Federal statute requires states to provide non-emergency medical transportation (NEMT) to Medicaid beneficiaries who have no other means of getting to medically necessary healthcare facilities. Though NEMT programs must meet certain federal requirements, states have considerable flexibility in the design and operation of their NEMT program. As a result, states vary widely in their NEMT procurement and contract standards, metrics, reporting, and enforcement of requirements for NEMT brokers, MCOs, and transportation providers. Health Management Associates, Inc. (HMA), examined NEMT-related requests for proposals (RFPs) and contracts for five states and interviewed state Medicaid officials, transportation brokers and providers, MCOs, advocates, and subject matter experts (SMEs). The goal was to synthesize the information gathered to help inform states and other stakeholders about key NEMT standards, challenges and successes, and considerations for developing RFPs and contracts.
1092 Results found.
The Medicare Advantage VBID Program Is Ending: Here’s What All Plans Can Do to Prepare for What’s Next
This week, our second In Focus article addresses the transition to end the Medicare Advantage Value-Based Insurance Design (VBID) model, which launched in 2017 and subsequently has been expanded with bipartisan support. This model was designed to promote flexible benefit design, reduce cost barriers, and enhance care for targeted populations, especially dual eligibles and individuals with chronic conditions. In December 2024, however, the Centers for Medicare & Medicaid Services (CMS) announced that the model would be terminated by the end of 2025, citing unmitigable costs to the Medicare Trust Funds, totaling more than $4.5 billion across 2021 and 2022 alone.
Despite its popularity and effectiveness in improving medication adherence and addressing social determinants of health, CMS concluded that the cost trajectory was unsustainable within the parameters of the Innovation Center’s mandate.
The end of the VBID model is not the end of innovation in Medicare Advantage (MA); rather, it is a strategic inflection point. Plans that approach this transition with a proactive, data-driven lens will be best positioned to maintain competitive advantage, compliance, and member trust. This article reviews critical steps VBID plans should be taking and how Medicare Advantage Organizations (MAOs) and their partners can best prepare for future opportunities.
Pain Points and Key Strategic Decisions for MAOs
As plans prepare for a post-VBID world, they face a series of complex trade-offs—especially those with Dual Eligible Special Needs Plans (D-SNPs) that had $0 drug cost sharing under VBID. With the end of CMS’s drug cost offset in the initial coverage phase, MAOs will need to determine whether and how to absorb those costs through alternative mechanisms. In addition, plans will need to make important decisions regarding their other VBID benefits, namely, whether to discontinue or transition them to the special supplemental benefits for the chronically ill (SSBCI) program. MAOs should consider the following key strategic decisions:
- Offer an Enhanced Alternative (EA) or Basic Alternative (BA) Part D Plan: To replicate $0 cost sharing, MAOs would need to use EA or BA plan designs with $0 deductibles and $0 copays across all tiers—an expensive move and potentially untenable investment for many.
- Tier-Specific Buy-Downs (T1/T2): Some plans may consider buying down T1 and T2 copays to $0, a much less costly approach. Others may consider moving key T2 drugs to T1, while keeping T1 copays at $0 to protect access and using non-zero dollar T2 copays to limit costs.
- Competitive Alignment Considerations: MAOs offering broader cost-sharing reductions (e.g., $0 copays on both T1 and T2 drugs) may experience undesirable shifts in enrollment patterns depending on how competitors structure their formularies and benefit designs. MAOs should consider competitive parity and attempt to maintain a balanced benefit structure that aligns with market norms.
- Transferring VBID Benefits to SSBCI: Some benefits—like non-health-related transportation, healthy foods, and general supports for living—could migrate to the SSBCI program. But SSBCI has strict eligibility, documentation, and operational requirements, calling for nuanced workflows and cross-departmental coordination.
Action Plan: What MAOs Should Be Doing Now
To navigate this transition successfully, teams of experts at Wakely, a Health Management Associates, Inc. (HMA) Company, are already working with VBID stakeholders to evaluate multiple transition scenarios. Our experts recommend that MAOs take the following actions:
What to Watch: Future Innovation in Medicare Advantage
Though VBID is ending, the innovation landscape is far from static. With the new Trump Administration and the return of Abe Sutton—a VBID expansion advocate—appointed as Director of the CMS Innovation Center, our experts are closely monitoring the potential for a revised version of VBID or similar models. Stakeholder advocacy could influence how CMS prioritizes the next wave of innovation. Plans should consider engaging in dialogue now to shape what happens next.
Connect with Us
Wakely is embedded in MA strategy and policy. Wakely and HMA teams are working with clients to evaluate multiple transition scenarios, helping them optimize value, protect Star Ratings, and preserve member satisfaction during this pivotal shift, while also supporting targeted policy engagement efforts to ensure their perspectives are reflected in future CMS and Innovation Center decision making.
Our joint capabilities bring together:
- Actuarial modeling expertise to quantify cost and risk impacts of design alternatives
- Regulatory insight to ensure compliance with CMS requirements
- Operational support to help you implement SSBCI programs efficiently
- Market strategy consulting to align your plan offerings with local competition and enrollment goals
- Policy advocacy to help clients engage in the conversation around what comes next after VBID
To connect on additional questions contact our featured experts below.
FY 2026 Medicare Hospital Inpatient Proposed Regulation Signals Several Changes Lie Ahead for the Hospital Industry and Beneficiaries
This week, our In Focus section reviews the policy changes that the Centers for Medicare & Medicaid Services (CMS) proposes to make in the Fiscal Year (FY) 2026 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Proposed Rule (CMS-1833-P). The IPPS proposed rule, released April 11, 2025, includes several important policy changes that will alter hospital margins and change administrative procedures, beginning as soon as October 1, 2025.
Key Provisions of the FY 2026 Hospital IPPS and LTCH Proposed Rule
For FY 2026, CMS proposes to modify several hospital inpatient payment policies. We highlight and interpret six of these proposed policies that may be among the most impactful for Medicare beneficiaries, hospitals and health systems, payers, and manufacturers, as follows:
- Annual inpatient market basket update
- Labor share reduction
- Medicare Advantage (MA) data integration in measuring hospital readmissions
- New Technology Add-on Payment (NTAP) program growth
- Transforming Episode Accountability Model (TEAM) modifications
- Uncompensated care payment increase for disproportionate share hospitals (DSHs)
Annual Inpatient Market Basket Update
Proposed Rule: CMS’s FY 2026 Medicare IPPS Proposed Rule will increase payments to acute care hospitals overall by 2.4 percent from FY 2025, amounting to an estimated $4 billion increase in reimbursement. This update is based on a hospital market basket increase of 3.2 percent and a 0.8 percent reduction for total factor productivity.
HMA Analysis: CMS’s 2.4 percent increase results from the estimated rate of increase in the cost of a standard basket of hospital goods—the hospital market basket. For beneficiaries, this payment increase will lead to a slightly higher standard Medicare inpatient deductible and an increase in out-of-pocket costs. For hospitals and health systems, payers, and manufacturers, the proposed payment increase (2.4 percent) is consistent with economy-wide inflation over the past year (2.4 percent) and below the amount that MA plans will receive for 2026 (5 percent).[1], [2] Although the published payment update for FY 2026 is 2.4 percent, other policy changes result in the average change in inpatient payments totaling slightly more than 3 percent. We anticipate the proposed 2.4 percent increase will increase somewhat by the time CMS finalizes these rates later in the year.
Labor Share Reduction
Proposed Rule: CMS proposes to modify the hospital labor share used to reimburse hospitals for inpatient services. Using 2023 hospital cost report data CMS proposed a national labor‑related share of 66.0 percent, a decrease from the labor share of 67.6 percent.
HMA Analysis: Every five years, CMS recalculates the hospital market basket and the hospital labor share using updated cost data from the hospital cost reports. For FY 2026, CMS conducted its routine rebasing calculation using 2023 cost report data, replacing the 2018 cost data currently used. As a result, CMS calculated that the cost of labor accounts for a slightly smaller share of total hospital costs in 2023 than in 2018. The labor share is used within the IPPS to identify the proportion of payments that are affected by the hospital wage index in an effort to adjust payments for geographic variation in labor costs. The consequence of a lower hospital labor share is that a slightly smaller share of hospital inpatient payments will be adjusted by the hospital wage index. The subtle impact of this change is that hospitals with higher wage index values may experience reductions in payment. Further, this downward revision of the labor share signals that hospital wages, salaries, and employee benefits account for a smaller share of total costs in the post-pandemic environment. This change may come to a surprise to some, as hospital labor costs have been a subject of concern since the COVID-19 public health emergency.
Medicare Advantage Data Integration in Measuring Hospital Readmissions
Proposed Rule: CMS proposed to make several modifications to the Hospital Readmissions Reduction Program (HRRP), including:
- Refining all six readmission measures to add MA patient data
- Removing the COVID-19 patient denominator exclusion from measures
- Reducing the applicable period from three years to two
- Modifying the DRG payment ratios in the payment adjustment formula to include MA beneficiaries
- Clarifying that CMS has the discretion to grant an extension to hospitals under the extraordinary circumstances exception (ECE)
CMS also proposed to include MA data in other measures included in the Hospital Value-Based Purchasing (VBP) program and the Inpatient Quality Reporting (IQR) program.
HMA Analysis: The inclusion of MA data in the HRRP may have significant payment implications for many hospitals because it will alter their readmission rates in unanticipated ways, particularly if hospitals’ MA patients differ substantially from traditional Medicare beneficiaries. Importantly, the inclusion of MA data in the HRRP measures, and also within the VBP program and the IQR program, signals that CMS is moving toward broader integration of MA data into Medicare fee-for-service reimbursement systems.
New Technology Add-on Payment Program Growth
Proposed Rule: CMS proposed to continue NTAP status for 26 products because they continue to meet the newness criteria required under this program. In addition, within the proposed rule CMS discusses new NTAP applications for 43 additional products. Among these applications, 29 were submitted under the alternative pathways for breakthrough devices and qualified infectious disease products (QIDP).
HMA Analysis: The overall number of products with NTAPs is on par with other recent years, but the number of NTAP applications has blossomed in FY 2026 as the result of the alternative breakthrough application pathway. This alternative pathway allows breakthrough devices and certain antibiotic and antimicrobial drugs to apply for NTAP using an abbreviated application process.
Transforming Episode Accountability Model Modifications
Proposed Rule: CMS proposed several modifications to the forthcoming CMS Innovation Center TEAM framework. Among the various methodological modifications proposed to this mandatory payment model beginning January 1, 2026, CMS proposed to take the following actions:
- Limit the deferment period for certain hospitals
- Replace the Area Deprivation Index (ADI) with the Community Deprivation Index (CDI)
- Use a 180-day lookback period and Hierarchical Condition Categories (HCC) for risk adjustment
- Remove health equity and health-related social needs data reporting
- Expand use of the Skilled Nursing Facility (SNF) three-day rule waiver
HMA Analysis: The critical aspect of CMS’s TEAM provision is that the agency proposes to follow through with this Innovation Center model while cancelling other Innovation Center payment models in recent months. It also is noteworthy that the agency has proposed to remove the health equity data reporting requirements for TEAM in line with actions taken with many other CMS programs. Another proposal of note is the plan to expand the use of the waiver to circumvent the SNF three-day inpatient stay rule, which will allow hospitals to discharge patients more quickly to SNFs.
Uncompensated Care Payment Increase for Disproportionate Share Hospitals
Proposed Rule: CMS proposes to increase uncompensated care payments to DSHs by $1.5 billion in FY 2026.
HMA Analysis: CMS’s proposal will increase uncompensated care payments to hospitals by 26 percent. This increase is driven by CMS’s assumption that the rate of uninsured people will increase to 8.7 percent of the population in 2026 from 7.7 percent in 2025.
Stakeholder comments on the IPPS proposed rule are due no later than June 10, 2025.
Connect With Us
The Health Management Associates, Inc. (HMA), Medicare Practice Group monitors federal regulatory and legislative developments in the inpatient setting and assesses the impact on hospitals, life science companies, and other stakeholders. Our experts interpret and model hospital payment policies and assist clients in developing CMS comment letters and long-term strategic plans. Our team replicates CMS payment methodologies and model alternative policies using the most current Medicare fee-for-service and Medicare Advantage (100%) claims data. We also support clients with DRG reassignment requests, NTAP applications, and analyses of Innovation Center alternative payment models.
For more information about the proposed policies, please contact our expert below.
[1] U.S. Bureau of Labor Statistics. Table 1. Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, by Expenditure Category. Modified April 10, 2025. Available at: https://www.bls.gov/news.release/cpi.t01.htm.
[2] Centers for Medicare & Medicaid Services. 2026 Medicare Advantage and Part D Rate Announcement. April 7, 2025. Available at: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-advantage-and-part-d-rate-announcement.
April 16, 2025
FY 2026 Medicare Hospital Inpatient Proposed Regulation Signals Several Changes Lie Ahead for the Hospital Industry and Beneficiaries
Ask HMA Experts: Medicare Town Hall
Join us for an open and engaging Medicare Town Hall with the experts from Health Management Associates (HMA). Whether you’re navigating Medicare Advantage policy changes, seeking actuarial insights, analyzing risk-based payment structures, or working to improve integration for Dual Eligibles and align D-SNPs, our team is here to provide actionable insights and answers. This is your opportunity to ask anything—from strategy to service delivery, coverage to compliance. We’ll have HMA professionals from across the country ready to share their perspectives and help you navigate the complexities of Medicare.
Bring your questions. Share your ideas. Gain clarity.
PACE Development Best Practices for Policy Makers and Program Sponsors
Health Management Associates (HMA) conducted a multi-state study to examine the policy decisions influencing the operation and expansion of Programs of All-Inclusive Care for the Elderly (PACE). It explored different program structures, associated advantages and challenges, and strategies to enhance efficiency while meeting regulatory requirements.
This webinar will summarize our research on 10 active PACE states (CA, FL, IL, KY, LA, MA, NJ, NY, OH, and WA) that have either implemented or expanded their PACE programs between 2020 and 2024. Using state survey responses and credible third-party, publicly available data, we will showcase the outcomes of PACE program development through open and competitive RFP processes. We will also outline development timelines to demonstrate the effectiveness of each approach and highlight key insights gained during the discovery and research phase of the study.
Learning Objectives:
- Comparing the Open versus Competitive RFP approach
- Understanding state-level practices, challenges, and opportunities for improvement
- Review state profiles highlighting: Program development outcomes; Building PACE program capacity; Program development timelines; Fostering PACE growth
How National Mandates in Digital Health & dQM are Transforming Healthcare
Digital quality measures (dQM) are quickly emerging as a cornerstone of healthcare operations, propelled by federal efforts to enhance efficiency, interoperability, transparency, and real-time data sharing. New bipartisan proposals like the Healthcare Efficiency Through Flexibility Act (H.R. 483) highlight just how quickly the legislative landscape can change.
Healthcare organizations face mounting pressure to do more with less. As legislation continues to evolve at both federal and state levels, digital innovation remains a critical, key strategy for driving efficiency and reducing administrative burden.
National mandates, emerging legislative proposals, and regulations continue to set the “rules of the road” for healthcare, including digital quality transformation. New bills can significantly reshape reporting requirements, data standards, and reimbursement models, often on accelerated timelines. Organizations that proactively adapt to these shifting mandates will be better positioned to improve patient outcomes, streamline operations, and remain leaders in this evolving market.
Foundational Legislation
- 21st Century Cures Act (2016): Enacted by the U.S. Congress, this laid the groundwork for modernizing the healthcare data ecosystem using application programming interfaces (APIs). Healthcare related provisions focused on interoperability & usability of electronic health data by preventing information blocking (unreasonable interference with access/ exchange of electronic health information); required certified electronic health records (EHRs) to utilize Fast Healthcare Interoperability Resources (FHIR)-based APIs to promote patient access to their health data.
- The Centers for Medicare & Medicaid Services (CMS) Interoperability & Patient Access Final Rule(CMS-9115-F) (2020): Required CMS-regulated payers (Medicare Advantage, Medicaid, Children’s Health Insurance Program (CHIP), Qualified Health Plan (QHP), and Federally-facilitated Exchanges (FFEs) beginning on or after January 1, 2022, to offer FHIR-based APIs for Patient Access and Provider Directories.
- Mandated Payer to Payer Data Exchange for patients to take their data with them if they change payers.
- Promoted data exchange by requiring hospital participation in sending patient event notifications through an ADT (Admissions, Discharge and Transfer) feed.
- Publicly reporting providers who do not list their digital contact information in the National Plan and Provider Enumeration System (NPPES).
- Further curtailed information blocking by publicly reporting eligible clinicians and hospitals who may be blocking information.
Subsequent federal communication in December 2021 formalized CMS’s decision not to enforce certain provisions of this rule to give payers additional time to comply.
- Health Data, Technology, and Interoperability (HTI-1): Certification Program Updates, Algorithm Transparency, and Information Sharing-Final Rule (2024): This rule, which was issued by the Office of the National Coordinator (ASTP/ONC)[1] introduces significant changes to software supporting care. It implements the Cures Act’s EHR Reporting Program, requiring transparent reporting on certified health IT metrics. It also updated information blocking regulations to make data easier to share. In addition, it established a new standard data model for all “certified” Health IT products: the United States Core Data for Interoperability (USCDI) version 3, starting January 1, 2026. In addition, the voluntary certification program (which has been adopted by 96% of all EHRs) has updated its standards, criteria, and requirements, including standardized FHIR APIs, electronic case reporting using Health Level Seven International Clinical Document Architecture (HL7 CDA) and FHIR-based specifications, revised decision support intervention criteria, and new functionality for patient Electronic Health Information (EHI) restriction requests.
- CMS Interoperability & Prior Authorization Final Rule (CMS-0057-F) (2024): Builds on previous CMS efforts and the 2020 CMS Interoperability & Patient Access Final Rule to improve access to and exchange of health records among patients, providers, and payers. It also focuses on simplifying and modernizing prior authorization processes while expanding data-sharing requirements to reduce administrative burdens. Impacted payers must begin implementing certain measures by January 1, 2026, while most API-related requirements are extended until January 1, 2027, based on stakeholder feedback provided to CMS.
Beyond federal legislation, other influential entities like CMS, National Committee for Quality Assurance (NCQA), and ASTP/ONC, are adopting new frameworks that accelerate the shift to digital quality measurement.
Rapidly Evolving National Healthcare Frameworks & Healthcare Quality Landscape Changes
- CMS National Quality Strategy/Meaningful Measures 2.0 and CMS Digital Quality Measurement Strategic Roadmap (Published in 2022)
These frameworks map out a future in which interoperability and digital measures play a pivotal role in improving care quality and outcomes.
- NCQA’s Shift to Digital Healthcare Effectiveness Data and Information Set (HEDIS)® Measures:
NCQA has taken a significant step in its quality measurement strategy for health plans. Specifically, HEDIS measures are moving to fully digital by 2030, signaling an industry-wide move toward automated data capture and reporting (published in 2024). In addition, they have also launched their Digital Content Services (DCS) product which allows organizations to submit their quality measures digitally for the 2024 measure year. - Digital Quality Implementers Community:
In 2024, a collaborative consensus-based effort was initiated to develop, advance, and standardize tools and platforms that make digital quality measurement possible using open standards instead of proprietary tools. This group is actively working to advance a quality enablement layer including tools, guidance, and standards changes. Leavitt Partners, an HMA company, facilitates this community.
Signals from the Trump Administration Related to Digital Quality
There is ongoing speculation about how the Trump Administration and Congress will approach digital healthcare transformation—particularly in areas like digital quality measurement. Yet multiple indicators suggest they will stay on this course, and perhaps even accelerate the adoption of digital quality measures.
One key signal is that Ryan Howells, a Principal with Leavitt Partners, an HMA Company, is reportedly one of two finalists under consideration for the position of Assistant Secretary for Technology Policy (ASTP). Known as a champion for digital healthcare data, Howells leads the CARIN Alliance, a national group focused on improving health data access. The ASTP/ONC has significant influence in shaping federal regulations for electronic health records and broader data, technology, and artificial intelligence strategies within the Department of Health and Human Services (HHS).
Additionally, recent bipartisan legislation introduced in January 2025 further underscores a commitment to pursuing digital quality transformation as a linchpin for success in a “digital-first” environment, one that prioritizes efficiency and enhanced patient outcomes.
H.R. 483: Healthcare Efficiency Through Flexibility Act
Proposes delaying electronic clinical quality measures (eCQM) adoption until 2030, citing the need to reduce provider burden and pilot more advanced, interoperable reporting tools, including digital quality measurement.
Meanwhile, the national shift toward dQM continues to gain momentum. With eCQM mandates set to begin in reporting year 2025 for Medicare Shared Savings Program Accountable Care Organizations (MSSP ACOs), many organizations view these requirements as redundant and burdensome, given the industry’s rapid move toward fully digital quality. Unlike eCQMs, dQMs leverage more robust structure and standardization, especially through FHIR-based APIs, to enable broader, more timely, and more efficient data capture. The result is a faster path toward high-impact quality measurement and improvement in our increasingly digital healthcare environment.
Major Implications for Healthcare Organizations
- Compliance Deadlines:
Evolving Administration rules can quickly shift timelines, significantly impacting prior authorizations, data exchange, and quality measurement. - Financial & Legal Risks:
Non-compliance may lead to financial penalties, legal actions, or even program exclusion. - Workforce Readiness & Capacity:
Requires strategic communications, robust change management efforts, and advanced technology infrastructure.
Strategic Recommendations
- Cross-Functional Collaboration:
Engage compliance, IT, clinical, and legal teams to track and adapt to new rules. - Stay Flexible:
Monitor Congress, CMS, ONC, and other federal notices regularly, as new bills and guidance can rapidly change targets. - Technology Assessment:
Evaluate interoperability, API readiness, and EHR workflows to identify gaps.
Need a Tailored dQM Strategy?
Contact HMA for best practices, policy insights, and a customized roadmap for your organization.
Learn more about HMA’s approach to dQM.
[1] ONC was renamed to the “Assistant Secretary for Technology Policy/Office of the National Coordinator (ASTP/ONC) in 2024, but in the current administration, may be folded back into CMS.
Amber ground ambulance dataset reflects complexity and challenges of the industry, highlights the need to improve and continue cost data collection
The Centers for Medicare & Medicaid Services (CMS) is on the cusp of possessing the data needed to make long anticipated changes to the Medicare fee-for-service (FFS) ground ambulance payment system. It has been more than two decades since CMS revised these payment rates through a negotiated rulemaking process that was exclusive of actual cost data or inflationary considerations. Since then, the cost structure of ground ambulance entities has changed. CMS is now using the Ground Ambulance Data Collection System (GADCS) to gather ambulance cost data, as required by Congress, to offer an improved understanding of the costs of delivering ground ambulance services. Given the potential of GADCS data to improve the adequacy of Medicare FFS reimbursement rates, the American Ambulance Association developed a similar data collection device, referred to as Amber, to test these data with its membership of ground ambulance entities. Amber offers a glimpse into the current challenges of the ground ambulance industry.[i]
Health Management Associates, Inc. (HMA) assessed the Amber dataset for response rates and data quality, along with responses containing calendar year 2022 financial data. Amber response rates were low, but sample volumes were on par with prior industry surveys conducted in the past by federal agencies. The Amber sample is representative of the industry’s wide variation in entity size and geographic service area. Amber data are reliable for calculating margins, but some aspects of these data also signal that ground ambulance entities, particularly smaller entities, may have had difficulty with variable definitions or the submission process. We observe that Amber would be improved by including information on uncompensated care and more details on medication supply costs.
The 2022 financial data from Amber suggest that Medicare FFS margins, at -6 percent, had declined since GAO’s 2010 assessment and that the share of costs associated with labor has increased. Amber data also suggest that the cost structure of smaller ground ambulance entities and rural and super-rural entities differs from that of larger and more urban entities. Margins for small and rural entities are lower.
Based on our assessment of the Amber dataset and its 2022 financial, we offer several recommendations to policymakers and stakeholders. These recommendations are intended to improve future cost collection efforts that may inform payment reforms to enhance the payment accuracy of the Medicare FFS payment system for ground ambulance services.
- Provide additional educational support to respondents to improve consistency of data reporting
- Streamline and modify data collection devices to adhere to industry trends and challenges
- Develop a standardized method for assigning ground ambulance entities to geographic service area for research purposes
- Collect data on ground ambulance uncompensated care and bad debt
- Collect payer level data for cases involving treatment without transport
- Collect targeted data on top 10 medications by cost to accurately reflect costs in payment rates
- CMS should consider collecting ground ambulance cost data on a semi-regular basis
- CMS should consider phasing in the use of GADCS data to ensure that the data reflect the diversity of ambulance entities and consistent reporting of key financial variables
[i] American Ambulance Association. Ambulance Cost Collection. 2023. Available at: https://ambulance.org/advocacy/cost-reporting/.
Medicaid Managed Care Enrollment Update: Q4 2024
Our second In Focus section reviews the most recent Medicaid enrollment trends in capitated risk-based managed care programs in 29 states.[1] Health Management Associates Information Services (HMAIS) collected and analyzed monthly Medicaid enrollment data from the fourth quarter (Q4) of 2024.
The data offer a timely overview of trends in Medicaid managed care enrollment and valuable insights into state-level and managed care organization (MCO)-specific enrollment patterns. This information allows state governments, their partners, and other organizations interested in Medicaid to track enrollment shifts. Understanding the underlying drivers of enrollment shifts is critical for shaping future Medicaid policies and adjusting program strategies amid a dynamic healthcare landscape.
Overview of the Data
The 29 states included in our review have released monthly Medicaid managed care enrollment data via a public website or in response to a public records request from Health Management Associates (HMA). This report reflects the most recent data posted or obtained. HMA has made the following observations related to the enrollment data (see Table 1):
- As of December 2024, across the 29 states tracked in this report, Medicaid managed care enrollment was 61.7 million, down by 3.6 million (-5.5%) year-over-year.
- Though most states experienced declines in enrollment, six states saw enrollment increases as of December 2024—double the number of states from the previous year.
Figure 1. Year-Over-Year Medicaid Managed Care Enrollment Percent Change in Select States, 2020−24
- Among the 22 expansion states included in this report, net Medicaid managed care enrollment has decreased by 2.1 million (-4%) to 49.5 million members at the end of Q4 2024, compared with the same period in 2023.[2]
- Among the seven states included in this report that had not expanded Medicaid as of December 2024, net Medicaid managed care enrollment decreased by 1.5 million, or 1 percent, to 12.3 million members at the end of Q4 2024 compared with to the same period in 2023.
Table 1. Monthly MCO Enrollment by State—October through December 2024
It is important to note the limitations of the data presented. First, not all states report the data at the same time during the month. Some of these figures reflect beginning of the month totals, whereas others reflect an end of the month snapshot. Second, in some cases the data are comprehensive in that they cover all state-sponsored health programs that offer managed care options; in other cases, the data reflect only a subset of the broader managed Medicaid population. This limitation complicates comparison of the data described above with figures reported by publicly traded Medicaid MCOs. Hence, the data in Table 1 should be viewed as a sampling of enrollment trends across these states rather than as a comprehensive comparison, which cannot be established based solely on publicly available monthly enrollment data.
HMAIS also compiles a more detailed quarterly Medicaid managed care enrollment report representing nearly 300 health plans in 41 states. The report provides by plan enrollment plus corporate ownership, program inclusion, and for-profit vs. not-for-profit status, with breakout tabs for publicly traded plans. Table 2 shows a sampling of plans and their national market share of Medicaid managed care beneficiaries based on a total of 66.3 million enrollees. These data too should be viewed as a broader representation of enrollment trends rather than as a comprehensive comparison.
Table 2. National Medicaid Managed Care Market Share by Number of Beneficiaries for Sample of Publicly Traded Plans, 2024
What to Watch
Enrollment in Medicaid MCOs has experienced significant fluctuations recently, influenced both by policy changes and economic factors. Since April 2023, Medicaid enrollment has been on a downward trajectory as states complete eligibility redeterminations after the end of the COVID-19 public health emergency. This trend, coupled with financial and political challenges, necessitates strategic planning for stakeholders to navigate the evolving Medicaid landscape effectively.
Potential changes that may affect enrollment and require scenario and readiness planning include:
- Federal requirement, or a new state option, to implement Medicaid work requirements for at least some categories of enrollees
- Changes to the federal financial match policy, which may cause some states to make different decisions about their Affordable Care Act expansion program for adults
- Modifications in requirements and expectations for more efficient eligibility processes to improve the accuracy of determinations and assignment to eligibility categories
Connect with Us
HMA is home to experts who know the Medicaid managed care landscape at the federal and state levels. The HMAIS subscription provides point-in-time and longitudinal Medicaid enrollment data, health plan financials, and additional actionable information about eligibility expansions, demonstration and waiver initiatives, as well as population- and service-specific information. HMAIS also includes a comprehensive public documents library containing Medicaid requests for proposals and responses, model contracts, scoring sheets, and protests.
For detail about the HMAIS enrollment report and subscription service, contact our experts below.
[1] Arizona, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin.
[2] Health Management Associates, Inc. Medicaid Managed Care Enrollment Update—Q4 2023. HMA Weekly Roundup. April 17, 2024. Available at: https://www.healthmanagement.com/insights/weekly-roundup/april-17-2024/#in-focus2.
CMS Finalizes 2026 Payment and Policy Updates for Medicare Advantage and Part D
CMS approves average increase of 5.06 percent for MA plans while deferring major policy changes in MA and Part D programs
The Centers for Medicare & Medicaid Services (CMS) released the 2026 Medicare Advantage (MA) and Part D Rate Announcement on April 7, 2025, finalizing payment updates for calendar year (CY) 2026. This announcement came shortly after the release of the Contract Year 2026 MA, Part D, and PACE Policy and Technical Changes Final Rule, on April 4, 2025. Together, these updates mark the conclusion of CMS’s annual rulemaking cycle for Medicare Advantage, ahead of the June 2, 2025, deadline for 2026 MA plan bids.
Notably, because of the timing of the draft notices and proposed rule, Trump Administration officials ultimately had more input into policies omitted from the rate notice and final policy rule than on policies that were finalized. For example, the final rule is exclusive of proposals to expand coverage for anti-obesity medications, guardrails for artificial intelligence (AI), and new requirements related to utilization management and prior authorization procedures.
In his confirmation hearing, CMS Administrator Mehmet Oz, MD, cited Medicare Advantage prior authorization practices and health risk assessments that lead to upcoding as areas that deserve further consideration and scrutiny, raising the potential for future regulatory shifts and even legislative reform. With the possibility of Medicare, including MA, facing cuts as part of broader budget negotiations in Congress, the rate notice and policy rule offer program stability counterbalancing the political and fiscal pressures that may emerge this year.
CMS has sought to stabilize MA and Part D programs into 2026, and stakeholders can benefit from understanding the impact in markets for 2026 and the signals of potential regulatory changes to come. For more in-depth analysis and insights on the rate notice, look for our policy and actuarial experts’ brief due out next week.
The remainder of this In Focus article reviews CMS’s decisions on major payment and policy proposals in the Rate Announcement and Final Rule and examines key considerations for healthcare stakeholders.
Payment Impact on Medicare Advantage Organizations
In the CY 2026 Rate Announcement, CMS projects that federal payments to MA plans will increase by 5.06 percent from 2025 to 2026, which represents a $25 billion increase in expected payments to MA plans next year. According to CMS, this represents an increase of 2.83 percentage points compared with the CY 2026 Advance Notice that is largely attributable to an increase in the effective growth rate. The increase in the effective growth rate—increasing to 9.04 percent in the Rate Announcement from 5.93 percent in the Advance Notice—is primarily the result of the inclusion of additional data on Medicare fee-for-service (FFS) expenditures, including payment data through the fourth quarter of 2024.
The Rate Announcement estimates represent the average increase in payments to MA plans and actual payments will vary from plan to plan. Below, Table 1 provides CMS estimates of the impact of finalized payment changes on net MA plan payments.
MA Risk Adjustment Changes
As expected, CMS finalized the last year of the three-year phase-in of the MA risk adjustment model, which requires calculating 100 percent of the risk scores using only the 2024 CMS-HCC (Hierarchical Condition Category) model in 2026. CMS also addressed stakeholder concerns with the planned transition toward a risk adjustment model based on MA encounter data, as previewed in the CMS CY 2026 Advance Notice. CMS pledged to engage stakeholders in this model development process while continuing to evaluate the feasibility, transparency, and timing of a future transition to an encounter-based risk adjustment model.
CMS also finalized the MA coding pattern adjustment factor of 5.9 percent for CY 2026, which is the statutory minimum adjustment factor to account for differences in coding patterns between MA plans and providers under Medicare FFS Parts A and B.
Part D Risk Adjustment
For CY 2026, CMS finalized the revised 2026 RxHCC model with adjustments for maximum fair price drugs. Importantly, CMS also finalized using separate FFS normalization factors for MA-Prescription Drug (MA-PD) plans and Prescription Drug Plans (PDPs), making 2026 the second year CMS will vary normalization for these two markets. The calculation of the factors for CY 2026 is different, however, and will have substantially greater impact than the method used previously. It also will reduce Part D risk scores significantly for MA-PD plans while increasing scores for PDPs.
MA Star Ratings
CMS continues to solicit feedback from stakeholders on ways to simplify and refocus MA Star Ratings measures to focus more on clinical care, outcomes, and patient experience of care measures. Also included in the CY 2026 Rate Announcement are non-substantive measure specification updates and a list of measures included in the Part C and Part D improvement measures and categorical adjustment index for the 2026 Star Ratings.
Separately, in the policy and technical changes rule, CMS finalized new regulatory requirements designed to enhance MA beneficiary protections in an inpatient setting, provisions related to allowable special supplemental benefits for the chronically ill (SSBCI), and the care experience for dually eligible beneficiaries enrolled in MA special needs plans.
Enhancing MA Beneficiary Appeal Rights and Notification Requirements
CMS is finalizing provisions that limit the ability of MA plans to reopen and modify a previously approved inpatient hospital decision on the basis of information gathered after the approval. Under the final rule, MA plans will be able to reopen an approved hospital admission only due to error or fraud. In addition, CMS finalized several provisions to enhance beneficiary appeal rights and new reporting and notice requirements, including:
- Ensuring that MA appeals rules apply to adverse plan decisions, regardless of whether the decision was made before, during, or after the receipt of such services
- Codifying existing guidance that requires plans to give a provider notice of a coverage decision
- Ensuring enrollees have a right to appeal MA plan coverage denials that affect their ongoing source of treatment
Non-Allowable Special Supplemental Benefits for the Chronically Ill
The final rule establishes guardrails for SSBCI benefits by codifying a list of non-allowable examples (e.g., unhealthy food, alcohol, tobacco, life insurance). CMS did not finalize proposals that were designed to improve administration of supplemental benefits and enhance transparency of the availability of such benefits.
Improving Care Experience for Dual Eligibles
CMS finalized new requirements for dual eligible special needs plans (D-SNPS) that are applicable integrated plans (AIPs) as follows:
- D-SNPs will be required to have integrated member ID cards for their Medicare and Medicaid plans
- D-SNPs will be required to conduct an integrated health risk assessment for Medicare and Medicaid, rather than separate ones for each program.
These provisions affecting certain D-SNPS plans will be effective for the 2027 plan year.
Provisions Pertaining to the Medicare Part D Inflation Reduction Act
CMS is finalizing proposals to codify existing requirements related to key provisions of the Inflation Reduction Act, including no cost sharing for adult vaccines and capping monthly copayments for insulin at $35. In addition, CMS is codifying existing guidance related to the implementation of the Medicare Prescription Payment Plan, which is also part of the Inflation Reduction Act.
Key Proposals CMS Has Yet to Finalize
As noted earlier, CMS finalized a streamlined rule that excluded several regulatory changes identified in the November 2024 proposed rule. In addition to provisions related to coverage of anti-obesity medications, guardrails for AI, and mandatory analysis of the health equity impact of MA plans utilization management practices, the following proposals were not finalized. CMS notes that these proposals might be finalized in future rulemaking.
- Expanding Medicare Part D Medication Therapy Management (MTM) eligibility criteria
- Ensuring equitable access to behavioral health services by applying MA cost-sharing limits
- Enhancing the Medicare Plan Finder to include information on plan provider directories
- Promoting informed choice by enhancing CMS review of MA marketing and communication materials
- Enhancing rules on MA plans’ use of internal coverage criteria
Key Considerations
The policies finalized in the CY 2026 Rate Announcement are projected to increase average Part C payments to MA plans by 5.06 percent in CY 2026—a significant uptick from the payment updates originally proposed in the CY 2026 Advance Notice. Nonetheless, the final rate increase will have varying effects across MA plans, with some experiencing larger or smaller impacts in CY 2026. MA plans should assess these outcomes as they prepare their bid submissions for 2026.
According to the CY 2026 Rate Announcement, CMS expects that the 5.06 percent increase will provide continued stability for the MA program and its beneficiaries while ensuring accurate and appropriate payments to Medicare Advantage organizations.
In the CY 2026 MA and Part D Final Rule, CMS adopted a significantly scaled-back final rule, which omitted some of the more far-reaching proposals for MA and Part D that were originally proposed in November 2024. CMS, however, could potentially revisit and finalize some of these proposals in future rulemaking. Moreover, new regulatory requirements that enhance enrollee protections in inpatient care settings and improving the care experience for dual eligibles signal CMS’s continued interest in improving program oversight and enhancing consumer protections for MA beneficiaries.
Connect With Us
MA stakeholders need to undertake scenario planning and be prepared to adapt to a rapidly evolving federal policy environment. From modeling and impact assessments of specific policy changes to strategy development and implementation, HMA is home to experts with diverse skill sets. Our team can help stakeholders assess and prepare for potential changes to prior authorization, looking holistically at their organization’s operations, patient care models, and reimbursement strategies. Our team also provides detailed modeling and assessments to ensure health plans are prepared for changes in risk adjustment and coding policies, supplemental benefits, and other key issues affecting capitation payment, bids, and care delivery models.
For details about the finalized payment and policy rules contact our featured experts below.
April 9, 2025
CMS Finalizes 2026 Payment and Policy Updates for Medicare Advantage and Part D