The Health Resources and Services Administration (HRSA) announced that it is extending the public comment period for the revised 340B pilot program from March 19 to April 20. The revised 340B pilot program would reshape the program such that drug manufacturers would provide rebates to providers after purchase instead of upfront discounts. Stakeholders sent a letter to HRSA Administrator on February 19 requesting an extended comment period to allow for sufficient and well-researched responses to the agency’s questions regarding pilot implementation (Inside Health Policy, February 26).
On March 2, CMS announced that it will be extending the deadline for drug manufacturers to apply for the GENErating cost Reductions for U.S. Medicaid (GENEROUS) Model. The CMS model aims to reduce prescription drug spending by implementing most favored nation pricing into the Medicaid program. Drug manufacturers will have until April 30 to apply to join the model instead of the previous March 31 deadline. CMS Administrator Dr. Oz announced that the extension comes after feedback from drug manufacturers requesting additional time (CMS Newsroom, March 2).
The American Medical Association (AMA) has remodeled the common procedural terminology (CPT) codes used during pregnancy and labor, the first significant change in maternal health billing since the mid-1990s. The changes are set to go into effect January 1, 2027 and will swap out global billing codes with new code categories for specific stages of pregnancy and delivery along with evaluation and management codes. Some groups argue that the removal of global billing codes will incentivize higher spending and overutilization and reverse efforts to move maternal health towards value-based care. However, supporters highlight how maternal health care has changed over the last 30 years, with many different provider types like certified nurse midwives or postpartum specialists being involved.
Moreover, transitions across different sites, like a rural patient transferring to a different hospital, can be difficult to capture using global codes according to supporters of the new codes. Supporters also express how more granular codes could improve data collection and care coordination for maternal health, an area that lags behind other, similar countries. The AMA has been in the process of developing these new maternal health codes for two years. The association has released the codes for 2027 with an advanced timeline for implementation, expecting it to be a sizeable change for insurers and other partners to pivot to the new system (Healthcare Dive, March 2).
On February 26, RAND, a non-profit think-tank, published a research report that delves into the state-level impacts of President Trump’s One Big Beautiful Bill Act (OBBBA). Many provisions of the Act require state policy changes related to spending limits, eligibility determinations, and the imposition of work requirements. The report compiles publicly available data, state and federal reports, and published literature to model expected impacts of 12 healthcare-related provisions on states through 2034. Key impacts highlighted in the report are:
(RAND, February 26; Inside Health Policy, February 27; Fierce Healthcare, March 2)
The Congressional Budget Office (CBO) projects that Medicare Part A Hospital Insurance Trust Fund will exhaust its reserves in 2040, which is 12 years earlier than previously estimated. The updated projection reflects lower expected revenues and higher spending. Revenues declined due to reduced payroll tax collections and tax changes affecting Social Security benefits, while spending increased because per-enrollee costs in traditional Medicare and Medicare Advantage were higher than expected. CBO estimates a 25-year actuarial deficit of 0.30% of taxable payroll. If no policy changes are made, maintaining scheduled benefits would require payment reductions of about 8% in 2040, rising to 10% by 2056 (Inside Health Policy, February 26).
The Trump administration announced new actions to address fraud across federal healthcare programs. The Centers for Medicare & Medicaid Services (CMS) will impose a six-month moratorium on new Medicare enrollment for certain durable medical equipment suppliers. The agency also plans to publish a list of revoked Medicare providers to improve transparency. Additionally, CMS is seeking feedback on additional fraud prevention strategies through its CRUSH (Comprehensive Regulations to Uncover Suspicious Healthcare) initiative, which would apply across Medicare, Medicaid, Children’s Health Insurance Program, and Affordable Care Act marketplace programs. The agency released a Request for Information (RFI) to gather stakeholder input on a prospective federal rule to combat FWA going forward and strengthen current authorities. Comments must be submitted by March 30, 2026 (CMS, February 25; Fierce Healthcare, February 25).
On March 2, Senator Bernie Sanders and Representative Ro Khanna introduced the “Make Billionaires Pay Their Fair Share Act” to reverse the Medicaid and ACA changes enacted under H.R. 1 and expand Medicare benefits. The bill would restore Medicaid and ACA provisions and add dental, vision, and hearing coverage to Medicare, funded by a wealth tax on billionaires (Hospital Review, March 2).
Key Healthcare Provisions
Funding
Budgetary and Coverage Impact
The proposal comes amid concerns that the reconciliation law will:
Medicare Expansion Details
Home and Community-Based Services (HCBS)
As Rural Health Transformation Program funding is distributed, some state legislatures or other state-level stakeholders have raised concerns and opposition to the pre-approved plans. Each state submitted a five-year plan detailing how it would spend the funds and is required to make progress towards the goals outlined in the document. Any major changes could slow progress or result in lost funding. However, according to Carrie Cochran-McClain from the National Rural Health Association, many states require legislation to spend federal dollars, resulting in opposing viewpoints in some cases. In Wyoming, state lawmakers declined to fund a proposed health plan for medical emergencies that was outlined in the states’ RHTP proposal. Separately, in Ohio, legislators are seeking to maximize RHTP funds that can be used for provider payments to support rural hospitals.
Other lawmakers are raising concerns about how the dollars might be allocated in their states. In Michigan, North Dakota, and North Carolina some legislators believe that urban areas might take funding from rural populations due to the definitions of “rural” or “partially rural.” Associations and provider groups are also speaking out against their states’ plans for RHTP. The Colorado Hospital Association criticized their state’s plan, noting that the association’s suggestions were ignored. Spokespersons from Michigan and Nebraska hospital and health associations also highlighted how they felt rural hospitals would be trampled in the competition to receive the RHTP funding. Federal officials are expected to begin evaluating the states’ RHTP plans in late summer of 2026 and determine 2027 distributions by the fall of 2026 (KFF Health News, March 4).
On February 25, Vice President JD Vance and CMS Administrator Dr. Mehmet Oz announced the administration’s decision to suspend $259.5M in Medicaid funding to Minnesota, based on its analysis indicating high spending and rapid growth in personal care, home and community-based services, and other practitioner services. If Minnesota is unable to carry out a corrective action plan, CMS may defer over $1B in federal funds over the next year. Dr. Oz also mentioned that California, Florida, and New York are on the agency’s radar and can expect a statement soon (CMS, February 25; Modern Healthcare, February 25).
The Wyoming legislature is in the process of making several changes to its Medicaid program. Senate File 6 will codify the community engagement requirements from H.R. 1 into state law and new state-specific requirements. The new state requirements mandate that Wyoming applicants prove their U.S. citizenship and state residency along with requiring authorization from the legislature should the federal government expand Medicaid eligibility to additional groups after July 1, 2026. SF 6 passed both chambers and was signed by the governor on February 27. Governor Gordon also signed House Bill 4 into law on February 27, allowing birthing centers to enroll as Medicaid providers. Finally, Senate File 4 is back in the state Senate after passing the House with amendments. The bill would increase the state’s reimbursement of emergency medical services to 100%, with a $1.3M appropriation from the General Fund for the next two fiscal years (Wyoming Public Media, February 25).
The Indiana Senate approved legislation updating eligibility rules for Medicaid and the Supplemental Nutrition Assistance Program (SNAP) and sent the bill to Governor Mike Braun, who has indicated he will sign it into law. The measure aligns state policy with provisions in the federal One Big Beautiful Bill Act. Under the bill, the Family and Social Services Administration must review Medicaid eligibility every six months. Applicants for the Healthy Indiana Plan must provide at least three months of employment history, and individuals applying for Medicaid or SNAP must show proof of U.S. citizenship or lawful permanent residency. Supporters argue the changes address Indiana’s high Medicaid payment error rate, which lawmakers cited at 19.3%, compared to the federal 3% threshold, potentially exposing the state to $2.25B in penalties. Opponents raised concerns that the added requirements could reduce access to healthcare and food assistance while increasing administrative burdens (WISHTV, February 25).
On February 2, Secretary Kennedy announced the Safety Through Recovery, Engagement, and Evidence-based Treatment and Supports (STREETS) Initiative that aims to address homelessness, opioid addiction, and improve public safety. The initiative will begin with a $100M investment that will focus on targeted outreach, psychiatric care, medical stabilization and crisis intervention, and connections to housing services. The Secretary also announced the Assisted Outpatient Treatment (AOT) program which will have $10M in grant funding to support adults with serious mental illness. The AOT program is civil court-ordered and provides a community-based outpatient mental health treatment program for individuals who are not able to be served through conventional outpatient treatment. The STREETS and AOT programs follow President Trump’s executive orders on January 29, “Addressing Addiction Through the Great American Recovery Initiative,” and July 24, 2025, “Ending Crime and Disorder on America’s Streets.” (US Department of Health and Human Services, February 2).
With the 2027 implementation deadline quickly approaching, many states do not currently have the capabilities to handle Medicaid work verification requirements and states anticipate the cost of establishing those capabilities may far exceed federal grants of $200M. On January 29, CMS announced pledges from tech companies to support states’ implementation of work requirements. Pledges include no-cost products and discounts on product implementation and ongoing services (discounts total $600M per CMS). CMS published a fact sheet with 17 vendors on track to contract with states to verify compliance with work and community engagement requirements and assist states with augmenting their Medicaid systems at low or no-cost over the next two years. 11 other vendors are currently listed as interested parties, but are not currently on the GSA schedule (CMS, January 29).
On February 6, Idaho’s Joint Finance-Appropriations Committee (JFAC) voted to approve an additional 1% cut in FY2026, amounting to a $131M general fund (GF) reduction. This will be on top of Governor Little’s 3% state agency cut that was implemented last year. Following this decision, the JFAC also voted to implement a uniformly permanent 2% budget cut to most of the state’s departments, amounting to about $143M in GF reductions in FY2027. Carved-out of the second round of cuts are the Medicaid program, the Idaho State Police, the Department of Correction, and the K-12 public school system. There has been a bipartisan pushback in the Idaho Legislature following the approval of the cuts, with many legislators seeing JFAC’s approach as short-sighted and fails to consider the state’s long-term growth potential. The week prior, state agencies submitted a list with potential impacts the budget cuts could have on public services, including furloughs for state employees and increased physician workforce shortages. JFAC is set to vote on operation maintenance budgets on February 13 (Idaho Capital Sun, February 6).
A large Medicaid claims dataset has been made publicly available through the Department of Health and Human Services (HHS) open data portal. The Department of Government Efficiency’s (DOGE) HHS team said the provider level billing data is intended to strengthen transparency and fraud detection efforts, pointing to alleged autism diagnosis fraud in Minnesota as an example of how the information could be used. The data includes provider-level Medicaid spending data from January 2018 to December 2024, aggregated to the provider-procedure-month level, and includes fee-for-service, managed care, and CHIP claims. HHS DOGE is seeking public research into the dataset, requesting that the “open-source community” assist in efforts to identify potential fraud, waste, and abuse. The release comes amid continued Republican scrutiny of Medicaid spending and oversight in certain states. HHS stated that privacy safeguards are in place and noted that the effort follows earlier federal initiatives to obtain and analyze state Medicaid claims data for oversight and utilization review (Inside Health Policy, February 13).
Arkansas plans to “soft launch” community engagement requirements in the summer of 2026 ahead of the January 2027 implementation date. The Department of Human Services (DHS) director of the Division of County Operations described how the agency intends to test its eligibility system by checking enrollees for compliance with the new community engagement requirements but will not require enrollees to submit any additional information. Importantly, no disenrollments will result from the test. Notices generated from the test would help enrollees understand their position and prepare for the new conditions ahead of the January 2027 go-live date. Like other states, Arkansas’ DHS is waiting for the interim final rule to be released to receive guidance on how to implement the new requirements. ARHOME, the state’s Medicaid expansion program, covers more than 220,000 residents. Previous efforts to implement work requirements in Arkansas resulted in nearly 20,000 enrollees losing coverage before being halted by a federal court in 2019. At the time of this publication, Nebraska remains the only state implementing community engagement requirements in 2026 (Arkansas Advocate, February 20).
