Sellers Dorsey Digest

Federal Updates

News

Rep. Mike Johnson Reelected as House Speaker, Announces Support of President-Elect’s Policy Agenda

• House Speaker Mike Johnson narrowly secured reelection as Speaker with last minute support from two representatives. Prior to his reelection, Johnson pledged to advance President-elect Donald Trump’s “America First” agenda and his intention to work with the DOGE commission. The Speaker committed to forming a group of experts who will work on reforms that align with DOGE’s mission of reducing government scope and spending. The group would be responsible for reviewing existing audits of federal agencies and producing a report to the Speaker. He also emphasized the need for aggressive reviews to identify fiscal irresponsibility and enforce accountability (Inside Health Policy, January 3).

CMS Selects States for Maternal Health Model

• The Centers for Medicare & Medicaid Services (CMS) have selected 14 states plus the District of Columbia to participate in the new Transforming Maternal Health Model. Originally introduced in December 2023, the 10-year program is designed to improve maternal health outcomes for those enrolled in Medicaid and CHIP by offering integrated physical, mental, and social support before, during, and after pregnancy. Up to $17M will go to participating states over the next decade to be used for hiring new staff, creating new partnerships, and more. Some priorities of the model include reinforcing data collection and strengthening maternity care services, with a focus on increasing access to midwives, doulas, and community health workers (Fierce Healthcare, January 7).

Advocates Urge Congress to Avoid Medicaid Cuts in 2025

• On January 3, 2025, a letter was sent to Congress from 326 national and local organizations, including Families USA, AFL-CIO, and the NAACP, urging lawmakers not to pursue Medicaid cuts. The letter stated that voters in the November election asked for reductions in the costs of groceries and rent, not in Medicaid. Advocates asked Congress to not push for reforms that could include reducing the federal share of Medicaid funding and imposing work requirements on Medicaid beneficiaries, cautioning that these proposals could lead to state budget shortfalls, reduced healthcare services, and increased costs for families. These groups have expressed a willingness to collaborate with Congress on bipartisan solutions to lower healthcare costs and improve healthcare efficiency (Inside Health Policy, January 3).

Federal Regulation and Guidance

CMS Releases CIB on Medicaid and CHIP Renewal Requirements

• On December 20, 2024, CMS released an Informational Bulletin (CIB) on requirements and expectations for providing renewal forms to Medicaid and CHIP beneficiaries when the ex parte renewal process cannot be completed. The CIB explained state requirements, including required renewal form elements such as using pre-populated forms, providing instructions for completing forms, and requesting additional information; the modality and timeline requirements for accepting forms; and allowing individuals to designate authorized representatives. The CIB included reminders that beneficiaries have at least 30 days to return the renewal form and that signed renewal forms with requested information received prior to the end of the beneficiary’s eligibility period must be acted upon, even if it exceeds the required timeframe. The CIB provided guidance for states completing renewals when the form is not returned and specified the required timelines for notification prior to making changes to a beneficiary’s eligibility. CMS noted that states must accept authorized representative designations by phone and establish a process to sign the designation by phone and reminded states that they must not exclusively require an electronic or paper signature for these cases. The CIB also details information on enhanced federal matching available for eligibility system changes. CMS provided detailed examples of potential renewal scenarios in the CIB for states and other stakeholders to review (CMS, December 20).

State Updates

News

New Healthcare Laws Across States Taking Effect in 2025

• A handful of states will implement new laws related to healthcare in 2025, including those related to reproductive care, insurance, and providers.
  • Arkansas requires that Medicare-managed care programs submit action plans to potentially eliminate or reduce prior authorizations.
  • California requires insurers to cover fertility services like in-vitro fertilization and mandate bias training and reporting for medical facilities to help address Black maternal mortality.
  • Colorado expanded Medicaid to cover pre and postnatal care for all pregnant people and medical, dental, and mental health services for children regardless of immigration status.
  • Connecticut requires its hospitals to conduct annual cybersecurity audits and develop contingency plans for cyberattacks.
  • Delaware will require one full-time behavioral health professional in public high schools by June 30, 2025, and will provide up to $750 for abortion services through Medicaid.
  • Idaho requires pharmacy benefit managers to share changes in pharmacy payments and provide transparency on drug formulary adjustments.
  • Illinois plans to increase insurance coverage for prescription drugs, testing and reproductive health services, and to allow social workers to prescribe opioid treatments and pharmacists to administer mental health injections.
  • Minnesota will require insurers to cover wigs for patients undergoing treatments for health conditions or gender-affirming care and cap copays for chronic condition prescriptions and mandate coverage for abortion services.
  • New Jersey, starting in July, medical debt notices will be required to include consumer protection information, and interest will be capped at 3% on medical debt.
  • Pennsylvania will add Medicaid coverage for doula pre and postnatal services.
  • Washington, on July 1, will expand who qualifies as a healthcare employee protected by the state’s overtime rules with an additional change to mandate physician assistants to work under written collaboration agreements with physicians.

These legislative changes reflect efforts to improve access to healthcare, enhance insurance coverage, and address healthcare disparities across the nation (Modern Healthcare, January 2).

UnitedHealthcare to Replace Blue Cross of Idaho

• UnitedHealthcare and Molina Health have been notified by the state of their selection for new contracts for the dual-eligible special needs plans in the state of Idaho; UnitedHealthcare will assume the Idaho Medicaid Plus Plan (IMPlus) and the Medicare Medicaid Coordinated Plan starting from 2026. Molina Health will also carry on with the contract for the plans although Blue Cross of Idaho, which had the IMPlus contract, will not be renewed. The new contracts are expected to be for four years with an option of a one-year extension (Health Payer Specialist, January 3).

SPA and Waiver Approvals

Waivers

• 1115(a)
  • Arkansas
    • On December 20, CMS approved an amendment to Arkansas’s 1115 demonstration titled, “Arkansas Healthy Opportunity for Me (ARHOME).” The state receives authority to provide non-medical transportation to and from HRSN services for eligible beneficiaries. The demonstration is effective through December 31, 2026.
  • Arizona
    • On December 27, CMS approved Arizona’s request to amend its 1115 demonstration. The state receives authority to provide limited coverage for eligible incarcerated individuals for up to 90 days prior to the individual’s anticipated date of release. This approval also provides expenditure authority for non-medical transportation to and from HCBS and HRSN services for eligible beneficiaries under the Arizona Long Term Care System. The demonstration is effective through September 30, 2027.
  • Colorado
    • On December 23, Colorado submitted a request to extend its 1115 demonstration titled, “Expanding the Substance Use Disorder (SUD) Continuum of Care.” The state requests that the demonstration be renamed, “Comprehensive Care for Colorado” effective January 1, 2026. Colorado seeks renewed authority to provide SUD treatment services to short-term residents in residential and inpatient treatment settings that qualify as IMDs. With this extension, the state is seeking new authority to incorporate presumptive eligibility for Long-Term Services and Supports. The state requests to incorporate all pending amendment requests into this demonstration, which includes continuous eligibility for children ages 0 to 3 and 12 months of continuous coverage for individuals leaving incarceration; reentry services for adults and youth leaving correctional facilities; reimbursement for acute inpatient and residential stays in IMDs for individuals with SMI or SED; and HRSN services for housing and nutrition support. The federal public comment period is open until February 5, 2025.
  • Idaho
    • On December 20, Idaho submitted a request to amend its 1115 demonstration titled, “IMD Behavioral Health Transformation Demonstration.” The state seeks to remove expenditure authority that allows the use of legally responsible individuals to provide personal care services. Idaho cites unanticipated and unsustainable program growth as well as a number of incidents of suspected and confirmed fraud and abuse that are unable to be resolved by the state agency given current constraints. The state requests an effective date of January 31, 2025. The federal public comment period is open until January 31, 2025.
  • Indiana
    • On December 20, Indiana submitted a request for a five-year extension of its 1115 demonstration titled, “Healthy Indiana Plan (HIP).” The state seeks authority to continue its Substance Use Disorder and Serious Mental Illness programs as currently approved. Indiana is seeking new authority to provide coverage for former foster care youth in accordance with the new eligibility group created by the SUPPORT Act. The federal public comment period is open until February 1, 2025.
  • Michigan
    • On December 27, CMS approved Michigan’s request for a new Reentry Services 1115 demonstration. The state receives authority to provide limited coverage for eligible incarcerated individuals for up to 90 days prior to the individual’s anticipated date of release. This includes youth who are or would be eligible for CHIP if not for their incarceration status. Michigan has been selected to provide services in state prisons, county jails, tribal correctional facilities, and juvenile facilities. The demonstration is effective through December 31, 2029.
  • Minnesota
    • On January 2, CMS approved a five-year extension for Minnesota’s 1115 demonstration titled, “Minnesota Reform: Pathways to Independence (Reform).” The state receives renewed authority to provide home- and community-based services to beneficiaries aged 65 and older in need of nursing facility-level care and who are not otherwise eligible for 1915(c) Medicaid HCBS programs due to financial eligibility limits. This approval shifts the demonstration’s budget neutrality model from an aggregate cap to a per member per month model. The demonstration is effective through January 31, 2030.
  • Nevada
    • On December 13, Nevada submitted its 1115 demonstration titled, “Reentry Demonstration Waiver.” The state seeks authority to provide healthcare and behavioral health services to individuals who are incarcerated for up to 90 days prior to the individual’s anticipated date of release. Nevada aims to improve health outcomes and reduce recidivism through access to stable and continuous care. The federal public comment period is open until January 29, 2025.
  • Pennsylvania
    • On December 26, CMS approved Pennsylvania’s new 1115 demonstration titled, “Keystones of Health.” The state receives authority to provide limited coverage for eligible incarcerated individuals for up to 90 days prior to the individual’s anticipated date of release from state prison or county jail. This approval also provides expenditure authority for certain housing and nutrition-related services to eligible Medicaid beneficiaries based on clinical and social risk criteria. The demonstration is effective through December 31, 2029.
  • Vermont
    • On January 2, CMS approved an amendment to Vermont’s 1115 demonstration titled, “Global Commitment to Health.” The state receives authority to provide health-related social needs services and infrastructure support; close the Substance Use Disorder (SUD) Community Intervention and Treatment (CIT) coverage gap; expand Developmental Disabilities Services benefits; and support the transition of Community Rehabilitation and Treatment (CRT) and Mental Health Under 22 services to the Medicaid state plan. CMS also granted approval for several HRSN attachments to allow the state to claim Federal Financial Participation (FFP) for HRSN expenditures. The demonstration is effective through December 31, 2027.
  • Wisconsin
    • On December 16, Wisconsin submitted a request to amend its 1115 demonstration titled, “BadgerCare Reform Demonstration Project.” The state is seeking approval to expand the current authority to reimburse for acute inpatient stays in Wisconsin hospital-based institutions for mental diseases (IMDs) to include Medicaid-enrolled adults aged 12 to 64 who are currently diagnosed with serious mental illness (SMI) or serious emotional disturbance (SED). Current policy provides coverage for members under 21 or over age 64. The state aims to close the gap in coverage and improve access to care for individuals with mental illness. The federal public comment period is open until January 21, 2025.

SPAs

• Administrative SPAs
  • Connecticut (CT-24-0023, effective October 1, 2024): Updates State Plan assurances in accordance with the federally mandated quality reporting requirements for the Child Core Set and the behavioral health quality measures on the Adult Core Set.
  • Wisconsin (WI-24-0023, effective December 31, 2024): Updates State Plan assurances in accordance with the federally mandated quality reporting requirements for the Child Core Set and the behavioral health quality measures on the Adult Core Set
• Eligibility SPAs
  • Iowa (IA-25-0001, effective January 1, 2025): Provides for 12 months of continuous postpartum coverage to eligible individuals enrolled in Medicaid.
• Payment SPAs
  • Texas (TX-24-0028, effective October 1, 2024): Updates the Early Periodic, Screening, Diagnosis, and Treatment (EPSDT) program fee schedule.
• Services SPAs
  • Maine (ME-24-0028, effective October 25, 2024): Removes electronic visit verification (EVV) for hospice services.

Private Sector Updates

News

Payers Complete Acquisitions in 2024

• Several large payers successfully completed acquisitions during 2024. Anthem Blue Cross and Blue Shield (Elevance Health) completed its acquisition of Indiana University Health Plans, expanding its Medicare Advantage and commercial health plan offerings in the state. With the acquisition, Elevance Health now operates around 75% of the commercial health insurance market in three Indiana metropolitan areas according to data from the American Medical Association. CareSource closed its acquisition of Common Ground Healthcare Cooperative after approval from CMS, expanding its presence in Wisconsin’s Affordable Care Act marketplace across 24 counties. Sanford Health, headquartered in Sioux Falls, South Dakota, completed its acquisition of Marshfield Clinic Health System in rural Wisconsin and Michigan’s Upper Peninsula. The acquisition creates a delivery system with an extensive network of providers, hospitals, and staff in addition to two health plans, specialty pharmacies, and research institutions (Health Payer Specialist, January 3).

Florida Blue Sues HHS and CMS Over Reduced MA Star Ratings

• Florida Blue has sued the Department of Health and Human Services (HHS) and CMS in federal court in the District of Columbia, alleging that it was unfairly denied a higher Medicare Advantage star rating. The suit claims that CMS should have applied the Extreme Circumstances Rule and issued a waiver as a result of the extreme flooding in Broward County in April 2023 which caused widespread service disruptions for MA enrollees. Additional disruptions occurred from Hurricane Idalia in September 2023. Florida Blue’s MA HMO plan received a lower 3.5 star rating for the 2025 plan year and the company alleges that it would have received a 4.5 star rating if there had been no weather-related disruptions or if it had been granted the waiver. The lawsuit seeks a court declaration that CMS’ actions were arbitrary and capricious, demanding application of the Extreme Circumstances Rule and a higher star rating. Several other payers have sued HHS and CMS over MA star ratings, with Elevance and Scan Health both successfully receiving higher ratings for 2024 through litigation. (Health Payer Specialist, January 3)

2025 Health Benefit Trends for Employers

• According to the Business Group on Health (BGH), employers will work to address rising healthcare costs and maintain employee well-being in 2025. BGH noted several trends for employers to consider, including integrating artificial intelligence (AI) to help streamline operations and provide more personalized patient experiences and developing benefits focused on nutrition to help combat chronic diseases such as obesity, cardiovascular problems, and diabetes. With rising healthcare costs, companies will prioritize cost management by implementing new health plan designs, value-based contracting, and partnerships with Centers of Excellence. Employers are also encouraging pharmacy benefit managers (PBMs) to cover lower-cost generics and biosimilars first, especially for specialty drugs. Mental health will remain a priority, with expanded initiatives addressing adolescent mental health, loneliness, and maternal well-being to reduce costs and enhance employee health (Inside Health Policy, January 2).

Sellers Dorsey Updates

Sellers Dorsey Welcomes Andrea Tull as Vice President of Data Analytics and Visualization Support Services

• We’re excited to announce that Andrea Tull, accomplished healthcare leader and data analytics expert, is joining the Firm as Vice President of Data Analytics and Visualization Support Services. Andrea is dedicated to advancing patient-centered, high-quality care. As a former Director of Business Analytics for an integrated healthcare system, Andrea’s previous experience includes leading an enterprise clinical performance framework to develop analytics products that improve outcomes and drive quality strategy across more than 10 hospitals. At Sellers Dorsey, Andrea will play a pivotal role in developing the Firm’s analytics solutions for clients to deliver maximum impact. Click here to learn more about Andrea.