A new CMS initiative aims to improve how care is delivered to children covered by Medicaid and CHIP, particularly those with complex medical and behavioral needs. Care is often fragmented across providers, making coordination difficult and increasing the risk that children miss early interventions, which can lead to more serious and costly care over time. To address this, CMS is launching the ASPIRE model, a pilot that will support a small number of states in testing a more coordinated, whole-child approach across Medicaid and CHIP populations.
CMS has set aside $125M over eight years for up to five states to support integration of physical, behavioral, and community-based services. The model also shifts away from fee-for-service by tying payments to outcomes, prevention, and care coordination. The initiative introduces additional support for families, including a single point of contact and 24/7 access to clinical guidance, with the goal of reducing administrative burden and improving care navigation. Overall, ASPIRE is intended to test whether a more integrated, value-based approach can improve outcomes and reduce costs for high- and rising-risk children (State News, March 24).
Following CMS’ release of its Notice of Benefit and Payment Parameters for 2027 Proposed Rule, key stakeholder groups including the Association for Community Affiliated Plans and Alliance of Community Health Plans (AHIP), Federation of American Hospitals and America’s Essential Hospitals came together in a March 13 letter to urge the agency not to finalize the rule. Both the insurer and provider groups expressed a shared view that non-network plans are unable to offer the level of comprehensive coverage required for QHP certification. They ask CMS to further clarify how it defines adequate access and how it’ll be enforced, as well as how consumers will be protected from balanced billing. The stakeholders request that CMS either cuts the proposal or delays it and seeks additional input from stakeholders. The AHA also sent a letter to the agency, highlighting similar concerns (Fierce Healthcare, March 18).
CMS deputy administrator Chris Klomp told reporters that the agency is considering plans to make Medicare Advantage the default enrollment option for seniors. However, no definitive policies have been announced, and such a change would require authorization from Congress. Legislation was introduced by a representative last May to switch default enrollment to the private option but did not progress past Committee. This potential shift comes as insurers in Medicare Advantage have faced additional scrutiny regarding excess payments (Health Payer Specialist, March 23).
On March 23, the Committee on Oversight sent a letter to Governor Gavin Newsom (D-CA) announcing that it has launched an investigation into the state’s federally funded hospice programs. The Republican-led committee alleges that the state overbilled Medicaid and enrolled beneficiaries without their knowledge. Based on an analysis by CBS News, in LA County 700 out of its 1,800 hospices have three or more flags for fraud. In the letter, the committee requests information on all documents and relevant communications between the Governor’s office and Departments of Health Care Services, Public Health, Social Services, and the Division of Medi-Cal Fraud and Elder Abuse (DMFEA) covering Medicare Part A hospice programs and Medi-Cal hospice programs. The state must submit this information no later than April 6 (Committee on Oversight, March 23; CBS News, March 23).
On Wednesday, March 18, two Democratic lawmakers introduced the Hospice Care, Accountability, Reform and Enforcement (CARE) Act of 2026, which would institute several policies aimed at reducing fraud in hospice care. The policies include a five-year moratorium on new hospice enrollment in Medicare, new data submission requirements for providers to receive payment, stronger hospice ownership transparency rules, increasing survey frequency for new hospices, and requiring that HHS send enrollees an explanation of benefits shortly after entering hospice. The CARE Act would also implement payment reforms in hospice care, like increasing reimbursement to providers that offer certain palliative care services. The bill would also require that the federal government move to outlier payments for hospice providers with high-cost, complex palliative services, covering part of the service plus a fixed loss amount. While stakeholders are generally supportive of the legislation, some policies have raised concerns about unintended consequences, like payment reform for routine services, new referring physician requirements, and the prohibition on new hospice entrants (Inside Health Policy, March 20).
KFF recently conducted a follow-up survey with ACA marketplace enrollees it originally surveyed last year. For many, the rising healthcare costs has added to the financial strain, with many finding it difficult to afford other expenses, such as groceries (37%), monthly utilities (32%), rent or mortgage (30%), and transportation costs (30%).One in ten former enrollees have left the marketplace and are now uninsured, but even as most have returned, about three in four (73%) are worried about being able to afford emergency care and hospitalization with about half of the respondees worrying about being able to afford routine visits (49%) and prescription drugs (45%) (KFF, March 19; Healthcare Dive, March 23).
Mississippi is facing a Medicaid funding gap as federal pandemic funding expires, requiring the state to backfill costs with state dollars. The Division of Medicaid is requesting about $1.36B in state funding, including a $390M increase, even though enrollment has significantly declined. Lawmakers continue to negotiate toward a final number, with the House proposing $969M and the Senate $1.07B, both below the agency request. If the agency’s full request is not funded, the state has indicated provider reimbursement cuts could be up to 11%, which could impact provider participation and access to care. The pressure is being driven by rising costs, particularly for long-term care and home-based services, combined with the loss of federal support and limited financing options moving forward (Mississippi Today, March 20).
On March 19, the Iowa House passed House File 2739 (HF 2739) to increase the premium tax rate on health maintenance organizations. To generate additional revenue, state lawmakers would increase the tax on HMOs from 0.925% to 3.5%, effective January 1, 2026, through September 30, 2026, and then drop to 0.95% effective October 1, 2026. HF 2739 would also transfer $347M from the taxpayer relief fund to the state’s general fund effective immediately upon passage. An additional $89M would be directed from the general fund to Iowa’s Department of Health and Human Services for the Medicaid program. These changes come as the Medicaid program is forecasted to have a $90.6M deficit in FY2026 and a $167.6M deficit in FY2027. Iowa Democrats strongly opposed the tax and filed several amendments that were not passed. Republican lawmakers argued that the opportunity to draw down additional federal funding with the HMO tax is critical, and that the tax would not be passed to residents through higher insurance premiums. The legislation moves to the Iowa Senate for debate where its companion bill, Senate File 2464, was approved by the Senate Ways and Means Committee (Iowa Capital Dispatch, March 19).
CMS is continuing to crack down on potentially fraudulent practices in Medicaid programs across the county. Florida is the first Republican-led state to receive CMS scrutiny related to fraud, waste, and abuse in its Medicaid program. Until this point, only California, Minnesota, New York, and Maine, all led by Democratic governors, have received letters from the federal government requesting additional information on program integrity efforts. According to a March 17 letter, Florida Medicaid will have 30 days to respond to the agency’s request for more information on program integrity efforts regarding high-risk categories like telemedicine providers, durable medical equipment providers, and pharmacies. Moreover, CMS is requesting information on what analytical tools Florida Medicaid uses to identify unusual billing trends, such as predictive models or algorithms (Inside Health Policy, March 19).
On March 23, the Idaho Legislature passed House Bill 863, which would cut reimbursement rates for residential rehabilitation services under Medicaid by $21.8M in FY2027. The cuts were recommended by Governor Little. The bill intends to implement the cuts by reducing pay raises for providers that were enacted by the legislature in 2022 but did not go into effect due to legal proceedings in a lawsuit against the state. A separate bill detailing the Department of Health and Human Services budget incorporates the $21.8M reduction. The reductions from HB 863 combined with the rate cuts from 2025 would result in a 10% reimbursement reduction for residential rehabilitation providers. Opponents of the bill argued that further cuts could upset the healthcare system and limit access to care. However, lawmakers who supported the bill claim that even with the current reductions, providers’ rates are still 33% higher compared to four years ago. HB 863 now goes to Governor Little’s desk for approval or veto (Idaho Capital Sun, March 23).
On March 19, CMS informed Minnesota’s Medicaid agency that its corrective action plan (CAP) has been approved. Prior to approval, CMS had acknowledged that Minnesota had met its goals for February 1 and March 1. However, it still remains unclear if the federal government will release the $243M in deferred funding, as promised by CMS Administrator Dr. Mehmet Oz. The agency has asked Minnesota to pause its lawsuit, but post-approval, state leaders are currently assessing the impact, and an agency lawyer has sent a letter to the U.S. District Court judge presiding over the case for more information. As part of the plan, by the end of May, Minnesota will be expected to conduct a revalidation program of high-risk providers (MPR News, March 20).
Nebraska has posted a draft 1115 waiver to limit all retroactive coverage effective October 1, 2026, for the full Medicaid population, including children, pregnant individuals, the elderly, and those with disabilities. Instead of the current three-month retroactive coverage policy, the state is seeking to limit retroactive coverage to the month in which an individual submits a Medicaid application. This goes beyond the changes in H.R. 1 which will reduce the retroactive coverage period to one month for the Medicaid expansion population and two months for other enrollees starting in 2027. The Nebraska Department of Health and Human Services (DHHS) estimates that the retroactive coverage policy change will result in savings totaling between $18M to $21M each year of the waiver’s five-year period. State officials in support of the waiver argue that the change will result in cost savings and will incentivize hospitals to enroll Medicaid-eligible patients quickly. However, many other stakeholders in Nebraska have voiced concern over the policy, finding it punitive and putting providers and patients at risk of negative financial impacts. Nebraska will accept public comment on its 1115 waiver through Thursday, March 26 (Flatwater Free Press, March 23).
New York has received approval from CMS to transition its Essential Plan following a meeting on March 20 between Dr. Oz and Governor Hochul. Moving forward, the state will restart its Basic Health Plan, which was also approved by the federal government this month. Starting in July, Essential Plan enrollees will receive 90-day notices of changes to their coverage. However, approximately 480,000 enrollees will no longer qualify for healthcare coverage as the eligibility for the program decreases from 250 to 200% of the federal poverty line. Discussions on coverage options for impacted individuals are expected to occur this week, but are unlikely to be fruitful ahead of the state’s budget deadline on April 1 (Politico Pro, March 20).
