Sellers Dorsey Digest

Federal Updates

News

Trump Administration Rescinds OMB Memo Freezing Federal Assistance Funds

• On January 29, 2025, the Trump administration rescinded the White House Office of Management and Budget’s (OMB) memo freezing federal assistance funds, clarifying that this is a rescission of the OMB memo issued to resolve confusion caused by a court injunction, not a recission of the funding freeze. This comes after it was announced that the Trump administration rescinded the federal funding freeze. The U.S. District Court for the District of Columbia temporarily blocked the freeze while assessing its legality. The executive order will remain in effect and will be strictly enforced. The proposed spending freeze aligns with President Trump’s executive orders targeting diversity, equity, and inclusion initiatives, in addition to limiting clean energy spending. The initial memo from the White House OMB halting all federal grants and loans caused confusion, but a follow-up clarified that Medicaid was not included, and programs like Social Security, Medicare, or any direct assistance to individuals were also exempt. Organizations dependent on federal funding fear potential delays in aid for homeless shelters, childcare facilities, college students, health grants, and disaster reconstruction. Experts have warned this freeze will cause major disruptions and shift the balance of spending power from Congress to the executive branch (The Hill, January 29; Politico, January 29; Modern Healthcare, January 29; The Washington Post, January 28).

MACPAC Holds January 2025 Public Meeting

• The Medicaid and CHIP Payment and Access Commission (MACPAC) met on January 23 and January 24 to consider the following topics:
  • Timely Access to Home- and Community-Based Services (HCBS): MACPAC staff reviewed the draft chapter and discussed various methods states can use to speed up Medicaid eligibility determinations and enrollment for individuals who are not subject to modified adjusted gross income (MAGI) and require HCBS. The chapter specifically highlights the use of presumptive eligibility and expedited eligibility options, as well as provisional plans of care. The chapter also reviews stakeholder interview findings, provides an examination of 1915(c) waivers, and includes a recommendation for the Secretary of HHS to instruct CMS to issue guidance on how states can implement provisional plans of care, coverage policy, and operational activities under various federal authorities. The Commission voted to approve this recommendation on Friday (MACPAC, January 23).
  • Home- and Community-Based Services Payment Policy Options: MACPAC staff reviewed findings and presented payment considerations, along with policy opportunities, to support the HCBS workforce. Shortages in the HCBS workforce limit Medicaid’s ability to meet the long-term care needs of individuals in home- or community-based settings, and while some aspects of the workforce fall outside Medicaid’s control, many states are considering ways to leverage Medicaid rate setting methodologies to develop the workforce and lessen turnover. Staff presented a policy option that considers increased state and federal collection and public reporting of HCBS wage data to inform state HCBS rate setting (MACPAC, January 23).
  • Utilization of Medications for Opioid Use Disorder (MOUD) in Medicaid: Staff presented state and national analyses of MOUD utilization based on data from the Transformed Medicaid Statistical Information System (T-MSIS). Staff highlighted differences in receipt of MOUD among beneficiaries based on demographic and/or health-related factors. They also discussed how the MOUD benefit mandate impacted methadone usage in states that had not previously covered methadone. Future discussion will focus on findings from stakeholder interviews and use of prior authorization policies (MACPAC, January 23).
  • Panel on Ensuring Appropriate Access to Residential Treatment for Children and Youth: A panel of experts discussed opportunities and challenges faced by stakeholders across the Medicaid program to provide Medicaid-enrolled children and youth with serious behavioral health diagnoses with effective, medically necessary treatment services in residential settings (MACPAC, January 23).
  • Examining the Role of External Quality Review (EQR) in Managed Care Oversight and Accountability: MACPAC staff discussed the draft chapter and three recommendations for the March 2025 report to Congress focused on improving EQR processes. The recommendations suggested a change from a review of process and compliance to significant outcomes and actionable data while improving usability through reporting consistency and transparency. On Friday, the Commission voted to approve the recommendations (MACPAC, January 23).
  • Medicaid Section 1915 Authorities for Home- and Community-Based Services (HCBS) – Analyzing Federal Administrative Requirements and Opportunities to Streamline: The draft chapter, to be included in the March 2025 report to Congress, analyzes federal administrative requirements and explores opportunities to reduce administrative burden on states. The chapter included information on administrative complexity across HCBS authorities and featured opportunities for streamlining. Lastly, the chapter recommended extending the renewal period for HCBS programs operating under Section 1915(c) waivers and Section 1915(i) state plan amendments from 5 years to 10 years. On Friday, the Commission voted to approve this recommendation (MACPAC, January 23).
  • Children and Youth with Special Health Care Needs (CYSHCN)- Transitions from Pediatric to Adult Care Policy Options: Staff presented amended policy options to address challenges related to transitions from pediatric to adult care for CYSHCN. The newly proposed options would require states to create a strategy for transitions of care for CYSHCN, including individualized transition plans, and providing transparency by making the strategy available to the public. MACPAC also recommends releasing guidance to states on existing authorities to cover transition-related services, requiring states to collect and report data on access and beneficiary and caregiver experiences, and mandating interagency agreements to clarify the roles and responsibilities of state Medicaid and Title V agencies (MACPAC, January 24).
  • Understanding the Program of All-Inclusive Care for the Elderly (PACE) Model – Interviews with Key Stakeholders: MACPAC staff highlighted insights from interviews on the PACE program and shared information acquired during interviews with state and federal PACE stakeholders, which offered a deeper understanding of a PACE oversight model, operations model, and rate payment development model (MACPAC, January 24).

MACPAC Outlines Possible Implications of Anti-Obesity Drug Coverage

• Following the Biden administration’s proposed rule to cover anti-obesity medications under Medicare and Medicaid, the Medicaid and CHIP Payment and Access Commission (MACPAC) sent a letter to CMS advising that the rule would have severe implications for the Medicaid program. Due to differing applicability dates, with new Medicare Part D requirements not taking effect until the start of the next calendar year and Medicaid coverage being required to begin within 60 days of a rule being finalized, Medicaid would face significant financial strain. MACPAC therefore urges CMS to combine the effective dates. Additionally, the commission requests that CMS publish guidance surrounding prior authorization and policies for anti-obesity medications (AOMs) and acceptable metrics (Inside Health Policy, January 24).

Acting Leadership Announced for FDA, CMS, and other Health Agencies

• Sara Brenner has been named as acting commissioner of the FDA, she previously served as associate director of medical affairs and chief medical officer for in vitro diagnostics since joining the agency in 2019. President Trump’s nominee to lead the FDA is Marty Makary, who is still awaiting Senate confirmation. The Senate Finance Committee is expected to vote on Makary’s position next week. Other federal health agencies’ websites were updated on January 24 to reflect their acting leadership. This includes Jeff Wu as acting CMS administrator and Cheri Rice as deputy administrator; Susan Monarez as acting director of the CDC; Matthew Memoli as acting director of the NIH; and Dorothy Fink as the acting HHS secretary. Trump’s nominees for these agencies include Mehmet Oz for CMS, David Weldon to the CDC, and Jay Bhattacharya for the NIH, who are each also awaiting confirmation (Inside Health Policy, January 24).

American Hospital Association (AHA) and the Federation of American Hospitals (FAH) Release Advocacy Agenda and Letter to Congress Highlighting the Prioritization of Protecting of Medicare, Medicaid, and ACA Tax Credits in 2025

• On January 14 and January 15, respectively, AHA released its 2025 Advocacy Agenda and FAH sent a letter to Congress focused on their priorities for the upcoming year. Both groups support extending the ACA tax credits beyond December 2025 and protecting Medicare and Medicaid from proposed cuts. The associations focus on the rural health impacts, children losing coverage, and their willingness to work with lawmakers to extend policies to support hardworking individuals who would otherwise not have access to health insurance. While the letter highlights the Trump administration’s willingness to protect Medicare beneficiaries, FAH requests that Congress also protect Medicaid, especially when it comes to Disproportionate Share Hospital (DSH) payment cuts, other provider payments, and rural health care. AHA also focuses on preventing DSH cuts, but also supports continuing supplemental payments, including state-directed payments (Inside Health Policy, January 27).

Federal Litigation

DOGE Initiative Launched to Reduce Federal Expenditures

• On January 20, House members started work with President Trump’s Department of Government Efficiency (DOGE). DOGE will be spearheaded by Elon Musk, focusing on reducing federal spending and regulations. Rep. Marjorie Taylor Greene will serve as chair of the House Oversight subcommittee on Delivering on Government Efficiency, joined by several Republican colleagues and the Democrat Representative Melanie Stanbury. Stanbury said she would support the efficiency improvements if they were truly to help the government’s efficiency. House Ways & Means Committee Chair Jason Smith vowed to work with DOGE to streamline government operations, while House Speaker Mike Johnson promised to form a team of unbiased experts to work with DOGE on governance and fiscal reforms (Inside Health Policy, January 22).

Federal Regulation and Guidance

Delay of Telehealth Compensation Guidance for Medicare Administrators (MACs) Continues After Two-Week Health Communication Freeze

• MACs continue to wait for guidance around the update of payment codes for telehealth services that was extended through March 2025. CMS is only publishing “mission critical” guidance during an administration-mandated two-week communication freeze, which is in place to allow for the new administration to prepare procedures for review and prioritization of healthcare guidance and other communications. It has been suggested by an industry expert that CMS may tell the MACs they have the information required to bill because it is a short-term resolution (Inside Health Policy, January 23).

Trump Administration Withdraws FDA Menthol Cigarette Ban

• On January 24, 2025, the Trump administration officially withdrew the FDA’s draft final rule to ban menthol cigarettes, ending a prolonged debate over the rule proposed in 2022. Although the rule had a strong backing from former Commissioner Robert Califf and public health groups, it faced opposition from some Republican lawmakers and business stakeholders. The Biden administration delayed the rule, and it is now officially no longer part of the FDA’s regulatory agenda. The Supreme Court is expected to issue decisions on the regulation of e-cigarette regulation this term (Inside Health Policy, January 24).

State Updates

News

Idaho Bill to Repeal Medicaid Expansion Raises Concerns

• Idaho lawmakers are pushing legislation to repeal the Medicaid expansion program in the state, which is currently covering more than 85,000 individuals. Representative John Vander Woude, who introduced the bill, said he was concerned about future cuts to federal funding. House Minority Leader Ilana Rubel argued that although repealing the Medicaid expansion program would save money in other areas, there is potential harm to rural hospitals (Boise State Public Radio, January 24).

Private Sector Updates

News

Hospitals Experience Challenges with Remote Patient Monitoring Despite Potential Successes

• Achieving a return on investment for remote monitoring can be a struggle for hospitals. Uncertainty with reimbursements from private and public payers has contributed to challenges in expanding remote services. Rural providers face additional challenges due to lower CMS reimbursements driven by lower costs of living and limited broadband access. However, remote monitoring in these areas could expand access to care and improve patient outcomes. Remote technology vendors are hopeful that the Trump Administration and Congress will work to increase access in rural areas. According to a study presented at a meeting of the American Heart Association, remote monitoring for hypertension improved outcomes for patients who were largely located in rural and underserved communities and reduced hospital admissions by 27% (Modern Healthcare, January 28).

Providers Achieve Cost Savings with Hospital-at-Home Alternatives

• Providers have begun offering hospital-at-home programs consistent with programs that have been granted waivers from the full Medicare program requirements. The Medicare Acute Hospital Care at Home program requires hospitals to provide two nurses visits per day, remote monitoring, meals, and some nonmedical services. Medicare reimburses hospital-at-home services at the same rate as in-hospital services. Nearly 380 hospitals have received approved waivers from the federal government, though not all have launched services. Ochsner Health, Los Angeles General Medical Center, and TRU PACE are among those providing similar programs without utilizing the waiver, citing high costs and difficulties with scaling as reasons to avoid partnering with Medicare. These programs find more flexibility outside of the waiver to partner with other companies or utilize more remote monitoring to free up the workforce. The alternative programs have seen cost savings and reduced hospitalizations in many cases, leaving more hospital beds available for more critical patients. However, most in-home hospital programs outside of the waiver lack rigorous standards for patient care, raising concerns about potential lapses in quality (Modern Healthcare, January 28).

Bayada Prioritizes Workforce Over Acquisitions

• Bayada Home Health Care’s CEO, David Baiada, is prioritizing workforce development over acquisitions for the company’s long-term growth. The nonprofit has partnered with Bayada Education to work through issues related to workforce development as an effort to address the nursing shortage. Baiada stated that the fragmented market limits the impact of acquisitions, while a limited workforce has restricted growth. Given the organization is also developing partnerships to increase nurse education and clinical training opportunities. Baiada remains optimistic that the sector’s investments will be beneficial for consumers (Modern Healthcare, January 27).

Sellers Dorsey Updates

NEWS

A Decade of Reform: Transforming Child Welfare in California

• California has made tremendous strides in transforming its child welfare system over the past decade to improve access, quality, and outcomes for the state’s children and families. An excellent learning opportunity for stakeholders in states across the country, 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 child welfare innovation while diving deep into the role of technology, data sharing, and community-based approaches.

Register today