Ohio Medicaid Implements Moratorium on HCBS Programs as the State is Probed for Potential FWA
On June 4, in alignment with Governor DeWine’s fraud prevention initiatives and authorization of EO 2026-02D days earlier, the Ohio Department of Medicaid (ODM) announced that it would suspend payments to 49 home health providers that the state has detected to be high-risk. The state’s initiative is part of an inter-agency collaboration that looks to enforce a six-month moratorium on new enrollments of high-risk providers, require more frequent checks, and implement a GPS-based Electronic Visit Verification (EVV) to monitor in-home visits. The moratorium will remain in effect from May 14 to November 14, 2026, and pause new Medicaid enrollment for home health, hospice, and related provider types. Following the state’s decision, on June 3 at the hearing for the House Oversight Committee’s Task Force on Defending Constitutional Rights and Exposing Institutional Abuses, legislators argued about the legitimacy of these claims. An Ohio State Auditor spoke on his office’s findings of $4.4B in potential fraud, and that about 56% of HCBS services were not being processed by the required EVV systems (Inside Health Policy, June 3; Ohio Medicaid, June 4).
New Mexico Bucks National ACA Enrollment Declines with State-Funded Subsidies
New Mexico reported an 18% increase in Affordable Care Act marketplace enrollment, reaching 84,099 enrollees, despite enrollment declines in most states following the expiration of enhanced federal premium tax credits at the end of 2025. The state is the only one to fully replace the lost federal subsidies, using funding through its Health Insurance Marketplace Affordability Program to lower premiums and out-of-pocket costs for marketplace enrollees through mid-2027. State officials credit the subsidies with improving affordability and helping residents maintain coverage, while industry observers question whether the approach can be sustained as healthcare costs continue to rise. Some estimates suggest the expiration of the enhanced federal subsidies could result in more than 4 million Americans losing coverage nationwide (Health Payer Specialist, June 5).
Minnesota Cuts Medicaid Payments to Thousands of Providers Following Federal Fraud Review
Minnesota disenrolled more than 3,000 providers across 13 Medicaid service categories, including personal care assistance, autism services, and non-emergency medical transportation, after completing a federally required revalidation effort aimed at addressing fraud concerns in high-risk programs. The state reviewed 5,583 providers in roughly four months, a process that is typically completed over three to five years, in response to federal pressure and a May 31 deadline tied to potential cuts in Medicaid funding. Of the providers reviewed, 2,061 were approved to continue services without interruption, while 2,491 were terminated due to revalidation issues. Providers and advocates argue the accelerated process resulted in payment disruptions for legitimate organizations because of paperwork issues, pending reviews, and administrative errors rather than evidence of fraud. While more than 3,000 providers lost funding, only 59 providers were referred to the state’s Office of Inspector General for further investigation. More than 800 providers have appealed their terminations. Minnesota’s Medicaid program spent $18B in 2024, with approximately 60% funded by the federal government (Minnesota Reformer, June 4).
Rhode Island House Approves Record $15.2B FY2027 Budget
The Rhode Island House approved a record $15.2B FY2027 budget in a 65-10 vote, representing roughly $300M more than the governor’s proposal and $900M above the current fiscal year budget. The spending plan includes a phased-in 3% tax increase on income over $1M, projected to generate $22M in FY2027 and $142M annually by the end of the decade, as well as $1.3M to establish a new state inspector general’s office focused on investigating fraud, waste, and abuse. The budget includes significant healthcare investments, including $116M to increase Medicaid reimbursement rates for behavioral and home health providers, nearly $39M for hospitals and healthcare providers to offset anticipated uncompensated care costs, and $22M to help reduce health insurance premiums for individuals purchasing coverage through the state’s marketplace. Lawmakers said the healthcare and social service investments are intended to help offset anticipated impacts from new federal restrictions on Medicaid and SNAP. Additional funding supports public transit, child tax credits, food assistance programs, and other social services. The proposal now heads to the Senate for consideration (News From the States, June 5).
Nebraska Declines Ask to Push Work Requirement Implementation to HR 1 Deadline
Last month, Nebraska became the first state to enact Medicaid work requirements under HR 1, but issues have since arisen following the Community Engagement Interim Rule release on June 1. Advocates in the state look to the Department of Health and Human Services (DHHS) to delay implementation until January 2027, as there remains uncertainty on how the guidance will affect Medicaid enrollees with serious medical needs or disabilities, such as mental health conditions, cancer, and HIV. The DHHS is currently reviewing the guidance but has declined any asks to delay. Many in the state worry about the coverage loss for thousands across the state and closures of rural hospitals (Nebraska Examiner, June 5; Health Payer Specialist, June 8).
Illinois Awards New HealthChoice Medicaid Contracts Through 2030
Illinois selected six insurers to participate in HealthChoice Illinois, the state’s largest Medicaid managed care program serving more than 2 million beneficiaries. The new contracts, which run through 2030, were awarded to Centene, Aetna, Molina, Health Care Service Corporation, CountyCare, and Humana, which will join the program for the first time as it expands its Medicaid footprint in the state. Valued at more than $140B over the initial term, the contracts include an option for Illinois to renew for up to five years and six months, which could add another $291B in value. The agreements place greater emphasis on care coordination, behavioral health, and social drivers of health. The awards come as Illinois prepares for upcoming federal Medicaid changes, including work requirements that could affect approximately 734,000 Medicaid beneficiaries beginning in 2027, though the state expects many individuals to qualify for exemptions (Healthcare Dive, June 9).
