Issue #251

Sellers Dorsey Digest

August 28, 2025

Rural Health Transformation Blog
NEW BLOG

How the Rural Health Transformation Program Can Support States and Rural Providers

Rural communities are facing a critical moment in healthcare. The Rural Health Transformation Program (RHTP) is designed to help states strengthen rural health access, stabilize providers, and invest in workforce solutions. But states face tight deadlines and complex requirements in developing their Rural Health Transformation Plans. In our latest blog, we break down what states need to know about RHTP applications, funding, and lessons learned from past federal initiatives, plus key takeaways for providers and policymakers.

Federal News

Potential New CMCS Director Emerges

Multiple outlets are reporting that Dan Brillman is expected to be the Trump Administration’s choice to fill the vacant spot of Director of the Centers for Medicaid and CHIP Services (CMCS) at CMS. Brillman is co-founder and CEO of Unite Us, a health tech company that facilitates social service referrals for patients. The company operates in 44 states, across a variety of nonprofits, providers, and payers. Earlier this summer, Drew Snyder stepped down as CMCS director, with Caprice Knapp stepping in as acting director in the interim (Fierce Healthcare, August 22).

HHS Forms New Healthcare Advisory Committee

The Department of Health and Human Services (HHS) is forming a new Healthcare Advisory Committee to provide strategic guidance on Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Affordable Care Act (ACA) exchanges. Announced by HHS Secretary Robert F. Kennedy Jr. and Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz, the committee will focus on chronic disease prevention and management, reducing regulatory burdens, advancing real-time data systems for claims and quality measurement, strengthening Medicaid, and ensuring the sustainability of Medicare Advantage. CMS is accepting nominations from experts in relevant fields until 30 days after the August 22 Federal Register notice, with members to be announced later this year (Fierce Healthcare, August 21).

Federal Judge Blocks Major Provisions of CMS’ ACA Marketplace Final Rule

On Friday, August 22, the US District Court of Maryland blocked major provisions of the CMS regulation, “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule,” from going into effect. While the Trump Administration contends that the final rule, which was set to become effective on August 25, is intended to reduce fraud and abuse in ACA Marketplace exchanges, many stakeholders argue that the rule would result in unnecessary loss of coverage. An estimated 1.8M individuals are expected to lose coverage as a result of the rule. The nonprofit Democracy Forward filed suit to block implementation of the rule in July on behalf of two advocacy groups and three large cities, arguing that the Trump Administration violated the Administrative Procedure Act, citing the potential for businesses to face higher costs if employees or members lose coverage. The District Court Judge blocked seven provisions, including the institution of a $5 premium for individuals who automatically re-enrolled in coverage and would otherwise have no premium costs; the prohibition of coverage for individuals who fail to reconcile tax credits with their income; the elimination of guaranteed coverage for people who are overdue on their premiums; the requirement for stricter eligibility verifications ahead of special enrollment periods; revisions to actuarial value requirements for plans; and the imposition of greater income verification standards if inconsistencies are found in tax data. The judge did not address the rule’s shortening of the ACA open enrollment window. Most provisions in the final rule impact plan year 2026, which insurers anticipate being challenging with the looming expiration of enhanced tax credits. It is unclear if the Administration will appeal the decision as the case continues (Healthcare Dive,  August 25; Inside Health Policy, August 22).

CHI Touts Idea for Rural Health Fund to be Used on Tech-Enabled Care

On August 21, the Connected Health Initiative (CHI), a coalition advocating for the use of technology to improve patient health outcomes, sent CMS a letter asking that part of the Rural Health Transformation Program (RHTP) fund be designated for AI, health information technology, wearable health devices, and telehealth services. CHI calls on CMS to clarify that telehealth services funded under the RHTP will not be held to pre-PHE Medicare telehealth standards and asks that the agency issue guidance regarding the adoption of cloud services and allow funds to be utilized to strengthen cybersecurity infrastructure and expand telehealth access (Inside Health Policy, August 21).

State News

New States Release Information on Marketplace Premium Increases

More states have announced premium increases in the individual coverage market, including Delaware, Illinois, New Mexico, and Vermont. In Delaware, state officials revealed an average increase of 30.6% in Marketplace premiums across three insurers. Three insurers are leaving the market in Illinois, with the remaining plans seeing an average rise of 28.9% in premiums. Additionally, despite New Mexico’s plans to cover any loss of enhanced premium subsidies up to 400% of the Federal Poverty Level with state funds in 2026, premiums are still increasing by an average of 35.7%. Finally, Vermont stands out with a comparatively nominal increase of 9.6% and 1.3% in premiums from two carriers, largely due to the Green Mountain Care Board. The board rejected a 23.5% proposal from one insurer and a 6.2% from the other, forcing rate increases from both carriers to shrink (Health Payer Specialist, August 25; WCAX, August 25).

Elevance and UnitedHealth Expected to Follow Suit Behind Aetna and Leave Colorado ACA Marketplace

Ahead of the expiration of ACA premium tax credits at the end of 2025, Elevance and UnitedHealth have notified Colorado that they may withdraw their individual health plans if their requested rates are not fulfilled. Though the decision is not final, leaders in the state worry that 96,000 Coloradans could potentially lose their coverage next year (Modern Healthcare, August 21).

North Carolina to Eliminate Medicaid Programs and Reduce Provider Rates to Juggle Budget Shortfall

On August 11, North Carolina Department of Health and Human Services (NCDHHS) Secretary Devdutta Sangvai issued a letter to legislators regarding the state’s response to the upcoming budget shortfall. By the end of August, the NCDHHS will begin to cut $319M for the Medicaid program through rate reductions of at least 3% across the board, 8% to 10% for certain providers (physicians, hospice care providers, behavioral long-term care and nursing home services), and elimination of certain services entirely, including funding for the Integrated Care for Kids Pilot and the optional coverage of weight loss drugs (GLP-1s). These changes will be effective October 1, 2025. Secretary Sangvai warned that the reductions and service terminations may drive providers out of the state and further harm Medicaid beneficiaries. He also noted the possibility of additional administrative cuts that could deepen the deficit (NC Newsline, August 13).

Idaho Medicaid Announces 4% Rate Cut for All Providers and Services

On August 22, the Idaho Department of Health and Welfare (DHW) announced a 4% rate cut for Medicaid providers. This follows Governor Brad Little’s directive to state agencies to reduce their general fund budgets by 3% due to a projected $80M budget shortfall for the state. The 4% reimbursement reduction will begin on September 1 for all provider types and services under the Medicaid program, with the exception of tribal providers. The rate cut will impact hospitals, nursing and intermediate care facilities, ambulatory surgical centers, school-based services, home- and community-based services, and pharmacy benefit rates. Managed care capitation rates will also be reduced. Currently, Idaho provides some but not all Medicaid services through managed care. The DHW Deputy Director stated that the program’s budget has a projected growth of 19% through FY2026, with more than 96% of costs going to trustee and benefit costs. With these rate reductions, the DHW estimates that the state will save $36.8M in FY2026 (Idaho Capital Sun, August 26; Idaho Reports, August 22).

SPAs and Waivers

SPAs

  • Administrative
    • Maine (ME-25-0002, effective June 1, 2025): Renews the exemption from the Recovery Audit Contractor (RAC) program for another two years, from June 1, 2025, through May 31, 2027.
    • Puerto Rico (PR-25-0002, effective July 1, 2025): Updates non-discrimination and state governor’s review pages.
  • Services
    • Nevada (NV-25-0017, effective July 1, 2025): Updates Nursing Facility (NF) prior authorization processes and adds defining language, such as medical necessity criteria.
    • New Hampshire (NH-25-0024, effective April 1, 2025): Provides an exemption to the four walls clinical service requirement for services provided by the Indian Health Service (IHS) and Tribal facilities for individuals who do not have a fixed home or mailing address.
  • Payment
    • Kentucky (KY-25-0004, effective July 1, 2025): Establishes a provider assessment funded quality program and adds clarification for ancillary service payment methodology through the Kentucky Medicaid Nursing Facility Ancillary Supplemental Schedules.
    • Maine (ME-24-0030-A, effective November 15, 2024): Adjusts Acute Care and Critical Access Hospital inpatient supplemental pool payment rate.
    • Missouri (MO-24-0012, effective January 1, 2025): Updates payment methodology by adding an Alternative Payment Model and Prospective Payment System (PPS) for Provider Based Rural Health Clinics (PBRHC).

Sellers Dorsey Updates

Issue Brief | Celebrating 60 Years of Medicaid: Driving Access and Innovation in Maternal Health

For 60 years, Medicaid has played a vital role in supporting the health of mothers and children. In our latest issue brief celebrating the 60th anniversary of Medicaid, we explore the program's legacy in maternal health, the current state of care, and where Medicaid is headed in meeting the needs of future generations.

Our Stories | Meet Our Team: Brittany McAllister

Meet Brittany McAllister, a new member of our child and family well-being team. Brittany is an experienced policy expert with a passion for improving the lives of children and families. We sat down with Brittany to discuss her career, opportunities for enhancing healthcare for children and families, and what healthcare impact means to her.

Kaleido Course | Visualizing Health and Healthcare Data

Join our instructor-led course designed for health and healthcare professionals. Learn to clearly communicate complex data through core visualization and dashboard design principles grounded in human cognition. Enjoy hands-on practice, real-world examples, and personalized feedback on your own project—no software or technical skills required.

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