HMA Weekly Roundup

Arizona

Arizona Receives Federal Approval for Section 1115 AHCCCS Demonstration Amendment for Pre-release Services, ALTCS Non-medical Transportation Services. The Centers for Medicare & Medicaid Services announced on December 27, 2024, that it has approved an amendment to Arizona’s Section 1115 Arizona Health Care Cost Containment System (AHCCCS) demonstration. The amendment will allow the state to provide limited pre-release and reentry Medicaid services to incarcerated individuals for up to 90 days prior to the date of release. It also will provide non-medical transportation to and from health-related social need services and home and community-based services for Arizona Long Term Care System (ALTCS) eligible beneficiaries. The demonstration is effective through September 30, 2027.

Arkansas

Arkansas Receives Federal Approval for Section 1115 ARHOME Demonstration Amendment for Non-Medical Transportation Services. The Centers for Medicare & Medicaid Services (CMS) announced on December 20, 2024, that it has approved Arkansas’s Section 1115 Arkansas Healthy Opportunity for Me (ARHOME) demonstration, effective through December 31, 2026. The amendment will allow the state to provide non-medical transportation (NMT) services to and from Health-Related Social Need (HRSN) services. Both the NMT services and the HRSN services for which NMT services are authorized must be described in the beneficiary’s care plan.

California

California to Impose Sanctions on 20 Medi-Cal Plans for Poor Quality Ratings. The California Department of Health Care Services (DHCS) published on December 20, 2024, that it will impose $3 million in sanctions on 20 Medi-Cal managed care plans for not meeting contractually required minimum performance levels on the Managed Care Accountability Set quality measures. Sanctions were largely related to Topical Fluoride for Children, Child and Adolescent Well-Care Visits, and Cervical Cancer Screening. For the Behavioral Health Accountability Set quality scores, 71 percent of county behavioral health plans met or exceeded benchmarks for at least half of the mental health measures.

Connecticut

Connecticut Comptroller Seeks Medicaid Reimbursement Reform Amid Hospital Financial Loses. CT Insider reported on January 6, 2025, that the Connecticut comptroller’s Healthcare Cabinet plans to prioritize health care affordability for 2025, including reforming the state’s Medicaid reimbursement system to get more funding to hospitals and front-line providers. This comes as state hospitals operated at negative margins for the second straight year in fiscal 2023 at -0.5 percent, according to a report from analyst Kaufman Hall. The Cabinet is also seeking to revive a plan that would allow small businesses and nonprofits to buy into the public option.

Florida

Florida Plan Sues HHS, CMS Over Medicare Advantage Star Ratings. Health News Florida reported on January 2, 2025, that Florida Blue has filed a lawsuit against the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) over the 2025 Medicare Advantage star ratings. The insurer claims that the agencies did not properly take into account disruptions caused by flooding in Broward County during 2023, which caused health service disruptions and negatively affected the ratings. Florida Blue also argues that if CMS and HHS had properly accounted for the disruption, the plan’s 2025 ratings would have been higher.

Georgia

Georgia Medicaid Expansion Work Requirement Faces Possible GAO Investigation. KFF Health News reported on December 18, 2024, that senators Ron Wyden (D-OR), Jon Ossoff (D-GA), and Raphael Warnock (D-GA) have requested that the Government Accountability Office (GAO) investigate the cost of Georgia’s Medicaid work requirements required under the Georgia Pathways to Coverage program. Program costs are largely administrative and not for enrollee medical care, with administrative costs estimated to increase to $122 million over four years. Current enrollment is around 5,900, falling short of the state’s initial projection of more than 25,000 in the first year.

Idaho

Idaho Submits Section 1115 Behavioral Health Transformation Demonstration Amendment to End Certain Personal Care Services. The Centers for Medicare & Medicaid Services (CMS) announced on January 2, 2025, that the Idaho Department of Health and Welfare has submitted an amendment to its Section 1115 Behavioral Health Transformation Demonstration seeking to remove an expenditure authority allowing the use of legally responsible individuals to provide personal care services for eligible Medicaid beneficiaries. The state cites unanticipated and unsustainable growth of the program, as well as suspected fraud and abuse, for the reason to end the services. CMS will accept public comments on the amendment through January 31, 2025.

Idaho to Award Molina, UnitedHealthcare With Dual, MLTSS Contracts. The Idaho Department of Health and Welfare (DHW) confirmed on December 17, 2024, that it plans to award contracts to new entrant UnitedHealthcare and incumbent Molina Healthcare for the state’s Medicare Medicaid Coordinated Plan, a Fully Integrated Dual Eligible Special Needs Plan, and Idaho Medicaid Plus, a wraparound managed long term services and supports (MLTSS) program. Incumbent Blue Cross of Idaho’s contract will be ending June 2, 2025, and the plan’s enrollees will have the option to transition to Molina or fee-for-service before United and Molina’s new contracts are implemented. Contracts are set to begin January 1, 2026, and run for four years, with a potential one-year renewal.

Illinois

Illinois Extends Medicaid to Cover Perinatal Doula, Lactation Consultant Services. WCIA reported on December 19, 2024, that Illinois will now allow Medicaid coverage for perinatal doula and lactation consultant services for pregnant and postpartum women. Certified doula services will be covered during the perinatal period and up to one year postpartum, while lactation consultant services includes the entire perinatal period through infant weaning. Services may be provided in person or via telehealth.

Indiana

Indiana Submits Extension Request for SUD, SMI Portions of the Healthy Indiana Plan Section 1115 Demonstration. The Centers for Medicare & Medicaid Services (CMS) announced on January 2, 2025, that Indiana has submitted a request to extend the substance use disorder (SUD) and serious mental illness (SMI) portions of the Healthy Indiana Plan 2.0 Section 1115 Demonstration, referred to as the Indiana SUD/SMI 1115. The extension application would extend the SUD/SMI 1115 as currently approved for five years, which is set to expire December 31, 2025. It would also align eligibility rules in the Former Foster Youth program for people formerly in foster care who turned 18 before January 1, 2023, with former foster youth who turned 18 on or after the same date who are eligible for the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act, effective July 1, 2025. CMS will accept public comments through February 1, 2025.

Indiana Proposes to Limit Medicaid ABA Services. Louisville Public Media reported on December 21, 2024, that the Indiana Family and Social Services Administration is proposing to change the standardized rate for Applied Behavioral Analysis (ABA) services, which would limit Medicaid members to 30 hours of comprehensive ABA services per week, for a maximum of three years. Following the maximum three year duration, ABA recipients would be permitted to continue limited hour behavior-specific, focused ABA services. The proposed rule would go into effect April 1, 2025, although the state is also proposing a continuity of care period until September 1, 2025.

Medicaid Director to Resign in Early 2025. The Indianapolis Star reported on December 20, 2024, that Indiana’s Medicaid director, Cora Steinmetz, will resign in early 2025 after serving in the role since August 2023.

Lawmaker Introduces Bill to Remove COPA Hospital Merger Law. KFF Health News reported on January 8, 2025, that Indiana Senator Ed Charbonnaeu (R-Valparaiso) has introduced a bill that seeks to revoke the 2021 “Certificate of Public Advantage” (COPA) law, which allows hospital mergers that the Federal Trade Commission (FTC) would deem illegal due to the threat of monopolies and reduced competition. State COPA laws allow these mergers to occur as long as the hospitals meet state-imposed conditions; however, the FTC argues that state oversight is not sufficient to create competition and such mergers can harm patients.

Indiana Made $56 Million in Improper Medicaid Payments for Applied Behavioral Analysis, OIG Finds. The Indianapolis Star reported on December 19, 2024, that Indiana made at least $56 million in improper fee-for-service Medicaid payments for applied behavioral analysis (ABA) for children diagnosed with autism, according to a report by the U.S. Department of Health and Human Services Office of the Inspector General (OIG). OIG also highlighted nearly $77 million in potential improper payments. The report examined payments from 2019 and 2020 and found that the many of the state’s ABA payments during this period did not fully comply with federal and state requirements, citing insufficient documentation, providers lacking credentials, and patients lacking proper diagnosis for treatment. The report outlined recommendations for the state, including refunding the federal government $39.4 million, providing more guidance to ABA facilities on documentation practices, and conducting periodic reviews on ABA payments to help educate providers on the requirements.

Iowa

Iowa Extends Postpartum Medicaid Coverage to 12 Months. Iowa Governor Kim Reynolds announced on January 7, 2024, that the Centers for Medicare & Medicaid Services has approved Iowa’s request to extend Medicaid postpartum coverage to 12 months for families within 215 percent of the federal poverty level. The implementation date has not yet been announced.

Maine

Maine Governor to Introduce Supplemental Budget Due to Medicaid Funding Gap. The Maine Morning Star reported on January 7, 2024, that Maine Governor Janet Mills plans to introduce a supplemental budget to bridge the MaineCare budget gap for the current fiscal year and the 2026-27 biennium. Health care providers may see limited Medicaid reimbursements if the state Legislature fails to address a Medicaid funding gap totaling $118 million in the FY 2025 budget, according to a letter from the Commissioner of the Maine Department of Administrative and Financial Services. The funding gap is attributed to an increase in the overall cost of healthcare services due to inflation and workforce challenges, and an increase in people using Medicaid services following declines during the pandemic.

Maryland

Maryland Extends Enrollment Pause for Select Behavioral Health Medicaid Providers Over Fraud Concerns. The Maryland Department of Health announced on December 26, 2024, that it is extending the pause of new provider enrollments in psychiatric rehabilitation programs, home health psychiatric rehabilitation programs, level 2.5 partial hospital programs, and level 2.1 intensive outpatient treatment programs through July 2025. The pause was originally approved by the Centers for Medicare & Medicaid Services in July 2024 and is meant to address fraud, waste, and abuse after the state moved to an accreditation-only model for provider licensing. The suspension will not affect access to behavioral health providers in individual practices, clinics operated in regulated hospitals, and federally qualified health centers.

Massachusetts

Massachusetts Legislature Passes Bill to Increase Financial Transparency Following Steward Health Care Bankruptcy. The Associated Press reported on December 31, 2024, that the Massachusetts Legislature passed a bill that would close loopholes in state law following the bankruptcy of Steward Health Care. The legislation would add reporting requirements for hospitals and increase and remove caps on penalties for not complying with the new proposed data reporting requirements. The bill is currently under review by Governor Maura Healey.

Michigan

Michigan Receives Federal Approval for New Section 1115 Demonstration for Reentry Services. The Centers for Medicare & Medicaid Services announced on December 27, 2024, that it has approved Michigan’s new Section 1115 demonstration for reentry services to incarcerated individuals for up to 90 days prior to the date of release. The demonstration will provide limited pre-release services in state prisons, county jails, tribal correctional facilities, and juvenile facilities for Medicaid beneficiaries and youth who would otherwise be eligible for the Children’s Health Insurance Program. The demonstration is effective through December 31, 2029.

Minnesota

Minnesota Receives Federal Approval for Five-year Extension of Minnesota Reform: Pathways to Independence Demonstration. The Centers for Medicare & Medicaid Services announced on January 2, 2025, that it has approved Minnesota’s five-year extension of its section 1115 Minnesota Reform: Pathways to Independence demonstration, effective through December 31, 2030. Under the renewal, the demonstration’s budget neutrality model will convert from an aggregate cap to a per member per month model. The demonstration provides home and community-based services (HCBS) to individuals aged 65 and over who are in need of nursing facility care and not otherwise eligible for other Medicaid HCBS programs under Section 1915 waivers.

Montana

Montana Legislature to Address Expiring Medicaid Expansion Bill. KFF Health News reported on January 8, 2024, that the Montana state Legislature will need to decide during this year’s session whether to extend its Medicaid expansion program, which is set to expire on June 30, 2025. The expansion debate is expected to impact other health policy issues such as behavioral health funding and hospital regulations. Governor Greg Gianforte has included funding for Medicaid expansion in his proposed budget and wants work requirements implemented for able-bodied adults without dependents.

Nevada

Nevada Submits Section 1115 Demonstration Application for Reentry Services. The Centers for Medicare & Medicaid Services announced on December 20, 2024, that Nevada has submitted a Section 1115 demonstration application for reentry services. The demonstration would provide Medicaid services to eligible justice-involved populations within the 90-day period prior to the expected release. Phase 1 of the demonstration would begin October 2025 with state prisons and all state-operated juvenile justice facilities, county-operated juvenile detention centers, or youth camps, followed by Phase 2 for county-operated jails. The public comment period is open through January 29, 2025.

New York

New York Rejects Lawsuit Over Single Statewide Fiscal Intermediary CDPAP Contract Decision. Crain’s New York Business reported on January 3, 2025, that the New York State Department of Health has rejected Freedom Care LLC’s lawsuit regarding the state’s selection of Public Partnerships LLC for the single statewide fiscal intermediary contract to run the $9 billion consumer-directed personal assistance program (CDPAP). The lawsuit, filed in November, claims that New York unlawfully collaborated with the contract winner before the awards were announced. The state denies any wrongdoing. New York will begin consolidating its home care program on January 6, 2025.

Pennsylvania

Pennsylvania Receives Federal Approval for Keystones of Health Section 1115 Demonstration. The Centers for Medicare & Medicaid Services (CMS) announced on December 26, 2024, that it has approved Pennsylvania’s new Keystones of Health Section 1115 Demonstration. The demonstration will allow the state to begin providing certain incarcerated individuals pre-release services up to 90 days before their release. It also allows Pennsylvania to cover housing and nutritional services for eligible Medicaid beneficiaries that meet medical and social risk criteria. The demonstration will run for a five year period and expires December 31, 2029.

South Carolina

South Carolina Governor Seeks Section 1115 Demonstration with Medicaid Work Requirements. WIS News 10 reported on December 18, 2024, that South Carolina Governor Henry McMaster has directed the state Department of Health and Human Services to prepare to submit a new Section 1115 demonstration with Medicaid work requirements as soon as President-elect Donald Trump is inaugurated. If the demonstration is approved, the requirement would apply to approximately 200,000 individuals. During the first Trump administration, the state had been approved to enforce work requirements with certain exemptions.

Supreme Court to Review Medicaid Planned Parenthood Case in South Carolina. Roll Call reported on December 18, 2024, that the Supreme Court agreed to hear a dispute over South Carolina’s effort to block Planned Parenthood clinics from receiving Medicaid payments for non-abortion health care services. The case will determine whether the Medicaid law establishes a federal right for beneficiaries to receive care at the qualified provider of their choice regardless of a state determination. South Carolina currently forbids Medicaid dollars from paying for abortions.

Vermont

Vermont Receives Federal Approval for Global Commitment to Health Section 1115 Demonstration Amendment. The Centers for Medicare & Medicaid Services (CMS) announced on January 2, 2025, that it has approved Vermont’s amendment request for the state’s Section 1115 Demonstration, “Global Commitment to Health.” The approval allows Vermont to cover health-related social needs services to eligible beneficiaries, expand eligibility for community intervention and treatment for those with substance use disorder making up to 225 percent of the federal poverty level, expand developmental disabilities service benefits, and help support the transition of community rehabilitation and treatment services to the Medicaid state plan. The demonstration is effective through December 31, 2027.

Virginia

Virginia Lawmakers Introduce Bipartisan Sole PBM Bill. The Virginia Mercury reported on January 8, 2025, that a bipartisan group of Virginia lawmakers introduced the Save Local Pharmacies Act, which aims to realign the state’s Medicaid pharmacy benefit under one state-contracted pharmacy benefits manager (PBM). The bill would remove multiple PBMs run by insurers, which lawmakers claim would increase accountability and cost effective pharmacy benefit management. The legislation would also direct the state Department of Medical Assistance Services to assess drug pricing, rebates, and administrative costs to give the state better oversight ability, and would direct the new PBM to protect pharmacy access for people in underserved areas.

Washington

Washington Receives Federal Approval for Medicaid Transformation Project 2.0 Section 1115 Demonstration Amendment. The Centers for Medicare & Medicaid Services announced on January 8, 2025, that it has approved an amendment to Washington’s Medicaid Transformation Project (MTP) 2.0 Section 1115 demonstration. The amendment allows the state to provide Medicaid coverage to certain former foster care youth, provide continuous Children’s Health Insurance Plan coverage for children up to age six through the end of their birthday month, expand the facilities approved in the reentry demonstration to include tribal jails, and allow the state to receive reimbursement for designated state health plans. Additionally, the Washington Health Care Authority announced that it intends to implement medical respite care for people experiencing homelessness or at-risk of homelessness as Medicaid-covered health-related social need under the demonstration beginning July 1, 2025. Services will include access to a bed, meals, medical transport, access to technology for telehealth visits, a place to store personal items, and wellness checks. The MTP 2.0 demonstration runs through June 30, 2028.

Washington Requests Additional Funding to Expand Medicaid for Undocumented Immigrants. Northwest Public Broadcasting reported on December 20, 2024, that the Washington Health Care Authority has requested an additional $102,775 for the 2025-27 biennium budget to add an additional 4,000 undocumented individuals to the Apple Health expansion program, beginning July 1, 2025, and to add 10,000 individuals starting July 1, 2026. As of July 2024, 11,936 undocumented individuals had enrolled in the program, with many being moved to a waitlist after the program reached capacity.

National

SAMHSA Awards 14 States, DC CCBHC Medicaid Demonstration Planning Grants. The U.S. Department of Health and Human Services (HHS) announced on January 7, 2025 that the Substance Abuse and Mental Health Services Administration (SAMHSA) has awarded Alaska, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Louisiana, Maryland, Montana, North Carolina, North Dakota, South Dakota, Utah, Washington, and West Virginia with $1 million, one-year Certified Community Behavioral Health Clinic (CCBHC) Medicaid Demonstration Program planning grants. The funding will support the states in developing CCBHC certification processes, establishing prospective payment systems, and preparing to apply for the four-year CCBHC demonstration program. Up to 10 of these states will be selected to participate in the demonstration in 2026.

CMS Requests Comments on Proposed Medicare Advantage Model of Care Submission Requirements. The Centers for Medicare & Medicaid Services (CMS) announced on January 3, 2024, an opportunity for Medicare Advantage Special Needs Plans (SNPs) and other stakeholders to comment on the proposed SNP Model of Care Submission Requirements. This is a revision of a currently approved information collection. Comments are due by March 4, 2025.

Health Insurance Marketplace Enrollment Nears 24 Million for 2025. The U.S. Department of Health and Human Services announced on January 8, 2025, that 23.6 million people have signed up for Marketplace coverage for 2025, including more than three million new customers, and 20 million returning. Nearly 17 million enrolled through Healthcare.gov, and 6.9 million enrolled through a state-based marketplace. The federal Marketplace open enrollment period ends January 15, 2025.

MACPAC Releases Brief on Effects of Medicaid Payment on Access to Physician Services. The Medicaid and CHIP Payment and Access Commission (MACPAC) released in January 2025, an issue brief exploring the relationship between Medicaid payment rates and access, and reviewing recent federal policy and regulatory changes. The brief summarizes the findings from a literature review and roundtable discussion, concluding with suggestions for future research.

More Than 300 Organizations Urge Congress to Protect, Strengthen Medicaid. MedCity News reported on January 6, 2024, that 344 organizations signed a letter urging the new Congress to protect and strengthen Medicaid. The letter was addressed to Senate Majority Leader John Thune, House Speaker Mike Johnson, Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries.

Medicaid, CHIP Enrollment Drops Nearly 78,000 in September 2024, CMS Reports. The Centers for Medicare & Medicaid Services (CMS) reported on December 27, 2024, that enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) was 79.4 million in September 2024, reflecting a decrease of 77,654 from August 2024. Medicare enrollment was nearly 68 million, up 160,454 from August 2024, including more than 34.3 million in Medicare Advantage plans. More than 8 million Medicare-Medicaid dual eligible individuals are counted in both programs.

CMS Releases 2026 Updates to Annual Guidance on Medicaid, CHIP Core Set Reporting. The Centers for Medicare & Medicaid Services (CMS) released on December 20, 2024, a State Health Official (SHO) Letter which includes updates for mandatory annual state reporting of the Core Set of Children’s Health Care Quality Measures for Medicaid and CHIP (Child Core Set) and the behavioral health measures on the Core Set of Adult Health Care Quality Measures for Medicaid (Adult Core Set). Changes include transitioning two measures from the Adult Core Set to the Home and Community-Based Services (HCBS) Quality Measure Set. The letter also includes guidance on mandatory reporting regulations; populations and the population exemption process; stratification categories; measures subject to stratification; and annual updates to the 2026 Child and Adult Core Sets.

CMS Releases State Guidance on Medicaid, CHIP Coverage Transitions, Eligibility Notices. The Centers for Medicare & Medicaid Services (CMS) released on December 20, 2024, an informational bulletin to provide guidance about new federal requirements related to coverage transitions of children between Medicaid and separate Children’s Health Insurance Programs (CHIP). The bulletin includes temporary enforcement discretion regarding state implementation of combined Medicaid and separate CHIP eligibility notices and the procedural disenrollment account transfer requirement, which was included under the April 2024 Final Rule. CMS will not require states to demonstrate compliance for 24 months from the effective date of the April 2024 Final Rule, or until June 3, 2026.

Medicaid Spending on Diabetes, Weight Loss Drugs Increased 540 Percent Over Five Years, OIG Report Finds. CQ reported on December 19, 2024, that Medicaid spending on popular weight loss and diabetes drugs increased from $1.5 billion in 2019 to $9.4 billion in 2023, a 540 percent jump, according to a report by the U.S. Department of Health and Human Services Office of the Inspector General (OIG). The report found that the 12 drugs it reviewed accounted for nine percent of Medicaid spending on outpatient prescription drugs in 2023, up from two percent in 2019. It also found that Medicaid claims for the 10 diabetes drugs included in the report increased by 333 percent between 2019 and 2023, and Medicaid claims for the two weight loss drugs increased 3,902 percent over the same period. The OIG estimates that if gross spending on these medications continues to grow at a similar rate, it could reach more than $29 billion in 2026.

Congress Does Not Pass Alternate Stopgap Budget Bill. Modern Healthcare reported on December 19, 2024, that Congress did not pass the alternate budget bill that House Speaker Mike Johnson (R-LA) introduced on December 19. Congressional Republicans scrapped a larger funding package that was agreed upon by lawmakers—which was initially introduced on December 17, 2024 and opposed by President-elect Donald Trump—and replaced it with Johnson’s proposal. The alternate budget removed certain healthcare provisions that were in the initial funding package, including restrictions on pharmacy benefit managers, reducing cuts to Medicare provider rates, and extending Medicare telehealth flexibilities. The existing federal funding expires at the end of the day on December 20, 2024.

CMS Announces State Participants in Innovation in Behavioral Health Model. The Centers for Medicare & Medicaid Services (CMS) announced on December 18, 2024, that Michigan, New York, Oklahoma, and South Carolina have been selected to participate in the agency’s Innovation in Behavioral Health (IBH) model, which aims to improve the quality of care for Medicare and Medicaid enrollees with moderate to severe mental health conditions and/or substance use disorder (SUD) through care integration, care management, health equity, and expanded health information technology. Practice participants will include specialty behavioral health providers—such as community mental health centers, opioid treatment programs, and public or private practices where individuals receive outpatient mental health and SUD treatment—that will be responsible for coordinating care to meet patients’ physical and behavioral health needs and health-related social needs. Oklahoma will implement the IBH model statewide, and Michigan, New York, and South Carolina will implement the model in designated service areas. The eight-year model begins January 1, 2025.

Healthcare Spending Reached $4.9 Trillion in 2023, CMS Report Finds. Modern Healthcare reported on December 18, 2024, that the U.S. spent $4.9 trillion on healthcare in 2023, up 7.5 percent from 2022, according to a report by the Centers for Medicare & Medicaid Services (CMS) Office of the Actuary. The office attributes most of the growth to greater utilization of services, with hospital care, physician and clinical services, and retail prescription drugs topping the list as the three largest categories of higher spending. Healthcare prices also increased, going up 3 percent. Additionally, Medicaid and Medicare enrollment remained high, with 91.7 million and 65.1 million enrollees, respectively. Medicaid spending increased by 7.9 percent and Medicare spending increased by 8.1 percent.