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CMS Announces 15 States Participating in the Transforming Maternal Health Model

The Centers for Medicare & Medicaid Services (CMS) on January 6, 2025, announced that 15 states have been selected to participate in the agency鈥檚 new TMaH) Model. They are: Alabama, Arkansas, California, the District of Columbia, Illinois, Kansas, Louisiana, Maine, Minnesota, Mississippi, New Jersey, Oklahoma, South Carolina, West Virginia, and Wisconsin. This week, our In Focus section reviews this initiative and the need for improved maternal healthcare for Medicaid and Children鈥檚 Health Insurance Plan (CHIP) enrollees.

Adverse Maternal Health Outcomes Among Medicaid and CHIP Enrollees

Medicaid and CHIP programs cover a large portion of all births in the United States. According to a CMS data brief published in December 2024, , the public health programs covered 41 percent of all births that year. In some states, Medicaid and CHIP-covered healthcare accounted for up to 67 percent of births.

The data brief examines the trends of premature births and severe maternal morbidity (SMM) events鈥攊ncluding blood transfusion, acute respiratory distress syndrome, sepsis, acute renal failure, ventilation, and other conditions鈥攊n Medicaid and CHIP-covered births for people ages 15 to 49 between 2019 and 2021. During this period, the percentage of preterm live births increased from 10.5 percent to 10.8 percent, and SMM rates increased from 209.6 per 10,000 live births to 252.7 per 10,000 live births.

Some demographic groups had higher rates of preterm births and SMM than others. Enrollees who were Medicaid-eligible because of disability had more than 1.5 times the percentage of preterm births, and nearly double the rate of SMM than enrollees in other eligibility categories. In addition, non-Hispanic Black enrollees and non-Hispanic Native American enrollees had the highest rates of preterm births and SMM compared with all other racial and ethnic groups.

With the increasing adverse maternal health outcomes facing Medicaid and CHIP enrollees, as well as people with private insurance, state leaders and their partners are looking toward different initiatives to help improve outcomes. As governors prepare for their 2025 State of the State Addresses, several are expected to identify maternal health as a key priority. Their priorities will initiate and build on policy changes and other actions in development since 2022, such as expanding Medicaid coverage to 12 months postpartum, collecting and publishing actionable data on pregnancy-associated and pregnancy-related mortality and causes, and directing funding to expand targeted high-quality care provided by doulas and community health workers (CHWs), for example.

TMaH Model

The TMaH Model, which CMS introduced in December 2023, is designed to improve maternal healthcare, improve health outcomes for Medicaid and CHIP-covered births, and lower healthcare expenditures. The model centers on three main pillars described in Table 1.

Notably, the model is intended to facilitate design and implementation of a value-based alternative payment model for maternity care services. It also includes a health equity strategy to address disparities among racial and ethnic minorities, as well as people who live in rural and underserved areas.

The 10-year TMaH Model has an initial three-year implementation period that began January 1, 2025. During that time, states will receive targeted technical assistance to develop and implement elements of the model while achieving pre-implementation milestones. Moreover, participating states will receive up to $17 million in cooperative agreement funding to support planning and implementation over 10 years.

Obstetrical Quality Measures and Standards

To further support the goals of the TMaH Model, CMS has new national health and safety standards, known as conditions of participation (CoPs), for hospitals and critical access hospitals that offer obstetrical services. These CoPs represent a significant step in advancing maternal health outcomes by requiring maternal quality assessment and performance improvement programs, setting baseline standards for the organization, staffing, and delivery of obstetrical care, and mandating staff training in evidence-based maternal health practices.

By establishing a consistent standard of high-quality maternity care for all Medicaid participating facilities, the CoPs complement the TMaH Model鈥檚 pillars of quality improvement and safety, as well as whole-person care. Together, these initiatives are intended to produce a unified framework for reducing maternal morbidity and mortality, addressing health disparities, and fostering equitable, patient-centered care across participating states.

Key Considerations

The new TMaH Model provides participating state Medicaid agencies (SMA) with an opportunity to accelerate their efforts to improve maternal health outcomes for a large percentage of their maternal population. State TMaH planning initiatives will need to consider the model requirements and include:

Strengthening partnerships. The model provides states with an opportunity to strengthen collaboration with and build capacity among key partners, including Perinatal Quality Collaboratives, hospitals, birth centers, healthcare centers and rural health clinics, maternity care providers, and CBOs, to successfully implement the model. Specifically, states can work with providers to use provider infrastructure payments to support their engagement with CBOs that can address the HRSNs and behavioral health needs of beneficiaries and integrate them into screening, referral, and follow-up activities.

Defining the role for managed care organizations (MCOs). Agencies will need to work with MCOs and stakeholder groups to support the model. SMAs may designate some of their Cooperative Agreement funding to MCOs to support infrastructure and capacity building for the TMaH Model.

Integrating TMaH with existing and other planned initiatives. Optimizing the TMaH Model requires states and their partners to consider how the framework complements and may be incorporated into other state initiatives. Specifically, the TMaH Model will require reporting on screening for three domains of HRSNs: food insecurity, housing instability, and transportation. The TMaH Model will require use of a validated health IT-encoded HRSN screening instrument, such as the Accountable Health Communities HRSN screening tool. States and their partners can integrate existing HRSN tools and Medicaid section 1115 demonstration initiatives with efforts carried out using the TMaH Model.

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Join 红领巾瓜报 (红领巾瓜报) experts聽Michelle Hurst,聽Marilyn Johnson, and聽Zipatly V. Mendoza聽for the聽Improving Maternal Health Outcomes: Navigating CMS Guidance for Better Care聽webinar on January 28, 2025. They will dive deeper into recent CMS regulations and other federal developments that affect maternal health, actionable strategies to implement regulations, and approaches to reduce maternal health disparities and ensure equitable care.

Congress Continues Negotiations on 2025 Spending and End-of-Year Package

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This week, our In Focus section reviews the year-end legislative package congressional leaders announced as part of the stopgap funding to prevent a government shutdown. The , which was unveiled December 18, 2024, would extend expiring Medicaid and Medicare policies, reauthorize health and human services programs, and extend federal funding for discretionary programs through March 14, 2025. The existing temporary funding measure expires December 20, 2024.

Following is a summary of several major healthcare policies that, if approved, will inform the shifting federal policy landscape and state and local programs in 2025.

Pharmacy Benefit Managers

The healthcare package includes policies that reflect several years of increased scrutiny on pharmacy benefit managers (PBMs), including:

Prohibiting PBMs from charging a Medicaid managed care organization more for a drug than the amount that a PBM pays a pharmacy (i.e., spread pricing)
Requiring consistency and additional transparency in contracts between Part D plans and PBMs
Prohibiting Medicare Part D plans from linking payments to drug list prices
Adding report requirements for PBMs

Medicaid Policies and Programs

The legislative text includes 13 separate sections that address Medicaid policies, including extensions on expiring policies, establishment of new programs, and plans to codify certain other policies related to Medicaid eligibility and renewals. These policy changes include:

Medicaid Disproportionate Share Hospital (DSH) allotment: Eliminates reductions for fiscal year (FY) 2025; delays the effective date of the two remaining years of Medicaid DSH allotment reductions until January 1, 2027; and changes the definition of the Medicaid shortfall component of the Medicaid DSH cap to include costs and payments for patients who have Medicaid as their primary source of coverage and for patients who are dually eligible for Medicare and Medicaid.
Home and community-based services (HCBS) waiver: Establishes a three-year, five-state Medicaid HCBS waiver program, which would allow states to cover these services for individuals who need them but do not meet the current statutory requirement of needing 鈥渋nstitutional level of care.鈥� States will have an opportunity to apply for planning grants.
Services for juveniles leaving public institutions: Delays by 12 months the requirement that state Medicaid programs provide screenings, diagnostic services, and targeted case management services for eligible juveniles within 30 days of their scheduled date of release from a public institution following adjudication.

Medicare Payments

The compromise package also increases the Medicare Physician Fee Schedule conversion factor by 2.5 percent in 2025 to partially offset a 2.83 percent cut that the Centers for Medicare & Medicaid Services (CMS) finalized in November. Providers consider this a short-term fix, however, and Congress, provider advocates, and other interested parties are engaged in discussions about making broader changes to Medicare physician pay in 2025.

Notably, the agreement includes a payment policy consistent with a bill that the House of Representatives passed earlier this year鈥攖he Lower Cost More Transparency Act鈥攖o provide enhanced information about payment differentials between off鈥恈ampus outpatient departments and other outpatient facilities. The provision requires each off-campus outpatient department to obtain and bill for services under a unique national provider identifier.

Other notable Medicare policies include:

Telehealth: Extends Medicare telehealth flexibilities through December 31, 2026; establishes special rules for telehealth services provided by Federally Qualified Health Centers and Rural Health Clinics for prospective payment and all-inclusive rates; adds modifiers for telehealth services provided incident-to other services and those offered via contracts with virtual platform vendors; expands services that can be provided via telehealth; and enhances tracking of telehealth use
Payment extensions: Extends the Medicare low-volume hospital payment adjustment and Medicare-dependent hospital program through December 31, 2025; Medicare ground ambulance add-on payments through December 31, 2026; incentive payments for advanced alternative payment models through payment year 2027 at an adjusted amount of 3.53 percent; and Qualifying Participant eligibility thresholds in effect for performance year 2023 through payment year 2027
Hospital at-home program: Extends the Acute Hospital Care at Home initiative through December 31, 2029
Part D: Prohibits cost sharing for generic drugs for Part D beneficiaries who are eligible for the low-income subsidy
Provider directories: Requires Medicare Advantage plans to maintain accurate provider directories on a public website beginning in plan year 2027
Screening: Adds multi-cancer early detection screening tests as a covered benefit beginning in 2029
Home infusion: Allows coverage of home infusion treatments by classifying certain approved infusion treatments as Durable Medical Equipment (DME)

Other Notable Provisions

Reauthorizes and revises the Second Chance Reauthorization Act of 2024, including allowing substance use disorder (SUD) services to be provided through the State and Local Reentry Demonstration Projects program
Reauthorizes and modernizes several aspects of child welfare programs
Provides mandatory funding for community health centers and the National Health Service Corps through FY2026, the Teaching Health Center Graduate Medical Education Program through FY2029, and the Special Diabetes Programs (SDP) for Type I diabetes and the SDP for Indians through FY2026
Reauthorizes through FY 2029 the SUPPORT for Patients and Communities Act, which includes a range of mental health and SUD prevention, treatment, and recovery programs
Reauthorizes Older Americans Act programs
Reauthorizes several programs and authorities related to preparedness and response through FY2026, including the Public Health Emergency Preparedness Program and the Hospital Preparedness Program

What鈥檚 Next

Funding for the federal government expires December 20, 2024. Congress will need to approve another temporary measure to avert a government shutdown. The length and scope of such an extension remains under discussion, though the current continuing resolution would push the funding deadline into the first few months of the incoming Trump Administration and new Congress. Healthcare stakeholders, including payers, state and local governments, providers, and community organizations, should continue to monitor the congressional negotiations and be prepared to analyze the impact of legislation that Congress ultimately approves.

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红领巾瓜报, Inc. (红领巾瓜报) experts will continue analyzing the implications of the funding and policy updates in the December 18 package and ongoing congressional discussions to reach an agreement. 红领巾瓜报鈥檚 experts have the depth of knowledge, experience, and subject matter expertise to assist organizations with navigating these changes and the impact for health and health adjacent sectors. Please contact Laura Pence and Andrea Maresca to connect with our experts.

The Medicaid Section 1115 demonstration landscape: past trends and anticipated shifts

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This week’s聽In Focus聽section summarizes states’ Medicaid Section 1115 demonstration priorities over the last four years and highlights predicted changes coming with a new presidential administration. In the waning days of any presidency, regardless of party, reviewing and approving pending Section 1115 applications that reflect the current administration鈥檚 key policy initiatives is a priority for officials at the Centers for Medicare & Medicaid Services (CMS).聽

Each administration has discretion over which Section 1115 demonstrations to encourage and approve. Though specific Medicaid priorities under the upcoming Trump Administration are still nascent, 红领巾瓜报, Inc. (红领巾瓜报), federal, and state experts are monitoring these developments. This article describes a subset of the signature initiatives the Biden Administration permitted states to pursue in their Medicaid Section 1115 demonstrations and how the new administration could focus on different priorities, rescind existing guidance, or potentially withdraw already approved waivers.

Overview of Biden-Era Section 1115 Demonstration Initiatives

CMS-approved Section 1115 demonstrations permit alternative methods to improve the accessibility, coverage, financing, and delivery of healthcare services under joint federal-state funded programs, specifically Medicaid and the Children鈥檚 Health Insurance Program (CHIP).

Addressing health disparities and promoting integrated care in Medicaid became a primary focus of the Biden Administration. In November 2023, CMS introduced a , giving state Medicaid agencies the opportunity to address the broader social determinants of health (SDOH) that affect their enrollees, leading to better health outcomes. The new initiatives were not intended to replace other federal, state, and local social service programs, but rather to coordinate with those efforts. HRSN demonstration approvals to date include coverage of rent/temporary housing and utilities for up to six months and nutrition support (up to three meals per day), departing from longstanding prohibitions on payment of room and board in Medicaid.

During the present administration, CMS also has provided novel opportunities for states to adopt strategies that promote continuity of Medicaid coverage, mainly through bolstering Section 1115 demonstrations to provide 鈥痜or children. In addition, CMS released鈥痠n April 2023 so states could apply for a new Section 1115 demonstration opportunity to test transition-related strategies that support community鈥痳eentry鈥痜or incarcerated people who would otherwise be eligible for Medicaid or CHIP.

The table and map below show the types of demonstrations approved and pending to date. We anticipate that incoming administration officials will closely examine the four demonstration initiatives outlined as they determine their own Medicaid policy agenda and priorities. Under President Biden鈥檚 Administration, nine states received federal approval for HRSN demonstrations under the new framework. Another 10 states have applications pending.

Rescissions and renewals. Incoming Trump Administration officials technically could attempt to rescind some of the Section 1115 demonstrations approved during the Biden Administration. The Biden Administration unsuccessfully pursued with, a similar strategy for certain 1115 demonstration components approved during President-Elect Trump鈥檚 first term. Like the Biden Administration, the incoming Trump officials may choose not to renew demonstrations, even if the courts prevent them from rescinding approvals.

Any signature Section 1115 policy is unlikely to emerge until the new administration鈥檚 policy officials are in place. There are, however, important insights to consider based on the first Trump Administration鈥檚 priorities and areas of common ground across the Biden and first Trump administrations.

Signature 1115 initiatives. During President Trump鈥檚 first term, one signature鈥€痑llowed states to apply work requirements to some eligibility groups. CMS officials at that time also approved 鈥痜or certain components of a state鈥檚 Medicaid program. Some states might consider revisiting these options with incoming administration officials. Two other key policy areas to watch following the transition include:

The first Trump Administration聽鈥痑 pilot program to test interventions addressing HRSNs in 鈥€疢edicaid 1115 demonstration program. Though the approved HRSNs were less expansive than the HRSN 1115 interventions later announced by the Biden Administration, this could be an area of common ground where the policy evolves and can be incorporated into discussions on other nascent initiatives.聽
Multiple administrations, including the first Trump Administration, have prioritized Medicaid policies and demonstration initiatives to address substance use disorders (SUD) and, separately, reentry. The intersection of these issues can provide another area of common ground and opportunity to continue work on state reentry initiatives, though likely with new and modified parameters.聽

Implementation Considerations

Federal approval of Medicaid Section 1115 demonstration proposals is a critical milestone for states. Demonstration implementation also requires significant and ongoing leadership, resources, and collaboration between states and CMS and states and their partners.

The type of state demonstration activity is expected to shift dramatically over the course of the new administration. For example, proposals may shift from expansions in coverage and benefits to reflect the new administration鈥檚 other priorities. States, too, may consider alternative approaches to Section 1115 demonstrations, such as state plan authorities like in lieu of services (ILOS), to pursue certain innovative approaches that they might otherwise have implemented with demonstration authority.

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红领巾瓜报 empowers states, providers, and other stakeholders to thrive in an ever-changing healthcare landscape. With deep expertise at every level, 红领巾瓜报 teams support state Medicaid programs and stakeholder partners nationally to address a range of operational challenges, including designing innovative healthcare approaches to address urgent healthcare challenges, expanding coverage opportunities, and optimizing integration to address program efficiencies and improved 鈥渨hole person鈥� care.

We have expertise in all of the components critical to developing Section 1115 programs鈥攆rom the policy knowledge, to actuarial/budgeting talent, to communications and project management skills, as well as the necessary IT infrastructure.

Contact鈥痮ur featured experts below聽to learn more about 红领巾瓜报鈥檚 capabilities and expertise.聽

Insights into federal approval of Medicaid-covered traditional healing to improve culturally relevant care for AI/AN populations

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This week’s In Focus聽section reviews new state initiatives to cover traditional healing services through Medicaid for American Indian/Alaska Native (AI/AN) individuals and communities.聽

Overview

In October 2024, The Centers for Medicare & Medicaid Services (CMS) Medicaid Section 1115 demonstration amendments for , , , and , allowing Medicaid and Children鈥檚 Health Insurance Program (CHIP) coverage of traditional healing services delivered at or through Indian Health Service facilities, Tribal facilities, and urban Indian organizations (I/T/U facilities).

This demonstration approval enables state Medicaid agencies to acknowledge traditional healthcare practices as important components of the wellness continuum of care for Native American populations. Medicaid funding will help strengthen and expand access to these services and support integration of these services into primary care, substance use disorder (SUD) treatment, and other behavioral health care in a way that I/T/U providers have designed and developed to meet the unique needs of their community.

Demonstrations for Arizona and Oregon are approved through September 30, 2027, New Mexico鈥檚 demonstration is authorized through December 31, 2029, and California鈥檚 through December 31, 2026.

Traditional Health Services: Providing Culturally Relevant Care

AI/AN populations generally experience worse health disparities compared with non-AI/AN populations, particularly in terms of obesity, diabetes, tobacco addiction, and cancer. AI/AN populations also face higher rates of mental health disorders, SUDs, and suicide.

Using Transformed Medicaid Statistical Information System (T-MSIS) claims and demographics data, 红领巾瓜报, Inc. (红领巾瓜报), staff assessed the incidence of specific chronic diseases in the Native American and non-Native American population in the four states approved to cover traditional healing services through their Medicaid program. For example, in these states, the prevalence of diabetes in AI/AN populations ranged from 27 percent to 87 percent higher than among non-AI/AN groups. Figure 1 shows the percentage of three chronic conditions among these groups in the four states.

Figure 1. Percentage of AI/AN vs. Non-AI/AN Medicaid Beneficiaries Living with Chronic Conditions in AZ, CA, NM, and OR (2022)

*Source: 红领巾瓜报 analysis of 2022 T-MSIS (Transformed Medicaid Statistical Information System)*

The demonstration approval is expected to improve access to culturally appropriate healthcare to address these disparities in chronic conditions for Tribal communities. Traditional healthcare practices vary widely across the 574 federally recognized Tribes in the United States, and many see traditional healthcare practices as a fundamental element of well-being that can help patients with specific physical and behavioral health conditions. For example, commonly offered traditional practices in Native American communities include talking circles, sweat lodges, and smudging. Studies show that incorporating traditional healthcare practices may improve mental health symptoms, outcomes, and quality of life, including among individuals with SUD.

Considerations for Key Partners

AZ, CA, NM, and OR are the first states to receive federal approval and will lay the groundwork for integrating time-honored healing practices into their Medicaid systems. They also could serve as a model for other states that choose to pursue this demonstration. I/T/Us were integral to shaping the demonstration design and are poised to continue shaping the program details and implementation of traditional approaches to care into their Medicaid systems.

红领巾瓜报 experts identified some key considerations for partners, such as states and Medicaid managed care organizations (MCOs), to follow as these services are incorporated into Medicaid:

Collaborate with I/T/U facilities and communities.聽Traditional healing practices are sacred and ceremonial, so flexibility will be essential in determining how Medicaid funding can be best allocated to support providers who offer traditional practices. Communities will be critical in helping identify the specific traditional healing practices that are needed.聽
Support operational changes needed in I/T/U facilities.聽Compliant and efficient billing practices will be essential to the success of the demonstrations. States can support I/T/U facilities to develop necessary trainings, workflows, and administrative processes. For example, the provider qualification criteria and implementation is central to meeting federal compliance and reporting requirements. Facilities also will need to meet Medicaid billing requirements to collect 100 percent of the federal medical assistance percentage (FMAP).聽
Partner with I/T/U facilities. To facilitate proper care coordination, states, health plans, and non-I/T/U providers should partner with I/T/U facilities to ensure patients experience the best health outcomes.聽

Connect With Us

红领巾瓜报 has learned the value and importance of working with Native American and Alaska Native populations and respecting their unique approaches to improving healthcare. 红领巾瓜报 has expertise on healthcare issues that uniquely affect AI/AN populations and is experienced in addressing these challenges through AI/AN leadership and engagement that is culturally sensitive and respectful. Our experience working directly with Tribes encompasses extensive and applicable knowledge of healthcare operations in rural and urban settings to support infrastructure needs, including data management, IT, staffing, policies and procedures, training, and eligibility and enrollment processes.

Contact our featured expert below聽to learn more about 红领巾瓜报鈥檚 work to support Native American and Alaska Native communities.聽

Webinar Replay: 2024 Political Checkpoint

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This webinar was held on November 12, 2024.

In the 2024 Political Checkpoint hosted by Leavitt Partners, an 红领巾瓜报 company, we explored up-to-the-minute insights on the election results, discussed both confirmed outcomes and remaining uncertainties, along with the mandate for change that has emerged. Our expert panelists provided an overview of what to expect from Congress and the Administration, focusing on key legislative priorities and executive actions, and shared their prediction for what to watch over the first 100 days:

2024 Wrap Up
Lame duck session in Congress, end of year regulatory action

A New President
Implementing campaign promises through appointments

2025 Policy Agendas
Where committees, agencies may set their sights

Key Issues
Healthcare priorities that could see the spotlight

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CMS Announces 15 States Participating in the Transforming Maternal Health Model

Congress Continues Negotiations on 2025 Spending and End-of-Year Package

The Medicaid Section 1115 demonstration landscape: past trends and anticipated shifts

Insights into federal approval of Medicaid-covered traditional healing to improve culturally relevant care for AI/AN populations

Webinar Replay: 2024 Political Checkpoint

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