee-for-service Medicare patients receiving SSI cash assistance during hospital stays.

Congress Passes Fiscal 2026 Budget Resolution with $880 Billion Healthcare Cuts. Modern Healthcare reported on April 10, 2025, that Congress has finalized the fiscal year 2026 budget resolution, a joint framework approved by both the House and Senate. The resolution instructs House committees to find at least $1.5 trillion in cuts, including up to $880 billion by the House Energy and Commerce Committee from Medicaid or other healthcare programs. The Senate committees are only required to cut $4 billion. Lawmakers will begin drafting reconciliation bills after the recess, though divisions remain within the Republican caucus regarding the scope of proposed tax and spending changes.

CMS to End Approvals of DSHP, DSIP Federal Matching Funds. The Centers for Medicare & Medicaid Services (CMS) announced on April 10, 2025, that it will no longer approve new or existing requests for federal matching funds through Section 1115 demonstration authority for designated state health programs (DSHP) and designated state investment programs (DSIP). The move intends to refocus CMS on its core mission of preserving the Medicaid program by ending spending that “duplicates resources” or is not directly tied to healthcare services for Medicaid beneficiaries, such as childcare, housekeeping, rural internet services, etc. CMS indicated that it will continue to focus on the statutory objectives of the Medicaid program. DSHPs and DSIPs had $2.7 billion in eligible expenditures in 2025.

Dr. Mehmet Oz Outlines Priorities for CMS. The Centers for Medicare & Medicaid Services (CMS) announced on April 10, 2025, that new administrator Dr. Mehmet Oz has outlined his priorities and vision for the agency. Oz will prioritize President Trump’s Make America Healthy Again initiative and aims to modernize Medicare, Medicaid, and the Marketplaces. Oz’s plans include: implementing President Trump’s executive order on transparency; equipping providers with better information about patients and holding them more accountable for health outcomes; identifying and eliminating fraud, waste, and abuse; and focusing on preventative care and disease management such as improving holistic health outcomes.

MACPAC Releases Briefs Exploring State, Federal Strategies to Manage Medicaid Spending Growth. The Medicaid and CHIP Payment Access Commission (MACPAC) released in April 2025, two policy briefs which explore strategies to manage Medicaid spending growth at both the state and federal levels. The first brief outlines options available to states, such as modifying eligibility, benefits, provider payment rates, and delivery systems, as well as improving program integrity to help control costs. The second brief examines alternative approaches to federal Medicaid financing, including policy design considerations intended to ensure long-term fiscal sustainability. Together, the briefs highlight the need for balanced solutions that maintain access and quality while addressing rising costs shared by state and federal governments.