Sellers Dorsey Digest
Issue #220
UPCOMING WEBINAR
A Decade of Reform: Transforming Child Welfare in California
California has made tremendous strides in transforming its child welfare system over the past decade, having a deliberate focus on innovative strategies to improve access, quality, and outcomes for the state’s children and families. Our latest webinar features Sellers Dorsey experts, Marko Mijic and Katie Renner Olse alongside Interim Executive Director of California’s Mental Health Services Oversight and Accountability Commission, Will Lightbourne, as they discuss opportunities for innovation while diving deep into the role of technology, data sharing, and community-based approaches.
Federal Updates
News
House Republicans Detail Cost Savings by Changing Medicaid Policies, Repealing Final Rules
- House Republicans have projected a potential cost savings of $2.20T for the federal government through several healthcare policy levers. According to documents obtained on Friday, January 17 from Politico and other sources, these include estimated savings of:
- $900B in savings by converting the program to a per-capita cap
- $387B over 10 years by reducing the federal Medicaid matching rate floor, currently set at 50%;
- $175B by reducing the amount of Medicaid provider taxes that can be used for federal matching from 6% to 4% in 2026-2027 and 3% in 2028;
- $100B through establishing work requirements for certain Medicaid beneficiaries; and
- Up to $25B by limiting state-directed payments in the Medicaid program.
Other policies House Republicans may pursue to generate cost savings include reforming Graduate Medical Education (GME) and uncompensated care payments. Sources also report that a potential change could include eliminating the 90% enhanced FMAP rate for Medicaid expansion populations, resulting in several states automatically rolling back coverage. Republicans may also find additional cost savings through reducing federal Medicaid funds to states that elect to provide healthcare coverage to undocumented immigrants with their own funds, though the estimated savings are unknown. Republicans have also shown interest in repealing the Biden Administration’s Medicaid eligibility rule and allowing states to conduct eligibility checks more frequently than 12 months. Lawmakers are also looking to reverse the Access Final Rule that was finalized in April 2024 (Inside Health Policy, January 17; CCF Georgetown, January 20).
CMS Releases Updates to Federal Poverty Guidelines for 2025
- On January 16, CMS released an information bulletin (CIB) updating the federal poverty guidelines. The 2025 guidelines were adjusted upward by 2.90% for inflation and then standardized to distinguish different family and household sizes. The 2025 poverty guideline in the contiguous U.S. and District of Columbia for a family of four is $32,150. There are separate figures for Alaska and Hawaii, which can be found in more detail in the Federal Register. Different guidelines may apply to U.S. territories. The CIB also includes the new standards for the Medicare Savings Program categories. These limits for dually eligible beneficiaries are derived from a statutory formula and not the poverty guidelines (Medicaid.gov, January 16).
KFF Poll Shows Support for Health Programs and Concerns Over Benefit Cuts
- A new KFF Health Tracking Poll of 1,310 respondents finds that most respondents favored increased federal spending on health programs, and many are very concerned that Medicare, Medicaid, and ACA benefits will be cut. For example, large shares of respondents expressed concerns about potential reductions in benefits: 81% on Medicare and 72% on Medicaid. It also determined that 61% favored tighter price transparency rules for hospitals and insurers, along with increased reform within the pharmaceutical industry. A majority of respondents (55%) said regulators should take a closer look into insurance claim denials, which delay care and make health worse. On Medicare, 55% of those polled favored expanded price negotiations for prescription drugs (Modern Healthcare, January 17).
ACA Marketplace Enrollment Hits All Time High
- On January 17, CMS reported that approximately 24.2 million people purchased affordable health coverage during the ACA Marketplace open enrollment period, with 3.9 million new consumers. Currently, the federal government manages exchanges in 28 states and 3 additional states utilize the HealthCare.gov Marketplace platform, for which there were an estimated 17.1 million sign-ups. In addition, there were approximately 7.03 million state-based marketplace (SBM) purchases. Although open enrollment closed January 15, these numbers may be higher as some state-based health insurance exchanges continue to accept applications (Modern Healthcare, January 17; HHS, January 17).
Federal Regulation and Guidance
Trump’s First Day in Office: Executive Orders and Health-Related Appointments
- On his first day in office, President Trump focused on signing executive orders. Among these signed executive orders was a regulatory freeze, which ordered all agencies to not implement or release any new rules until reviewed and approved by Trump’s head of that department. Agencies were also directed to withdraw proposed rules that had not been published, delay enforcement of issued but inactive regulations, and consider extending public comment periods. The administration also made health-related appointments, including appointing Dr. David Weldon to head the Centers for Disease Control and Prevention and Dr. Dorothy Fink as acting HHS Secretary. (Inside Health Policy, January 20).
State Updates
News
Idaho Expands Postpartum Medicaid Coverage to 12 Months
- On January 17, Idaho received approval to expand comprehensive postpartum coverage for Medicaid and CHIP beneficiaries from 60 days to a full 12 months. With this approval, Idaho joins 47 states, along with the District of Columbia and the U.S. Virgin Islands, that have expanded postpartum coverage. An additional 8,000 people in Idaho will be eligible for coverage under the expansion. The postpartum expansion is intended to reduce maternal mortality rates, address complications, and support mental health and recovery (Medicaid.gov, January 17).
Georgia and Arkansas Governors Announce Potential Changes to Medicaid Programs
- Governor Brian Kemp of Georgia announced his plan to seek federal approval to exempt parents and legal guardians of children six and under from work requirements in the state’s Medicaid Georgia Pathways Program. Currently, adult program beneficiaries are required to complete 80 hours a month of qualifying activity including employment, volunteerism, or education. Finally, in Arkansas, Governor Sarah Huckabee Sanders noted her interest in reinstituting mandatory Medicaid work requirements for able-bodied adults. Arkansas previously introduced a rule to establish work requirements under former Governor Hutchinson in 2018, though the requirement was blocked by the courts and the federal government (Georgia Recorder, January 15, Health Payer Specialist, January 17).
SPA and Waiver Approvals
Waivers
- 1332
- Nevada
- On December 29, 2023, Nevada submitted a State Innovation Waiver application, with subsequent addendums in August 2024 and January 1, 2025, for the implementation of a state-contracted qualified health plan (QHP) to be known as the Battle Born State Plans (BBSPs) and a Market Stabilization Program for CY 2026 through 2030. The proposal was approved on January 10, 2025.
- Nevada
- 1115(a)
- Maine
- On January 9, Maine submitted an amendment to its 1115 waiver titled, “Substance Use Disorder Care Initiative.” The state is seeking a midcourse correction to budget neutrality due to changes in rates. The federal public comment period is open from January 16 through February 14.
- Virginia
- On December 31, 2024, Virginia submitted an amendment to its 1115 waiver titled, “Virginia Building and Transforming Coverage, Services, and Supports for a Healthier Virginia” (BTCSSHV). The state seeks approval to receive Federal Financial Participation (FFP) for medically necessary short term inpatient treatment services within acute care psychiatric hospitals or residential crisis stabilization settings. Eligible beneficiaries include all mandatory or optional eligibility groups receiving full Medicaid coverage, from ages 21 to 64. The federal public comment period is open from January 16 through February 15.
- Maine
SPAs
- Administrative SPAs
- Louisiana (LA-24-0028, effective December 31, 2024): Updates assurances to align with the federally mandated quality reporting requirements outlined in the Child Core set and behavioral measures on the Adult Core Set.
- Eligibility SPAs
- Alaska (AK-24-0010, effective January 1, 2025): Maintains new income standards for the optional state supplement program and makes related changes to eligible groups.
- Idaho (ID-25-0001, effective January 1, 2025): Provides for 12 months of extended postpartum coverage to individuals who were eligible and enrolled under the Medicaid state plan during their pregnancies (including during a period of retroactive eligibility).
- Payment SPAs
- California (CA-24-0025, effective July 1, 2024): Updates payment methodology by permitting supplemental add-on payments for eligible ground emergency medical transportation (GEMT) under the GEMT Quality Assurance Fee program from July 1, 2024 through June 30, 2025.
- Colorado (CO-24-0012, effective July 1, 2024): Updates payment methodology for Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) providers, allowing for reimbursement negotiations in cases of limited access due to set rates.
- Colorado (CO-24-0030, effective July 1, 2024): Updates payment methodology for primary care providers by adding health equity payments to Medicaid enrolled primary care practices serving high proportions of marginalized patients.
- Idaho (ID-23-0014, effective January 26, 2023): Establishes payment methodology for supplemental payments for ground emergency medical transportation (GEMT) services that are provided by state or political subdivisions.
- New Jersey (NJ-24-0004, effective January 1, 2024): Provides Medicaid Indirect Medical Education (IME) payments for the Health Education, Advancement, Learning, and Success (HEALS) program, within fee-for-service and managed care delivery systems.
- New York (NY-18-0015, effective March 22, 2018): Updates payment methodology for intermediate care facilities for the intellectually disabled (ICF/ID) by increasing the reimbursement rate by 3.25%.
- Oklahoma (OK-24-0019, effective October 1, 2024): Updates payment methodology for Standard Nursing Facility services by establishing an add-on rate for those serving high-acuity tracheostomy dependent patients.
- Oklahoma (OK-24-0022, effective October 1, 2024): Increases reimbursement rates for personal care services and skilled nursing evaluations.
- South Carolina (SD-24-0016, effective October 1, 2024): Defines current procedure for Preadmission Screening and Resident Review (PASRR) specialized services within nursing facilities, as well as available categorical determination options.
- Texas (TX-24-0031, effective October 1, 2024): Updates payment methodology for the Financial Management Services Agencies (FMSAs) and standardizes FMSA state plan service rates.
- Utah (UT-24-0004, effective July 1, 2024): Updates payment methodology for School Based Services by including information about reimbursement steps and eligible staff.
- Wyoming (WY-23-0015, effective July 1, 2023): Authorizes a new supplemental payment for physicians, by updating calculations for the Qualified Rate Adjustment (QRA) and Private Hospital Supplemental (PHS) payment programs. Also maintains current payment methodology for outpatient UPL (Upper Payment Limit) and Professional Services Supplemental (PSSP) UPL.
- Services SPAs
- Nevada (NV-24-0033, effective October 1, 2024): Corrects the omission of Community Health Workers (CHWs) as preventive service providers under previously approved SPA NV-23-0016.
- South Carolina (SC-24-0026, effective November 2, 2024): Updates the Selective Contracting section, giving the state the ability to limit the number of managed care plans within the Healthy Connections program to two to four based on projected enrollment.
- Texas (TX-24-0003, effective September 1, 2024): Establishes Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) as approved home telemonitoring services providers. Providers of these services must establish a plan of care with outcome measures that are to be shared with the individual’s primary physician.
Private Sector Updates
News
BlueCross BlueShield of Vermont Facing Financial Hurdles in 2025
- BlueCross BlueShield of Vermont is facing significant financial challenges entering 2025. The company has experienced high medical costs, including over $100M in hospital spending over multiple quarters in 2024. Emergency room spending surged from under $35M to $64M in 2024. Prescription drug expenditures also rose for four consecutive quarters to $94M in September 2024. With the payer at risk of financial insolvency, the Green Mountain Care Board approved premium increases that went into effect on January 1. BlueCross BlueShield of Vermont’s Medicare Advantage business has also suffered and raised concerns of a potential market exit. Despite parent company Blue Cross Blue Shield of Michigan providing nearly $12M in financial support, ratings firm AM Best has downgraded BlueCross BlueShield of Vermont’s credit rating to a C++, citing worsening financial conditions (Health Payer Specialist, January 17).
Sellers Dorsey Updates
News
Gary Jessee Interviewed for Insights on Waiver-Facilitated Innovations in Medicaid
- Sellers Dorsey Senior Vice President Gary Jessee was interviewed by Healthcare Innovation to share his expertise on recent innovations in Medicaid, specifically Section 1115 waivers. Gary discusses how these waivers have pioneered change for Medicaid beneficiaries including expanding access to mental health services, telehealth, substance abuse programs, and more. Plus, discover how managed care can improve care management over time and what’s in store for the future of Medicaid.
Read the full interview
Transforming Public Health with Data Analysis and Visualization
- Whether it’s optimizing care delivery, understanding the impact of health policies on communities nationwide, or preparing for pandemics, data analysis and visualization are key to addressing public health challenges and crises. In our latest blog, Sellers Dorsey Director of Healthcare Quality, Karla Richardson, discusses the role data analytics and visualization play in transforming public health and healthcare systems.
Read the blog