Issue #300
Sellers Dorsey Digest
August 20, 2026
Explore:
6 Strategies for the Next Phase of HCBS Transformation: Honoring the ADA in Today’s Fiscal and Operational Realities
Federal News
Rural Areas Projected to See More Acute Healthcare Professional Shortages
A new report released by AMN Healthcare, a staffing firm, projects a shortage of physicians to continue, reaching upwards of 86,000 positions in primary and specialty care by 2036. Registered nurses are also projected to have a shortfall of 63,000 by 2030. The firm’s healthcare hiring data, cross-referenced with federal labor data, found that rural healthcare organizations will experience the brunt of workforce shortages. Among the more than 7,700 federally designated rural, primary care health professional shortage areas (HPSAs), around 13,000 providers are needed to fill the gap. However, according to AMN’s report only 2% of new physicians reported wanting to work in rural and remote areas. In 2025, hiring rates for registered nursing positions in rural areas were only a third of hiring rates in urban areas. AMN suggests that this could be exacerbated by healthcare cuts from H.R. 1, despite other investment under the Rural Health Transformation Program. However, the report highlights that new artificial intelligence tools could be integrated into workflows to reduce the potential for burnout among the existing rural health workforce (Healthcare Dive, August 13).
HHS Announces $102M Health Center Expansion
On August 13, 2026, HHS, through HRSA, announced $102M in New Access Points awards to expand the Health Center Program. The funding will support 158 new and existing health centers in establishing 415 new sites, with HHS estimating the expansion will increase access to comprehensive primary care for almost 1 million people nationwide. The new sites will provide primary care, as well as behavioral health, substance use disorder, oral health, preventive, and nutrition services in medically underserved communities. HRSA-funded health centers currently serve more than 32 million people across more than 16,000 service sites nationwide. HRSA also announced it is exploring a platform to help health centers identify and purchase American-made medical supplies and equipment (HHS, August 13).
HHS OIG Opens Pathway for Food-as-Medicine in FQHCs
The Department of Health and Human Services Office of Inspector General (OIG) issued a favorable opinion (AO 26-16) that may allow additional Federally Qualified Health Centers (FQHCs) to provide limited food-as-medicine programs. An FQHC was providing a food-as-medicine program for patients with diabetes or hypertension to support a healthy diet. The FQHC under review provided the program’s food boxes or vouchers without charge to participants but billed participants and their insurers, as applicable, in line with the facility’s fee schedule and sliding fee discount policy. The program was also partially supported by grant funding. The OIG found that the FQHC’s arrangement did not satisfy the Financial Need-Based Exception but concluded that the risk of fraud and abuse is satisfactorily low. The findings of AO 26-16 may allow other FQHCs to implement food-as-medicine programs, provided that scope remains appropriate (Hall Render, August 17).
Bipartisan Group of Senators Introduce Health Care Fraud Prevention and Enforcement Act
A bipartisan group of Senators introduced a bill titled “Health Care Fraud Prevention and Enforcement Act.” The legislation, brought forth by Senators Cortez Masto, Grassley, Crapo, and Wyden, would increase mandatory funding for federal fraud enforcement as well as expand and introduce efforts to strengthen program oversight in the ACA Marketplace and Children’s Health Insurance Program (CHIP). This includes newly authorizing the HHS Office of Inspector General (OIG) to use the Health Care Fraud and Abuse Control (HCFAC) program funding to oversee the ACA Marketplace plans, both public and private. In CHIP, program data would, for the first time, be added to the CMS Medicare-Medicaid Data Match Program starting in 2027 to better identify potential patterns of fraud.
This bipartisan bill in the Senate comes after House Republicans introduced a bill titled “Anti-Fraud Fund Act of 2026,” allocating $28B over three years. The Health Care Fraud Prevention and Enforcement Act would appropriate a smaller amount of funding: $2.61B in FFY2028 and $2.82B in FFY2029, with annual adjustments for inflation thereafter. According to the Senators, the bill would result in cost savings to the federal government of at least $45B. Notably, Senator Crapo serves as the Senate Finance Committee chairman and Senator Wyden as a ranking member, while Senators Grassley and Cortez Masto are members of the committee (Inside Health Policy, August 13; Sen. Chuck Grassley News Releases, August 7).
New Survey Supports ICHRA Adoption for the Stabilization of ACA-Related Risk Pools
A new survey by the HRA Council, a nonpartisan advocacy association, may reinforce the idea that Individual Coverage Health Reimbursement Arrangements (ICHRAs) will help support more stable ACA risk pools, as more employers consider transitioning from traditional group health plans to the benefit. As of January 2026, the number of employers offering ICHRAs has doubled over the previous year. One key benefit of the model is its flexibility, allowing employers to offer coverage tailored to individual needs through different plan tiers. Early on, ICHRAs were a popular choice amongst small businesses who struggle to offer coverage to its employees; however there has been a shift recently as larger employee base firms have begun offering ICHRAs, leading to increased stability to risk pools (Fierce Healthcare, August 14).
State News
Certain States to Prohibit Self-Attestation of Medical Frailty Ahead of Schedule
Six states plan to implement stricter community engagement policies starting in 2027. Despite having the option to accept self-attestation of medical frailty in 2027, Arkansas, Indiana, North Carolina, North Dakota, New Hampshire, and Utah have either statutes or regulations that prevent the Medicaid agency from accepting this method of compliance. Ohio is in the process of implementing a proposed rule that will also prohibit self-attestation. Starting in 2028, all states subject to the community engagement requirements will not be able to accept self-attestation without additional documentation. The medical frailty definition for community engagement requirements remains contested, with 25 states and the District of Columbia pursuing a lawsuit against the federal government over its interpretation of medical frailty (Health Payer Specialist, August 12).
Washington Caregiver Union Pushes for Higher Medicaid Reimbursement Rates
The state of Washington and the labor union SEIU 775 are negotiating caregiver reimbursement rates that will affect about 80,000 workers as the state faces a projected budget shortfall heading into the 2027 legislative session. SEIU initially sought a 12% wage increase over two years, estimated to cost the state about $367M, but revised its proposal to a 3% increase next year and 5% the following year, with an estimated state cost of about $224M. The state has proposed no wage increases, though other contract costs would add about $60M to the state budget over the next two fiscal years.
Washington currently pays $37.42 per hour in Medicaid reimbursement for caregivers, including wages and benefits, while workers generally earn between $22 and $25 per hour. Under the state proposal, the Medicaid reimbursement rate would stay close to the current $37.42 per hour next year before increasing to $38.13 in FY2029, while the union is proposing $38.44 next year and $40.68 the following year. The parties have until October 1, 2026, to reach an agreement for inclusion in the governor’s proposed two-year budget, with the next rate-setting board meeting scheduled for August 24 (Washington State Standard, August 17).
Dartmouth Health Plans to End Tele-ICU and Tele-ED Services
Five Vermont hospitals could lose access to remote emergency and intensive care support as Dartmouth Health prepares to discontinue its Tele-ICU and Tele-ED services. The programs connect rural hospitals with specialists at Dartmouth Hitchcock Medical Center for critical care monitoring, emergency physician support, documentation, and patient transfers. In Vermont, Northwestern Medical Center and Southwestern Vermont Medical Center use Tele-ICU, while Brattleboro Memorial Hospital, Grace Cottage Hospital, Southwestern Vermont Medical Center, and Mt. Ascutney Hospital and Health Center use Tele-ED. Dartmouth Health said the programs are not financially sustainable at their current scale without external support but did not disclose their operating costs. The decision follows a $63.5M operating deficit reported in May 2026. Dartmouth Health has not set a final closure timeline and said it will work with participating hospitals to establish alternatives before ending the services (VT Digger, August 17).
Georgia Seeks Increased Funding to Keep Their Partial Expansion Program Afloat
On August 13, Georgia’s Board of Community Health announced that they have requested the federal government to increase the federal match from 67% to 90%, so it can continue to support Pathways to Coverage, its partial Medicaid expansion program. Under the program, low-income adults must complete 80 hours of work, school, or community service activities to be eligible for healthcare coverage. Previously, the only exemption under the program was for parents who are caregivers to a child under the age of 6, but enrollees are expected to increase by about 100,000 due to new federal guidelines that expand exemptions to individuals who are medically frail, former foster care individuals, and parents of children under the age of 13. The board alleges that the state will be unable to afford the program in the long term.
Pathways is being temporarily extended until the end of 2026, with a pending request to continue the program through 2030. The waiver amendment is open for public comment until September 14 (Georgia Recorder, August 14).
Arkansas Secretary of Human Services Relays Commitment to Medicaid Expansion Program
Arkansas Secretary of Human Services announced that the state will not consider ending Medicaid expansion at a meeting with the Arkansas Legislative Council’s Hospital, Medicaid, and Developmental Disabilities Study Subcommittee. During the meeting, Secretary Janet Mann said that she is confident CMS will grant the state’s two-year extension request of the ARHOME program. The state is currently weighing the options between moving its Medicaid expansion population to either managed care or fee-for-service (FFS). If the state chooses the managed care option, it will lower the amount of insurance premium tax revenue collected that is used to fund the state’s share of Medicaid expenditures. Moving to FFS would completely eliminate the revenue. If, however, CMS does not grant the temporary extension, enrollees could be moved to FFS on January 1 (Arkansas Advocate, August 17).
SPAs and Waivers
SPAs
- Services
- Arkansas (AR-26-0013, effective July 1, 2026): Establishes coverage and payment methodology for non-IMD acute care hospitals providing inpatient residential treatment for individuals under the age of 21 with substance use disorders.
- Nebraska (NE-26-0005, effective July 1, 2026): Establishes certified lactation consultants as providers under the Prenatal Plus Program.
- Payment
- Michigan (MI-26-0007, effective July 1, 2026): Updates hospital payment methodology to disallow readmissions at a different hospital within 15 days of being deemed separate.
- Minnesota (MN-26-0008, effective January 1, 2026): Updates payment methodology for Residential Crisis Stabilization (RCS), Youth Assertive Community Treatment (ACT), and Intensive Rehabilitative Mental Health Services in Central, Metro, Northeast, Northwest, Southeast, and Southwest regions, with rate reductions.
- Nevada (NV-26-0011, effective June 1, 2026): Aligns state plan with Section 202 of the Consolidated Appropriations Act of 2022, related to commercial insurance (CI) pursuit of recoveries if it is the primary insurer and requiring response to state inquiries by insurance carriers or third-party payers.
- New Jersey (NJ-25-0015, effective October 1, 2025): Establishes a supplemental payment for qualifying physicians or professional service practitioners under eligible health systems.
- New Mexico (NM-26-0003, effective July 1, 2026): Establishes a unified preferred drug list (PDL) and updates payment methodology.
- Oregon (OR-26-0004, effective July 1, 2026): Updates payment methodology of certain fee-for-service (FFS) and substance use disorder (SUD) treatment services with rate increases.
- Oregon (OR-26-0005, effective July 1, 2026): Updates payment methodology for family planning services and family planning clinic rates.
- South Dakota (SD-26-0001, effective July 1, 2026): Updates payment methodology for Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs).
- Washington (WA-26-0007, effective April 1, 2026): Updates fee schedule effective dates for Rural Health Clinics (RHCs) to April 2026.
- Washington (WA-26-0013, effective July 1, 2026): Clarifies oversight measures for managed care organizations (MCOs) and Primary Care Case Management (PCCM) related to identification of non-compliance and violation remediation.