The following is the latest health policy news from the federal government for July 18-24.  Some of the language used below is taken directly from government documents.

The White House

The White House has released its AI action plan.  Winning the Race:  America’s AI Action Plan is a 28-page document that mentions health care only in passing but includes provisions that could potentially affect the health care industry.  Find the plan here.

Congress

The House has adjourned for recess and will return to Washington after Labor Day.  The Senate remains in session, expecting to recess next week.  When Congress returns to Washington in September it will focus on funding the federal government before the current federal fiscal year ends on September 30.  Appropriators in both chambers hope to pass at least a handful of individual appropriations bills before the deadline but leaders acknowledge they will need to pass a partial or full continuing resolution to avoid a government shutdown.

In addition, a number of health care extenders will expire at the end of the fiscal year unless Congress acts.  Absent legislation, cuts to Medicaid DSH allotments will begin October 1.  Also, telehealth flexibilities, the Acute Hospital Care at Home program, the Medicare-dependent hospital and low-volume hospital programs, and others will expire on September 30.  House and Senate committee leaders are working on a wide-ranging health care legislative package that could include the health care extenders and may include Medicare Advantage reforms, changes in the regulation of pharmacy benefit managers, and possibly site-neutral Medicare payment policies.  Congress also may consider possible changes in some Medicare post-acute-care reimbursement policies, including for long-term-care hospitals (LTACHs).  We expect to see action on health care legislation this fall.

Centers for Medicare & Medicaid Services
  • CMS has issued guidance to states explaining that it does not anticipate approving new or extending existing section 1115 demonstration waivers that have permitted some individuals to remain enrolled in Medicaid or CHIP for extended periods of time even if they may not otherwise be eligible.  In addition, CMS has indicated that it does not anticipate approving new or extending existing Medicaid-funded workforce initiatives – programs that use Medicaid dollars to fund certain health care job training or employment-related activities.  CMS will permit currently approved waivers to complete their course but does not anticipate extending them or approving new waivers.  The agency has conveyed these two policy decisions in separate letters to state governments.  Learn more from the following resources:

In the coming weeks CMS intends to give guidance to the states on how this process will work.  Learn more about CMS’s findings about duplicative enrollments and its plan for addressing them from this news release.

Department of Health and Human Services

HHS’s Office of the Inspector General has added a study titled “Misleading Marketing Practices in Medicare Advantage” to its work plan for audits and investigations.  Learn more here.  The results are expected sometime next year.

Approved Medicaid State Plan Amendments

CMS has approved the following state plan amendments for Medicaid and CHIP programs.

  • To Mississippi, providing presumptive eligibility for pregnant women.
  • To Mississippi, permitting the state’s Division of Medicaid to remove prior authorization language and clarify details for inpatient referrals of physician specialist and inpatient hospital physician visit limits.
  • To Montana, adding provider types and certain supported employment services under the rehabilitative services benefit.  The state plan amendment also makes other minor changes to the state plan pages.
  • To Virginia, to provide mandatory coverage for eligible juveniles who are incarcerated in a public institution post-adjudication of charges.  This amendment is effective on January 1, 2025 and will sunset on December 31, 2026.
  • To Kentucky, providing for mandatory coverage for eligible juveniles who are incarcerated in a public institution post-adjudication of charges.  This benefit takes effect on January 1, 2025 and will sunset on December 31, 2026.
State-Directed Medicaid Payments

CMS has approved the following state applications for Medicaid state-directed payments.

  • To New Mexico, renewing a value-based purchasing and uniform percent increase arrangement to increase nursing facility per diem rates by the market basket index factor and to provide quality incentive payments for nursing facilities that meet performance requirements on specified quality metrics for the rating period covering July 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based adjustment.
  • To New Mexico, renewing a value-based purchasing and uniform percent increase arrangement to increase nursing facility per diem rates by the market basket index factor and to provide quality incentive payments for nursing facilities that meet performance requirements on specified quality metrics for the rating period covering January 1, 2025 through June 30, 2025, incorporated into the capitation rates through a risk-based adjustment.
  • To New Mexico, renewing the uniform dollar increase for inpatient and outpatient hospital services and performance-based quality payments for the state teaching hospital that provides guaranteed access to care for Native Americans for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a separate payment term of up to $310 million.
  • To New Mexico, renewing a uniform increase and value-based payment arrangement to implement the Healthcare Delivery Access Act for inpatient and outpatient hospital services for the rating period January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a separate payment term up to $1.5 billion.
  • To New Mexico, renewing the value-based payment and uniform increase for participating nursing facilities that demonstrate quality improvement for the rating period covering January 1, 2025 through June 30, 2025, incorporated into the capitation rates through a risk-based rate adjustment.
  • To New Mexico, renewing a uniform dollar increase for eligible government-owned emergency medical transport providers for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a separate payment term of up to $17 million.
  • To New Mexico, renewing the uniform percentage increase for inpatient and outpatient services provided by practice plans under contract to community hospitals that serve a disproportionate share of Native American enrollees for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Tennessee, amending a uniform percentage increase for nursing facility services for the rating period, January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a separate payment term of up to $80.5 million.
  • To Tennessee, renewing a value-based payment and uniform dollar increase for primary care services for the rating period January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Nebraska, approving a uniform increase for non-state-owned or operated hospitals for inpatient and outpatient hospital services for the rating period of January 1, through December 31, 2024, incorporated into the capitation rates through a separate payment term of up to $705.5 million.
  • To Nebraska, expanding 1915(i) eligibility to youth with a history of foster care and probation involvement.
  • To Arizona, renewing a uniform increase by the state for primary care, behavioral health outpatient, and justice-involved clinic services for the rating period October 1, 2024 through September 30, 2025, incorporated into the capitation rates through a separate payment term up to $62 million.
  • To Arizona, renewing a uniform increase by the state for primary care, behavioral health outpatient, and justice-involved clinic services for the rating period October 1, 2023 through September 30, 2024, incorporated into the capitation rates through a separate payment term up to $59 million.
  • To Arizona, updating the fee schedule rates for Medicaid-assisted treatment services.
  • To Maryland, renewing a uniform percentage increase and value-based payment for professional services at an academic medical center, primary care services, specialty physician services, and qualifying practitioner services for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a separate payment term amount up to $42 million.
  • To Maryland, establishing a minimum fee schedule for primary care services for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Massachusetts, renewing a maximum fee schedule for MassHealth-contracted acute hospitals (except for specialty cancer hospitals and freestanding pediatric hospitals for an inpatient discharge with a MassHealth DRG Weight of 3 or greater) for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Massachusetts, updating reimbursement for inpatient acute hospital services for rate year 2025.
  • To Massachusetts, enabling Indian Health Services facilities to bill MassHealth for up to five medically necessary visits per person per day at the all-inclusive IHS encounter rate.
  • , increasing rates for personal care attendants who have completed the new hire orientation.
  • To Missouri, renewing a uniform dollar increase for government-owned or operated ground ambulance providers for the rating period covering July 1, 2025 through June 30, 2026, to be incorporated into the capitation rates through a separate payment term amount of up to $82.3 million.
  • To Missouri, establishing a maximum fee schedule for inpatient and outpatient hospital services for the rating period covering July 1, 2024 through June 30, 2025, incorporated in the capitation rates through a risk-based rate adjustment.
  • To Louisiana, renewing a fee schedule and value-based payment arrangement for behavioral health and home- and community-based services providers for the rating period covering January 1, 2024 through December 31, 2024.
  • To Maryland, establishing a population-based payment for primary care services for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Virginia, establishing a uniform percentage increase for physician services by physicians employed by or contracted with a private acute-care hospital system with a level one trauma center located in the Tidewater Metropolitan Statistical Area in 2020 for the rating period, July 1, 2024 through June 30, 2025, incorporated into the capitation rates through a separate payment term up to $21 million.
  • To Virginia, establishing a uniform percentage increase for physician services by physicians employed by or contracted with a private acute-care type 2 hospital system with at least one level 2 trauma center as of January 2022 located in Lord Fairfax Health District and Northwest Health Planning Region for the rating period July 1, 2024 through June 30, 2025, incorporated into the capitation rates through a separate payment term up to $3.6 million.
  • To Virginia, establishing a uniform percentage increase for physician services by physicians employed by or contracted with a private acute-care type 2 hospital system with at least one level 2 trauma center as of January 2022 with at least 290 beds in cost report period 2020 located in the Eastern Health Planning Region for the rating period July 1, 2024 through June 30, 2025, incorporated into the capitation rates through a separate payment term up to $8,567,924.
  • To Virginia, renewing a uniform increase for physician services provided by physicians who participate in Children’s Specialty Group, affiliated with Children’s Hospital of the King’s Daughters, for the rating period July 1, 2025 through June 30, 2026, to be incorporated into the capitation rates through a separate payment term up to $11 million.
  • To Vermont, renewing a value-based payment arrangement for children’s integrated services providers for the rating period January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Vermont, renewing a value-based payment arrangement for community-based residential substance use treatment facilities for the rating period covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Wisconsin, establishing a value-based based payment arrangement for children’s integrated services providers for the rating period January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Wisconsin, to reflect exclusion of the following populations from mandatory managed care enrollment:  bone marrow or stem cell transplant recipients and sickle cell disease gene therapy recipients.
  • To New York, renewing the enhanced minimum fee schedule for home- and community-based services approved through the state’s 1115 waiver for the rating period April 1, 2024 through March 31, 2025, incorporated into the capitation rates through a risk-based rate adjustment.
  • To New York, updating the minimum wage for all regions of the state to account for increased labor costs resulting from statutorily required increases in the New York state minimum wage.
  • To California, establishing long-term care delivery system reform, transitioning coverage from fee-for-service to managed care at fee-for-service per-diem rates for the rating periods covering January 1, 2023 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To California, adding certified wellness coach services as a new benefit.
  • To Illinois, renewing a value-based payment arrangement for eligible primary care and behavioral health providers contracted with the Egyptian Health Department for the rating periods covering January 1, 2025 through December 31, 2025, to be incorporated into the capitation rates through a risk-based rate adjustment.
  • To Colorado, establishing a minimum fee schedule for community mental health centers and comprehensive behavioral health providers for the rating period covering July 1, 2024 through June 30, 2025, incorporated into the capitation rates through a risk-based rate adjustment.
  • To Utah, renewing a uniform increase for home- and community-based services providers, behavioral health providers, and school-based services providers for the rating period covering July 1, 2024 through June 30, 2025, incorporated in the capitation rates through a separate payment term of up to $12.5 million.
  • To Utah, updating the rate for medical supplies and durable medical equipment to 73 percent of Medicare.
  • To Utah, reallocating the quality improvement incentive pool amounts for nursing facilities and intermediate care facilities for individuals with intellectual disabilities.
  • To Arkansas, unbundling and increasing rates for prenatal, delivery, and postpartum professional services by 70 percent.
  • To Kansas, updating physician services and reimbursement rates.
  • To North Dakota, aligning the alternative benefit plans for 19-20-year-old Medicaid expansion members.
  • To Hawaii, adding coverage of diabetes prevention services.
  • To Kentucky, revising the state plan to disregard post-application resource increases for non-MAGI (Modified Adjusted Gross Income) groups.
  • To Nevada, renewing the state’s 1915(i) state plan home- and community-based services benefit.
  • To Washington state, bringing the state into compliance with Section 5121 of the Consolidated Appropriations Act, 2023, which requires the provision of medically necessary EPSDT screening and diagnostic services.
  • To Connecticut, bringing the state into compliance with CMS’s final rule authorizing an exception to the Medicaid clinic services “four walls” requirement for Indian Health Services and Tribal clinics.
  • To Washington, D.C., extending the exception to the requirement of having a Recovery Audit Contractor for an additional two years, through May 31, 2027.
  • To Ohio, updating the state’s alternative benefit plan to add the list of targeted case management groups that were inadvertently deleted from the plan.
  • To Alabama, increasing bonus-enhanced payments to providers that actively participate with the Alabama Coordinated Health Network.
  • To New Hampshire, establishing a minimum fee schedule for durable medical equipment for the rating period covering July 1, 2025 through June 30, 2026, to be incorporated into the capitation rates through a risk-based rate adjustment.
HHS Newsletters, Reports, and Videos
Medicare Payment Advisory Commission (MedPAC)

Earlier this year MedPAC commissioned a contractor to conduct focus groups with Medicare beneficiaries and Medicare clinicians.  Topics discussed in the beneficiary groups included the process of choosing coverage, access to primary care and specialty care, and prescription drugs.  Subjects discussed in the clinician groups included acceptance of new patients and insurance, working with other clinicians, changing organization of medical care, working with insurance and Medicare Advantage plans, use of artificial intelligence in health care, quality reporting, accountable care organizations, and prescription drugs.  MedPAC notes that the focus groups were intended to take a snapshot and provide guidance and cannot necessarily be assumed to reflect nationwide sentiment.  Learn more from the MedPAC report “Beneficiary and Clinician Perspectives on Medicare and Other Issues: Findings from 2025 Focus Groups in St. Louis, Missouri, and 2021–2025 Rural Focus Groups.”

Government Accountability Office (GAO)

Noting that thousands of recipients of billions of dollars in state and federal aid during the COVID-19 emergency have missed deadlines for reporting on how they used those funds and many never filed reports at all, the GAO examined the extent of this problem and what states and the federal government might do to recoup funds for which adequate reports have not be filed.  Learn more about what the GAO found and what it recommends that states and the federal government do about it from the GAO report “COVID-19 Relief:  Treasury Could Improve Compliance Procedures and Guidance for State and Local Fiscal Recovery Funds.”

Congressional Budget Office

The CBO’s analysis of the FY 2026 budget reconciliation bill (the “One Big Beautiful Bill Act”) concludes that the final version of the bill will increase by 10 million the number of uninsured people by 2034.  The CBO reports that the law includes $1 billion in Medicaid and health insurance marketplace subsidy reductions over the same period.  Learn more from the link to the CBO estimate found here.

Stakeholder Events

CMS – Transition of Hospital Short Stay Patient Status Review Webinar – July 30

CMS will hold an informational session on the upcoming transition of hospital short stay patient status reviews on Wednesday July 30 at 2:00 (eastern), providing an overview of the transition and addressing questions from stakeholders.  For information about registering to participate and submitting questions, see this CMS notice.

CMS – Advisory Panel on Hospital Outpatient Payment Meeting – August 25

CMS’s Advisory Panel on Hospital Outpatient Payment will meet virtually on Monday, August 25 at 9:30 (eastern).  The panel advises CMS on the clinical integrity of the Ambulatory Payment Classification (APC) groups and their associated weights.  Learn more about the panel and the meeting’s agenda from this CMS formal notice.  The deadline for submitting comments and questions is August 1.

MedPAC – Commissioners Meeting – September 4-5

MedPAC’s commissioners will hold their next public meeting virtually on Thursday, September 4 and Friday, September 5.  An agenda and registration information are not yet available but when they are they will be posted here.

MACPAC – Commissioners Meeting – September 18-19

MACPAC’s commissioners will hold their next public meeting virtually on Thursday, September 18 and Friday, September 19.  An agenda and registration information are not yet available but when they are they will be posted here.