Sellers Dorsey Digest

Federal Updates

News

Dr. Oz Explains His Policy Priorities for Medicaid, Medicare, and More in Confirmation Hearing

• On Friday, March 14, the U.S. Senate Finance Committee held Dr. Mehmet Oz’s confirmation hearing for his nomination to become CMS Administrator. President Trump’s nominee faced questions on public health, Medicare Advantage, Medicaid policies, and more. In his testimony, Dr. Oz appeared to be supportive of the Administration’s Make America Healthy Again agenda and signaled his willingness to pursue policy options that address chronic disease with the aim of reducing healthcare costs. Dr. Oz also stated that he considered upcoding in Medicare Advantage to be fraudulent and reiterated his commitment to reducing fraud, waste, and abuse in both government programs. However, he declined to comment on the potential Medicaid cuts from the House. In contrast, Dr. Oz signaled his willingness to work with policymakers on work requirements for Medicaid, stating that while he supports a strong work ethic, he also believes that the policies should not be used as an obstacle to coverage. Dr. Oz discussed the topic of federal financing for Medicaid expansion, explaining his belief that the Medicaid expansion population stretches healthcare resources for categorically eligible beneficiaries – like the aged, blind, disabled, and youth – more thinly, thus reducing the quality of their care. Other areas of interest for Dr. Oz that were discussed included the use of AI in healthcare, increased price transparency, and financial incentives for providers. It is expected that Dr. Oz will secure the votes necessary to become CMS Administrator.(Modern Healthcare, March 14; Health Payer Specialist, March 14; Inside Health Policy, March 14).

Judge Orders Reinstatement of Federal Workforce, Agencies Offer Resignations

• On Thursday, March 13, a Baltimore judge (Judge James Bredar) issued a temporary restraining order (TRO) directing the reinstatement of probationary federal employees discharged across 18 agencies under the Trump Administration’s workforce cuts, including the Department of Health and Human Services (HHS). This order was more expansive in scope than a court order earlier that day in California, which only directed the reinstatement for six agencies. The agencies had until 1 p.m. on Monday, March 17, to comply. Judge Bredar found the probationary layoffs to be illegal, citing a lack of proper notice and individual assessments, categorizing them as unlawful reductions in force (RIFs). Judge Bredar’s order applies nationwide to ensure consistency in job reinstatement regardless of location. The layoffs are paused for 14 days pending further decisions from the court. The Trump Administration is appealing the case to the Fourth Circuit Court of Appeals. Meanwhile, sources say that while HHS agencies are beginning to comply with the TRO, some employees are being placed on administrative leave instead of returning to work. Additionally, some probationary employees state that as of the beginning of the week, they had not heard from their supervisors or human resource departments. In some cases, it appears that CMS is offering probationary employees the opportunity to resign with a clean record. The plaintiffs in the case, Democratic state attorneys general, estimate that around 24,000 probationary employees were discharged, though the defendants dispute this count (Inside Health Policy, March 14; Fierce Healthcare, March 17; Inside Health Policy, March 17).

CMMI Ends Several Innovation Models

• The Centers for Medicare & Medicaid Services (CMS) is shutting down several healthcare programs under the Center for Medicare and Medicaid Innovation (CMMI) earlier than planned. The agency states the move will save taxpayers $750M and allow CMS’s Innovation Center to focus on programs with meaningful impact. These programs, originally designed to improve care quality and efficiency, were part of CMS’s Innovation Center, which tests new healthcare payment and delivery models. The affected models include:
  • Primary Care First
  • Making Care Primary
  • Maryland Total Cost of Care
  • End Stage Renal Disease (ESRD) Treatment Choice
  • Medicare $2 Drug List Accelerating Clinical Evidence

While some of the health programs were already scheduled to end, others – like Making Care Primary (originally set to end in 2034) – were relatively new. CMS states that they are not stepping away from primary care but instead shifting gears to explore better ways to improve healthcare while keeping costs down. Healthcare providers who invested time and resources into these programs have criticized CMS for shutting down these programs, with CMS stating they will provide transition support for affected participants. Looking ahead, CMS shared that it is planning a new strategy for the agency, focusing on evidence based preventative care, patient empowerment, and pushing choice and competition (Inside Health Policy, March 12; Health Payer Specialist, March 14).

Federal Legislation

Senate Passes Continuing Resolution, Averting Impending Government Shut Down

• On March 14, the Senate voted 54-46 to pass a continuing resolution (CR) funding the federal government through the end of this fiscal year (September 30, 2025), ahead of the March 14 deadline. The CR also extends healthcare services and programs that were set to expire on March 31, including an extension of the delays to Disproportionate Share Hospital (DSH) cuts and continued funding for Federally Qualified Health Centers. The resolution was signed into law by President Trump on March 15 (Fierce Healthcare, March 14; The Hill, March 14; The Hill, March 15).

Senate Bipartisan Healthcare Package Blocked

• Last week, it was reported in the Digest that Senators Bernie Sanders (I-VT), and Ron Wyden (D-OR) reintroduced the bipartisan healthcare spending bill from December 2024. The two Senators sought unanimous consent to pass the legislation through the chamber. However, on March 14^th, the bill was blocked without explanation by Senator Rick Scott (R-FL), under a process that allows one Senator to object rather than needing to receive majority vote. The healthcare package included a two-year extension of Medicare telehealth flexibilities, a five-year extension of the Acute Hospital Care at Home program, and reforms to pharmacy benefit managers (PBMs) aimed at reducing drug costs. It also proposed a 2.5% increase in Medicare physician reimbursements, a ban on Pharmacy Benefit Managers (PBMs) using spread pricing with Medicaid, and measures to improve transparency in drug pricing and generic drug approvals. Additionally, the package sought to reauthorize key programs like the Pediatric Priority Review Voucher and the Pandemic and All-Hazards Preparedness Act. However, the Continuing Resolution that was signed into law on March 15th includes some of the same policies, absent PBM reforms, an increase in Medicare physician payments, and others (Inside Health Policy, March 14).

Federal Regulation and Guidance

New CMS Regulations to Bring About CT Scan Safety Measures

• Approximately 93 million CT scans are performed in the United States every year, over half of which are for individuals over the age of 60. As research on radiation exposure and CT dosage grows, experts in the field warn of caution for the continuous usage of these scans for children and older adults. A 2009 report published in JAMA indicated that CT scans were responsible for approximately 29,000 cases of excess radiation each year, potentially contributing to growth issues in children and a higher cancer risk in older adults. CMS is in the process of publishing new regulations which aim to make imaging safer by requiring careful assessment of dosage, quality, and necessity of CT scans. While the regulation formally began this January, it will take three years for the rules to be completely established. Additionally, beginning in 2027, providers who do not comply with the regulations may face fines under Medicare (Modern Healthcare, March 14).

State Updates

News

Illinois Awards Four D-SNP Contracts

• Ahead of its transition from its previous Medicare-Medicaid Alignment Initiative (MMAI) program to a fully integrated Dual Special Needs Program (D-SNP) model, Illinois has awarded four D-SNP contracts to Centene, Aetna, Humana, and Molina. BCBS Illinois, a subsidiary of Health Care Service Corp, was not included in the awards. The payer will continue serving its members under the MMAI program until the end of its contract on December 31, 2025. It is unclear if BCBS Illinois will move to protest this decision. The new contracts are set to begin on January 1, 2026, and end on December 31, 2029, with the option to extend for an additional five and a half years. While the D-SNP initiative awaits approval from CMS, Illinois has stated its plan to add managed long-term services and supports (MLTSS) into the program in 2027 (Becker’s Payer Issues, March 11; Health Payer Specialist, March 12).

NC Health Insurer to Close in Summer 2025

• The North Carolina League of Municipalities’ Health Benefits Trust announced that it will be closing on June 30, 2025. The closure impacts 8,000 local government employees and their families. A spokesperson for the trust cited the rising prices of healthcare and specialty drugs as contributors to the decision to close after 42 years. The loss of the Health Benefits Trust largely impacts communities in Eastern North Carolina (Becker’s Payer Issues, March 12; WITN, March 11).

Arkansas to Ban Noncompete Agreements for Physicians

• Arkansas Governor Sarah Sanders signed a bill (Senate Bill 139) earlier this month which prohibits healthcare employers in the state from enforcing noncompete clauses for physicians if it limits their scope of practice. The new law is effective mid-July and will allow doctors to join rival organizations freely. Arkansas joins several states, including Pennsylvania, Maryland, and Illinois, which ban noncompete agreements for clinicians. Other states, California, Minnesota, North Dakota, and Oklahoma, have broader bans on noncompete agreements across all industries. More states have introduced legislation to reduce noncompete agreements. Last year, the Federal Trade Commission (FTC) finalized a rule which would prohibit most noncompete agreements, but the rule was struck down by an appellate court in August 2024. The FTC appealed, but the case is ongoing (Modern Healthcare, March 13; KARK, March 5).

Minnesota Bill Aims to Require Insurance Coverage for Obesity Treatments

• Minnesota lawmakers have introduced a bill (SF 1053) requiring health insurance plans to cover treatments for obesity, including FDA-approved medications like GLP-1s. The bill mandates coverage for evidence-based treatments, such as behavioral, dietary, and physical activity programs, bariatric surgery, and weight-loss medications. If passed, the law could go into effect on January 1, 2026, ensuring that people with state-regulated health plans can access comprehensive care for obesity. The bill also requires Medicaid to cover this care, improving access to essential treatments for individuals with obesity (Becker Payer, March 12).

SPA and Waiver Approvals

SPAs

• Administrative
  • South Dakota (SD-25-0002, effective June 1, 2024): Extends the Recovery Audit Contractor (RAC) Program exemption for two years.
• Services/Payment
  • Alaska (AK-24-0011, effective January 1, 2025): Authorizes the state to voluntarily engage in value and outcome-based contracts with pharmaceutical companies.
  • American Samoa (AS-24-0003, effective October 1, 2024): Adds coverage and payment for on and off-island out-patient dialysis services within free-standing End-Stage Renal Diseases (ESRD) and dialysis clinics. Additionally, it makes technical edits to dental services provider eligibility requirements.
  • Hawaii (HI-25-0002, effective January 1, 2025): Adds coverage for services provided by pharmacy interns and pharmacy technicians under the supervision of a licensed pharmacist.
  • New Jersey (NJ-24-0023, effective October 1, 2024): Under emergency Use Authorization (EUA), allows coverage of certain prescribed drugs that do not meet the definition of “covered outpatient drugs” and sets reimbursements at the same rate as covered outpatient drugs.
  • New Jersey (NJ-24-0024, effective October 1, 2024): Authorizes the state to voluntarily engage in Value-Based Supplemental Rebate agreements with pharmaceutical companies.
  • Oklahoma (OK-24-0024, effective January 1, 2025): Adds coverage and payment for community health services provided by community health workers (CHW) as public health clinic services.
  • Wisconsin (WI-24-0026, effective November 1, 2024): Adds coverage and payment for Intensive Outpatient Treatment Services.

Private Sector Updates

News

Innovaccer Introduces Platform for Risk Adjustment and Quality Improvements in Health Plan Coding

• Innovaccer, a health technology company, has launched a new platform called the 360-Degree Gap Closure Solution which aims to support insurers in risk adjustment and quality improvements. The platform is intended to enhance coding accuracy and patient outcomes, which comes as regulatory scrutiny is increasing over upcoding. Payers can share data directly with providers through patients’ electronic health records. Moreover, health plans can utilize a one-click campaign to address care gaps (Fierce Healthcare, March 12).

Cigna to Launch Holistic Fertility Program

• As part of a new partnership, Cigna’s Global Health Benefits unit and Carrot Fertility are collaborating to deliver a holistic and individualized fertility care plan, equipped with over 11,000 clinicians, agencies, and attorneys in 170 countries for “globally mobile” workforces. This new program will provide enrollees with personalized care based on individual needs and available at no cost to them or their covered spouses and partners (Fierce Healthcare, March 13).

Baylor Scott & White Health Boosts Primary Care Access Amid Potential Funding Cuts

• Baylor Scott & White Health is working to improve primary care access and reduce costs amid potential federal funding cuts. CEO Peter McCanna highlighted the 52-hospital system’s efforts to limit unnecessary care, enhance provider-patient communication, and strengthen partnerships with other health systems. The health system is also focusing on targeted services like a chronic headache care program available 24/7 and postpartum support for new mothers. Additionally, Baylor Scott & White Health is leveraging new technology like AI to reduce administrative costs while expanding its facilities to meet the growing demand for care (Modern Healthcare, March 17).

Sellers Dorsey Updates

In the News: Gary Jessee on Why Medicaid is the Most Innovative Payer in Healthcare

• Sellers Dorsey Senior Vice President of National Consulting, Gary Jessee, was featured in Chief Healthcare Executive to share his insights on how Medicaid has become a leader in healthcare innovation, covering over 79 million people nationwide and driving improved health outcomes through value-based models and whole-person care. Explore Gary’s insights and discover why Medicaid is the most innovative payer in healthcare.

Read Gary’s article

Expert Summary of HHS’ New Policy on Public Notice Requirements

• The U.S. Department of Health and Human Services (HHS) recently announced that it was withdrawing a policy that has been in effect since 1971 known as the “Richardson Waiver,” which required HHS to publish proposed rules and obtain public comments before making most policy changes. Our experts summarized this significant policy change and what it means for you.

Read the Summary