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Brief & Report

CMS’s Proposed Provider Tax Rule Could Reshape Medicaid Financing

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The Centers for Medicare & Medicaid Services (CMS) has proposed significant changes to how Medicaid provider taxes are structured, reported, and monitored. Issued in response to the Working Families Tax Cut Act (WFTCA), the proposed rule would affect provider tax grandfathering, hold harmless thresholds, reporting requirements, and permissible tax classes, with important implications for states, Medicaid agencies, health plans, providers, and other healthcare stakeholders.

This issue brief from HMA breaks down the proposal into practical, actionable insights. It highlights what is changing, what remains uncertain, and the operational and financial considerations organizations should evaluate as CMS moves toward a final rule.

Executive Summary

CMS’s July 2026 proposed rule introduces sweeping changes to the administration of Medicaid provider taxes, implementing provisions required under the Working Families Tax Cut Act (WFTCA). Among the most significant proposals are revised standards for determining which provider taxes qualify for grandfathering, new methodologies for calculating grandfathered tax rate thresholds, expanded state reporting requirements, elimination of the “75/75” indirect hold harmless test, and creation of a new permissible tax class for certain health insurers.
Many of these proposals introduce new operational requirements and leave important implementation questions unanswered. This issue brief summarizes the proposed rule and outlines the potential implications for Medicaid financing, provider tax programs, and state implementation strategies.

Key Takeaways

  • CMS proposes new standards for determining whether provider taxes qualify for grandfathering under the WFTCA.
  • States would be required to calculate grandfathered provider tax thresholds using actual tax collection and net patient revenue data.
  • The proposal establishes new one-time and ongoing quarterly reporting requirements for provider taxes.
  • CMS proposes eliminating the second prong of the 75/75 indirect hold harmless test, making applicable hold harmless thresholds the primary compliance standard.
  • A new permissible provider tax class for certain health insurers could affect future state financing strategies.
  • Several operational and policy questions remain unresolved and may be addressed through the rulemaking process.

What You’ll Learn

This issue brief provides a practical overview of the July 2026 proposed rule, including:

  • How CMS proposes to determine whether provider taxes qualify for grandfathering
  • The methodology for calculating grandfathered tax rate thresholds
  • New reporting requirements and implementation timelines for states
  • Proposed changes to the indirect hold harmless provisions
  • The potential impact of creating a new permissible tax class for health insurers
  • Operational considerations and implementation questions organizations should begin evaluating now

Frequently Asked Questions

Why did CMS issue this proposed rule?

The proposed rule implements provisions included in the Working Families Tax Cut Act (WFTCA) related to provider taxes and Medicaid financing.

Who could be affected?

The proposal has implications for state Medicaid agencies, health plans, providers, health systems, and other organizations involved in Medicaid financing and provider tax administration.

What are the biggest proposed changes?

The rule proposes changes to grandfathering requirements, provider tax threshold calculations, ongoing reporting requirements, indirect hold harmless policies, and permissible provider tax classifications.

Does the proposed rule answer every implementation question?

No. HMA identifies several operational questions and policy issues that remain unresolved, including reporting methodologies, implementation timing, compliance processes, and how certain provisions may be applied in practice.

Why It Matters

Provider taxes play an important role in Medicaid financing, and the proposed rule would significantly change how states establish, administer, and monitor these programs. New reporting requirements, revised grandfathering standards, and phased changes to hold harmless thresholds could affect state financing strategies, Medicaid payments, compliance activities, and long-term budget planning.
Organizations that understand the proposal early will be better positioned to evaluate potential impacts, prepare for implementation, and participate in the rulemaking process.

Why HMA’s Analysis Matters

The proposed rule is lengthy, technical, and operationally complex. HMA’s experts reviewed the regulation and distilled its most significant provisions into a concise issue brief designed for healthcare leaders.

Beyond summarizing the proposal, HMA identifies areas where implementation may present challenges, highlights operational considerations, and outlines policy questions that remain unanswered. This practical perspective helps organizations understand not only what CMS is proposing, but also what it could mean in practice.

Need Assistance?

Changes to Medicaid provider tax policy can have significant implications for financing, compliance, and long-term strategic planning.

HMA works with state Medicaid agencies, health plans, providers, and other healthcare organizations to assess the impact of federal policy changes, evaluate Medicaid financing strategies, and prepare for evolving regulatory requirements. If your organization is assessing how the proposed provider tax rule could affect its operations or financing approach, our experts can help.

Brief & Report

CMS Proposed Rule (CMS-2452-P) Could Reshape State Health Insurer Assessments—and Put Marketplace and Reinsurance Funding at Risk

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What CMS-2452-P Means for State-Based Marketplaces, Section 1332 Reinsurance Programs, the individual market, and Medicaid Financing

On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) released the Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes Proposed Rule (CMS-2452-P) to implement Section 71115 of the 2025 budget reconciliation legislation, P.L. 119-21, now known as the Working Families Tax Cut.

Although the proposal is primarily intended to reform Medicaid financing and provider taxes, it raises broader questions about whether state assessments on commercial health insurers—including those used to fund State-Based Marketplaces (SBMs), Section 1332 reinsurance programs, and other state affordability initiatives—could become subject to new federal limitations.

HMA’s latest analysis examines the proposed rule, explains the policy changes, and explores the potential implications for states, insurers, Marketplace authorities, and policymakers.

Download the full white paper to understand what CMS is proposing, what remains unclear, and what organizations should be monitoring as the rulemaking process continues.

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Executive Summary

CMS Proposed Rule CMS-2452-P would establish a new permissible provider tax class for the “services of health insurers.” Although the proposal is framed as implementing Medicaid financing reforms under Section 71115 of the 2025 budget reconciliation legislation, now known as the Working Families Tax Cut, it introduces uncertainty about whether insurer assessments used to finance commercial market programs—including State-Based Marketplaces and Section 1332 reinsurance programs—could also become subject to Medicaid provider tax requirements.

The proposed rule is unclear as to whether these new limitations apply only to taxes associated with Medicaid financing or extend more broadly to commercial insurance assessments. That distinction could have significant implications for states that rely on insurer assessments to support Marketplace operations, affordability programs, and other insurance initiatives.

Key Takeaways

  • CMS proposes creating a new permissible provider tax class for services of health insurers.
  • The proposal implements Section 71115 of the Working Families Tax Cut Act, which changes the indirect hold harmless thresholds for healthcare-related taxes.
  • The rule is primarily focused on Medicaid financing, but its language raises questions about commercial insurer assessments.
  • State-Based Marketplaces (SBMs) and Section 1332 reinsurance programs may face uncertainty if existing insurer assessments become subject to the new framework.
  • CMS has not clearly explained whether the proposal applies only to Medicaid financing or to all state insurer assessments.
  • States, insurers, and Marketplace leaders are expected to seek additional clarification during the public comment process.

What You’ll Learn from This White Paper

This paper explains:

  • What CMS Proposed Rule CMS-2452-P would change
  • How Section 71115 of the Working Families Tax Cut Act modifies provider tax rules
  • Why states are closely evaluating the proposal
  • Potential implications for State-Based Marketplaces
  • Possible effects on Section 1332 waiver reinsurance programs
  • How the proposal compares with CMS’s 2019 Medicaid Fiscal Accountability Regulation (MFAR)
  • Key policy questions CMS has yet to answer
  • What states, insurers, and Marketplace organizations should monitor moving forward

Frequently Asked Questions

What is CMS-2452-P?

CMS Proposed Rule (CMS-2452-P) would implement Section 71115 of the Working Families Tax Cut Act (WFTCA) by modifying the federal indirect hold harmless framework for healthcare-related taxes and creating a new permissible tax class for services of health insurers.

What does Section 71115 of the WFTCA do?

Section 71115 replaces the historical nationwide indirect hold harmless threshold with new state-specific and provider class-specific limits for healthcare-related taxes used in Medicaid financing.

Could this proposal affect State-Based Marketplaces?

Potentially. Many State-Based Marketplaces are funded through assessments on commercial health insurers. The proposed rule does not clearly explain whether these assessments would become subject to the new provider tax framework.

Could Section 1332 reinsurance programs be affected?

Possibly. Many Section 1332 reinsurance programs rely on insurer assessments to support state funding. If CMS interprets the proposal broadly, future changes to these assessments could face new federal limitations.

Does the proposed rule apply only to Medicaid financing?

This remains one of the most important unanswered questions. The proposal is issued under Medicaid financing authority but introduces a new insurer tax class without clearly defining whether it applies exclusively to Medicaid-related taxes or more broadly to commercial insurance assessments.

Why should insurers and states pay attention?

If finalized as broadly interpreted, the proposal could affect future funding flexibility for State-Based Marketplaces, Section 1332 waiver programs, and other state affordability initiatives financed through insurer assessments.

Why It Matters

State governments increasingly rely on commercial insurer assessments to finance programs that improve health coverage affordability and stabilize insurance markets.

These funding mechanisms support:

  • State-Based Marketplace operations
  • Section 1332 reinsurance programs
  • Individual market affordability initiatives
  • Other state programs

If CMS ultimately determines that these assessments fall within the new health insurer tax class established in Section 71115, states may face new constraints on increasing existing assessments or creating new funding mechanisms after July 4, 2025.

Because the proposed rule does not clearly answer this question, states and insurers face considerable policy uncertainty while CMS completes the rulemaking process.

How This Proposal Differs from the 2019 MFAR Rule

CMS previously proposed creating a health insurer tax class in the 2019 Medicaid Fiscal Accountability Regulation (MFAR).

However, today’s proposal differs in one important way. Since Congress enacted Section 71115 of the Working Families Tax Cut Act, the proposed insurer tax class would now operate within a new statutory framework that includes state-specific indirect hold harmless thresholds. As a result, the potential policy implications extend beyond those in the 2019 proposal.

Why HMA’s Analysis Matters

HMA’s policy experts, actuaries, Medicaid financing specialists, and Marketplace consultants work with states, health plans, and public agencies across the country to evaluate federal policy changes and their operational and financial impacts.

The proposed rule leaves several important policy questions unresolved. Understanding its potential implications now can help states, insurers, Marketplace leaders, and policymakers prepare for future regulatory changes.

Download HMA’s full analysis to explore the proposal in greater detail, understand its potential impacts, and identify key questions that may shape the final rule.

Need Assistance?

HMA’s experts advise states, health plans, Marketplace authorities, and other healthcare stakeholders on Medicaid financing, Section 1332 waivers, Marketplace operations, actuarial strategy, and federal regulatory implementation. If you have questions about how CMS Proposed Rule CMS-2452-P could affect your organization, contact one of the report authors to discuss your specific circumstances.

Brief & Report

How States Are Implementing Medicaid Section 1115 Justice-Involved Reentry Demonstrations

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Medicaid Section 1115 Justice-Involved Reentry Demonstrations allow states to provide selected Medicaid-covered services before an individual is released from incarceration. This report highlights the operational, governance, technology, and care coordination strategies needed for successful implementation across multiple jurisdictions.

HMA’s new report, Lessons Learned from Implementing 1115 Justice-Involved Reentry Initiatives: Strategic Planning and Operational Considerations, shares practical implementation strategies, lessons learned, and operational best practices drawn from supporting justice-involved healthcare initiatives in multiple states. For organizations strengthening an existing program or preparing for a new demonstration, the report offers actionable guidance to improve implementation readiness, reduce operational risk, and build sustainable systems that support better outcomes for justice-involved populations.

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Key Takeaways

Readers will learn how successful organizations are:

  • Building governance structures that align corrections, Medicaid, healthcare providers, and community partners
  • Designing operational workflows that support seamless transitions from incarceration to community care
  • Preparing correctional facilities, managed care organizations, and providers for new responsibilities
  • Addressing technology, interoperability, eligibility, and data-sharing challenges
  • Creating person-centered care coordination models that improve continuity of care
  • Identifying implementation risks before they become operational barriers
  • Using performance measurement and continuous quality improvement to strengthen long-term program success

Why Medicaid Section 1115 Justice-Involved Reentry Demonstrations Matter

For decades, individuals leaving incarceration have faced significant barriers to accessing healthcare. Interruptions in Medicaid coverage, gaps in medication, delayed connections to primary care and behavioral health services, fragmented care coordination, and limited communication between correctional and community providers have contributed to poorer health outcomes and increased reliance on emergency and crisis services.

Medicaid Section 1115 Justice-Involved Reentry Demonstrations are designed to address these long-standing challenges by allowing eligible individuals to receive selected Medicaid-covered services before being released from incarceration. Early engagement with healthcare providers establishes care prior to reentry, improves coordination with community-based organizations, and strengthens transitions into ongoing medical, behavioral health, and social support services.

As more states implement Medicaid reentry demonstrations, organizations are discovering that operational success depends on thoughtful planning, strong governance, effective partnerships, and sustainable implementation strategies.

Why Organizations Struggle with Implementation

Across states implementing Medicaid Justice-Involved Reentry Demonstrations, several consistent challenges have emerged.

Cross-Agency Governance

Correctional agencies, Medicaid programs, managed care organizations, healthcare providers, behavioral health organizations, and community-based organizations often have different operational processes, funding structures, and priorities. Building shared governance and clear decision-making processes is essential for successful implementation.

Operational Workflow Design

Organizations must create new workflows for eligibility determination, care management, medication continuity, discharge planning, provider referrals, and community handoffs—many of which have never existed before.

Technology and Interoperability

Connecting correctional electronic health records with community healthcare systems remains one of the largest implementation challenges. Secure data exchange, interoperability, privacy requirements, and real-time communication require significant planning and investment.

Workforce Readiness

Successful implementation requires training correctional healthcare staff, case managers, community providers, managed care organizations, and Medicaid partners on new roles, responsibilities, and operational processes.

Care Coordination

Person-centered care coordination begins before release and continues after individuals return to the community. Organizations must establish sustainable partnerships that support continuity of care across healthcare, behavioral health, housing, and social service systems.

The most successful organizations recognize that Medicaid Section 1115 Justice-Involved Reentry implementation is not simply a compliance exercise—it is a comprehensive system transformation effort.

HMA’s Five Pillars of Successful Medicaid Reentry Implementation

Drawing on implementation experience across multiple states, HMA has identified five foundational elements that consistently support successful implementation:

1. Governance and Cross-Sector Collaboration

Building shared leadership, accountability, and decision-making across agencies.

2. Operational Planning

Developing standardized workflows that support eligibility, care coordination, referrals, and continuity of care.

3. Technology and Data Exchange

Improving interoperability between correctional and community healthcare systems while supporting secure information sharing.

4. Person-Centered Care Coordination

Designing services around the needs of individuals transitioning from incarceration into their communities.

5. Continuous Quality Improvement

Using performance measures, implementation feedback, and operational data to improve program effectiveness over time.

Readers will gain insights into:

  • Building effective cross-sector governance and decision-making structures
  • Designing operational workflows that support continuity of care
  • Preparing correctional facilities and community providers for new responsibilities
  • Strengthening partnerships with managed care organizations and Medicaid agencies
  • Addressing technology, interoperability, and data-sharing challenges
  • Developing person-centered care coordination models
  • Measuring performance and using continuous quality improvement to refine implementation
  • Identifying common risks before they become operational barriers

Rather than focusing solely on policy requirements, the paper emphasizes the organizational strategies that position programs for long-term success.

Who Should Read This Report?

This report is designed for leaders responsible for planning, implementing, financing, managing, or overseeing Medicaid Section 1115 Justice-Involved Reentry Demonstrations, including:

  • State Medicaid agencies
  • Departments of Corrections
  • County jail administrators
  • Probation and parole agencies
  • Managed care organizations
  • Correctional healthcare providers
  • Behavioral health providers
  • Federally Qualified Health Centers (FQHCs)
  • Community-based organizations
  • County and state policymakers
  • Healthcare executives
  • Medicaid program managers
  • Reentry program leaders
  • Population health and care management leaders

Whether your organization is launching a new demonstration or refining an existing implementation strategy, this report provides actionable guidance that can accelerate implementation while improving long-term outcomes.

Why HMA?

HMA has supported Medicaid agencies, correctional systems, managed care organizations, behavioral health providers, healthcare organizations, and community-based partners across numerous justice-involved healthcare initiatives. Our experience spans policy development, implementation planning, operational design, governance, technology strategy, care coordination, and program evaluation.

The recommendations in this report reflect real-world implementation experience and practical lessons learned from helping organizations navigate the complex operational challenges of Medicaid Section 1115 Justice-Involved Reentry Demonstrations.

Frequently Asked Questions

  • What is a Medicaid Section 1115 Justice-Involved Reentry Demonstration?

A Medicaid Section 1115 Justice-Involved Reentry Demonstration allows eligible individuals to receive selected Medicaid-covered healthcare services before they are released from incarceration. The goal is to improve continuity of care, strengthen transitions to community providers, and improve long-term health outcomes.

  • What are the biggest implementation challenges?

Organizations commonly face challenges related to governance, cross-agency coordination, operational workflow design, technology integration, data sharing, workforce readiness, eligibility processes, and care coordination.

  • Who is responsible for implementing Medicaid reentry demonstrations?

Implementation requires collaboration among state Medicaid agencies, correctional systems, managed care organizations, healthcare providers, behavioral health organizations, community-based organizations, and technology partners.

  • Why is operational planning important?

Successful implementation depends on designing sustainable workflows, governance structures, technology infrastructure, and partnerships that support individuals before release and throughout their transition back into the community.

  • How can organizations improve implementation readiness?

Organizations can improve readiness by establishing cross-sector governance, investing in technology and interoperability, standardizing operational processes, strengthening care coordination, measuring performance, and continuously refining implementation based on lessons learned.

Download the Report

As additional states pursue Medicaid Section 1115 Justice-Involved Reentry Demonstrations, organizations have an unprecedented opportunity to transform how healthcare is delivered to justice-involved populations.

Lessons Learned from Implementing 1115 Justice-Involved Reentry Initiatives: Strategic Planning and Operational Considerations provides practical implementation strategies, operational recommendations, governance models, technology considerations, and lessons learned to help organizations avoid common pitfalls, accelerate implementation, and build sustainable Medicaid reentry programs that improve outcomes for individuals and communities.

Brief & Report

Community Health Workers as Trusted Messengers: Strengthening the Community Health Information Ecosystem

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Learning What Works to Foster Trusted and Effective Communication Channels

Community health workers (CHWs) are among the most trusted sources of health information, yet they often lack reliable systems for receiving, validating, and sharing timely guidance. This report examines how health information flows to, through, and from CHWs in Cook County, Illinois, and identifies strategies to strengthen the community health information ecosystem.

Key Findings

  • Community health workers are among the most trusted messengers within their communities.
  • CHWs routinely validate, interpret, and adapt health information before sharing it.
  • Information systems remain fragmented and inconsistent across organizations.
  • CHWs rely on both professional and personal community relationships to distribute trusted information.
  • Better infrastructure, governance, and financing are needed to support sustainable information sharing.
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This new report, Enabling Trusted Messengers within the Community Health Information Ecosystem, examines how public health information, guidance, and resources reach, are interpreted by, and flow through community health workers (CHWs), with a focus on Cook County. Developed by Health Management Associates with support from Michael Reese Health Trust and Community Memorial Foundation, the assessment reflects insights from community health workers and their employers, as well as advocates and program leaders designing the systems that support CHW integration within the healthcare system. The report explores the role of CHWs as trusted messengers, health educators, and connectors between healthcare, public health agencies, community-based organizations, and the communities they serve. We highlight the essential contributions of CHWs to public health communication, community engagement, and health equity.

The report describes how CHWs receive, validate, translate, and share trusted health information with individuals and families, and how the community insights they gather are used to help inform healthcare organizations, public health systems, and policymakers. It examines the broader community health information ecosystem and identifies opportunities for focused investment, improved coordination, stronger health infrastructure, and formal processes that strengthen the bidirectional flow of health information among CHWs, healthcare providers, public health agencies, community-based organizations, and the communities they serve. The findings also explore how stronger information sharing can improve care coordination, support social care integration, and advance health outcomes.

The report is especially timely given Illinois’ implementation of a new Community Health Worker Medicaid benefit, development of a statewide Social Health Care Network, and regional hubs designed to coordinate and support the delivery of social health services through community-based organizations. These initiatives represent an important opportunity to strengthen the community health information ecosystem, improve coordination across healthcare and social service systems, and build a more connected, community-centered model of care.

Findings underscore that CHWs are trusted messengers—”the voice of the community”—who often operate within fragmented, rapidly changing information environments where health misinformation, inconsistent guidance, and outdated resources create barriers to effective communication. Stakeholders described the burden of navigating unreliable information, noting that “sometimes I’m scanning the internet and the information is not up-to-date” and that “there is no one way” to access current guidance. The findings also demonstrate that CHWs do far more than deliver messages; they interpret and adapt health information, making it meaningful and actionable through trusted relationships in their work and communities. As one CHW explained, “I carry materials in my purse.”

The report offers practical recommendations for strengthening the systems that support CHWs and the broader community health information ecosystem, including trusted message validation, timely dissemination channels, multilingual and culturally grounded communication, resource verification, community feedback loops, workforce development, shared governance, and sustainable financing. Ultimately, the report concludes that strengthening the CHW information ecosystem is not simply a communications initiative, but a broader strategy for building trust, strengthening the workforce, and advancing health equity. Aligning public health, healthcare, community-based workforce, and philanthropic investments can help Cook County and Illinois partners build a more accurate, responsive, equitable, and sustainable system that improves access to care, strengthens community trust, and delivers better health outcomes.

What You’ll Learn

This report answers questions including:

  • What role do community health workers play in public health communication?
  • How do CHWs identify trusted health information?
  • What are the biggest barriers to sharing accurate health information in communities?
  • How can healthcare organizations better support community health workers?
  • What is a community health information ecosystem?
  • How can states prepare for Medicaid reimbursement of CHWs?
  • What are best practices for trusted messengers in public health?
  • How can public health agencies improve community trust?

Recommendations

The report recommends:

  • Creating trusted message validation processes
  • Establishing centralized dissemination channels
  • Supporting multilingual and culturally responsive communication
  • Improving resource verification
  • Building feedback loops between communities and health systems
  • Investing in CHW workforce development
  • Developing shared governance models
  • Supporting sustainable financing

Who Should Read This Report

This report is designed for:

  • Public health agencies
  • Medicaid agencies
  • Health systems
  • Community health workers
  • Community-based organizations
  • Foundations
  • Health policy leaders
  • Health equity professionals
  • Healthcare executives
  • State policymakers

Frequently Asked Questions

What is a Community Health Information Ecosystem?

A community health information ecosystem is the network of organizations, people, technologies, and communication channels that create, share, validate, interpret, and use health information across communities, healthcare organizations, public health agencies, and community-based organizations.

Why are community health workers considered trusted messengers?

Community health workers are trusted because they have deep relationships within the communities they serve. They often share lived experiences, understand local cultures and languages, and help translate complex health information into culturally relevant guidance. Their trusted relationships make them essential partners in improving public health communication and advancing health equity.

What challenges do community health workers face when sharing health information?

The report found that CHWs often work in fragmented and rapidly changing information environments. They frequently navigate inconsistent guidance, outdated resources, and multiple sources of information while responding to community needs. Many also spend significant time translating information, verifying resources, and adapting messages to ensure they are accurate, culturally appropriate, and actionable.

What recommendations does the report make?

The report recommends strengthening the systems that support community health workers by improving trusted message validation, creating more effective information-sharing channels, supporting multilingual and culturally grounded communications, verifying community resources, strengthening feedback loops between communities and institutions, investing in the CHW workforce, establishing shared governance, and creating sustainable financing models.

Why is this report especially relevant for Illinois?

Illinois is implementing several major initiatives that will reshape how community health workers and community-based organizations support residents, including a new Community Health Worker Medicaid benefit, a statewide Social Health Care Network, and regional hubs that coordinate social health services. The report provides practical insights that can help inform these efforts and strengthen collaboration across healthcare, public health, and community organizations.

How does strengthening the community health information ecosystem improve health outcomes?

A stronger community health information ecosystem helps ensure that accurate, timely, and culturally responsive health information reaches communities through trusted relationships. It also creates better pathways for community feedback to inform healthcare and public health decision-making, leading to more responsive services, stronger community trust, improved access to care, and better health outcomes.

Bottom line: Strengthening the community health information ecosystem requires more than better communications. It requires investing in community health workers as trusted messengers, improving information infrastructure, supporting bidirectional communication between communities and institutions, and building sustainable systems that advance health equity.

Brief & Report

Final 2027 Notice of Benefit and Payment Parameters Notice: What States and Issuers Need to Know

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What are the changes in the payment notice for 2027? On May 15, 2026, the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) released the final Notice of Benefit and Payment Parameters (NBPP) for 2027, setting key rules for the individual and small group health insurance markets. This report explains the most important 2027 Payment Notice changes for health care payers, issuers, state regulators, and state-based exchanges—including what CMS finalized, what changed from the proposed rule, what takes effect in 2026, 2027, and 2028, and what the rule signals for future marketplace policy. Topics include ACA marketplace operations, eligibility and enrollment, marketing oversight, plan design flexibility, cost-sharing, Essential Health Benefits, QHP certification, and state authority. According to HHS, the final rule could reduce marketplace enrollment by 1.2 million to 2.0 million people, making it essential for decision makers to understand the operational, financial, and compliance implications now.

Need to understand how the final 2027 NBPP affects your organization? Connect with the report authors to discuss implications for pricing, product strategy, exchange operations, compliance, and state marketplace oversight. Whether you are evaluating operational changes, preparing for upcoming requirements, or assessing market impact, our experts can help you turn the final payment notice into a clear action plan. Click this link to set up a free 15-minute consultation with one of the report authors.

Brief & Report

Medicaid Community Engagement Interim Final Rule: Key Implications for States, Payers, and Providers

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HMA’s issue brief on the Medicaid Community Engagement Interim Final Rule provides a clear, actionable summary of new Medicaid work requirements and community engagement requirements for states, Medicaid health plans, providers, community-based organizations, and technology vendors. The report explains key policy changes issued by CMS on June 1, 2026, including exemptions such as medical frailty, verification and reporting expectations, enrollee notification requirements, and the state systems changes needed to prepare for the January 1, 2027 implementation deadline. If you are searching for a summary of Medicaid work requirements, a summary of Medicaid community engagement requirements, the medical frailty definition, or guidance on Medicaid work requirements state systems changes, this brief helps translate complex federal regulation into practical next steps to support compliance, reduce coverage loss risk, and inform implementation strategy.

Please fill out this form to receive a copy of the issue brief.

Brief & Report

Ground Ambulance Payment Landscape: Challenges and Policy Options

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Ground ambulance transport is a critical piece of the US healthcare infrastructure and is currently facing several challenges, which may result in the loss of patient access to care. These life-saving services play a vital role in the patient care continuum and significantly impact acute care and long-term recovery. Often, at critical and tense moments before the patient is able to reach hospital care, ground ambulance paramedics and emergency medical technicians (EMTs) are the first point of healthcare contact for the patient. These medical professionals stabilize and treat patients to ensure they begin their care pathway smoothly and recover rapidly.

To address the challenges that the ground ambulance industry is experiencing today and lessen the impact of the various emerging issues, this report offers several recommendations for policymakers and stakeholders to consider.

Brief & Report

Proposed Changes to Medicaid State Directed Payments and Targeted Practitioner Payments

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On May 20, 2026, the Centers for Medicare & Medicaid Services (CMS) released the Medicaid Managed Care State Directed Payments and Medicaid Fee-For-Service Targeted Medicaid Practitioner Payments Proposed Rule.

This proposed regulation outlines critical updates to Medicaid provider reimbursement, directly addressing federal mandates from the One Big Beautiful Bill Act (the Working Families Tax Cut legislation enacted on July 4, 2025). Notably, the rule extends payment limitations to additional healthcare providers operating under both Medicaid managed care models and fee-for-service (FFS) delivery systems.

To help healthcare organizations, state agencies, and health plans navigate these complex regulatory shifts, Health Management Associates (HMA) experts have developed a comprehensive compliance and impact overview.

The proposed changes to Medicaid state directed payments are highly complex. The HMA consulting team is actively analyzing the regulatory text and stands ready to assist organizations with impact evaluations, policy interpretation, and strategic response planning.

Don’t Miss Our Upcoming Webinar: The Future of Medicaid State Directed Payments
Wednesday, June 10, 2026 | 12:00 PM ET

As federal regulators move to reshape the Medicaid landscape, states, providers, and insurers face intense pressure to adapt. Join HMA subject matter experts as they deliver timely, up-to-the-moment analysis on federal guidance, waiver activity, and litigation shaping the operational environment.

👉 Register for the webinar to secure your spot and gain actionable insights for your organization.

Brief & Report

Treatment-Resistant Depression: Costs, Caregiving, and Gaps in Care

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HMA’s report examines the clinical, economic, and caregiving burden of treatment-resistant depression (TRD), a condition affecting nearly one in three individuals with major depressive disorder. Drawing on a comprehensive literature review and analysis of Medicare data, the report highlights the substantial costs associated with TRD, including higher rates of hospitalization, increased healthcare utilization, and approximately $8,000 in additional annual spending per Medicare beneficiary compared to individuals with well-controlled depression.

The findings also underscore the broader economic impact, with prior research estimating that TRD accounts for tens of billions of dollars annually in national costs. In addition, the report details the significant demands placed on families and caregivers, who often provide more than 23 hours of care per week and face considerable financial and emotional strain.

Together, these insights highlight the scale of TRD’s impact across the healthcare system and households, as well as ongoing gaps in access to care for individuals with more complex mental health needs.

Brief & Report

The New Uninsured: State Policy Options for Californians Losing Medi-Cal Coverage

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HMA’s new report for the California Health Care Foundation explains how recent federal and state policy changes could cause up to two million Californians to lose Medi-Cal coverage. These changes will place new strains on the state budget and safety-net system. The report outlines practical short-term program paths California could use to preserve access to care while full-scope coverage is restored. It summarizes the policy and fiscal context (including work requirements, more frequent eligibility checks, and immigrant eligibility restrictions), describes stakeholder-informed design goals (statewide access, privacy protections, fiscal prudence, scalability, and safety-net stability), and presents two illustrative coverage alternatives with modeled cost ranges and key trade-offs in benefits, provider payment rates, cost sharing, and bridge-period design.

Brief & Report

2027 Proposed NBPP: Analyzing State and Consumer Impacts

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On February 9, 2026, the Department of Health and Human Services (HHS) released the proposed Notice of Benefit and Payment Parameters (NBPP) for 2027. The notice includes important proposed rules and parameters for the operation of the individual and small group health insurance markets in 2027 and beyond.

This paper summarizes key provisions in the proposed notice with a focus on the major changes to plan types, cost-sharing, network design and oversight, marketplace philosophy, and the shift of responsibilities from the federal government to states. It also evaluates any changes to returning policies from the Marketplace Affordability and Integrity rule from last year, which are currently being challenged in court, and codifies relevant statutory changes in the One Big Beautiful Bill Act.

The paper reviews the potential impact of these proposed policies on consumer affordability and access as well as the impact and associated level of effort on state regulators and marketplaces. Lastly, it touches on policies not included in this rule, including those highlighted as issues that may or will be addressed in future rulemaking as well as issues surprisingly not covered in this proposed rule, such as revisions to the Section 1332 waiver process as well as details on how a state could explore and pursue a 1333 interstate compact. Comments are due no later than March 13, 2026.

Brief & Report

Case Study Report: Lessons Learned from HealthySteps Technical Assistance in California

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This report synthesizes insights from multiple efforts to support the financial sustainability of HealthySteps sites in California, including federally qualified health centers (FQHCs), community clinics (non-FQHCs), private practices, and other settings. Led by the HealthySteps National Office and Health Management Associates (HMA), the technical assistance (TA) elevated challenges, strategies and best practices to achieve sustainability informed by learning collaboratives, individualized TA sessions, and financial modeling exercises. This report complements additional resources that the HS National Office and HMA developed which are available via the HealthySteps (HS) Sustainability website.

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