Sellers Dorsey Digest

Federal Updates

News

President Elect Taps Jim O’Neill for HHS Deputy

• President-Elect Donald Trump has selected Jim O’Neill as his nominee for HHS Deputy Secretary. O’Neill’s experience includes work in the private sector and a previous position as an HHS official during the George W. Bush administration. Should he be confirmed to the role, O’Neill would work as a deputy to HHS Secretary nominee Robert F. Kennedy, Jr. and assist in overseeing the agency’s operations and creating improvements in transparency and accountability (Health Payer Specialist, November 27; Inside Health Policy, November 27).

Federal Regulation and Guidance

Focuses of Proposed Rule Include Medicare Advantage (MA) Prior Authorization, Provider Directories, and Marketing Guidelines

• On Tuesday, November 26, CMS unveiled its proposed rule for MA and Part D plans for 2026, which includes a requirement for MA plans to share full provider directories with CMS. The rule also proposes enhanced reporting on prior authorizations and an expanded definition of MA plan marketing to be regulated by CMS. Starting January 1, 2026, the rule would prevent MA plans from charging higher in-network cost-sharing for behavioral health services—such as mental health specialty care, psychiatric inpatient care, partial hospitalization, substance use disorder outpatient services, and opioid treatment programs—compared to traditional Medicare. To further ensure adherence to federal non-discrimination policies, the proposed rule mandates that MA plans conduct an annual health equity analysis of their prior authorization practices. This analysis would identify any disparities and require plans to take corrective actions where necessary. The proposed rule aims to further reform the prior authorization process for MA plans by requiring them to publicly disclose their internal coverage criteria for services and ensure these are easily accessible on their websites. The criteria may not delay or deny medically necessary care that is covered by traditional Medicare. MA plans would also be required to resolve any discrepancies between their criteria and Medicare’s National Coverage Determinations (NCDs) or Local Coverage Determinations (LCDs) (Inside Health Policy, November 26; Modern Healthcare, November 26).

Federal Studies and Reports

OIG Issues Report on HHS Office for Civil Rights Regarding Cybersecurity

• Given the rise of successful cyberattacks, the Office of Inspector General (OIG) conducted an audit of the Office for Civil Rights (OCR) and released its report on November 25, detailing failures of the HHS office in mitigating cybersecurity risks related to the Health Insurance Portability and Accountability Act (HIPAA). The OIG evaluated the OCR’s periodic HIPAA audits from 2016 and 2017 as required by the Health Information Technology for Economic and Clinical Health (HITECH) Act. The scope of the report includes actions taken by the OCR from January 2016 through December 2020, though a HIPPA compliance audit has not been completed since 2017. The report found that while the OCR did fulfill its statutory requirement, it did not effectively assess electronic Protected Health Information (ePHI) protections or improve cybersecurity protections. The OCR’s audits only investigated eight of the 180 HIPAA Rules requirements, none of which related to physical and technical security safeguards. The OIG recommended that the OCR enhance its HIPAA audit program by expanding the scope of assessments, implement standard practices to correct identified issues in a timely manner, define and document criteria for determining if an identified compliance issue during a HIPAA audit should initiate a compliance review, and establish metrics to better monitor the effectiveness of HIPAA audits in improving ePHI protections. The OCR agreed with three of the four OIG recommendations. Additionally, the OCR highlighted budget and personnel constraints that have persisted for several years despite increasing health breaches (OIG, November 25; Fierce Healthcare, November 26).

State Updates

News

Alabama Medicaid Requests Increased State Funding in FY2026

• Alabama Medicaid Commissioner Stephanie Azar submitted the agency’s FY2026 budget to the state with requests for increased funding, citing inflation and increasing healthcare costs as drivers of the request. Azar did not disclose the amount requested and noted that other states are experiencing similar issues. KFF reported that state Medicaid spending rose by nearly 20% in FY2024 due to a decrease in federal funding. The organization anticipates spending will stabilize at 7% in FY2025. Alabama Medicaid’s state budget requests have varied over the years, with FY2025 seeing an increase while FY2022 saw a decrease in funding requests. In FY2023, Alabama Medicaid only raised its request by 3.2% despite increased enrollment during the pandemic. Currently, Medicaid enrollment in Alabama is under 1.1 million following the end of unwinding. Despite uncertainty in funding, the Medicaid director does not anticipate service cuts for beneficiaries (Alabama Reflector, November 27).

Projected Budget Deficits of $10B to $12B in Washington State

• On November 19, Washington State’s Office of Financial Management (OFM) released a budget reductions FAQ detailing its projected budget deficit of $10B to $12B over a four-year period. A November 8 letter from the governor’s budget director, Pat Sullivan, noted that the deficit stems from rising costs in program maintenance, increased caseload, and declines in revenue forecasts. Governor Jay Inslee is expected to release the biennial budget by December 20 with ideas to mitigate the budget gap, while governor-elect Bob Ferguson will take the helm in January. In next year’s legislative session, state legislators will propose their own budget proposals and solutions to decrease or eliminate the budget gap, such as spending cuts and tax raises. The final biennial budget is expected to be released by late April and enacted shortly thereafter (Axios Seattle, December 2, OFM, November 8; OFM, November 29).

Arkansas Lawmakers Push Medicaid Expansion for Postpartum Coverage

• The Arkansas legislative session began last week with bipartisan bill filings aimed at expanding postpartum Medicaid coverage to 12 months, an effort previously rejected by Governor Sarah Huckabee Sanders, which left Arkansas as the only state without such an extension. Representative Aaron Pilkington’s (R-Knoxville) bill offered two options: coverage through the ARHome managed care model or traditional fee-for-service, ensuring women without coverage during transitions are included. House Minority Leader Andrew Collins (D-Little Rock) also introduced a similar bill with slight differences, emphasizing bipartisan collaboration during Tuesday’s Democratic press conference. Expanding postpartum Medicaid has been a priority for Pilkington for two years, reflecting growing acknowledgment of gaps in coverage for postpartum women (MSN, November 21).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Arizona
    • The state has submitted an amendment to expand coverage for former foster care youth. Arizona is requesting authority to continue coverage for individuals who turned 18 on or before December 31, 2022, until a beneficiary reaches age 26. With this amendment, the state aims to help address the increased risk of chronic health conditions and health related social needs in this population. If approved, this amendment will run concurrently with the Arizona Health Care Cost Containment System’s (AHCCCS’) requested renewal period through September 30, 2027. The federal public comment period is open from December 3, 2024, through January 1, 2025.
  • Utah
    • On November 22, the state submitted a request to amend its waiver. Utah is seeking authority to reimburse for traditional healing services provided by a traditional healing provider in an eligible facility to Medicaid beneficiaries who are members of an American Indian or Alaskan Native (AI/AN) tribe. With this amendment, the state aims to provide culturally appropriate care that maintains and sustains health and wellness. Utah requests to operate this demonstration through June 30, 2027. The federal public comment period is open from December 3, 2024, through January 1, 2025.

SPAs

• Eligibility SPAs
  • Wyoming (WY-24-0006, effective October 1, 2024): Provides assurances that health insurance companies are prohibited from denying reclamation claims in circumstances where the Agency did not obtain prior authorization for items or services, in compliance with the Consolidated Appropriations Act of 2022 and requires health insurance companies to process reclamation claims within 60 days of obtaining it.
• Payment SPAs
  • Maine (ME-24-0027, effective October 1, 2024): Updates the state’s third-party recovery methodology to assure compliance with §1902(a)(25)(E) in Title XIX of the Social Security Act.
  • Mississippi (MS-24-0014, effective July 1, 2024): Allows the state to reimburse for certain diabetic equipment and supplies based on the reimbursement methodology for drugs when provided by a pharmacy.
• Services SPAs
  • Washington (WA-24-0026, effective January 1, 2025): Adds Community Health Workers (CHW) as preventative service providers.

Private Sector Updates

News

Instacart Releases SNAP Eligibility Screening Tool

• On November 21, Instacart unveiled its new Supplemental Nutrition Assistance Program (SNAP) eligibility screening tool that allows consumers to anonymously check their eligibility for the program’s benefits. This innovative tool is a collaborative effort with Advocatia Solutions, Inc. When a consumer checks their eligibility status, they will be directed to relevant state resources to aid in streamlined enrollment. The company’s initiative, Instacart Health, strives to increase access to healthy food and improve health outcomes. By partnering with stakeholders like the National Association of Community Health Centers (NACHC), the tool can be used to further support individuals and families facing food insecurity. On November 19, the delivery platform announced its partnership with Molina Healthcare of Michigan to provide 600 potential enrollees with 18-month Instacart+ memberships and $100 stipends for nine months. The program stems from Molina’s goal to improve equity for underserved populations within Michigan, and the MCO’s focus on reducing disparities in birth outcomes (Fierce Healthcare, November 22; Instacart, November 21; Instacart, November 19).

Siemens Healthineers and Ohio State Partner on $105M Imaging Collaboration

• Siemens Healthineers and the Ohio State Wexner Medical Center have entered a 10-year, $105M partnership to drive innovation in diagnostic and therapeutic imaging, focusing on cancer and cardiac and neurological conditions. The collaboration will see the health system purchase Siemens’ advanced imaging products including MRI, CT, and PET scanners, while developing workflows to reduce scan times and improve accessibility. A new imaging center will bring together scientists and clinicians to co-develop technologies for rapid clinical integration. This partnership builds on a 15-year relationship, during which the organizations have pioneered MRI techniques for cardiac imaging and affordable solutions for low field MRI (Modern Healthcare, November 27).

Sellers Dorsey Updates

Meet our Team: Q&A with Sellers Dorsey Director of Data Analytics and Visualization, Lindsay Betzendahl

• From working as a marriage and family therapist to becoming a healthcare data visualization expert and Tableau Ambassador, Sellers Dorsey Director of Data Analytics and Visualization, Lindsay Betzendahl, has had a transformative career journey. With an eye for design and experience working with various clients across the healthcare landscape, Lindsay’s passion and creativity have helped Sellers Dorsey work toward its mission to improve health and healthcare for vulnerable communities. We sat down with Lindsay to discuss her career, her role at Sellers Dorsey, and the importance of data visualization and analytics in healthcare. Click here to explore our Q&A.

EDITORS’ NOTE 

With every Presidential Administration transition, change is certain to occur. The Sellers Dorsey Digest remains committed to providing subscribers with the industry’s most current healthcare and Medicaid updates on a federal, state, and private sector level. While many media sources report on a variety of topics that may include predictions about what changes will occur with the new Presidential Administration, the Sellers Dorsey Digest stays true to its mission by providing current information from primary sources. Subscribers can feel confident that the Sellers Dorsey Digest is a source that helps stakeholders navigate change through information and education. We are grateful for your continued readership and look forward to bringing you the latest insights.

Kind regards,

Your Editors of the Sellers Dorsey Digest