Issue #263
Sellers Dorsey Digest
November 20, 2025
Federal News
CMS Announces 2026 Medicare Premium Increases
In 2026, Medicare beneficiaries will see higher costs across Parts A, B, and D. The standard Part B premium will rise nearly 10% to $202.90 per month, with the deductible increasing to $283 per month. CMS explained that the increases reflect typical price and usage trends but noted that new payment rules for skin substitutes prevented an even steeper jump. Spending on those products had surged dramatically in recent years, prompting CMS to change how they are reimbursed starting in 2026. For Part A, the inpatient hospital deductible climbs to $1,736.00, with modest increases in coinsurance for extended hospital stays and skilled nursing care. Meanwhile, higher-income enrollees will pay additional surcharges for both Part B and Part D coverage, with Part D adjustments ranging from $14.50 to $91 depending on income. Overall, the updates reflect rising healthcare costs but also targeted efforts to rein in excessive spending (CMS, November 14; Inside Health Policy, November 14).
Trump Signs Bill Temporarily Protecting Medicare Telehealth Flexibilities
On November 12, President Trump signed HR 5371 into law, which, in addition to ending the government shutdown, extends the Acute Hospital Care at Home program and Medicare telehealth coverage flexibilities until January 30, 2026. Although coverage for these programs has bipartisan support, the budget disputes that led to the government shutdown caused legislators to miss the September deadline to push a bill extending the telehealth and hospital-at-home programs. The extension is a short-term fix, but longer-term action is needed to preserve this type of care (Healthcare Dive, November 13).
Trump Administration Releases Proposed Rule Regarding Public Charge Regulations
The Department of Homeland Security (DHS), along with the U.S. Citizenship and Immigration Services (USCIS), released a proposed rule on November 17 that would rescind a 2022 rule from the Biden administration regarding public charge ground of inadmissibility regulations. Previously, the first Trump administration promulgated a public charge rule, which gave immigration officers the authority to deny lawfully present immigrants residency if they used or could potentially use government benefits, like Medicaid or SNAP, in the future. The Biden administration stopped enforcement of the rule in 2021 and rescinded it in 2022 with formal rulemaking. Now, the 2025 proposed rule would rescind the 2022 Final Rule from the Biden administration. In the 2025 proposed rule, DHS announced its intention to provide policy and guidance on this topic shortly following the rulemaking process. Any rulemaking or guidance would likely reinstate or provide additional authority to USCIS and DHS when making determinations about who is using or who could potentially use public welfare services. DHS estimates that rescinding the 2022 Final Rule would save the federal government approximately $8.97B per year, due to disenrollment or forgone enrollment in public programs. The proposed rule is set to be published in the Federal Register on November 19, and DHS will accept public comments until December 19 (PoliticoPro, November 17).
CMS Issues Guidance on Provider Tax Changes from HR1
On November 14, CMS issued guidance to states regarding the changes to provider taxes that were enacted in HR1 earlier this year. The agency described what it considers to be the meaning of the terms “enacted” and “imposed,” which are critical to the identification of grandfathered provider tax programs. CMS will consider a tax to be enacted when both the entire legislative process was completed and the tax structure was in effect on July 4, 2025, and CMS had approved the tax waiver, if needed, by that date. Imposed taxes mean that a state or local government was actively collecting tax revenue as of July 4, 2025, with flexibility for states that collect taxes on a delayed schedule consistent with routine collection or billing practice. CMS also explained that tax waiver proposals that were pending on or after July 4, 2025, will not be included in the new indirect hold harmless threshold. In this guidance, CMS also defines transition periods for non-compliant MCO taxes with a waiver in place prior to enactment of H.R. 1—these will be grandfathered through the end of the state’s fiscal year that ends in calendar year 2026. All other taxes in place on date of enactment of H.R. 1 will be grandfathered through the end of the state’s fiscal year that ends in calendar year 2028.
Moving forward, CMS announced its intention to utilize standard notice and comment rulemaking to address any issues and formalize the definitions (CMS.gov, November 14).
CMS Releases Guidance on Medicaid and CHIP Changes in the Working Families Tax Cut Act
On November 18, 2025, CMS released the Medicaid and CHIP provisions included in the Working Families Tax Cut Act (Public Law 119-21), which became law on July 4, 2025. The bulletin outlines the major statutory changes states will need to implement across eligibility, enrollment operations, program integrity, financing, cost sharing, and new program authorities. It highlights new federal requirements to check death records and prevent duplicate enrollment across states, reductions to retroactive eligibility, and limits on when federal matching funds are available for certain non-citizen coverage groups. CMS also details several financing changes, including new constraints on provider taxes, guardrails on state-directed payments in managed care, and the requirement that future Section 1115 demonstrations receive federal budget neutrality certification from the CMS Chief Actuary. The law adds a community-engagement requirement for certain adult beneficiaries and establishes new cost-sharing expectations for some expansion adults. The bulletin also describes the new 1915(c) HCBS option and the Rural Health Transformation Program, which creates new CHIP funding streams to support rural health system initiatives. CMS positions this release as initial guidance to help states understand these statutory changes ahead of more detailed operational instructions (Medicaid.gov, November 18; CMS, November 18).
State Updates
BCBS Vermont Pauses Reimbursement Rate Cuts for Unlicensed Mental Health Providers
BlueCross BlueShield (BCBS) of Vermont has postponed a planned reduction in reimbursement rates for unlicensed mental health providers after receiving feedback from clinicians. BCBS of Vermont had proposed paying these providers 24% less than licensed peers beginning in January, citing concerns about long-term trainees who had not pursued licensure, supervision practices, and alignment with Medicaid. Providers objected, saying the change could discourage new clinicians from entering training and worsen workforce shortages. State officials also noted that Medicaid rates are based on education level rather than licensure, differing from BCBS’s approach. The insurer said it will take more time to discuss the proposal with providers and community leaders. The decision comes as BCBS Vermont faces financial challenges, including $150M in losses since 2021 and its recent exit from the state’s Medicare Advantage market (Health Payer Specialist, November 17).
MDwise Will No Longer Serve Indiana Medicaid Members
On November 12, the Indiana Family and Social Services Administration (FSSA) announced that the managed care plan MDwise will no longer participate in the Healthy Indiana Plan (HIP) and Hoosier Healthwise programs beginning in 2026. The agency stated that the decision was based on cost and quality concerns compared to the other three managed care plans. MDwise currently covers over 300,000 individuals in the state. Anthem, CareSource, and MHS will continue to serve Indiana Medicaid members. According to MDwise, the company has held a managed care contract in Indiana for more than 30 years and warned about potential adverse effects on enrollees and employees in the plan (Health Payer Specialist, November 13).
North Carolina Legislature Refuses Governor’s Call for Special Session on Medicaid
North Carolina Governor Josh Stein called for a special legislative session on November 6 to address a shortfall in the state’s Medicaid budget. However, the House Speaker and Senate Leader refused the governor’s request on November 13. North Carolina’s Health and Human Services Secretary and other health officials claim that the lawmakers reduced the Medicaid program’s rebase by approximately $319M for FY2026, prompting broad rate cuts on many services ranging from 3% to 10% starting in October of this year. In their response to the governor, the legislative leaders claimed that since the General Assembly is already in session, any extra session called for is unnecessary and does not meet the criteria for an “extraordinary” circumstance. Republican lawmakers also argue that the Medicaid program has enough funding to operate without cuts through April 2026, with any financial reductions being due to mismanagement or political motivation. Although the North Carolina legislature was in session in October, lawmakers focused on redrawing congressional districts. The legislature is set to meet again in December. North Carolina is the only state in the country without an enacted budget for the current fiscal year (NC Newsline, November 13).
OptumHealth to Go Out of Network for A Number of New York Plans
On November 7, OptumHealth announced that beginning on January 1, 2026, it would be going out of network for commercial, D-SNP, Medicaid, Medicare and Individual Exchange plans under Fidelis WellCare, as well as Cigna’s Medicare Advantage plan, Health Spring in New York state. Optum has quickly become the largest physician employer in the nation, with over 2,100 providers in the tri-state area alone. In New Jersey, the health system also announced that it would be closing about 90 clinics providing services like behavioral health, dermatology, and endocrinology, many of which are due to close at the end of the month, and layoff about 572 employees in 2026 (Times Union, November 7; CBS New York, November 7).
SPAs and Waivers
Waivers:
- 1115
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- On September 26, 2025, Maryland submitted a request to extend its HealthChoice 1115 waiver for five years. The waiver is used to manage and operate its Medicaid managed care program, alongside other innovative programs and benefits. The state is seeking new authority to modify the eligibility criteria for its Increased Community Services (ICS) program to shorten the length of stay required in a nursing home prior to enrollment in the program. The federal public comment period is open from November 4, 2025, though December 14, 2025.
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- On October 1, 2025, Nebraska submitted an amendment to its 1115 waiver titled, “Nebraska Substance Use Disorder Program.” The state is seeking federal financial participation for services provided to eligible individuals receiving treatment for serious mental illness or serious emotional disturbance in facilities that meet the definition of an institution for mental disease. Nebraska is also seeking authority to provide a medical respite care service to adults who are unhoused or at risk of being unhoused and are recovering from acute or acute-on-chronic physical health conditions after discharge from an eligible setting. The federal public comment period is open from November 4, 2025, though December 14, 2025.
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SPAs:
CMS resumed posting approved SPAs after the end of the government shutdown, including a tranche of SPAs that have approval dates during the shutdown.
- Administrative SPAs
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- Colorado (CO-25-0008, effective August 6, 2025): Allows the contingency fee paid to the Medicaid Recovery Audit Contractor (RAC) program contracts to exceed that of the highest Medicare RAC and allows FFP for the full amount of the contingency fee paid to the RAC.
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- Indiana (IN-25-0005, effective October 1, 2025): Extends the exemption requirement for the state to contract recovery audit services to a third party for an additional two years.
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- Ohio (OH-25-0012, effective July 1, 2025): Updates the State Plan to utilize the new clinic services template required by CMS.
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- Utah (UT-25-0021, effective November 1, 2025): Extends the exemption requirement for the state to contract recovery audit services to a third party for an additional two years.
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- Wisconsin (WI-25-0020, effective July 1, 2025): Updates the State Plan to utilize the new clinic services template required by CMS.
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- Wisconsin (WI-25-0022, effective November 1, 2025): Extends the exemption requirement for the state to contract recovery audit services to a third party for an additional two years.
- Eligibility SPAs
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- Tennessee (TN-25-0007, effective July 1, 2025): Allows for an income disregard for the compensation of Beneficiary Advisory Council members.
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- Louisiana (LA-25-0013, effective July 1, 2025): Increases the monthly personal needs allowance (PWA) to support individuals in long-term care (LTC) who have personal expenses not otherwise covered by facility fees.
- Payment SPAs
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- Alabama (AL-25-0007, effective October 1, 2025): Allows SFY2024 reimbursement methodology for inpatient and outpatient hospitals services to apply in SFY2025.
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- District of Columbia (DC-25-0006, effective July 1, 2025): Updates the fee schedule rates for home health services.
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- Georgia (GA-25-0008, effective July 1, 2025): Increases the reimbursement rates for all existing autism spectrum disorder services to 3%.
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- Kansas (KS-25-0018, effective July 1, 2025): Adds cognitive assessment and care plans services and increases reimbursement rates for physician services.
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- Kansas (KS-25-0020, effective July 1, 2025): Updates select dental service reimbursement rates.
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- Louisiana (LA-25-0005-B, effective July 1, 2025): Attests that the state is in compliance with Section 5121 of the Consolidated Appropriations Act, 2023, and has implemented the required coverage and reimbursement for incarcerated youth in Medicaid.
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- Mississippi (MS-25-0006, effective January 1, 2025): Reimburses certain high-cost drugs outside of the All-patient refined Diagnosis Related Group (APR-DRG) reimbursement system.
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- Missouri (MO-25-0012, effective July 1, 2025): Updates the way that nursing facility rates are rebased, beginning in SFY2025. Provides an opportunity for replacement nursing facilities to be designated as new or existing. Amends the cost report total Case Mix Index. Updates the value-based purchasing quality measures and provides for the multiple component incentive to be recalculated with the semi-annual and annual rate updates.
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- Missouri (MO-25-0013, effective July 1, 2025): Increases the fee schedule for anesthesia services.
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- New Hampshire (NH-25-0013, effective January 1, 2025): Attests that the state has developed an operational plan in accordance with section 1902(a)(84)(D) of the Act to provide screening and diagnostic services and targeted case management to eligible juveniles who are incarcerated in a public institution post-adjudication of charges.
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- New Mexico (NM-25-0003, effective July 1, 2025): Updates the Family Infant Toddler (FIT) fee-for-services fee schedules.
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- New York (NY-24-0051, effective April 1, 2024): Provides a 2.84% cost of living adjustment for psychiatric residential treatment facilities.
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- New York (NY-24-0066, effective August 1, 2024): Reduces Care Coordination Organizations’ reimbursement rates in accordance with the FY2025 enacted budget.
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- North Dakota (ND-25-0018, effective July 1, 2025): Implements a rate increase for home health services.
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- North Dakota (ND-25-0021, effective July 1, 2025): Implements a 2% rate increase for services rendered by Medicaid providers.
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- North Dakota (ND-25-0022, effective July 1, 2025): Implements an inflationary increase of 2% for Intermediate Care Facilities.
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- North Dakota (ND-25-0023, effective July 1, 2025): Implements a 2% rate increase for 1915(i) services.
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- Pennsylvania (PA-25-0004, effective January 19, 2025): Establishes a new class of supplemental payments to qualifying Medical Assistance (MA) enrolled acute care general hospitals that promote the availability of emergency department services to the MA population in an area of the Commonwealth that has the highest number of MA enrollees.
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- Wisconsin (WI-25-0003, effective January 1, 2025): Updates add-on rate for outpatient dental services and establishes the state’s outpatient pay-for-performance system and Health Information Exchange Program.
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- Connecticut (CT-25-0005, effective January 1, 2025): Extends rate add-ons for inpatient pediatric psychiatric services provided by privately owned and operated pediatric psychiatric hospitals and pediatric psychiatric hospital units, through December 31, 2026.
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- Connecticut (CT-25-0011, effective March 1, 2025): Institutes a quarterly supplemental payment of $800K to free-standing chronic disease hospitals that exceeded 75% in Medicaid inpatient utilization for state FY223.
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- Iowa (IA-25-0028, effective July 1, 2025): Updates the payment methodology for child specialty hospitals.
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- Kansas (KS-25-0021, effective July 18, 20225): Adds a description for Rural Emergency Hospital (REH).
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- Louisiana (LA-25-0010, effective July 1, 2025): Updates the payment methodology for nursing facilities (NF) to implement the patient driven payment model (PDPM) for case-mix classification.
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- Massachusetts (MA-25-0009, effective March 28, 2025): Updates the payment methodology of clinical substance use disorder (SUD) services.
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- Ohio (OH-25-0013, effective July 1, 2025): Removes page 66a of Section 4.19-B, as it’s outdated.
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- Oklahoma (OK-25-0011, effective July 1, 2025): Establishes a base rate increase for standard nursing facilities, standard private and specialized private intermediate care facilities for individuals with intellectual disabilities (ICF/IIDs), and nursing facilities providing services to individuals with AIDS. Additionally, adds detailed criteria for tracheostomy patients to streamline language for the add-on rate.
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- Oklahoma (OK-25-0013, effective July 1, 2025): Updates the payment methodology for partial hospitalization program (PHP) services by increasing the per diem rate.
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- Oregon (OR-25-0019, effective January 1, 2026): Carves out sickle cell gene therapy drugs and certain d long-acting reversible contraceptive (LARC) devices from hospital DRG reimbursement and use actual acquisition cost (AAC).
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- South Carolina (SC-25-0007, effective July 1, 2025): Updates the payment methodology of service provided within Pediatric HIV Clinics (PHCs).
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- South Carolina (SC-25-0009, effective October 1, 2025): Updates the nursing facility payment methodology.
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- Texas (TX-25-0031, effective September 1, 2025): Updates the payment methodology of personal attendants providing Personal Care Services (PCS), to include wage increases to an average of $13.00/hour.
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- Texas (TX-25-0033, effective September 1, 2025): Updates the payment methodology for physicians and other practitioners.
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- Texas (TX-25-0034, effective September 1, 2025): Updates the payment methodology of the Early Periodic Screening, Diagnosis, and Treatment (EPSDT) program.
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- Texas (TX-25-0035, effective September 1, 2025): Updates the payment methodology of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS).
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- Virginia (VA-25-0013, effective July 1, 2025): Reaffirms state regulations disallowing third-party payers from refusing payment for items or services that did not receive prior authorization.
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- Washington (WA-25-0017, effective August 1, 2025): Updates the payment methodology of hospital administrative days.
- Services SPAs
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- Alaska (AK-25-0005, effective July 1, 2025): Removes service authorization and grantee requirements for Community Behavioral Health Services providers and mental health physician clinics. Revises case management language for behavioral health services.
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- Arizona (AZ-25-0013, effective October 1, 2025): Attests that the state is in compliance with Section 201 of the Consolidated Appropriations Act, 2023, and has made the mandatory Medication Assisted Treatment (MAT) benefit permanent.
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- California (CA-25-0023, effective July 1, 2025): Adds local educational agencies and public higher education institutions to the list of eligible providers that can supervise Community Health Workers (CHWs). Clarifies existing policy that any CHW certificate of completion that meets the curricula outlined in the State Plan is acceptable regardless of issuer.
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- Colorado (CO-25-0021, effective October 1, 2025): Attests that the state is in compliance with Section 201 of the Consolidated Appropriations Act, 2023, and has made the mandatory Medication Assisted Treatment (MAT) benefit permanent.
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- Colorado (CO-25-0002, effective January 1, 2025): Attests that the state has developed an operational plan in accordance with section 1902(a)(84)(D) of the Act to provide screening and diagnostic services and targeted case management to eligible juveniles who are incarcerated in a public institution post-adjudication of charges.
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- Florida (FL-24-0011, effective October 15, 2025) Updates the state’s home health benefit to include Family Home Health Aide services and allows home health agencies to receive reimbursement for services provided by an eligible provider relative caring for a medically fragile child.
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- Georgia (GA-24-0014, effective October 1, 2024): Implements Qualified Residential Treatment Programs (QRTPs) under the Medicaid program.
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- Indiana (IN-25-0007, effective September 1, 2025): Attests that the state is in compliance with Section 201 of the Consolidated Appropriations Act, 2023, and has made the mandatory Medication Assisted Treatment (MAT) benefit permanent.
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- Louisiana (LA-25-0005, effective January 1, 2025): Attests that the state is in compliance with Section 5121 of the Consolidated Appropriations Act, 2023, and has implemented the required coverage and reimbursement for incarcerated youth in Medicaid.
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- Minnesota (MN-25-0022, effective August 1, 2025): Changes provider qualification for Treatment Coordinators and adds mental health professionals, clinical trainees, and advanced practice registered nurses to the personnel who can provide SUD services.
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- Nebraska (NE-25-0011, effective July 1, 2025): Updates the state’s current targeted case management benefit for individuals with developmental disabilities benefits to the TCM pre-print format and modifies the State Plan to use person-centered language.
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- North Dakota (ND-25-0017, effective July 1, 2025): Aligns the North Dakota Medicaid Expansion Alternative Benefits Plan with the 19–20-year-old ABP and makes technical changes to the Other Licensed Providers section.
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- North Dakota (ND-25-0013, effective January 1, 2025): Provides coverage for clinic services provided outside of the “four walls” of IHS and Tribal clinics in accordance with the Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center (ASC) Payment System final rule.
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- Ohio (OH-25-0011, effective July 1, 2025): Establishes coverage and payment provisions of other licensed practitioner services for an evidence-based home visiting model titled, “Family Connects,” that offers treatment, education, home visits, and training to postpartum individuals with the goal of improving birth outcomes and child health and development.
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- Oklahoma (OK-25-0010, effective January 1, 2025): Provides coverage for clinic services provided outside of the “four walls” of IHS and Tribal clinics in accordance with the Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center (ASC) Payment System final rule.
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- California (CA-25-0032, effective October 1, 2025): Streamlines the list of Behavioral Health Treatment (BHT) providers by removing duplicative titles.
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- Missouri (MO-25-0008, effective December 1, 2025): Streamlines the Diabetes Prevention Program service requirements to improve accessibility for enrollees and lessen administrative burden on providers.
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- Oregon (OR-25-0018, effective July 1, 2025): Moves Oregon Youth Authority (OYA) targeted case management (TCM) to its own SPA, separate from the Child Welfare targeted group, and updates payment methodology.
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- Vermont (VT-25-0007, effective January 1, 2025): In alignment with § 5121 of the Consolidated Appropriations Act of 2023, affirms adherence to mandatory coverage for eligible juveniles who are inmates of a public institution following adjudication of charges.
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- Washington (WA-25-0010, effective January 1, 2026): Adds Psychological Associates to the “Other Practitioner Services” section and updates the Certified Peer Support Specialists and Certified Peer Support Specialist Trainees title.
