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红领巾瓜报 Acquires HealthTech Solutions, Expanding Technology Capabilities and Medicaid Expertise

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Acquisition Strengthens 贬惭础鈥檚 Government Health Technology Services and Enhances Data, Analytics, and Compliance Offerings

OKEMOS, Mich., March 27, 2026 鈥 红领巾瓜报, (红领巾瓜报), a national leader in health and human services consulting, today announced the acquisition of HealthTech Solutions, a premier provider of Medicaid-focused technology, analytics, and compliance solutions.

The acquisition of enhances 贬惭础鈥檚 capabilities in government health technology, adding advanced data, analytics, and systems modernization expertise to its established policy, regulatory, and operational advisory services. HealthTech鈥檚 specialization in Medicaid technology strengthens 贬惭础鈥檚 ability to support state agencies with integrated solutions spanning strategy through technical implementation.

鈥淗ealthTech Solutions has an impressive track record of providing state-of-the-art IT solutions and strategic insights that deliver results for clients,鈥 said Jay Rosen, 贬惭础鈥檚 founder and current president and chairman. 鈥淭heir expertise further expands the ways in which we can serve our clients now and into the future. We are excited to have HealthTech join the 红领巾瓜报 team.鈥

鈥淭his acquisition marks an important step in 贬惭础鈥檚 continued evolution as a comprehensive partner to state Medicaid agencies and government health programs. We are thrilled to welcome the talented HealthTech Solutions team to our distinguished group of colleagues,鈥 said Chuck Milligan, chief executive officer of 红领巾瓜报. 鈥淗ealthTech鈥檚 advanced technology platform, experienced leadership team, and strong client relationships enhance our ability to deliver innovative solutions that improve outcomes for the populations our clients serve.鈥

Sandeep Kapoor, co-founder and chief executive officer of HealthTech Solutions, added, “This acquisition marks an exciting new chapter for our company. Joining 红领巾瓜报 will allow us to grow, expand the value we deliver to our clients, and build on the strong foundation we have created. At the same time, our commitment to excellence in service and products remains unchanged and will continue to be at the heart of everything we do.鈥

HealthTech Solutions will continue to operate as HealthTech Solutions, an 红领巾瓜报 Company. Terms of the transaction were not disclosed. Synergy Advisors served as exclusive financial advisor to HealthTech Solutions in this transaction.

About 红领巾瓜报 (红领巾瓜报)
红领巾瓜报 is an independent, national research and consulting firm specializing in publicly funded healthcare and human services policy, programs, financing, and evaluation. We serve government, public and private providers, health systems, health plans, community-based organizations, institutional investors, foundations, and associations. With multidisciplinary consultants coast to coast, 红领巾瓜报’s expertise, services, and team are always within client reach.

About HealthTech Solutions
HealthTech Solutions is a leading provider of Medicaid-focused technology, analytics, and compliance solutions. With a modular cloud-based platform and a team of more than 300 professionals, HealthTech supports state agencies in systems modernization, reporting, and regulatory compliance initiatives.

HIMSS26: Building the Foundation for Interoperable, AI-Ready Healthcare聽

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Key Insights from the 2026 HIMSS Global Health Conference and What They Mean for Your Organization  

American healthcare is confronting two urgent realities. First, the administrative burden on clinicians and patients remains very high. Prior authorization delays, manual intake forms, fragmented records, and identity challenges continue to drive cost and erode the trust that is the foundation of the provider-patient relationship. At the same time, artificial intelligence (AI) capabilities are advancing rapidly, outpacing governance frameworks, regulatory structures, and data infrastructure. Together, these dynamics are the defining operational challenge of 2026. 

Federal policy is responding less through sweeping new regulation than through coordinated execution levers. The Centers for Medicare & Medicaid Services (CMS) initiatives, including the , information blocking enforcement,  (HTI-5) Proposed Rule , and the prior authorization (PA) final rule, reflect a shift toward making interoperability operational in production environments. What distinguishes this moment from prior efforts is the explicit linkage between interoperability and AI. Federal leaders are saying openly that reliable, trustworthy, and deflationary AI depends on disciplined data exchange, identify, and governance. 

罢丑别鈥 (HIMSS26),鈥疢arch 9鈥12, in Las Vegas, NV, marked a marked a turning point in which the industry began translating that message into tangible organizational decisions. Two 红领巾瓜报 (红领巾瓜报), companies actively engaged in the program: the  moderated sessions in the preconference forums and Interop Experience Pavilion, and , lent their expertise in Medicare Advantage (MA), Medicaid managed care, risk adjustment, and quality measurement鈥攖he areas in which FHIR-based infrastructure will directly reshape performance and risk management. 

This article reflects what these teams learned and what it means for the industry. 

What We Learned at HIMSS 

Several themes surfaced throughout the conference, not as isolated ideas but as shared assumptions of the field shaping near-term strategy: 

Successful AI deployments rely on interoperability and quality data.  Across sessions and conversations, speakers emphasized that success will require not just access, but data that are standardized, governed, and semantically consistent. The promise of AI is advancing quickly, but many organizations are still working to build the data foundation needed to support it. 

CMS-aligned networks are paving the way for federal transformation. Concrete pledge deadlines, and a Centers for Medicare & Medicaid Services (CMS) Administrator willing to say publicly that healthcare is the only sector where technology has failed to be deflationary, sent a signal that the industry took seriously. Voluntary frameworks are being seen as previews of future requirements. 

Information blocking enforcement is no longer theoretical. Officials from ASTP/ONC confirmed that notices of potential nonconformity have already gone out to health IT firms under the certification program, and more are on the way. With Department of Health and Human Services Office of the Inspector General penalties of up to $1 million per active violation and more than 1,500 complaints filed since the federal portal launched, the compliance calculus has shifted. Dr. Thomas Keane, National Coordinator for Health Information Technology, was direct: Developers that block information risk losing their certification, and their clients risk losing access to CMS payment incentives. The long implementation runway is over, enforcement is now active, and the consequences are real. 

The federal vision for AI is patient-first. CMS Administrator Dr. Mehmet Oz said to slow the inflationary effects of the growth in healthcare technology, he wants to put agentic AI tools in the hands of every Medicare beneficiary before the end of this administration鈥攁n ambitious goal. He cautioned, however, that none of it works without building the necessary data infrastructure now. AI is the destination; interoperability is the road. 

CMS is ready to pivot to digital quality measures and put investment behind it. CMS and ASTP/ONC leadership announced that all quality measures will now be modeled on HL7 FHIR. MultiCare Connected Care showed it working in production. Early adopters will shape the pathway and gain strategic advantage as the transition accelerates. Successful transformation will require simplified workflows, established lines of accountability, and a product-oriented mindset geared toward data and interoperability. 

Identity is a known gap, but the solution is taking shape. Patient matching, provider directories, and consumer-facing credentialing came up in nearly every policy and technical session. The $6 billion CMS cited for annual provider directory validation waste alone captured attendees鈥 attention. But HIMSS26 brought concrete, live progress on the credential side and a Leavitt Partners-moderated preconference session focused on moving the industry from alignment in principle to alignment in production. 

Governance is now an operational discipline. Health system chief information officers and chief medical information officers described governance structures already in place and under active revision. The shift from “we need governance” to “our governance needs to evolve” was palpable. 

Consumer technology has entered the clinical conversation. Emory Hillandale Hospital鈥檚 announcement of the first all-Apple facility signaled that the boundary between consumer devices and clinical infrastructure is evolving. 

Autonomous AI systems were everywhere. Vendors demonstrated how AI agents are handling administrative workflows, such call centers, revenue cycle, scheduling, and PA. Health system leaders acknowledged real deployments alongside real uncertainty about governance, security, and identity management for non-human actors in clinical environments. The technology is moving faster than the frameworks designed to oversee it. 

What It Means: Five Insights 

The CMS Health Technology Ecosystem is redefining what “interoperable” means for federal programs; TEFCA will scale what it proves 

For years, interoperability has been a certification checkbox rather than a functional description. The CMS ecosystem is changing that by tying the definition to observable behaviors: HL7 FHIR APIs that respond, encounter notifications that fire, identity verification that works at the front door. More than 700 organizations have pledged; CMS has set hard deadlines (March 31 for initial results, July 4 for advanced capabilities), and the agency is tracking outcomes, not just attestations. 

In the fireside chat moderated by ,  was direct: The regulatory cycle is slow, and what the ecosystem can produce in nine months is what the regulations will eventually codify. Organizations that shape this work now will have less catching up to do when it becomes mandatory. 

The Trusted Exchange Framework and Common Agreement (), which now exchanges 600 million health records across 75,000+ organizations (up from 10 million in January 2025), is the rising tide that scales what the speedboat networks prove. And state-level health information exchanges (HIEs) remain strategically important given their governance structures, trust relationships, and operational capabilities. 

Provider directory is the sleeper issue 

Patient matching and digital identity got considerable attention, but a provider directory may be the highest-yield near-term opportunity. CMS estimates $6 billion is wasted annually simply validating where providers practice, what licenses they hold, and what insurance they accept鈥攁 problem that compounds every time a payer, health system, or patient tries to connect with the right clinician through the right channel. 

A real-time, standardized provider directory is foundational to PA, network adequacy, and care navigation. It is also one of the three heavy lifts that the CMS Health Technology Ecosystem is actively working to address. Organizations that invest now in clean, FHIR-based provider data will be ahead of an upcoming requirement. 

Semantic Consistency Determines AI Outcomes 

The distinction between syntactic interoperability (data move between systems) and semantic interoperability (data means the same thing in every system) was a running thread through the Interoperability and HIE Forum. Dan Liljenquist, chief strategy officer at Intermountain Healthcare, put the operational reality plainly during his keynote address: Intermountain is building a unified semantic data layer in the cloud鈥攊ngesting EHR data daily, normalizing it against common models, making it computable across 34 hospitals鈥攂ecause without that layer, AI produces unreliable outputs at scale. 

Graphite Foundry, the mechanism Graphite Health is developing as a nonprofit collaborative, represents a model where health systems build shared semantic infrastructure rather than solving the same problem independently behind proprietary walls. The broader implication: AI strategy and data infrastructure strategy are the same, and organizations that treat them separately will find that their AI investments underperform. 

Digital Identity and Privacy Architecture are Converging 

Policy and industry discussions reflected growing alignment around higher鈥慳ssurance digital identity, privacy鈥憄reserving design, and consistent credentialing. Progress in this area reduces friction for patient鈥慸irected access while supporting trust and security across ecosystems.  

Mr. Howells moderated the preconference session, Bridging Digital Worlds: Identity Federation Strategies Across B2B and B2C Ecosystems, which brought together CMS Chief Health Technology Officer Alberto Colon Viera, David Bardan (CLEAR), Wes Turbeville (ID.me), and Renee Edwards, Applied AI at UnitedHealth Group. The session produced three concrete outcomes:  

  • CMS confirmed Medicare.gov is now live with CLEAR, ID.me, and Login.gov, meaning consumers can choose which credential they use and relying parties can leverage that same credential to authenticate consumers into their own systems.  
  • Participants agreed on a common IAL2 token payload.  
  • UnitedHealth Group announced United Health Group鈥檚 pursuit of Kantara certification and unification of all their portals to a single identity based on IAL2. 

Identity has long been a blocker to scalable patient access. Aligning on a common IAL2 model removes another friction point and moves the industry closer to a future in which patients can securely access their medical records through the apps they choose. 

Interoperability is Expanding Beyond Traditional Boundaries  

For years, FHIR-based infrastructure has been built primarily around clinical and claims data. But two sessions in signaled meaningful progress on two long-neglected fronts: pharmacy and oral health. Pharmacy data 鈥 critical to medication management, managed care, and complete longitudinal records鈥攁re increasingly being drawn into the standards-based exchange ecosystem, including the recognition of pharmacists as clinicians whose data and clinical contributions belong in the longitudinal record. 

Patients are also gaining real-time visibility into their own pharmacy benefits: the Consumer Real-Time Pharmacy Benefit Check, an open FHIR-based standard, puts cost and coverage information directly in patients’ hands at the point of prescribing 鈥 a meaningful step toward the same patient empowerment that the “kill the clipboard” and digital identity work is driving elsewhere in the ecosystem.  

Oral health data, long absent from the medical record despite its correlation with diabetes, cardiovascular disease, and maternal health, is now the subject of active federal interoperability investment across CMS, the Veterans Health Administration, and the Indian Health Service. Leavitt Partners’ alliances in both domains鈥攖he Oral Health Interoperability Alliance and the Pharmacy Interoperability and Clinical Services Alliance (PICSA)鈥攁re helping shape the technical and policy frameworks that will bring these data streams into the broader ecosystem. Whole-person care requires whole-person data, and the field is finally building the infrastructure to support it. 

What Remains Unresolved 

Despite momentum, several issues remain unresolved:  

The Role of Payers in TEFCA and National Exchange is Still Evolving 

There is growing interest in extending TEFCA beyond provider-to-provider exchange to support payer use cases such as quality measurement, care management, and prior authorization. However, questions remain around participation models, data rights, governance, and value alignment. Until these are resolved, payer engagement will likely remain uneven, limiting the full potential of nationwide exchange. 

The Business Case for Interoperability is Not Yet Consistently Realized 

While the policy direction is clear, the economic incentives are still misaligned. Providers often bear the operational burden of data exchange, while financial benefits may accrue elsewhere. Similarly, investments in interoperability infrastructure do not always translate into immediate or measurable returns. Advancing adoption will require clearer ROI pathways, shared incentives, and models that distribute value more equitably across stakeholders. 

Governance and Operating Models are Still Catching Up to the Technology. 

There is increasing recognition that interoperability at scale is not just a technical challenge 鈥 it is a governance challenge. Questions around enforcement, delegation of authority, participant accountability, and operational oversight remain active areas of development. As exchange expands, these governance structures will need to mature rapidly to sustain trust and ensure consistent implementation. 

Near-term signals, such as CMS responses to pledged-network deadlines, finalization of HTI5 and related rules, continued prior authorization modernization, and digital quality measure implementation, will shape the next phase of execution. 

What We’re Watching 

Extending Open Standards to Rural and Underserved Providers 

The Rural Health Transformation Program offers a unique opportunity to expand the open standards ecosystem being built. Leavitt Partners and Wakely are engaged in both the policy conversations and implementations that will determine how to ensure this opportunity can transform healthcare. 

March 31 and July 4 deadlines 

CMS set these dates publicly and specifically. How the agency responds to organizations that miss them will signal how serious the voluntary framework really is and how quickly it becomes a program condition. 

HTI-5 Finalization and HTI-6 Proposed Rule 

ONC’s proposed rule to focus certification on HL7 FHIR APIs, algorithm transparency, and interoperability is still in proposed form. Finalization, as proposed, would transform the vendor landscape and remove the safe harbor that legacy proprietary interfaces have relied on. 

Prior Authorization is Moving 

The federal regulations and last summer’s voluntary commitment by more than 60 health insurers covering 257 million Americans across commercial, Medicare Advantage, and Medicaid markets has created a moment of regulatory and industry alignment. Payers committed to reducing the volume of services requiring PA, standardizing electronic PA using HL7庐 FHIR庐 APIs, and answering at least 80 percent of electronic requests in real time by 2027. The direction is clear, the commitments are specific, and the infrastructure to support them 鈥 HL7庐 FHIR庐 APIs being built for patient access and the ecosystem is the same infrastructure PA modernization requires. Leavitt Partners and Wakely are watching closely as implementation moves from pledge to production.  

The Digital Quality Measure (dQM) Enters the Implantation Phase 

CMS has made clear where the market is headed: digital quality measurement built on HL7 FHIR. The challenge now is execution. FHIR infrastructure developed for prior authorization or patient access can be leveraged for quality reporting as well, creating the potential for reusable investment across use cases. But the transition to dQM is not simply a technology upgrade; it is a broader business transformation that will require changes in workflows, governance, and organizational readiness. 

Digital Identity Momentum 

The IAL2 token payload agreement, Medicare rollout of digital identity, and United Health Group鈥檚 Kantara pursuit signal that the industry is aligning on a shared credential infrastructure. Leavitt Partners will continue to support the development and adoption of the open identity standards that make patient-directed access real across payers, providers, and health technology platforms. 

The infrastructure for an interoperable, AI-ready healthcare system is being built under real policy pressure in real-world environments. 红领巾瓜报 companies bring health IT policy and open standards expertise to help organizations shape and navigate that landscape as well as actuarial and implementation depth to translate it into financial and operational decisions. Organizations that invest in the foundation鈥攄ata, identity, standards, governance鈥攚ill be positioned to move faster and more responsibly as AI capabilities continue to advance. 

We Can Help 

红领巾瓜报 companies are uniquely positioned to help organizations move from interoperability strategy to real-world execution. We provide end-to-end support across digital quality measurement transformation, policy-to-operations execution, pharmacy interoperability, oral health interoperability, digital insurance cards, and the actuarial and financial modeling needed to assess performance impact, revenue implications, and reporting risk. Leavitt Partners and Wakely professionals were active participants in HIMSS26 conversations and bring the policy, operational, measurement, and financial expertise needed to help clients prepare for what comes next. 

This blog reflects policy signals and public session content from the 2026 HIMSS Global Health Conference. It represents the perspective of Leavitt Partners and Wakely Consulting Group, both 红领巾瓜报 Companies, and does not constitute legal or regulatory advice

How Do Life Sciences Companies Keep Innovating When the Rules Keep Changing?

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This episode of Vital Viewpoints on Healthcare unpacks the rapidly evolving regulatory landscape for pharmaceuticals. The discussion covers the challenges to innovation, such as the growing unpredictability in FDA policy, the challenges with reimbursement, and the increasing role of real-world evidence in bringing therapies to market. Julie Tierney, principal at Leavitt Partners (an 红领巾瓜报 Company) shares her expert perspectives on rare disease innovation and upcoming user fee negotiations; while Ben Shand, vice president at 红领巾瓜报, talks about why organizations must actively engage to navigate risk, identify opportunity, and ultimately improve patient access to care.

Achieving Success with New Technology Add-on Payment (NTAP): What Life Sciences Companies Need to Know

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This webinar is designed for life sciences companies seeking to navigate the New Technology Add-on Payment (NTAP) program. This session will equip drug, device, and diagnostic manufacturers with a clear understanding of eligibility requirements, the application process, and how to strategically position products for approval. Experts from 红领巾瓜报 and Manatt Health will also break down CMS evaluation criteria and highlight key updates shaping the NTAP program in 2026 and 2027.

Learning Objectives:

  • Understand NTAP eligibility requirements and the end-to-end application process
  • Learn how CMS evaluates applications and what drives approval decisions
  • Explore key updates and policy changes impacting NTAP in 2026 and 2027

Speakers:

  • Clare Mamerow, Principal, 红领巾瓜报
  • Ross Margulies, Partner, Manatt Health

Fiscal 2027 State Budget Proposals: Provider Taxes, Medicaid Financing, and OBBBA Effects

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As of March 15, 2026, most governors had released proposed budgets for state fiscal year (FY) 2027. In addition, several governors in states that enacted biennial budgets in 2025 have released supplemental proposals. These FY 2027 state budget proposals signal how governors are responding to Medicaid financing changes, provider tax phase downs, and new implementation costs created in the  (P.L. 119-21, OBBBA). 

Given the requirement enacted in OBBBA, this year鈥檚 state budgets are more than spending plans. They are critical policy tools governors will use to navigate changes in federal funding, new program requirements, and increasing pressures across Medicaid and broader healthcare markets. 

The FY 2027 budgets indicate how governors are attempting to balance competing imperatives: maintaining healthcare coverage and access, stabilizing provider networks, financing Medicaid obligations, and aligning state healthcare and health-related programs with new federal rules. Healthcare provider taxes, revised funding priorities, and targeted funding proposals are key levers in the process of balancing budgets. 

红领巾瓜报 Information Services (红领巾瓜报IS) has published its final iteration of the  (subscriber access required), which examines proposed FY 2027 state budgets (January 22, 2026, A Look at Proposed State Fiscal Budgets). Our March 2026 issuance covers all proposed FY 2027 budgets for non-biennial budget states and some supplemental budget proposals for states that enacted biennial budgets in 2026. Following is a look at key trends in Medicaid proposals and some of the substantial budget proposals that are discussed within the report. 

Provider Taxes and Medicaid Financing Under OBBBA 

One notable fiscal federal policy change under OBBBA is the phase down of the Medicaid provider tax programs, a financing mechanism many states rely on to draw down federal matching funds and support provider payments. The federal law freezes existing provider tax programs, prohibits new ones, and requires Medicaid expansion states to phase down the minimum allowable tax rate from 6 to 3.5 percent by 2032. 

In addition, OBBBA places new limits on state-directed payments, capping them at 100 percent of Medicare rates for expansion states and 110 percent for non-expansion states. Grandfathered payment arrangements will be phased down by 10 percent annually beginning in 2028. 

FY 2027 state budget proposals highlight how these changes will have substantial and long-term fiscal impacts, even if some effects are delayed. Examples include: 

  • Arizona estimates it will receive $5.3 billion less in federal support between FY 2029 and 2033 as a result of policy changes. 
  • 颁补濒颈蹿辞谤苍颈补听projects聽that聽state聽expenditures聽for Medi-Cal聽will聽grow $2.4 billion in聽FY聽2027, largely聽because聽the Medical Provider Interim Payment聽expires聽in聽FY聽2026 and聽a decrease in聽managed care organization (MCO)聽tax revenue available聽to support the聽Medi-Cal聽program.聽Gov.聽Gavin Newsom鈥檚 proposed聽FY聽2027 budget assumes a transition period for the decreased MCO tax through December 31, 2026.聽
  • Connecticut Gov. Ned Lamont鈥檚 proposed supplemental budget for the 2025鈥27 fiscal biennium calls for reducing hospital provider taxes by $275 million. Connecticut increased supplemental payments and provider taxes during the 2025 legislative session, but the governor鈥檚 proposal would reduce the inpatient hospital provider tax rate from 6 percent to 4.1 percent. 
  • Illinois projects that most of the budgetary impacts will begin in FY 2028, with federal Medicaid support reduced by approximately $2.8 billion annually by FY 2031. 
  • New York Gov. Kathy Hochul鈥檚 budget proposal updates the managed care tax spending plan and estimates the state will collect $1.5 billion fewer receipts than anticipated in fiscal 2027. 

Implementation Costs: Staffing, Systems, and Administrative Burden 

Along with the decreased federal funding, implementing OBBBA carries significant administrative and operational costs, compounding pressure on state budgets. 

According to an Associated Press  of 25 state budget protections, states will need to spend up to $1 billion in federal and state funds on technology upgrades and additional staff to fully implement the Medicaid work and community engagement requirements. Many FY 2027 budgets reflect this reality, with new investments focused on expanding staffing capacity and modernizing eligibility and data systems. For example:

  • 惭颈肠丑颈驳补苍鈥檚 proposed budget, for example, includes $186.6 million from the state general fund to fully implement OBBBA, including $80.3 million in all funds to hire additional full-time employees who can meet the increased workload. 
  • Missouri proposes $294.6 million and dedicated staff members to comply with OBBBA. 
  • Arizona proposes a $14.4 million one-time investment and dedicated OBBBA implementation staff. 

Several governors also propose investments to help beneficiaries remain enrolled amid more frequent eligibility checks and new requirements. For example: 

  • Kentucky proposes $35.6 million in FY 2027 and $11 million in FY 2028 to modify the Medicaid information technology systems and other administrative systems to cover increased costs for the more frequent six-month eligibility redeterminations and to implement the new community engagement and work requirements. 
  • Rhode Island proposes $32.7 million for technology modifications to the RIBridges software to maintain compliance for various health and human services programs to align with OBBBA. 

What to Watch: FY 2027 Budget Decisions and Medicaid Financing Risks 

Upcoming provider tax phase downs and caps on state-directed payments constrain core funding tools just as implementation costs for staffing and systems are rising, forcing difficult decisions about coverage, provider support, and administrative capacity. Providers face growing uncertainty as tax supported supplemental payments are reduced or restructured, with potential implications for cash flow, service availability, and network participation. 

Managed care plans, meanwhile, must navigate shifting rate development assumptions, changes in provider payment arrangements, and increased enrollment churn tied to eligibility and redetermination changes. 

While the timing and magnitude of effects vary, these proposals underscore that provider tax and supplemental payment changes are more than abstract future concerns. They already are shaping FY 2027 budget decisions and long-term Medicaid financing strategies. 

Most state legislatures are still debating their spending plans, making it critical to track which proposals are included in FY 2027 budgets, which are scaled back, and which are eliminated. These budget decisions will play a central role in determining market stability, access to care, and program sustainability in the years ahead. 

红领巾瓜报IS will publish additional reports in the coming months summarizing each state鈥檚 enacted budget. The first iteration is expected in May 2026. 

Connect with Us 

As the policy and funding landscapes continue to evolve, states and other stakeholders need to remain flexible. 红领巾瓜报 brings the expertise, tools, and insights needed for stakeholders to stay on top of the rapidly changing environment. For questions or to connect with an 红领巾瓜报 expert, contact Andrea Maresca and Kathleen Nolan

The full report is available to 红领巾瓜报IS subscribers. Questions can be directed to Maddie McCarthy

Connecting the Dots: Medicaid Community Engagement Requirements and State Readiness for 2027

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New federal Medicaid community engagement requirements, along with more frequent redetermination and a reduced retroactive聽eligibility timeframe, take effect January 1, 2027. These changes are reshaping state Medicaid policy agendas, budget decisions, and聽eligibility system design as states prepare to implement federally mandated聽work and聽community engagement requirements聽for the Affordable Care Act (ACA) expansion population.聽This blog addresses the forthcoming policy changes, key issues related to eligibility and information systems, and聽timely聽actions for state partners preparing to meet the new requirements.

Community engagement requirements聽often聽are聽discussed聽in broad terms: whether they encourage聽self-sufficiency聽or create barriers.聽For state Medicaid agencies, managed care plans聽(MCPs), and providers, however,聽the more聽immediate and consequential question is operational:聽Is the Medicaid program鈥攁cross eligibility systems, data flows, partner roles, and communications鈥攔eady聽to administer these requirements without losing eligible people?聽

Based on our work with states, Medicaid programs, and community partners, the answer is dependent on the approach to execution. Specifically, it hinges on how states prepare their systems and partners for compliance with community engagement requirements without placing undue burden or expectations on beneficiaries, government agencies, MCPs, and community partners. 

Federal Context: Medicaid Community Engagement Requirements Beginning in 2027 

Under , states that extended Medicaid to able鈥慴odied adults in the ACA Medicaid expansion population (up to 138 percent of the federal poverty level) must: 

  • Apply community engagement requirements to expansion adults, unless they qualify for an exemption聽
  • Conduct聽eligibility redeterminations at least every聽six聽months聽for these enrollees聽
  • Reduce retroactive coverage eligibility from聽90聽to聽30 days聽
  • Verify聽community engagement聽or exemptions using available data sources聽
  • Enforce consequences for noncompliance beginning in 2027聽

Forthcoming federal guidance and regulations will clarify key implementation details. In the interim, states are using the statutory framework to design the necessary policy changes. For example, many states will move beyond a simple 鈥渞equirement鈥 model toward support-oriented programs that make compliance achievable for enrollees, minimizes administrative churn, and leverages available data and information systems functionality to reduce compliance burden. In so doing, states need to use existing federal guidance to answer the following questions: 

  • Who is in scope and who is聽exempt聽and聽how聽are聽exemptions聽verified聽without creating new burdens聽on聽enrollees聽and the people and systems that support them?聽
  • What counts as聽a 鈥渜ualifying activity鈥 for compliance聽with the community engagement聽requirement聽(e.g., education/training and caregiving)?聽
  • Which聽data sources can聽be聽deemed聽as聽鈥渁uthoritative鈥澛爁or聽verifying聽compliance?聽
  • How聽and when聽will聽beneficiaries be notified, supported, and given opportunities to聽supply聽missing information?聽
  • How聽do they聽track compliance with the community engagement聽requirement聽and聽address聽its聽intended and unintended impacts?聽
  • How聽do聽the聽verify eligibility聽for new聽applicants and what process聽do they聽use to聽monitor聽ongoing compliance for existing enrollees?聽

Analyis and planning for聽community聽engagement聽is underway now,聽state by state, and will determine whether the mandates聽will聽increase employment, education, and volunteerism聽and yield the expected health聽and聽economic benefits聽or drive avoidable coverage loss.聽

From Policy Requirement to Workable Medicaid Community Engagement Implementation 

The  touch multiple components of a Medicaid enterprise, including: 

  • Eligibility and enrollment systems and renewal workflows聽
  • Data sources (wage databases, SNAP/TANF interfaces, workforce systems, education/training records)聽
  • Managed care member services聽and,聽potentially,聽capitated聽payments聽
  • All engagement with contact聽centers聽(e.g.,聽phone, chat, text messaging,聽email,聽beneficiary portal, etc.)聽
  • Document processing聽
  • Notices, appeals, fair hearing processes, and case management聽
  • Reporting, audit trails, and quality assurance聽

In other words, the backend systems that support compliance with the community engagement requirement must be designed and built for real-world administration and meet oversight requirements. Backend system readiness is among the most important operational issues for expansion states, as it will dictate the overall timeline and success in meeting Medicaid leaders鈥 goals. 

How Medicaid MCPs and Providers Will Support Enrollees 

The Centers for Medicare & Medicaid Services (CMS) collaborated with  to meet the compressed community engagement implementation timeline, the scale of system changes required across eligibility and verification workflows, and long-standing cost and capacity constraints. States are being asked to implement these complex new expectation largely within existing eligibility platforms, which were designed for purposes other than continuous activity tracking or cross-agency data exchange. 

Although these arrangements may improve affordability and speed, states must still assess whether vendor-offered solutions align with their specific policy choices, data sources, partner roles, and operational risk tolerance. 

Medicaid MCPs and provider groups, including hospitals and federally qualified health centers (FQHCs), will be on the front lines of enrollee retention. These organizations should engage with states now to ensure systems and information flows support their work. MCPs should focus on access to: 

  • Timely actionable information聽regarding聽which聽members are subject to the requirement聽
  • Visibility into exemption status and pending聽verification聽
  • Clear rules and data feeds that support proactive outreach聽
  • Alignment on plan member communications聽

Primary care providers, hospitals, FQHCs, and behavioral health providers play a critical role in identifying and supporting exemptions. If the exemption processes are slow, unclear, or burdensome, patients with legitimate medical or functional limitations may lose coverage and providers may incur increased uncompensated care costs. Providers should be engaging states to solidify: 

  • Streamlined, clinically grounded exemption processes聽
  • Clear guidance on documentation standards聽
  • Fast, predictable exemption determinations聽
  • Feedback loops when exemption requests are denied or incomplete聽

Community engagement requirements will require coordination with nontraditional partners, such as: 

  • Departments of Labor/Workforce聽Development聽
  • Community colleges, adult education, and training programs聽
  • SNAP/TANF agencies (and their employment and training programs)聽
  • Community-based聽and聽faith-based organizations,聽organizations聽that聽offer聽volunteer and community service opportunities,聽and local workforce boards聽
  • Employers, chambers, and sector-based workforce intermediaries聽

These partners can become essential to making the policy workable for enrollees, but they often have timelines, data standards, funding streams, and performance incentives that differ from Medicaid鈥檚. Partners should be in conversation with states now about investments in a cross-agency and cross-sector governance structure that answers practical questions about the definitions, systems and workflows, and beneficiary experience. 

States Should Act Now 

A real and preventable risk is embedded in the 2027 timeline: coverage loss among healthy, working adults who remain eligible but cannot navigate new processes. States must look across every part of their Medicaid system, decide what they need each partner to do, and ensure those partners have the information, tools, and authority to act. Plans and providers must be clear and advocate for what they need to prevent eligible individuals from losing coverage. 

Handled well, this is an opportunity to modernize systems, strengthen cross-sector coordination, and may demonstrate whether community engagement can yield a net benefit to members鈥攏ot just add steps to maintaining coverage. 

Connect with Us 

红领巾瓜报 Medicaid experts assist Medicaid and state policymakers with the following: 

  • Policy-to-operations design聽
  • Cross-agency governance and partner alignment聽
  • Information聽systems聽impact assessment, change planning,聽testing聽strategies聽and readiness metrics聽
  • Scenario聽planning and beneficiary impact analysis聽
  • Communications聽and operational playbooks聽
  • Program聽integrity, reporting, and audit support聽

红领巾瓜报 contributors to this article include Erin DorrienKaitlyn FeiockAndrea Maresca, and Juan Montanez

红领巾瓜报 Blog Series 

The 红领巾瓜报 (红领巾瓜报) Connecting the Dots blog series brings our experts together to examine the major policy, program, and market forces shaping healthcare coverage, delivery systems, and financing in 2026. The posts look beyond individual changes to connect emerging developments across programs and markets to help leaders understand what鈥檚 changing, why it matters, and how their decisions shape the path ahead. This month our experts weigh in on preparations for Medicaid Work and Community Engagement Requirements.  

PBM Reform Accelerates: New Rules, Broader Oversight, and What鈥檚 Ahead

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The first quarter of 2026 marked a turning point in federal oversight of pharmacy benefit managers (PBMs), the intermediaries that manage prescription drug benefits for most health plans across the commercial insurance market, Medicare Part D, and other programs. New legislation, agency rulemaking, and enforcement activity collectively signal a new phase of oversight that could materially reshape PBM contracting, compensation, and transparency requirements. 

Most notably, the following developments stand out: 

  • The聽US Department of Labor (DOL)聽聽new disclosure requirements for PBMs聽that聽serve聽self-insured聽Employee Retirement Income Security Act聽(ERISA)聽plans.聽
  • The聽Consolidated Appropriations Act聽of聽2026 (CAA 26),聽聽February 3,聽2026, establishes聽comprehensive PBM聽transparency and contracting聽requirements聽in the聽commercial insurance market and Medicare Part D.聽
  • The聽Federal Trade Commission (FTC)聽聽a settlement聽with Express Scripts, Inc.聽(ESI),聽requiring significant聽changes to聽ESI鈥檚聽business practices.聽

Together, these actions signal a trend toward greater PBM accountability, with implications for plans, pharmacies, manufacturers,聽and聽consumers.聽This article provides a high-level overview of the major聽recent聽developments聽in the PBM reform policy landscape, along with key considerations for聽stakeholders.聽

Medicare Part D: Key Statutory Changes 

Beginning in plan year 2028, CAA 26 makes significant changes for PBMs operating in Medicare Part D. Key provisions include: 

  • Requiring聽PBMs to聽provide聽annual reports to聽plan sponsor clients聽detailing aggregate and drug-specific costs聽
  • Restricting聽PBMs compensation聽structures, prohibiting payments tied to drug prices, rebates, or price-based benchmarks聽and聽limiting PBMs to only receive聽bona fide service fees that reflect聽fair market value聽
  • Stipulating聽additional聽parameters related to rebate guarantees, contract terminology, and audit rights聽

Additional provisions that will take effect in beginning with plan year 2029 include: 

  • A requirement that聽plan聽sponsors and PBMs聽comply with聽forthcoming聽standards for 鈥渞easonable and relevant鈥澛爌harmacy聽contracting terms and conditions聽
  • Expansion of聽the聽enforcement infrastructure聽to avert聽potential violations of聽the program鈥檚聽pharmacy contracting聽requirements聽

Key considerations: The Centers for Medicare & Medicaid Services (CMS) has broad discretion in implementing these provisions, including setting pharmacy contracting standards, determining which PBM affiliates are subject to new requirements, and defining 鈥渇air market value.鈥 PBMs will face expanded reporting and compliance obligations, while plans and other stakeholders will have opportunities to shape implementation through the regulatory process. 

Commercial Health Insurance Market: Key Statutory Changes 

For the commercial market, CAA 26 establishes similar transparency requirements for PBMs that serve fully insured and self-insured plans, with reporting required up to four times per year. Unlike Medicare Part D, the statute does not prohibit pricelinked compensation in the commercial market, but it does require detailed disclosure of PBM fees and revenue streams. For contracts with selfinsured plans, PBMs must remit 100 percent of rebates and fees tied to drug utilization, subject to specified limitations. 

Key considerations: These provisions significantly expand federal oversight in the commercial market. PBMs will need to scale compliance infrastructure, while employers and other plan sponsors may seek enhanced analytical and actuarial support to interpret disclosures and assess PBM performance. 

Medicaid Left Out, For Now. 

Unlike prior , CAA 26 does not include Medicaid-specific PBM reforms, such as  on spread pricing (i.e., a PBM charges a payer more than the amount it pays the dispensing pharmacy for a prescription) and expanded National Average Drug Acquisition Cost () reporting. 

Key considerations:聽These policies聽continue to have聽聽and聽could聽reemerge in legislation.聽States,聽PBMs,聽and managed care plans聽should continue聽monitoring聽for聽renewed federal action聽on these policies.聽

DOL鈥檚 Proposed PBM Fee Disclosure Rule 

DOL鈥檚 proposed , 鈥淚mproving Transparency Into Pharmacy Benefit Manager Fee Disclosure,鈥 would require PBMs serving self-insured ERISA plans to  information about rebates, manufacturer fees, pharmacy payments, and spread pricing. In late February, DOL  the public comment period to April 15 to allow stakeholders to address how the proposed rule should align with the newly enacted CAA 26 provisions. 

Key considerations: DOL could withdraw the proposal in favor of the statutory framework or could finalize the rule to take effect before the CAA 26 requirements begin. Either path would further increase near-term compliance for PBMs and plan sponsors, and stakeholders should monitor this space closely. 

FTC Settlement with ESI 

罢丑别&苍产蝉辫;贵罢颁鈥檚&苍产蝉辫; with ESI resolves insulin-focused  against the PBM and imposes extensive requirements related to transparency, compensation, rebates and fees, and benefit design. The settlement also includes less common provisions, such as a commitment to reshore and increase disclosures related to ESI鈥檚 rebate group purchasing organization (GPO) functions. 

Key considerations: If similar settlements are reached with other PBMs, the FTC could play an expanded role in shaping PBM market behavior, supplementing legislative and regulatory reforms with enforcement-driven standards. 

State Efforts to Regulate PBMs 

States continue to pursue PBM reforms, with  of laws enacted in recent years addressing licensure, reporting, pharmacy reimbursement, and contracting standards. Although the Supreme Court鈥檚 2020  in Rutledge v. PCMA opened the door to certain state-level reforms,  have narrowed the scope of permissible state regulation, particularly when ERISA preemption or Medicare Part D conflicts arise. 

Key considerations: Stakeholders operating across multiple markets and states will continue to face a complex and evolving patchwork of requirements, underscoring the importance of ongoing policy tracking and compliance coordination. 

Connect with Us 

Recent federal and state actions suggest that PBM reform is entering a more operational phase defined by transparency聽and聽enforceable standards governing compensation, contracting, and market聽behavior. As implementation unfolds, stakeholders across the prescription drug supply chain will need to engage closely with regulators, assess new data flows, and adapt聽their聽business practices to a more prescriptive oversight environment.聽

For more information about the policies described鈥痠n this article and the PBM policy landscape more broadly, please contact our experts  or Stephen Palmer

Outlook 2026: What CMS鈥檚 Proposed 2027 NBPP Signals for ACA Marketplaces, States, and Consumers

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The Centers for Medicare & Medicaid Services (CMS) proposed  marks a notable shift in Marketplace policy, expanding lower premium plan options, relaxing certain federal standards, and moving more implementation and oversight responsibility to states and Marketplaces. It also introduces eligibility and verification policies that could significantly affect enrollment, operations, and market stability. 

To unpack what this could mean for plan year 2027 and beyond, Andrea Maresca spoke with Zach Sherman, Managing Director for Coverage Policy and Program Design at 红领巾瓜报 (红领巾瓜报); Lina Rashid, Principal at 红领巾瓜报; and , PhD, Principal at Wakely, an 红领巾瓜报 company, who, alongside colleagues, published a Policy Brief on state-level and consumer impacts, as well as a Wakely  on the proposed rule. 

 Q: When you zoom out from the technical details, what are the big takeaways from the proposed 2027 NBPP for states, consumers, and issuers? 

Lina Rashid: At a high level, the proposal reallocates risk and responsibility across the system. Consumers may see more lower premium options through expanded catastrophic plan eligibility and more flexible bronze plan design, but often with more cost-sharing, higher deductibles, or greater complexity. For consumers, affordability is about more than just premiums; it鈥檚 about how much healthcare costs for individuals and their families overall and the cost of care when they need it. 

States are being given options to take on more oversight and operational responsibility but without additional federal funding. And issuers are being given more flexibility, but it comes with uncertainty regarding enrollment and risk mix. 

Zach Sherman: The rule鈥檚 cumulative effect matters more than any one policy. Expanded catastrophic eligibility, higher out-of-pocket exposure, relaxed network standards, and tighter verification requirements all interact. Together, they raise questions about access, affordability, and whether Marketplaces are equipped to manage administrative and enrollment disruption. 

Q: The paper highlights potentially significant enrollment effects. What鈥檚 driving that dynamic? 

Michael: Two things stand out. First, the proposal implements statutory changes that remove advance premium tax credit (APTC) eligibility for certain lawfully present immigrants beginning in 2027. CMS estimates more than a million people could lose eligibility, and it鈥檚 reasonable to expect most of them will exit the individual market. 

Second, the proposed income verification changes could generate millions of data matching issues (DMIs) that temporarily or permanently cut off access to advance premium tax credits. While CMS projects a relatively modest disenrollment effect, our analysis suggests losses could be meaningfully higher depending on how quickly issues are resolved. We estimate that approximately 4.7 million enrollees could receive DMIs under the proposal, and upward of 80 percent of them could temporarily or permanently lose access to APTCs, putting coverage at risk. 

Zach: If consumers can鈥檛 afford the full premiums while resolving a data issue, many will drop coverage. That creates churn and administrative strain that Marketplaces must manage. 

Q: How do these policies affect state Marketplaces and regulators specifically? 

Zach: States are being asked to do more across multiple fronts. Network adequacy oversight is shifting toward states that conduct effective rate review. States may also choose or feel pressure to take on Essential Community Provider (ECP) review authority, including for new non-network plans. Accepting that responsibility requires legal authority, staff capacity, and technical infrastructure. 

At the same time, states may need to stand up the State Exchange Improper Payment Measurement (SEIPM) program, which CMS acknowledges will increase administrative burden. 

The proposed State Exchange Enhanced Direct Enrollment (SBE-EDE) option is also a significant shift. Rather than operating a centralized consumer enrollment platform, Marketplaces would focus on certifying, overseeing, and monitoring multiple third-party entities. As a former director of a state-based Marketplace program, I know this is a fundamentally different operational posture that comes with oversight and compliance costs. 

Q: The proposal also introduces non-network plans. What should stakeholders be watching here? 

Michael:  may offer lower premiums, but they change how access works. Provider participation depends on the willingness to accept the plan鈥檚 payment as payment in full. On paper a plan may meet access standards, but in practice consumers could face difficulty finding care. That places additional oversight responsibility on states to determine whether access is sufficient in practice. If aggressively priced non-network plans disproportionately attract healthier enrollees, it can create financial risk for issuers and for the broader market. 

Q: What does this mean for market stability going forward? 

Zach: Stability will vary by state. States that invest in oversight, consumer assistance, and operational readiness鈥攐ften a state-based Marketplace鈥攎ay be better positioned to manage these changes. Others may see sharper enrollment declines or access issues. That divergence across states is an important signal from this proposal. 

Q: What should states and stakeholders be doing right now? 

Zach: States should be doing scenario planning, assessing which flexibilities to adopt, where to maintain higher standards, and whether they have the capacity to take on expanded responsibilities. These decisions will shape how the rule plays out on the ground. 

Michael: Issuers should be , risk adjustment exposure, and operational readiness. All stakeholders should remember that comments on the proposed rule are due March 13, 2026. 

尝颈苍补:听Notably, CMS聽is not done with聽regulatory reforms.聽The聽agency solicited聽comment聽on聽medical聽loss聽ratio (MLR)聽policies聽and聽paused聽Essential Health Benefit聽benchmark updates,聽as well as issues not covered in this proposed rule, such as revisions to the Section 1332 waiver and聽Section聽1333 interstate compacts.聽States and issuers should be tracking what may come next, not just what鈥檚 in this proposal.

2027 Proposed NBPP: Analyzing State and Consumer Impacts

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On February 9, 2026, the Department of Health and Human Services (HHS) released the proposed Notice of Benefit and Payment Parameters (NBPP) for 2027. The notice includes important proposed rules and parameters for the operation of the individual and small group health insurance markets in 2027 and beyond.

This paper summarizes key provisions in the proposed notice with a focus on the major changes to plan types, cost-sharing, network design and oversight, marketplace philosophy, and the shift of responsibilities from the federal government to states. It also evaluates any changes to returning policies from the Marketplace Affordability and Integrity rule from last year, which are currently being challenged in court, and codifies relevant statutory changes in the One Big Beautiful Bill Act.

The paper reviews the potential impact of these proposed policies on consumer affordability and access as well as the impact and associated level of effort on state regulators and marketplaces. Lastly, it touches on policies not included in this rule, including those highlighted as issues that may or will be addressed in future rulemaking as well as issues surprisingly not covered in this proposed rule, such as revisions to the Section 1332 waiver process as well as details on how a state could explore and pursue a 1333 interstate compact. Comments are due no later than March 13, 2026.

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