Sellers Dorsey Digest

Federal Updates

President Trump Says He Will Veto Potential Medicaid Cuts

• In an April 22 interview with Time Magazine, President Trump stated that if Congress sends him a bill cutting Social Security, Medicare and/or Medicaid, he would veto it. The president asserted that the proposed House Republican budget, which calls for more than $800B in spending cuts to the committee overseeing Medicaid and Medicare over the next decade, would not result in cuts to services or coverage, but would instead merely focus on reducing waste, fraud, and abuse (Health Payer Specialist, April 25; Time Magazine, April 25).

Medicaid Stakeholders Express Support for Provider Assessments

• During a recent KFF virtual session on Medicaid fraud and abuse, panelists expressed their continued support for provider assessments, which has been a discussion point as lawmakers look for ways to reduce federal Medicaid spending. The expert panelists included a state Medicaid director, a former HHS Inspector General, and a current MACPAC Commissioner. They explained that states are allowed significant flexibility in generating their share of the revenue for the program, which is jointly run by the states and federal government. Moreover, they discussed how provider assessments can be used to boost provider payments and expand access to Medicaid. The discussion on Medicaid provider assessments comes as Congressional Republicans are aiming to make sizable cuts to the federal budget. The panelists stressed that CMS approves and conducts important oversight of these programs. (Inside Health Policy, April 25)

Democrats Say Medicaid Cuts Could Undermine Opioid Crisis Progress

• Democrats on the Congressional Joint Economic Committee warn that proposals to cut Medicaid expansion funding could undermine progress in fighting the opioid crisis. Their new report highlights that most people receiving medication for opioid use disorder (OUD) rely on Medicaid, particularly through states’ Medicaid expansion programs. With overdose deaths recently declining, possibly due to improved treatment access, Democrats argue that reducing federal Medicaid support would put many patients receiving care for OUD at risk of losing care. Several states have laws that would automatically end Medicaid expansion if federal funding drops below certain levels, which could impact the eligibility of more than 110,000 people. The report suggests broader cuts could also lead other states to roll back coverage, reversing gains made since expansion began in 2014 (Inside Health Policy, April 24).

Reforming the 340B Program – Addressing Concerns of Misuse and Ensuring Patient Benefit

• Senator Bill Cassidy (R-LA) is pushing for major changes to the 340B drug discount program, which helps hospitals and clinics serving low-income communities buy outpatient medications at lower prices. A new report from the Majority Party on the Senate Health, Education, Labor, and Pensions (HELP) Committee, says the program has grown by 600% since 2000 and reached $66.3B in drug purchases last year alone. The investigation found that while some health centers use the savings to directly lower costs for patients, others, especially larger hospital systems, have not shown how the program savings helped their patients. The report also alleges that contract pharmacies, like CVS and Walgreens, charge confusing and growing fees that reduce the program’s funds. Drugmakers said they are also worried about abuses like duplicate discounts or drugs going to ineligible patients. Senator Cassidy is calling for annual reports from hospitals and pharmacies on how 340B money is used, as well as clearer rules to make sure the benefits reach patients. Drug companies say the report confirms their concerns that some hospitals and third parties are manipulating the system. Meanwhile, hospital groups argue it overlooks how essential the program is, especially for facilities that serve the most vulnerable communities and rely on 340B to stay afloat (Healthcare Dive, April 25; Fierce Healthcare, April 24).

Supreme Court Requests Additional Briefs in Braidwood Preventive Services Case

• Following the first hearing on Monday, April 21, the Supreme Court of the United States (SCOTUS) has requested additional briefs from both the plaintiffs and defendant in the Kennedy v. Braidwood Management case addressing whether Congress gave the HHS Secretary the authority to appoint members to the United States Preventive Services Task Force (USPSTF), an independent panel of medical experts that issues evidence-based recommendations on preventive care. The briefs must be filed by May 5, focusing on previous rulings in the United States v. Hartwell and United States v. Smith. According to a law expert, some justices like Kavanaugh and Barrett may be uncertain about the textual evidence of appointment authority for the USPSTF, despite potentially supporting the task force’s independence (Inside Health Policy, April 28).

Supreme Court Rules that CMS Can Exclude Certain Patients in DSH Payment Calculations

• On April 29, SCOTUS ruled against the plaintiffs in the Advocate Christ Medical Center v. Kennedy case in a 7-2 decision. SCOTUS sided with HHS over how CMS calculates its Disproportionate Share Hospital (DSH) payments, agreeing that the agency does not need to count all patients who are enrolled in both Medicare and Supplemental Security Income (SSI). The hospital and the more than 200 systems that joined the suit in 2017 argued that all Medicare and SSI patients should be included in DSH payment calculations, even if they were not receiving SSI benefits in the month they were hospitalized. The plaintiffs alleged that they lost significant amounts of needed funding as a result of CMS’ exclusion of some patients who were not receiving cash benefits when they were receiving care. In its ruling, SCOTUS upheld two lower court decisions supporting the federal government. Justice Amy Coney Barrett wrote the majority opinion, citing that the eligibility for SSI fluctuates over time, even month to month. Justices Ketanji Brown Jackson and Sonia Sotomayor dissented, with Justice Jackson arguing in her dissent that in excluding these patients CMS misinterprets the nature of SSI safety net (Modern Healthcare, April 29).

State Updates

Vermont to Cut $200M before 2026, Or Risks Premium Increase

• Vermont is currently on a strict timeline to figure out a way to save $200M amidst commercial health insurance premium increases. On April 23, healthcare leaders met with the state’s House and Senate healthcare committees to discuss possible solutions. A number of initiatives were introduced, including an eight-month framework devised by the state’s Agency of Human Services, in which the agency would offer technical assistance to providers in an effort to offset administrative costs and streamline medical services. Additionally, the CEOs of three rural hospitals spoke about their plans to cut costs by laying off staff, ending services and resource-sharing with other providers. Lawmakers worry about the effectiveness of the plans introduced. If the state is unable to find a solution, residents can expect insurance premiums to increase by at least 15% to 20% in 2026. (Vermont Digger, April 23)

States Brace Themselves for Possible Impacts from Federal Policies

• States are preparing for potential federal spending cuts by being proactive in their FY2026 budgets. 11 states have passed their FY2026 budgets thus far, with many remaining states expected to pass their budgets by the end of May. Many lawmakers are pursuing a “wait and see” approach or gearing up ways to secure their spending plans by balancing their budgets based on the current conditions and monitoring possible federal changes. Virginia created an interim committee to figure out how to address funding cuts while bolstering the state’s economy and supporting eliminated federal workers. Maryland cut spending by approximately $2.3B and raised taxes by $1.6B to offset the effects that federal workforce reductions have had on their economy. Idaho is choosing to leave over $800M in FY2026 and FY2027 revenue unspent. Lastly, Colorado is looking to close a $1B deficit by reducing spending for social programs and transportation, as well as setting $4M aside to counter potential federal funding cuts and pay for any legal challenges the state may pursue against the Trump administration. It is still unclear how much states will be affected by federal changes going forward (Pluribus News, April 17).

Illinois Immigrant Healthcare Program Faces Cuts Amid State Budget Concerns

• On April 23, immigration advocates and individuals who rely on state funded health insurance gathered at the Illinois Capitol to urge legislators to continue funding the Health Benefits for Immigrant Adults (HBIA) program, which faces potential cuts under Governor JB Pritzker’s proposed 2026 budget. The program, which has provided healthcare to low-income immigrants since 2022, costs the state around $330M. The proposed budget eliminates HBIA for noncitizens aged 42-64, though the Health Benefits for Immigrant Seniors program for those over 65 will remain. Pritzker’s office cites fiscal concerns as the reason for the cut, emphasizing the need for a balanced state budget. A rally attended by about 100 demonstrators highlighted the personal stories of those affected by the program’s potential loss. An audit from 2023 revealed that both programs had significantly overspent, with the seniors’ program costing 84% more than expected and the adult program running 284% over budget. As an alternative, individuals who lose HBIA coverage may still access primary and preventative care at Federally Qualified Health Centers and charitable clinics which serve people regardless of ability to pay (The State Journal Register, April 25).

West Virginia Health Right Expands Rural Care

• West Virginia Health Right has provided care to uninsured and underinsured residents since 1982. As the state’s largest and longest-running free clinic, it offers a range of services including primary care, dental, vision, and behavioral health. In recent years, it has expanded access through mobile medical and dental units that serve rural counties. A third mobile unit, focused on nutrition and chronic disease, will launch in July 2025. With $1M from state funding, the clinic continues to bring essential healthcare to underserved communities across West Virginia (WV News, April 21).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Missouri
    • On April 9, 2025, Missouri submitted a request to extend its 1115 waiver for former Foster Care Youth. The state is requesting new authority to provide Medicaid coverage to youth under age 26 who were in foster care under the responsibility of another state for at least 6 months when they turned 18 and were enrolled in Medicaid while in foster care. Additionally, the waiver requires that all children in the custody of Missouri and those receiving adoption subsidy assistance enroll in a single specialty health plan on a continuous basis. The federal public comment period is open from April 24, 2025, through May 24, 2025.

SPAs

• Eligibility SPAs
  • New Hampshire (NH-25-0012, effective January 1, 2025): Increase the medically needy income level (MNIL).
  • North Dakota (ND-25-0008, effective July 1, 2024): Realigns the Alternative Benefits Plan (ABP) to include members aged 19 and 20 and adds clarifying language for benefits related to the under 21 age group.
  • Wisconsin (WI-25-0006, effective January 1, 2025): Modifies the maximum amount allowed for the maintenance of a home of institutionalized beneficiaries to reflect the Social Security Cost of Living Adjustment (COLA).
  • Wisconsin (WI-25-0006-A, effective January 1, 2025): Memorializes new income standards for its optional state supplement program.
• Payment SPAs
  • Oregon (OR-25-0004, effective January 1, 2025): Increases payment rate for caregivers that provide foster care under the state’s 1915(k) Community First Choice state plan option.
  • Pennsylvania (PA-25-0006, effective January 19, 2025): Creates an additional class of supplemental payments to qualifying Medicare Advantage members enrolled acute care general hospitals, that rely on government payers and serve a large elderly population.
  • Texas (TX-25-0014, effective January 19, 2025): Updates payment methodology for Clinical Diagnostic Laboratory Services (CDL) and removes language about COVID-19 labs rates.
  • Washington (WA-25-0007, effective January 1, 2025): Updates fee schedule effective dates for various Medicaid programs and services.

Sellers Dorsey Updates

Meet Our Team: Sellers Dorsey CEO, Kevin Seabaugh

• With over 20 years in healthcare, Kevin Seabaugh has led innovation across employers, providers, and health plans. As CEO of Sellers Dorsey, he’s focused on expanding our impact nationwide. In this Q&A, Kevin shares his career journey and insights on the evolving healthcare landscape.

Read the Q&A

Upcoming Data Visualization Courses

• Offered just a few times a year, this non-technical training helps health professionals turn complex data into clear, compelling visuals and stories.
  • Visualizing Health and Health Care Data | May 5–6
  • Advanced Tableau Course | May 12–15