Issue #309
Sellers Dorsey Digest
October 22, 2026
Explore:
Turning Patient Data into Coordinated Action
Federal News
President Trump Signs Executive Order on Women’s Health
On Monday, October 19, President Trump signed an executive order to create a new division in the National Institutes of Health (NIH), the Women’s Health Division, and create a task force on women’s healthcare issues. Within 90 days, the new Women’s Health Division will begin operations and work with the existing Office of Research of Women’s Health to support research that addresses conditions that primarily or disproportionately impact women’s health. The new division will prioritize research on cancer, endometriosis, fibroids, polyendocrine metabolic ovary syndrome (PMOS), osteoporosis, menopause, infertility, cardiovascular disease, cancer, and other conditions. The task force on women’s health will be jointly led by Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. and White House Chief of Staff Susie Wiles. It will include leaders from the FDA, CMS, CDC, and other agencies. The task force is authorized to implement pilot programs that incentivize the integration of prevention, early intervention, and treatment of disease with the goal of removing silos between agencies, programs, and systems (Inside Health Policy, October 19).
CMS Proposes Rule on Medicare Advantage Provider Directories, PBM Transparency, and Dual Eligible Copayments
On October 16, CMS released a proposed rule (CMS-4214-P) to implement certain provisions of the Consolidated Appropriations Act, 2026, specifically:
- Section 6219: Eliminates the $1 generic drug copayment for full-benefit dual-eligible beneficiaries at or below 100% of the Federal Poverty Level, beginning in plan year 2028.
- Section 6220: In alignment with the Requiring Enhanced and Accurate Lists of Health Providers (REAL Health Providers) Act, beginning in calendar year (CY) 2028, Medicare Advantage (MA) organizations would be required to verify and update provider directories at least every 90 days (annually for acute inpatient hospitals, critical care services, and surgical services), publish accuracy scores, and disclose network, provider group, and ownership information in a public, machine-readable format. Enrollees who receive out-of-network care because of an inaccurate directory would be protected from higher cost sharing. CMS proposes codifying these requirements by CY2029 and adding “cultural and linguistic capabilities” as a directory element, though further clarity is needed on what this includes.
- Section 6224: Regulates pharmacy benefit manager (PBM) payments in Medicare Part D by limiting compensation to bona fide service fees based on fair market value rather than drug costs. PBMs would also be required to apply consistent definitions and methodologies in price guarantees and report compensation and cost performance data annually to plan sponsors and CMS. The rule also seeks funding disallowances for violations of remuneration requirements.
If finalized, the rule would improve the accuracy of MA provider directories, increase PBM transparency, and lower prescription drug costs for some low-income Medicare beneficiaries, with key provisions starting in 2028. The proposal is open for public comment for 60 days. It is designed to align with the National Provider Directory (NPD) that CMS is developing, a centralized, public-facing repository for provider directory data (Inside Health Policy, October 16; Inside Health Policy, October 16; CMS, October 16; CMS, October 16).
DOJ Issues Policy to Streamline Self-Disclosure of Criminal Healthcare Fraud
The Department of Justice (DOJ) issued a new policy on voluntary self-disclosure protocol for criminal healthcare fraud on October 15. Companies will now only need to disclose the conduct to the Fraud Division to receive the benefit of both the DOJ’s Corporate Enforcement Policy and the Health and Human Services Office of Inspector General (HHS-OIG) Health Care Fraud Self-Disclosure Protocol. The agencies hope to streamline the disclosure of criminal conduct and promote accountability, transparency, and integrity. The HHS-OIG has also updated its policy to reflect the changes that have made the DOJ’s Fraud Division the single point of contact. The DOJ may still prosecute some companies that self-disclose but do not qualify as voluntary. However, these companies will see reduced penalties according to the DOJ’s recent corporate reporting policy memo (Modern Healthcare, October 19).
State News
Minnesota DHS Warns It May Have to Claw Back Funds Amidst Funding Standoff with CMS
In a recent statement to Becker’s, the Minnesota Department of Human Services (DHS) indicated that if CMS continues to disallow funds, it may be forced to recoup funds from the state’s Medicaid providers. The warning follows CMS’s deferral of federal funding over fraud, waste, and abuse (FWA) allegations. According to a 2025 KFF report, of the state’s $18.5B of total Medicaid spending, $11.8B was federal funding. Although CMS approved DHS’s corrective action plan (CAP), funding has not been restored, and the state is seeking clarity on a path to resolution. Minnesota filed a federal lawsuit over the issue in March, but the case has been stayed until at least January 2027. Meanwhile, under CMS guidance, the state paused enrollment of new Medicaid providers across 13 programs beginning January 30, 2026, with 12 of those programs having resumed enrollment as of July (Becker’s Hospital Review, October 16).
Louisiana Renews $16 Billion in Medicaid Managed Care Contracts
Louisiana’s Joint Legislative Committee on the Budget approved more than $16B in Medicaid managed care contracts for 2027, covering approximately 1.2 million beneficiaries across four managed care organizations (MCOs): Aetna, AmeriHealth Caritas, Humana, and Louisiana Healthcare Connections. The renewals follow the withdrawal of UnitedHealthcare and an Elevance Health–Blue Cross Blue Shield of Louisiana joint venture from the state’s Medicaid market. Louisiana Healthcare Connections also reached an agreement with Ochsner to maintain network access for approximately 70,000 Medicaid enrollees. During the approval process, lawmakers raised concerns about rising Medicaid spending and the state’s continued poor health outcomes. State Medicaid officials attributed increasing costs to healthcare inflation and worsening health conditions among enrollees (Louisiana Illuminator, October 16).
Utah Expands Oversight of AI Healthcare Pilots
Utah is expanding its oversight of clinical AI tools through a third-party evaluation system for its AI Regulatory Sandbox. The move follows the state’s recent expansion of the program to include three new pilots involving AI-generated treatment plans and prescribing of non-controlled substances, along with two agreements with health systems. Utah is the first state to move forward with clinical generative AI technology intended to become autonomous without FDA approval. To oversee these pilots, the state’s Office of Artificial Intelligence Policy (OAIP) is working with the Coalition for Health AI (CHAI) to establish a network of independent evaluators. Evaluations will focus on patient safety, privacy protections, and clinical performance, with greater emphasis on monitoring AI tools in real-world healthcare settings rather than relying solely on testing before deployment. Participating companies will cover evaluation costs, while independent evaluators must report safety concerns and provide findings to OAIP to help determine whether pilots should continue or be modified (Inside Health Policy, October 19).
Trump Administration Defers Additional $1.2B in California Medicaid Funding
California now faces $2.5B in deferred Medicaid reimbursements following the Trump administration’s decision to delay an additional $1.2 billion over potential fraud concerns. CMS Administrator Dr. Mehmet Oz cited a 24% increase in the state’s personal care services program over three years, reportedly twice the average growth rate in other states, but did not provide evidence of fraud. The decision follows a $1.3B funding deferral in May involving hospice and in-home care programs. Senator Alex Padilla raised concerns about potential impacts on older adults and people with disabilities, while Governor Gavin Newsom’s office has previously defended the In-Home Supportive Services (IHSS) program as a less costly alternative to nursing home care, estimating annual costs of $30K compared to $137K (LA Times, October 20).
SPAs and Waivers
Waivers
- 1115
- Indiana
- On October 9, Indiana submitted a request for a new 1115 waiver demonstration titled, “Healthy Indiana Plan 3.0.” The state is seeking authority to cover its Medicaid expansion population through a standalone demonstration instead of the state plan. The state requests authority to provide a simplified benefit design, where enrollees would be offered a single benefit package and point-of-service copayments. Enrollees would be able to reduce their copayments by completing preventive care and chronic disease management activities. The application also seeks explicit authorization from CMS to terminate the demonstration or cap enrollment if program costs exceed available state funding. The federal public comment period will be open from October 20, 2026, through November 19, 2026.
- Indiana
SPAs
- Payment
- Georgia (GA-26-0005, effective July 1, 2026): Discontinues the $1,500 add-on payment for newborn deliveries in rural counties with a population between 35,001 and 50,000.
- Massachusetts (MA-25-0027, effective July 7, 2025): Updates acute outpatient hospital services payment methodology.
- New York (NY-25-0068, effective November 1, 2025): Extends eligibility for medically fragile young adults residing in pediatric specialized nursing facilities (NF), allowing them to remain until age 36.
- Ohio (OH-26-0015, effective July 1, 2026): Establishes processes for monitoring noncompliance and corrective action plan implementation for psychiatric hospitals, managed care organizations, and primary care case managers.
- South Carolina (SC-26-0001, effective January 1, 2026): Establishes a reimbursement rate of $1330/day for state government-owned Psychiatric Residential Treatment Facilities (PRTF).