Issue #254
Sellers Dorsey Digest
September 18, 2025
Federal News
CMS Releases NOFO for the Rural Health Transformation Program
On September 15, CMS released a Notice of Funding Opportunity (NOFO) for the Rural Health Transformation (RHT) Program. State governments are invited to apply to receive an allotment of the $50B fund to support their rural communities through driving innovative care, digital tools, sustainable access, workforce development, and promotion of health innovations through evidence-based interventions. Each fiscal year, beginning in FY2026 to FY2030, $10B will be available for distribution to grantees. The RHT Program funds will be split into baseline funding, where $25B will be split equally between eligible states and the other $25B will be for workload funding that will be allocated by CMS based on factors such as the rural population and challenges faced by certain hospitals in the State. Applications for RHT are due on November 5, 2025, and CMS will make decisions regarding awards by December 31, 2025. The agency will hold webinars for interested RHT Program applicants on September 19th and September 25th (Simpler Grants, September 15; Grants, September 15; Medicaid, September 15; CMS, September 15).
CMS Senior Advisor Announces Redetermination Policy Guidance Releasing in December
At a session at last week’s Medicaid Health Plans of America (MHPA) conference, CMS Senior Advisor Grant Thomas revealed that the agency intends to issue a rule implementing the H.R. 1 requirement around redetermining Medicaid expansion beneficiaries’ eligibility every six months. The rule would become effective on December 31, 2026, per statutory requirements. Additionally, Grant expressed that CMS would look to MCOs to help during the implementation process of work requirements to aid in educating their enrollees on the redetermination process (Inside Health Policy, September 12).
CMS Tests Income-Verification App Ahead of Medicaid Work Requirement
As the federal government prepares states for the rollout of Medicaid’s new work requirement under H.R.1, CMS is testing a digital income-verification tool in Louisiana and Arizona that links directly to payroll and gig-economy data, reducing the need for beneficiaries to provide paperwork. The legislation also allows CMS to distribute $200M to states to support system changes to implement work requirements. State officials welcome federal tools and funding but emphasize the technical and communication challenges of integrating data across multiple systems. According to the Congressional Budget Office, the policy is expected to save $326B over ten years but could also increase the number of uninsured by more than five million by 2034 (Inside Health Policy, September 12).
OMB Releases Unified Agenda, Details Regulation on Medicaid and Medicare
The Office of Management and Budget released its Spring 2025 Unified Agenda on September 4, outlining the regulatory plan for the second Trump Administration. The Department of Health and Human Services is slated to promulgate several rules over the remainder of the year. This includes several rules on Medicare, including the annual fee schedule update and changes to the CMS innovation center models. Another regulation scheduled to be published is a final rule regarding electronic transactions and file attachments for prior authorizations, which faced criticism from stakeholders. The agenda includes regulations implementing provisions in H.R. 1, passed earlier this year, and updates to 1115 waiver budget neutrality, enrollment procedures, provider taxes, and Medicaid managed care state-directed payments (Modern Healthcare, September 15).
State News
Rhode Island Insurance Premiums Increase, New Fee Added
The Rhode Island Office of the Health Insurance Commissioner (OHIC) has approved commercial insurance premiums for 2026. Individual market rates are increasing by an average of 21%, while small group rates go up 17.6% and large group rates increase by 19.3%. Despite these increases, the OHIC did not allow insurers to raise the per member per month administrative cost. The OHIC stated that individual market premiums have risen due to the anticipated expiration of enhanced premium tax credits at the end of 2025, though Congress has the authority to extend the tax credits, and while some members have floated legislation to extend the credits, it is not yet certain if an extension will pass. Similar increases in rates have been happening across the country, with KFF reporting an average increase of 18%. Additionally, the Rhode Island General Assembly approved a new health insurance fee for FY2026. It is expected to cost each person $50 per year, or around $4 per month, and was factored into the OHIC’s rate increases. The fee is intended to fund Medicaid rate increases for primary care and other necessary healthcare services (GoLocalProv, September 15).
Fidelis Care Expands Income Guidelines in New York
On September 15, Fidelis Care announced that they have expanded the income guidelines for the Child Health Plus program, which provides tailored health coverage for eligible children across New York state. Included in this update is eligibility for children under age 19 if they are not eligible under Medicaid or other health insurance coverage, affordable premiums from $15 to $60 per child per month depending on family income and size, and no monthly premiums for families with an income that is less than 2.2 times the FPL (Fidelis Care, September 15).
North Carolina Removes Prescription Requirement for Updated COVID-19 Vaccines
Governor Josh Stein signed an order allowing residents of North Carolina at higher risk, including seniors and adults with certain health conditions, to receive the updated COVID-19 vaccine at pharmacies without a prescription. Patients can self-attest to their eligibility rather than provide medical records, and Medicaid will cover costs for beneficiaries. State officials emphasized vaccines’ importance in preventing severe illness, and the governor’s office said major pharmacy chains across the state already have the updated vaccine available (NC Newsline, September 12).
Audit Finds New York Improperly Paid $1.2 Billion in Medicaid Managed Care Premiums
A state audit concluded that New York improperly paid Medicaid managed care premiums for people who no longer lived in the state, totaling nearly $1.2B between 2017 and 2024. Auditors found that the Department of Health did not consistently verify residency, delayed use of federal databases, and failed to prevent duplicate enrollments. Officials attributed some of the lapses to pandemic-era rules that froze disenrollment, but said new data checks and quality controls have since been added. The comptroller urged stronger verification processes, broader use of address-change data, and recovery of improper payments, warning that the findings highlight ongoing challenges with Medicaid overspending as New York faces rising costs and looming federal cuts (Times of Wayne County, September 13; Office of the New York State Comptroller, September 9).
SPAs and Waivers
SPAs
- Eligibility
- North Dakota (ND-25-0015, effective July 1, 2025): Increases the personal needs allowance (PNA) for institutionalized persons.
- Services
- Maryland (MD-25-0008, effective April 19, 2025): Updates targeted case management (TCM) care coordination requirements to include children and youth with serious mental illness.
- Massachusetts (MA-25-0006, effective April 1, 2025): Adds licensed mental health counselors and licensed marriage and family therapists to other practitioner service category.
- Michigan (MI-25-0006, effective January 1, 2025): In alignment with § 5121 of the Consolidated Appropriations Act of 2023, adds mandatory coverage for eligible juveniles who are inmates of a public institution following adjudication of charges and adds coverage of targeted case management (TCM) services for eligible justice involved youth. Will be sunset on December 31, 2026.
- New Jersey (NJ-25-0003, effective January 1, 2025): In alignment with § 5121 of the Consolidated Appropriations Act of 2023, adds mandatory coverage for eligible juveniles who are inmates of a public institution following adjudication of charges and adds coverage of targeted case management (TCM) services for eligible justice involved youth. Will be sunset on December 31, 2026.
- Oregon (OR-25-0020, effective October 1, 2025): Withdraws the expiration date for the medication-assisted treatment (MAT) option for those with opioid disorder.
- Payment
- Kansas (KS-25-0015, effective June 1, 2025): Adds payment methodology for drug eluted stent procedures.
- Massachusetts (MA-25-0010, effective June 6, 2025): Updates payment methodology for restorative services, such as physical therapy.
- Massachusetts (MA-25-0016, effective April 25, 2025): Increases payment rates for independent psychologists and licensed independent behavioral health clinician services.
- North Carolina (NC-25-0015, effective April 1, 2025): Updates payment methodology under the 1915(i) Authority.
- Texas (TX-25-0019, effective April 1, 2025): Updates family planning services fee schedule.
- Texas (TX-25-0021, effective June 1, 2025): Updates physician and other practitioner program fee schedules.
- Utah (UT-25-0011, effective July 1, 2025): Removes provisions relating to educating parents on Shaken Baby Syndrome.
- Utah (UT-25-0015, effective July 1, 2025): Removes provisions relating to transitional outpatient payments, due to funding cuts for service providers.
- Wyoming (WY-25-0004, effective July 1, 2025): Updates payment methodology of inpatient hospital services, such as removing provider categories that receive Diagnosis Related Group (DRG) base rates.
