In May 2025, the US House of Representatives passed a budget bill that includes funding for cost-sharing reduction (CSR) payments, marking a potential end to the 鈥渟ilver loading鈥� practice that has shaped pricing in the Affordable Care Act (ACA) Marketplace pricing since 2017. The US Senate is now considering this legislation as part of a broader budget reconciliation package that includes major Medicaid reforms, such as new work requirements and changes to eligibility and financing rules.
This evolving policy landscape has significant implications for states, payers, providers, and consumers. Wakely, an 红领巾瓜报 Company, recently published , which outlines how reinstating CSR payments could reshape ACA marketplace plan pricing, enrollment patterns, and federal subsidy flows. It also highlights the operational and financial risks stakeholders must prepare for in 2026.
Broad Loading and Silver Loading
Because CSR loading increases premium costs on silver plans that determine subsidies, they also increase federal payments for premium tax credit (PTC) subsidies. Guidance from the US Department of Health and Human Services on silver plan pricing has evolved over time. Three types of CSR loading are occurring in ACA markets, specifically:
Broad loading: Increasing premiums for all metal level qualified health plans (QHPs) in the individual market to collect enough revenue to offset the CSR costs of the silver plan variants enrollees
Two means of silver loading:
Increasing premiums for only silver QHPs in the individual market to collect enough revenue to offset the CSR costs of the silver plan variant enrollees
Raising premiums, functionally, for only on-exchange silver QHPs
As discussed in the Wakely paper, the impact of silver loading is that the federal government is likely paying out more in additional PTC subsidies than would be paid if CSR payments were fully funded. On Friday, May 2, 2025, the Centers for Medicare & Medicaid Services (CMS) released guidance related to silver loading and CSR payments for 2026 rate filings. This action was urgently needed, especially for states with May filing deadlines.
What鈥檚 at Stake
If Congress does appropriate funding for CSR payments, some issuers will be reimbursed for the difference in cost sharing between standard and CSR-enhanced silver plans. Issuers that cover nonemergency pregnancy termination services, would be ineligible for CSR payments; however, as the Wakely paper indicates, these payments would not cover the additional utilization driven by richer benefits. For example, it is anticipated that a member in a 94 percent actuarial value CSR plan will use more services (i.e., four primary care visits versus three in a standard plan), but reimbursement would only reflect the cost-sharing difference鈥攏ot the increased volume of care.
States like Georgia and New Mexico, which mandate silver loading, could see significant shifts in premium relativities and enrollment behavior. Wakely鈥檚 modeling suggests that changes in CSR policy鈥攅specially if paired with the expiration of enhanced premium subsidies at the end of 2025鈥攃ould lead to higher net premiums, reduced enrollment, and a deterioration in risk pool morbidity.
What to Watch
The Senate鈥檚 deliberations will determine whether CSR funding is restored and could have significant implications on whether enhanced premium subsidies are extended beyond 2025. These decisions will directly affect the following:
2026 rate filings and benefit designs
Marketplace affordability and enrollment stability
State reinsurance funding and 1332 waiver dynamics
Consumer costs and plan switching behavior
Wakely鈥檚 analysis also cautions that if CSR funding is restored without accounting for induced utilization, issuers may still need to price for higher service use鈥攑otentially leading to premium volatility. In addition, if broad loading is mandated instead of silver loading, it could raise premiums across all metal tiers and reduce the value of premium tax credits for many enrollees.
Key Considerations for Stakeholders
States聽should assess how CSR policy changes affect reinsurance programs, waiver funding, and Medicaid redeterminations.
Payers聽must prepare for multiple pricing scenarios and evaluate how changes in subsidy structures influence enrollment and risk adjustment, 1332 reinsurance programs, and overall market risk.
Providers聽should anticipate shifts in patient mix and utilization (i.e., more uncompensated care with more uninsured patients).
Advocates聽need to monitor how policy changes affect access and affordability for low-income and underserved populations.
These developments also create more opportunities for movement between Medicaid, Marketplace, and uninsured populations, underscoring renewed opportunity for integrated eligibility systems and coordinated outreach.
Connect with Us
红领巾瓜报 (红领巾瓜报), experts are actively advising stakeholders on how to navigate these complex changes. Whether you鈥檙e a state policymaker, health plan executive, provider leader, or advocate, we can help you assess the impact and plan strategically.
These issues will also be explored in depth at the聽红领巾瓜报 Conference in October 2025. To discuss how these developments will affect your organization, contact our featured expert below.
A recent case study highlighted how 红领巾瓜报 (红领巾瓜报) worked with a medical supply firm to identify gaps in their revenue cycle, and by working with us have seen improvements in denial rates and reimbursement. Advanced Diabetes Supply (ADS)/ US Medical Supply (USMed) came to 红领巾瓜报 for help with its revenue cycle goals. What began as a revenue cycle gap assessment at one ADS office in California was expanded to be repeated for the Florida office. As a result, 红领巾瓜报 helped ADS produce 12% YoY increase in cash collections, resulting in more than $38 million in additional revenue, and a $16 million reduction in outstanding A/R within six months.
A leading provider of diabetes supplies, ADS faced challenges in optimizing their revenue cycle processes. By partnering with 红领巾瓜报, they embarked on a transformative journey that resulted in streamlined operations and improved financial performance. The case study highlights the key strategies implemented by ADS and 红领巾瓜报, including the adoption of advanced technologies, process re-engineering, and staff training. These initiatives not only addressed existing inefficiencies but also paved the way for future growth and innovation.
Organizations need efficient revenue cycle management to ensure sustainability and growth in the constantly changing and competitive healthcare landscape. As healthcare reimbursement can involve many complex processes, it creates opportunities for gaps and process breakdowns. 红领巾瓜报 helps organizations implement the processes, training, and technology necessary to close process gaps, improve cash flow, determine root causes for gaps, and reduce denials.
红领巾瓜报 experts have decades of experience in every facet of the revenue cycle. They come from all sides of the healthcare industry, including providers, payers, managed care organizations, and more.
On May 22, 2025, the US House of Representatives advanced a comprehensive legislative package that includes expansive changes to healthcare spending and tax policies. The , will be subject to further revision in the Senate 鈥� and potentially again in the House 鈥� before it can be sent to the president for his signature. If enacted, the legislation would have significant implications for the Medicaid program, including a nationwide work and community engagement requirement. The House-passed bill establishes a deadline of December 31, 2026, for implementation, but individual states could move earlier.
As state legislatures pass work requirement bills, governors consider executive actions, and Congress contemplates revisions to the Medicaid work mandate, vetting key implementation issues may significantly affect the direction of related policies. Even before implementation, states must test operations, enable systems, and establish connections to beneficiaries to reduce potential implementation missteps, inappropriate disenrollments, and litigation risks.
If the goal of Medicaid work requirement policies is to stimulate connections between health benefits and employment/workforce, building state and federal capacities to support these approaches is critical to effectuating that change. In the remainder of this article, 红领巾瓜报 (红领巾瓜报), experts focus on the operational dynamics that need to be discussed, tested, and built as states begin introducing work and community engagement initiatives.
Federal Policies and Early State Actions on Work Requirements
The House bill would require all states to implement work and community engagement requirements for adults without dependents for at least 80 hours per month.[1] Employment, work programs, education, or community service (or a combination of those activities) would satisfy the requirement.
The work requirements in the House-passed legislation would apply only to individuals between the ages of 19 and 64 without dependents, and the following groups are exempted:
Women who are pregnant or entitled to postpartum medical assistance
Members of Tribes
Individuals who are medically frail (i.e., people who are blind, disabled, with chronic substance use disorder, has serious or complex medical conditions, or others as approved by the Secretary of the US Department of Health and Human Services)
Parents of dependent children or family caregivers to individuals with disabilities
Veterans
People who are participating in a drug or alcoholic treatment and rehabilitation program
Individuals who are incarcerated or have been released from incarceration in the past 90 days
In addition, individuals who already meet work requirements through other programs, such as Temporary Assistance for Needy Families (TANF) or the Supplemental Nutrition Assistance Program (SNAP), would be exempt. However, the House-passed version would make the eligibility verification and work requirements for SNAP more stringent and shift program costs to these states, which would affect cross-functional eligibility. The legislation also includes temporary hardship waivers for natural disasters and areas with an unemployment rate greater than 8 percent (150 percent of the national average).
Though the federal budget package has received a great deal of attention, at least 14 states already have moved forward (see Table 1) in advance of the current federal debate by passing laws and submitting work requirement demonstration requests to the Centers for Medicare & Medicaid Services (CMS).
Table 1. A Review of 2025 States鈥� Approaches to Work Requirements in Medicaid
Status
State
Population Criteria
Requirements
Exemptions/ Notes
Public Comment
Work Requirement Request Submitted
Arizona
Ages 19鈭�55
80 hours/month
Multiple exemptions; 5-year lifetime limit
Closed
Work Requirement Request Submitted
Arkansas
Ages 19鈭�64; covered by a qualified health plan (QHP)
Data matching to assess whether on track/not on track
No exemptions
Closed
Work Requirement Amendment Request Submitted
Georgia
Ages 19鈭�64; 0-100% FPL
80 hours/month
Already has approval but is requesting reporting be changed from monthly to annually and adding more qualifying activities
Federal comment period open through June 1, 2025
Work Requirement Request Submitted
Ohio
Ages 19鈭�54; expansion adults
Unspecified hours
Limited list of exemptions
Closed
Legislation Passed
Idaho
Ages 19鈭�64
20 hours/week required
Limited list of exemptions
鈥�
Legislation Passed
Indiana
Ages 19鈭�64; expansion adults
20 hours/week required
Limited list of exemptions
鈥�
Legislation Passed
Montana
Ages 19鈭�55
80 hours/month required
Multiple exemptions
鈥�
Ballot Initiative Passed
South Dakota
Expansion adults
鈥�
2024 ballot initiative asking voters for approval for state to impose work requirements for expansion adults passed
鈥�
Legislation Pending
North Carolina
鈥�
鈥�
Pursue requirements that are CMS approvable
鈥�
Work Requirement Request Draft
Iowa
Ages 19鈭�64; expansion adults
100 hours/month required
Limited list of exemptions Separate bill would end expansion if work requirements are withdrawn/ prohibited (80 hr./mo.)
Closed
Work Requirement Request Draft
Kentucky
Ages 19鈭�60; no dependents; enrolled more than 12 months
Connected to employment resources
Multiple exemptions
State comment period open through June 12, 2025
Work Requirement Request Draft
South Carolina
Ages 19鈭�64; 67%鈭�100% FPL
Specified activities (work specific is 80 hours/month)
Limiting participation to 11,400 individuals based upon available state funding
State comment period open through May 31, 2025
Work Requirement Request Draft
Utah
Expansion adults ages 19鈭�59
Register for work, complete an employment training assessment and assigned job training, and apply to jobs with at least 48 employers within 3 months of enrollment
Several exemptions, largely aligned with federal SNAP exemptions
State comment period open through May 22, 2025
Anticipated Waiver Request
Alabama
Non-expansion population
鈥�
Potential to resubmit previous work requirement demonstration request
鈥�
Key Questions to Guide State Policy Decisions
Considerable research and findings from previous Medicaid work requirement initiatives can help prepare policymakers to implement a potential new phase of Medicaid work requirement policies. Some previous findings include the high cost of administration relative to potential savings, the importance of systems that support foundational items like logging an enrollee鈥檚 compliance activities and exemptions, as well as developing an efficient appeals process. The Medicaid and CHIP Payment and Access Commission (MACPAC), General Accounting Office, National Institutes for Health, and multiple researchers have published assessments regarding previous experiences that could prove useful in policy making.
红领巾瓜报 experts have experience identifying key issues and considerations, analyzing options, and implementing critical issues and for state leaders and stakeholders who will be responsible for implementing work requirements. Several of these issues are described below and in more detail in the 红领巾瓜报 blog, Building State Capacities for Medicaid Work and Community Engagement Requirements.
Exemptions, particularly medical frailty definitions and assessments. The federal government and states will need to identify individuals classified as 鈥渕edically frail鈥� and make them exempt from the mandates. Medically frail individuals include those with chronic, serious, or complex medical conditions. Various methods can be employed to identify these people.
Developing and streamlining systems and processes to promote continued coverage for eligible individuals. The Medicaid unwinding from the COVID public health emergency taught policymakers lessons about the complexities of Medicaid systems, patient engagement, and reliable methods of member outreach. State Workforce Commissions and Departments of Labor are clear partners, as they manage integrated eligibility systems and data-sharing agreements across programs like SNAP and TANF, which also serve many Medicaid participants. These and other partnerships will need further exploration.
Clinical and utilization data that promote eligibility assessment. Many, but not all, individuals with chronic diseases may be exempt from the requirements. Knowing the health status and chronic conditions of the populations affected and the conditions that qualify people for exemption are variables as implementation questions, like the definition of medically frail, are addressed.
Anticipated need for effective Medicaid managed care engagement in work requirements/community engagement initiatives. Approximately of Medicaid expansion enrollees are members of comprehensive managed care organizations (MCOs). States will need to review the scope of existing vendor contracts as well as determine the need for new services, roles, third-party reporting, oversight, and potential exemptions for emergencies. Work requirements can disrupt MCO risk pool stability and care coordination. MCOs have a financial incentive to drive down inappropriate disenrollments and are uniquely positioned to support state responsibilities, including maintenance of up-to-date contact information.
Measuring impact and adapting policies as needed. Dynamic metrics that provide actionable information to federal and state policy makers will support effective oversight and monitoring.
Connect with Us
红领巾瓜报 helps stakeholders鈥攊ncluding state agencies and their partners鈥攎anage the challenges of implementing new Medicaid or CHIP initiatives, with a focus on ensuring efficient integration and improvements in outcomes. Our teams are adept at developing materials for and supporting stakeholder engagement from design to implementation, which is a critical aspect for work and community engagement initiatives and other potential new eligibility and renewal requirements.
For support tracking federal and state level developments and enhancing your organization鈥檚 strategy and preparations for new Medicaid requirements, contact our featured experts below.
[1] U.S. Congress. House. One Big Beautiful Bill Act. H.R.1. 119th Cong., 1st sess. Introduced May 20, 2025. .
It is hard to keep abreast of the changes being made to the healthcare system at the Federal level, and how these changes will impact behavioral health (BH) services. The current reprioritization of funding by the Department of Health and Human Services (HHS) and the proposed changes in the budget bill pending in Congress will significantly reshape Medicaid and critical behavioral health programs. States and local organizations will need to sharpen their understanding of this new funding landscape, so they are able to focus on addressing critical needs for prevention and treatment of mental health and substance use disorders.
– 红领巾瓜报鈥檚 Behavioral Health Town Hall, Thursday, May 29 at 12 p.m.
With Federal funding levels in question, States and their stakeholders need to consider how they are funding BH initiatives. We鈥檒l address participant questions and topics we know are top of mind, for example:
What steps can states take to ensure sustainable funding for critical programs? Are states strategically utilizing their Medicaid programs to preserve BH specific program dollars for other purposes? What efficiencies and enabling technologies can organizations adopt to support their mission? How should state and local entities be thinking about the opioid settlement dollars to maximize support for services and initiatives that face uncertain future financial support?
In addition, Congress is debating changes to Medicaid eligibility and funding policies that may result in shifts in key aspects of the program. States can start planning now for changes to their processes and for outreach and education campaigns that will be essential in supporting individuals with mental health and substance use disorder diagnoses. Payers should be planning for changes in enrollment and enrollee risk profiles while providers should expect changes in their payer mix and a need for enhanced collaboration with community organizations. Are there different models that can be pursued to effectively navigate these shifts? How will all of this uncertainty affect the BH workforce? Stakeholders need to be prepared to engage in downside risk arrangements, think about their patient/consumer engagement strategies and integrating digital BH tools that are the focus of the CMS Innovation Center agenda.
You probably have questions that we didn鈥檛 even list here. Here is your chance to ask them: Join 红领巾瓜报 on Thursday, May 29 at 12 p.m. at a dynamic and interactive Behavioral Health Town Hall where 红领巾瓜报 experts Heidi Arthur, Rachel Bembas, Allie Franklin, Teresa Garate, , and will be available to answer your questions live on a wide range of critical topics, including:
Federal policy, personnel, and funding changes;
Emerging strategies for addressing social determinants of health, substance use disorder and crisis coordination (including 988);
Leveraging cross-sector partnerships to build ecosystems of care across communities promoting coordination and collaboration;
Behavioral health revenue cycle management and alternative payment models; and
Innovations in addressing workforce shortages, integrated service delivery, digital mental health tools, and best practices for community mental health service delivery.
Whether you鈥檙e navigating regulations, searching for new funding, designing service delivery systems, or just trying to understand what happens next, this town hall is your chance to ask questions, share insights, and discuss real-world solutions with industry experts.
This week, in our In Focus section, health IT experts at Leavitt Partners, an 红领巾瓜报 Company, review the recently released Request for Information (RFI) from the Centers for Medicare & Medicaid Services (CMS) and the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health (ASTP/ONC), titled (CMS-0042-NC). The RFI, published May 16, 2025, signals a renewed federal focus on advancing digital health tools, improving data interoperability, and supporting patient-centered innovation.
Notably, this RFI aligns with the vision laid out in Leavitt Partners鈥� policy blueprint, developed in collaboration with a broad coalition of healthcare stakeholders. The paper outlines a future in which patients and providers benefit from seamless digital experiences, real-time data exchange, and reduced administrative burden. The RFI reflects many of the same priorities鈥攕uch as expanding FHIR庐 Application Programming Interfaces (APIs), improving provider directories, and promoting digital identity solutions鈥攖hat were highlighted in the paper as essential to modernizing the healthcare system.
Why This RFI Matters
The RFI invites public input on how CMS and ASTP/ONC can strengthen the digital health ecosystem for Medicare beneficiaries. It builds on years of federal investment in interoperability. The agencies are now seeking feedback on how to reduce barriers to data access, promote innovation in digital health products, and align technology with value-based care goals.
This is a pivotal opportunity for stakeholders to shape the future of digital health policy鈥攅specially as CMS continues to explore how APIs, digital identity, and patient-facing tools can improve care delivery and outcomes.
Key Themes in the RFI
The RFI is broad in scope, but several themes stand out, including:
Addressing Patient and Caregiver Needs: The RFI asks patients which digital tools would be most helpful to them and their caregivers in managing their health needs, navigating care, and accessing all relevant health information in one place. It asks what features are most needed, what is missing from current apps, and how CMS can support adoption, especially for Medicare beneficiaries with limited digital experience. CMS is exploring how to make more data鈥攂eyond claims and clinical data鈥攁vailable through APIs. It also explores the role that CMS should play in reviewing and measuring the real-world impact of these tools on outcomes and costs. They also are considering how to promote the use of secure, standardized digital identity credentials (e.g., Login.gov, ID.me) to streamline patient access. Feedback also is sought on how TEFCA, FHIR APIs, and health information exchanges (HIEs) can better support seamless data exchange.
Provider Adoption of Digital Health Tools: CMS is exploring how to help providers, especially those in rural areas, adopt digital health tools by addressing barriers like workflow integration, data access, and interoperability. CMS is also looking to improve administrative functions like scheduling and intake through third-party apps. In addition, CMS is seeking to understand which FHIR APIs and capabilities are already being supported or utilized in provider systems. They are also interested in understanding how providers might accept standardized digital identity credentials from patients and any challenges that might inhibit its adoption. ASTP/ONC is also seeking information on revisions to the information blocking requirements.
Engaging Payers: The RFI invites payers to share how they can support interoperability and digital innovation, including through the use of APIs, digital identity credentials, and real-time access to clinical quality data. CMS is also interested in how payers can reduce provider burden, support value-based care (VBC), and contribute to a more connected digital health infrastructure. Feedback is requested on TEFCA participation, payer-to-payer data exchange, and the potential for a nationwide provider directory.
Advancing VBC Organizations: The RFI emphasizes the role of digital health in supporting alternative payment models (APMs) and accountable care organizations. CMS is seeking feedback on which digital capabilities are most essential for success in VBC鈥攕uch as care coordination, quality measurement, and patient engagement鈥攁nd how certification criteria and data standards can better align with these needs. The agencies are also exploring how to reduce complexity for APM participants while maintaining flexibility and data access.
Enabling Technology Vendors, Data Providers, and Networks: The RFI requests feedback from developers, data aggregators, and HIEs on how to unlock innovation through better access to CMS data, improved API standards, and streamlined certification processes. The RFI asks which technical and policy changes would enable more effective digital health products, recommendations to improve interoperability across networks, and means of supporting the viability of data exchange infrastructure.
Implications for Stakeholders
This RFI is more than a technical exercise; it is a strategic signal. The Trump Administration is maintaining momentum behind VBC and digital transformation. Stakeholders should consider:
Submitting comments聽to CMS by the June 16, 2025, deadline.
Assessing internal readiness聽to adopt or develop digital tools that align with CMS鈥檚 vision.
Engaging in policy discussions聽regarding digital identity, data standards, and patient access.
Monitoring related RFIs, including the exploring the potential use of HL7 FHIR standards to support the submission of study data derived from real-world data sources鈥攕uch as electronic health records, claims, and registries鈥攆or regulatory purposes.
Next Steps
红领巾瓜报, Inc. (红领巾瓜报), encourages healthcare organizations to review the RFI and consider how their experiences, innovations, and challenges can inform CMS鈥檚 next steps. This is a rare opportunity to influence the infrastructure that will shape digital healthcare for years to come.
For support in drafting comments or understanding how this RFI intersects with your organization鈥檚 strategy, contact our Leavitt Partners health IT experts below.
On May 13, 2025, the Centers for Medicare & Medicaid Services (CMS) published its new for the CMS Innovation Center. The strategy builds on the lessons of the first 15 years of the Innovation Center, while presenting a significant pivot in policy direction, which emphasizes evidence-based prevention, consumer engagement, and tech-enabled care, while prioritizing financial performance over broad participation.
The provides high-level direction on the Trump Administration鈥檚 vision for the next phase of value-based payment reform under the leadership of CMS Administrator Dr. Mehmet Oz and Innovation Center Director Abe Sutton. They intend to 鈥渄ouble down on our commitment to value-based care and take the learnings from the[se] previous investments to build a health system that empowers people to drive and achieve their health goals and Make America Healthy Again.鈥� Notably, the strategy also aligns with goals central to the Trump Administration鈥檚 .
This new direction affirms the administration鈥檚 commitment to continue advancing value-based care and opens additional opportunities for organizations seeking to enhance the delivery of services that drive positive outcomes. 红领巾瓜报 (红领巾瓜报), experts will be tracking the implementation of the Innovation Center鈥檚 new strategy, including expected forthcoming models, movement toward greater levels of downside risk, and changes to existing models to align with the administration鈥檚 priorities. In this article, our experts review the strategy and provide insights on key takeaways for stakeholders.
New Strategy Overview
CMS leaders view the Innovation Center agenda as a framework for accelerating healthy behaviors, leveraging the agency鈥檚 authority to test new approaches designed to incentivize and engage stakeholders. According to CMS officials, the Innovation Center 鈥渨ill work expeditiously toward the future of health鈥攂uilding a system in which people are empowered to achieve their health goals and providers are incentivized to compete to deliver high-quality, efficient care and improve the health outcomes of their patients.鈥�
The strategy has three interrelated, foundational pillars:
Promoting evidence-based prevention
Empowering people to achieve their health goals
Driving choice and competition.
Table 1 provides more detail on each pillar.
In addition to the new agenda, CMS released a seeking industry input on strategies that can better leverage data and technology to empower consumers. The focus of the RFI aligns with the Innovation Center鈥檚 strategic pillars to use tools, information, and processes that better connect people to their health data and allow them to make informed health decisions alongside their providers.
Table 1. CMMI鈥檚 Interrelated Strategic Pillars
Takeaways and Considerations
Critical to CMS鈥檚 approach is the belief that empowering individuals to make their health decisions鈥攖hrough incentives, better data access, and more flexible options鈥攃an lead to better health outcomes and lower overall costs. This shift reflects an evolution in healthcare policy that places greater emphasis on personal accountability and private sector collaboration鈥攁 key theme that is emerging across the administration鈥檚 policy initiatives.
Consumer Engagement. One of the most notable aspects of the new Innovation Center strategy is the promotion of consumer engagement; it places more focus on direct consumer engagement through education and incentives compared with earlier initiatives. This is one area in which the Innovation Center plans to collaborate with the private sector to develop consumer-facing tools (e.g., mobile apps, nudges toward healthy behaviors, etc.).
The focus on consumer engagement also presents opportunities for organizations to enhance their customer experience. By understanding the needs and preferences of their patients, organizations can tailor their services and care models to better meet those demands. This personalized approach not only improves patient satisfaction, but also drives continuity of care, ultimately contributing to long-term improvements in health.
Data and Technology. The new strategy also emphasizes the importance of data, indicating intentions to better equip organizations that participate in the model with data that can inform decisions and optimize their processes. CMS officials are examining policies and collaborations that will empower private sector organizations, including model participants, researchers, and technology vendors, to develop innovative data-driven solutions to drive efficiencies and improved health.
To that end, the May 16, 2025, Request for Information (RFI) from CMS and the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health (ASTP/ONC), (CMS-0042-NC), focuses on Medicare beneficiaries’ use of technology to improve health outcomes. The RFI, which 红领巾瓜报 experts analyze here [insert bookmark or link to the other In Focus article] underscores the administration鈥檚 intentions of taking 鈥渂old steps to modernize the nation鈥檚 digital health ecosystem.鈥�
Medicare Advantage. The Innovation Center鈥檚 new strategy indicates that stakeholders should expect more models that address Medicare Advantage (MA). The agency stated that 鈥渇eatures of a model could include testing changes to payment for MA plans, such as testing the impact of inferred risk scores, regional benchmarks, or changes to quality measures that better align with promoting health.鈥� Additionally, the strategy references a forthcoming specialty-focused longitudinal care model within MA and Medicaid, signaling intentions to drive multi-payer alignment.
Saving Federal Tax Dollars. Another major aspect of the strategy is 鈥減rotecting federal taxpayers.鈥� This goal reflects a continued emphasis on total cost of care accountability and indicates a more aggressive shift to downside risk. The Innovation Center says it will 鈥渞equire all models to have downside financial risk and require providers to assume some of the financial risk..鈥� Additional provisions of protecting tax dollars include reducing role of state governments in rate setting, simplifying model benchmark methodology, and ensuring 鈥減roper and nondiscriminatory provision of funds for health care services.鈥�
What to Watch
For healthcare organizations, the Innovation Center鈥檚 agenda signals a need to prioritize consumer-centric models. Hospitals, providers, and insurers should anticipate the following:
Increased focus on preventive care initiatives to align with new model designs
More robust data-sharing and technology requirements, meaning investments in patient-focused digital tools will become essential
New opportunities in MA, given potential payment model innovations affecting plan structures and risk-adjusted reimbursement
Healthcare stakeholders should monitor possible developments related to the strategy.
While details on specific strategies have yet to emerge, the Innovation Center it plans to provide more information on new models, as well as changes to existing models, in the coming months.
The Innovation Center has not provided a goal akin to the previous administration鈥檚 effort to have 100 percent of Medicare beneficiaries in accountable care relationships by 2030. It is still unknown whether these goals are forthcoming or if this will remain vague.
Stakeholders are still awaiting clarity on changes to existing models, including key models set to conclude at the end of 2026 (i.e., ACO REACH and Kidney Care Choices).
Strategy language indicates that the agency may develop payment innovation in prescription drugs, medical devices, and technology.
Connect With Us
The 红领巾瓜报 Annual Conference, , October 14-16, 2025, in New Orleans, LA, will feature discussions on how the new strategy is reshaping the healthcare system and care delivery for patients, particularly the opportunities to revisit provider contracts with MA plans and to integrate technology to advance the prevention of chronic conditions and achieve population health goals.
For more information about the opportunities and considerations the Innovation Center agenda presents for your organization, contact 红领巾瓜报鈥檚 featured experts below.
This week, our third In Focus section highlights the national 988 Suicide and Crisis Lifeline, the three-digit number for individuals in need of behavioral health crisis support. The 988 Lifeline is composed of 200-plus contact centers across the country, which connect people to trained counselors to deescalate crises, provide behavioral health resources, or connect individuals to an in-person responder. Supported by federal legislation to help create a nationwide, standardized, easy to remember 3-digit number, the program is still in its early stages, having been established three years ago this coming July.
In this article, 红领巾瓜报 (红领巾瓜报) experts provide important context about the 988 Lifeline and future policy direction and suggests actions state leaders can take to enhance use of this critical resource.
988 Lifeline: A Product of Coordinated Collaboration
The story of how the 988 Lifeline was created is an example of long-term advocacy and innovation that demonstrates how a solution needs to combine the state and local decisionmakers with federal policy and support. People experiencing a mental health crisis, thoughts of suicide, or concerns about substance misuse should receive the appropriate local response to seek support or care.
Prior to the 988 Lifeline, individuals experiencing a behavioral health crisis may have contacted 911 and, therefore, not always received the most appropriate response for their unique needs. In some situations, 911 responders鈥攖ypically law enforcement, emergency medical services, or hospital emergency departments鈥攁re ill-equipped to direct people experiencing a behavioral health crisis. Trained behavioral health professionals responding to an individual experiencing a crisis is the appropriate intervention at most points of access. Increased diversion from 911 calls to 988 when an individual is experiencing a behavioral health crisis is an expected long-term outcome.
The federal government鈥檚 role is to continue to support the work to enhance the 988 Lifeline, but there’s so much more that needs to happen to increase education and awareness in states, localities, and Tribal nations. They still need support in building out their systems.
State Initiatives Strengthening the 988 Lifeline
Since the launch of the 988 Lifeline in July 2022, 50 percent of the states have approved some type of appropriation or some type of legislation to further cement 988 in their local communities. Some states have established trust funds or implemented 988 cell phone fees similar to what 911 does to provide financial support. Other states have established committees to study and support 988 implementation, building out the various components of a true coordinated crisis system of care.
红领巾瓜报 experts have identified strategic and operational recommendations to support this ongoing work, including:
Be intentional about having the right people at the table where decisions are made, including voices with lived experience and people who are part of the policy-making process. Establishing this formal, standardized 988 system enables local communities to better allocate resources in crisis situations. In most cases, the contact with the 988 Lifeline is the best intervention to ensure people get the support or resources needed to resolve or deescalate the crisis.
When designing a crisis system in a community, think about prevention and what happens when the crisis is over. Crisis systems established on a poor behavioral health foundation will fail. Stakeholders and decisionmakers should continue building out their systems by remembering that the entire continuum of care鈥攆rom crisis to ongoing support鈥攊s needed.
Identify the data that are needed to tell the story about the value of the 988 Lifeline and crisis care systems. Anecdotes are essential and should be paired with data, especially when ongoing funding is needed.
Where Is the 988 Lifeline Headed?
It is likely to take decades to generate greater awareness about the 988 Lifeline, to have interoperability between 911/988, to ensure every person in the country has access to the service no matter their zip code, and to see a fully transformed behavioral health crisis system will take decades to accomplish. The collaboration between federal, state, territories, Tribal nations, and local communities is pivotal to reaching these goals.
While we are at the beginning phases of this work, much has been done that should be celebrated. The 988 Lifeline has transformed how we as a nation talk about behavioral health and suicide prevention. Still, we as a collective have work ahead to achieve the vision of transforming the behavioral health crisis care system.
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红领巾瓜报 (红领巾瓜报) is hosting a live, interactive event on Thursday, May 29, 2025. [The Ask the Experts: Behavioral Health Town Hall /insights/webinars/ask-hma-experts-behavioral-health-town-hall/ ] will explore the latest developments in behavioral health鈥攆rom policy shifts and funding trends to real-world solutions for service delivery, workforce challenges, and system design. 红领巾瓜报 and Leavitt Partners, an 红领巾瓜报 Company, experts will be on hand to answer participant questions and share insights about 988 and other topics:
Policy and funding updates at the federal level
Innovative approaches to crisis response, 988 implementation, and substance use services
Revenue cycle improvements and evolving payment models
Strategies to strengthen the workforce, integrate care, and leverage digital mental health tools
For more information about 988 systems and effective practices emerging in crisis care, contact Monica Johnson, Managing Director for Behavioral Health. Prior to joining 红领巾瓜报, Ms. Johnson, Managing Director for Behavioral Health, was the director of the 988 & Behavioral Health Crisis Coordinating Office at the Substance Abuse and Mental Health Services Administration鈥攖he federal agency that leads public health efforts to advance the behavioral health of the nation.
Medicaid covers nearly 80 million people nationally, with an estimated 20 million covered through the Medicaid expansion. As state legislatures pass work requirement laws, governors consider executive actions, and Congress contemplates a nationwide mandate, vetting key implementation issues can significantly impact the direction of related policies.
It is difficult to generate accurate projections given the lack of specificity in the current legislation and state implementation variables. According to Congressional Budget Office (CBO) estimates, approximately 5 million people with coverage because of the Medicaid expansion would lose their coverage as a result of not meeting community engagement requirements. The legislation passed by the House on May 22nd establishes a deadline of December 31, 2026 for implementation, but individual states could move earlier. Even before implementation, states must test operations, enable systems, and establish connections to beneficiaries to reduce potential implementation missteps, inappropriate disenrollments, and litigation risks.
If the goal of Medicaid work requirement policies is to stimulate connections between health benefits and employment/workforce, building state and federal capacities to support these approaches is critical to effectuating that change. This blog focuses on introducing operational dynamics that need to be discussed, tested, and built.
Legislative and Other Context
In the language that House advanced, all states would be obliged to implement work and community engagement requirements for adults without dependents for at least 80 hours per month.[1] Employment, work programs, education, or community service (or a combination of those activities) would satisfy the requirement. There were also provisions which enabled states to implement more frequent eligibility checks and compliance requirements as well as co-pays for certain services. Though the federal authorization has received a great deal of attention, at least 14 states have moved forward (see Table 1) in advance of the current federal debate by passing laws and submitting work requirement demonstration requests to the Centers for Medicare & Medicaid Services (CMS).
Table 1. A Review of 2025 States’ Approaches to Work Requirements in Medicaid
Status
State
Population Criteria
Requirements
Exemptions/ Notes
Public Comment
Work Requirement Request Submitted
Arizona
Ages 19鈭�55
80 hours/month
Multiple exemptions; 5-year lifetime limit
Closed
Work Requirement Request Submitted
Arkansas
Ages 19鈭�64; covered by a qualified health plan (QHP)
Data matching to assess whether on track/not on track
No exemptions
Closed
Work Requirement Amendment Request Submitted
Georgia
Ages 19鈭�64; 0-100% FPL
80 hours/month
Already has approval but is requesting reporting be changed from monthly to annually and adding more qualifying activities
Federal comment period open through June 1, 2025
Work Requirement Request Submitted
Ohio
Ages 19鈭�54; expansion adults
Unspecified hours
Limited list of exemptions
Closed
Legislation Passed
Idaho
Ages 19鈭�64
20 hours/week required
Limited list of exemptions
鈥�
Legislation Passed
Indiana
Ages 19鈭�64; expansion adults
20 hours/week required
Limited list of exemptions
鈥�
Legislation Passed
Montana
Ages 19鈭�55
80 hours/month required
Multiple exemptions
鈥�
Ballot Initiative Passed
South Dakota
Expansion adults
鈥�
2024 ballot initiative asking voters for approval for state to impose work requirements for expansion adults passed
鈥�
Legislation Pending
North Carolina
鈥�
鈥�
Pursue requirements that are CMS approvable
鈥�
Work Requirement Request Draft
Iowa
Ages 19鈭�64; expansion adults
100 hours/month required
Limited list of exemptions Separate bill would end expansion if work requirements are withdrawn/ prohibited (80 hr./mo.)
Closed
Work Requirement Request Draft
Kentucky
Ages 19鈭�60; no dependents; enrolled more than 12 months
Connected to employment resources
Multiple exemptions
State comment period open through June 12, 2025
Work Requirement Request Draft
South Carolina
Ages 19鈭�64; 67%鈭�100% FPL
Specified activities (work specific is 80 hours/month)
Limiting participation to 11,400 individuals based upon available state funding
State comment period open through May 31, 2025
Work Requirement Request Draft
Utah
Expansion adults ages 19鈭�59
Register for work, complete an employment training assessment and assigned job training, and apply to jobs with at least 48 employers within 3 months of enrollment
Several exemptions, largely aligned with federal SNAP exemptions
State comment period open through May 22, 2025
Anticipated Waiver Request
Alabama
Non-expansion population
鈥�
Potential to resubmit previous work requirement demonstration request
鈥�
Key Questions Regarding State Policy Options
Considerable research and findings put policymakers in a better position to be prepared to act on a new law since previous attempts and implementing similar policies exposed fundamental problems. Some previous findings include the high cost of administration relative to potential savings, the importance of systems that support foundational items like logging an enrollee鈥檚 compliance activities and exemptions, as well as developing an efficient appeals process. The Medicaid and CHIP Payment and Access Commission, General Accounting Office, National Institutes for Health, and multiple researchers have published assessments regarding previous experiences that could improve policymaking.
Below we discuss critical issues and considerations including:
Exemptions, particularly medical frailty definitions and assessments
Developing and streamlining systems and process to promote continued coverage for eligible individuals
Clinical and utilization data that promotes eligibility assessment
Managed Care engagement in Work Requirements/Community Engagement initiatives
Measuring impact and adapting policies where needed
1. Which populations are exempt from work requirements?
The requirements in the current legislation would apply only to individuals between the ages of 19 and 64 without dependents, and the following groups are exempted: women who are pregnant or entitled to postpartum medical assistance, members of Tribes, individuals who are medically frail (i.e., people who are blind, disabled, with chronic substance use disorder, serious or complex medical conditions, or others as approved by the Secretary of the U.S. Department of Health and Human Services), parents or caregivers to a dependent child or individuals with a disability, veterans, people who are participating in a drug or alcoholic treatment and rehabilitation program, or individuals who are incarcerated or have been released from incarceration in the past 90 days. Additionally, individuals who already meet work requirements through other programs, such as Temporary Assistance for Needy Families (TANF) or the Supplemental Nutrition Assistance Program (SNAP), would be exempt. However, according to the House-passed version, the eligibility verification and work requirements for SNAP have been made more stringent and program costs are being shifted to states, which affects cross-functional eligibility. Lastly, the legislation includes temporary hardship waivers for natural disasters and areas with an unemployment rate greater than 8 percent or 150 percent of the national average.
The federal government and/or states will identify individuals classified as “medically frail” and make them exempt them from the mandates. This includes those with chronic, serious, or complex medical conditions. Various methods may be employed to identify these individuals, such as analyzing historical medical and pharmacy data to categorize complex conditions, using proprietary algorithms to stratify individuals with multiple comorbidities, and enabling physicians to evaluate enrollees without relying on a claims history.
2. Which systems best align to build from and support coverage?
The Medicaid unwinding from the COVID Public Health Emergency taught lessons about the complexities of Medicaid systems (e.g., assessing cases to ensure eligible children retain coverage if a parent is removed), patient engagement, and reliable methods of member outreach (e.g., email, text, and member portals rather than paper communication). Call abandonment rates, call center wait times, and application processing times surfaced as practical measures of performance (or lack thereof) during the Medicaid unwinding. Multiple informal sources point to poor mailing address or 鈥渞eturn to sender鈥� as being anywhere between 15 and 50 percent, bringing tangibility to an implementation baseline. TANF and SNAP programs have work requirement provisions. While those programs are regulated and administered by multiple federal and state agencies, the platforms that support those provisions and the potential for integration are critical vehicles to explore.
State Workforce Commissions and Departments of Labor are clear partners, as they manage integrated eligibility systems and data-sharing agreements across programs like SNAP and TANF, which also serve many Medicaid participants. These and other partnerships will need to be explored to address engagement challenges for many populations, including individuals facing housing instability, which disrupts communication, engagement, and compliance tracking.[2] It is essential that states develop targeted outreach and education strategies to support awareness of participation requirements and ways for individuals to meaningfully engage.
3. Do we have a sense of the healthcare needs/chronic conditions among the Medicaid enrollees that will be affected by work requirements?
Many individuals with chronic diseases may be exempt from the requirements, but not all of them. To that end, insights regarding pharmacy claims may be a useful lens through which we can ascertain an understanding of the potential impact on utilization trends. Notably, the Medicaid expansion population still has significant healthcare utilization rates for services related to behavioral health and for chronic health conditions like hypertension and diabetes. In fact, a recent 红领巾瓜报 (红领巾瓜报), analysis of CMS data indicated that the top pharmaceuticals spending classes for the Medicaid expansion population were hypoglycemics ($7.6 billion), antivirals ($5.5 billion), and anti-inflammatories ($3.3 billion). The drugs are used to treat autoimmune conditions, including rheumatoid arthritis and psoriatic arthritis. Knowing the health status and chronic conditions of the populations affected and which conditions qualify for exemption are variables as implementation issues like the definition of medically frail are addressed.
4. What does this mean for managed care organizations?
Approximately of Medicaid expansion beneficiaries are enrolled in comprehensive managed care organizations (MCOs). States will need to review the scope of existing vendor contracts as well as determine the need for new services, roles, third-party reporting, oversight, and potential exemptions for emergencies. Work requirements can disrupt MCO risk pool stability and care coordination because of administrative burdens and disruptive, less predictable enrollment cycles. That said, MCOs not only have a financial incentive to drive down inappropriate disenrollments, but are also uniquely positioned to support state responsibilities, including maintenance of up-to-date contact information. The delineation of roles and clarification of contracts and responsibilities among states, MCOs, TPAs, and other specialty organizations supporting work requirements will be a critical early-stage framing point for a functional infrastructure.
Many states have sought to support more seamlessness among insurers, with a goal of having the same insurers provide coverage to people as they transition through Medicaid, Marketplace, and employer-sponsored insurance (ESI) as their employment status changes over time. States like Nevada, Rhode Island, and New Mexico require Medicaid MCOs to participate in the Marketplace. Additionally, states like North Carolina, Utah, and West Virginia not only require MCO participation in the Marketplace, but also enable MCOs to co-market Medicaid and Marketplace products for individuals who lose their Medicaid eligibility.
As Figure 1 indicates, Marketplace enrollment in non-expansion states has received considerable traction in recent years and has outpaced expansion states with respect to member growth in the past five years. Marketplaces have undeniably carved out large roles in the health coverage infrastructure in non-expansion states鈥攁 point that was less clear just a few years ago. Though, multiple factors affect those Marketplace growth rates, including congressional decisions regarding the continuation and funding of the enhanced premium tax credit program. In the current legislation, these credits expire, which the CBO estimates will lead to an additional coverage loss of nearly 5 million by 2034.
5. Can states measure and be nimble with policies as the impacts are determined?
Federal and state regulations that identify contextualized and dynamic metrics that provide actionable information to federal and state policy makers will support effective oversight and monitoring. States starting with listening sessions in the near term can help identify goals and metrics. The focus of such efforts could include actively monitoring potential changes and cost shifts for the uninsured population to non-public payers and providers.
The Medicaid unwinding also demonstrated that the story was far less of a red/blue story than a series of complex tasks that required many administrative resources, provider and community partnerships, and enrollee outreach to create a path that would limit unnecessary disruptions and expenses. CMS guidance for goals and evaluations as well as state inputs will need to emerge prior to implementation so policymakers can be well-equipped to be nimble and dynamic with policy changes as well as understanding the short-term and longitudinal effects of this fundamental shift.
[1] U.S. Congress. House. One Big Beautiful Bill Act. H.R.1. 119th Cong., 1st sess. Introduced May 20, 2025. .
[2] Soni A, Blackburn J. Health Characteristics of Adults Unable to Complete Medicaid Renewal During the Unwinding Period. JAMA Health Forum. 2025;6(3):e250092. doi:10.1001/jamahealthforum.2025.0092
The Section 1115 Justice-Involved (JI) Reentry Demonstration marks a transformative step in closing the healthcare gap for incarcerated individuals. By allowing Medicaid coverage to resume up to 90 days prior to release, the demonstration aims to improve care continuity and reduce recidivism. Yet, translating this vision into action within jails, prisons, and juvenile detention facilities presents a host of operational challenges. For implementation to succeed, jurisdictions must navigate fragmented systems, strained resources, and competing priorities. That鈥檚 where structured tools鈥攍ike implementation checklists鈥攂ecome essential.
The Challenges: Implementation in Complex, High-Stakes Environments
Implementing the 1115 JI Reentry Demonstration is more than a policy shift鈥攊t鈥檚 a systemic overhaul that requires cross-agency collaboration, infrastructure alignment, and cultural change. Among the most significant challenges:
1. Fragmented Systems and Data Silos
Carceral systems, Medicaid agencies, and community-based providers often operate in silos, using different data platforms and standards. This fragmentation hinders real-time information exchange and care coordination during the transition from incarceration to the community.
2. Operational Readiness Gaps
Many facilities lack established procedures for conducting Medicaid eligibility screenings, care plan development, and referrals to community-based services within the release window. Without predefined workflows, implementation can stall.
3. Workforce Capacity and Training Needs
Reentry planning demands coordination among correctional officers, social workers, nurses, behavioral health clinicians, and Medicaid staff. Many jurisdictions face staffing shortages and limited training on trauma-informed care, care management, or reentry protocols.
4. Policy Misalignment and Legal Constraints
Local policies may restrict access to Medicaid-related functions during incarceration, or limit facility staff鈥檚 ability to share data. Misinterpretation of federal and state rules can create implementation delays.
5. Trust and Engagement Barriers
Justice-involved individuals often face stigma or mistrust from systems they鈥檝e interacted with. Culturally responsive engagement strategies are crucial but frequently underdeveloped.
The Solution: Using a Checklist-Based Implementation Framework
To navigate these hurdles, stakeholders need more than vision鈥攖hey need structure. Implementation checklists tailored to jails, prisons, and juvenile facilities serve as a practical roadmap that transforms policy goals into operational plans. Here’s how they help:
Clarify Roles and Responsibilities
Checklists break down complex goals into clear, role-specific tasks鈥攚ho enrolls individuals in Medicaid, who develops care plans, and who ensures warm handoffs to community providers.
Promote Cross-Sector Coordination
Structured checklists prompt regular touchpoints across agencies鈥攃orrections, health services, Medicaid, and behavioral health鈥攅nsuring alignment and accountability.
Standardize Procedures and Tools
By specifying recommended workflows, assessment tools, and communication protocols, checklists minimize variation and streamline implementation across facilities.
Track Progress and Gaps
Built-in progress indicators make it easier to monitor what鈥檚 completed, what鈥檚 pending, and where additional support or training is needed.
Support Compliance and Evaluation
A checklist-based approach provides the documentation trail needed for program audits, reporting, and continuous quality improvement.
Conclusion: A Strategic Tool for Lasting Impact
Implementing the Section 1115 JI Reentry Demonstration is a bold, necessary move toward health equity and system transformation. But success depends on more than ambition. With structured checklists in hand, agencies can move from aspiration to execution鈥攂uilding a thoughtful, well-orchestrated reentry infrastructure that improves health outcomes, reduces recidivism, and meets federal expectations.
On May 12, 2025, the President signed an Executive Order (EO), .鈥� The EO calls for or, in some cases, presumes a range of manufacturer, administrative and regulatory actions to reduce drug prices, but ultimate outcome remains unclear.
红领巾瓜报 experts, including Leavitt Partners, an 红领巾瓜报 company, are closely following executive agency and stakeholder responses to the EO. In this article, our experts summarize the EO and identify key considerations for healthcare stakeholders.
Policy Overview
Since his first administration, President Trump has consistently criticized disparities in brand-name prescription drug prices between the United States and other developed countries. In 2018, the previous Trump Administration issued a to institute an International Pricing Index (IPI) model targeting Medicare payments for a subset of clinician-administered drugs. The IPI model would have set a Medicare payment amount for select Part B drugs at a lower amount to align with international prices and allow for negotiation of prices, while still providing a drug add-on payment to providers consistent with historical drug costs. In November 2020, the administration issued an interim final rule (IFR) instituting an escalated version of this concept, entitled the . Both the IPI proposal and the MFN final rule, the latter of which was enjoined by the courts on largely procedural grounds and later rescinded by the Biden administration, would have been implemented under the Center for Medicare and Medicaid Innovation鈥檚 (CMMI) demonstration authority.
On May 12, 2025, the President signed an EO, , which reaffirms the Administration鈥檚 concerns regarding what it perceives to be American funding of pharmaceutical research and development 鈥渨hile foreign health systems get a free ride.鈥� In an effort to address the Administration鈥檚 concerns, the EO notes that the Administration 鈥渨ill take immediate steps to end global freeloading鈥� and that 鈥渟hould drug manufacturers fail to offer American consumers the most-favored-nation lowest price, my Administration will take additional aggressive action.鈥�
The EO outlines efforts to implement this policy, including:
Trade Efforts.聽The US Department of Commerce and United States Trade Representative (USTR) are directed to ensure that foreign countries are not engaged in actions with the effect of forcing Americans to 鈥減ay for a disproportionate amount鈥� of R&D costs.
Direct-to-Consumer (DTC) Sales at MFN Price.聽The US Department of Health and Human Services (HHS) is directed to facilitate DTC sales programs for manufacturers to offer MFN prices.
MFN Targets.聽The HHS Secretary is directed to provide MFN targets to manufacturers within 30 days with the expectation that manufacturers will 鈥渂ring prices for American patients in line with comparably developed nations.鈥�
If 鈥渟ignificant progress鈥� toward MFN pricing is not made, HHS will be directed to propose a rulemaking plan to impose it.
The order suggests that the HHS Secretary certify, on a case-by-case basis, that reimportation will pose no additional risk to public health and will result in savings, as well as to create standard mechanisms for importation. It is unclear how this direction aligns with the current statutory framework, which is focused on Canada.
Federal Trade Commission/Department of Justice Action.聽The EO calls for efforts 鈥渃onsistent with law鈥� to undertake enforcement action against anticompetitive practices identified in the prior drug pricing EO, including use of the Sherman Antitrust Act.
Key Considerations
At this stage, the scope and practical effects of the EO remain uncertain, as the administration has not yet provided details regarding the regulatory and subregulatory actions envisioned under the document. With respect to trade policy, for instance, the EO does not outline explicitly what particular tools it expects USTR or the Commerce Department to leverage in combating 鈥渇oreign freeloading.鈥�
Similarly, the EO does not elaborate on the steps that the administration plans to take in 鈥渇acilitat[ing]鈥� voluntary MFN target pricing under DTC purchasing arrangements. Such efforts could theoretically bring waivers or other regulatory flexibilities to bear, or else they could take a more hands-off approach, simply encouraging drugmakers to take action on their own.
Without further clarifications around how the administration might define or assess 鈥渟ignificant progress鈥� towards MFN pricing targets on the part of manufacturers, nor the form, manner, or timeline that 鈥渁ggressive action鈥� in the absence of such progress might take, the EO serves principally as an illustration of the President鈥檚 posture, perspective, and priorities with respect to prescription drug affordability and access.
Even in the absence of immediate pricing or payment interventions, the EO could provide a preview of future executive actions aligned with the document鈥檚 focus. Such actions could include CMMI models building on the IPI or MFN initiatives from the first term, explicit trade negotiation priorities, regulatory measures related to DTC purchasing arrangements, FDA reimportation program flexibilities, or any number of other drug-related policies.
Our experts will continue to monitor these activities as they progress.
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For details regarding the EO and potential impact on the healthcare sector, contact our featured experts below at聽[email protected]
This week, key committees in the House of Representatives released recommendations for legislative language that meets their federal savings and spending targets required in the fiscal year (FY) 2025 budget resolution. On May 11, 2025, the House Energy and Commerce Committee released legislation鈥攁nd subsequently a substitute amendment鈥攖hat contains several substantive Medicaid proposals designed to address eligibility and enrollment; financing; fraud waste, and abuse; and to institute mandatory work and community engagement requirements and cost sharing. The Committee completed its markup on May 14, 2025, voting to approve the provisions in the substitute amendment.
The release of text and committee markups are key steps in Congress鈥檚 budget reconciliation process; however, proposals may change during Senate proceedings.
红领巾瓜报 (红领巾瓜报), and Leavitt Partners, an 红领巾瓜报 company, are tracking these developments and analyzing the extensive health and health-related legislative text, including the Medicaid, Medicare, and Affordable Care Act (ACA) Marketplace proposals. Below, we review the status of congressional efforts and key policies.
Background
The budget reconciliation process is a powerful tool for enacting significant fiscal policy changes, as it allows for expedited consideration and passage of budget-related legislation. It has been used in the past to enact major tax reforms, healthcare legislation, and other important budgetary measures.
In 2025, Congress has been actively working to develop its budget bills through a series of steps. The House adopted a budget resolution on February 25, 2025, which sets the framework for federal spending, revenue, and the debt limit for fiscal year 2025 and outlines budgetary levels for the following years through 2034. The Senate passed an amended version of the budget resolution on April 5, 2025. The Senate鈥檚 amendments included reconciliation instructions that require $4 billion in gross deficit reductions and allow a $5.8 trillion net deficit increase. On April 10, 2025, the House agreed to the Senate鈥檚 amendments with a vote of 216鈭�214. This agreement set the stage for the development of a reconciliation bill.
House Energy and Commerce Markup
On May 14, 2025, the House Committee on Energy and Commerce completed its second day of legislative language to comply with the Concurrent Resolution on the Budget for Fiscal Year 2025, voting to advance the proposals out of committee. The committee鈥檚 proposal excluded certain significant structural reforms that had generated concern among some members and stakeholders, such as broad reductions in the federal matching rate (enhanced federal matching assistance percentage (FMAP)) for Medicaid expansion populations, per-capita caps on federal Medicaid cost growth, or reductions in the safe harbor threshold for state Medicaid provider taxes. The proposal does, however, contain more than a dozen provisions that would reduce federal health care spending by $715 billion with the funding reductions mostly focused on Medicaid, which the Congressional Budget Office projects will reduce the federal share of Medicaid spending, including:
Adding mandatory work and community engagement requirements for individuals ages 19鈭�64 without dependents, subject to exceptions for pregnant women, people who are medically frail, people with disabilities, people in compliance with other government program work requirements, people living in areas experiencing a temporary hardship, and other individuals
Adding cost sharing for beneficiaries in the expansion population who earn more than 100 percent of the Federal Poverty Level, not to exceed $35 per item or service
Pausing implementation of several final rules published during the Biden Administration, including: the final rule published September 21, 2023, 鈥淪treamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment鈥�; the April 2, 2024 rule, 鈥淪treamlining the Medicaid, Children鈥檚 Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes鈥�; and the May 10, 2024, final rule, 鈥淢inimum Staffing Standards for Long Term Care Facilities and Medicaid Institutional Payment Transparency Reporting鈥�
Adding provider screening requirements
Increasing frequency of eligibility redeterminations for certain individuals and adding enrollee address verification policies
Reducing expansion FMAP for certain states that provide Medicaid coverage to undocumented individuals and families, regardless of the source of funding
Preventing certain spread pricing arrangements in Medicaid between states and pharmacy benefit managers
Restricting funding for certain essential community providers that furnish family planning services, reproductive health, and related healthcare services
Ending a temporary increased FMAP to new states adopting Medicaid expansion, revising policies governing the use of Medicaid provider taxes, and payment limits for state directed payments
Committee Markups
Various other House committees have begun holding markups for the reconciliation package. The Committee on Ways and Means conducted its markup on May 13, 2025, to discuss its of the reconciliation bill, which involves $4.5 trillion in deficit increases. The initial Ways and Means proposal did not include many significant healthcare proposals, but on May 12, 2025, the committee released a substitute amendment that includes several changes that would affect private insurance coverage and Medicare. Key provisions include:
Changes to Medicare and ACA premium tax credit (PTC) eligibility requirements related to immigration status
Improvements to ACA PTC eligibility verification checks
Changes to Health Savings Account flexibilities
Codification and renaming of individual coverage health reimbursement accounts, which serve as a defined contribution that employees can use to purchase insurance in the individual market
Other committees, such as the Education and Workforce, Judiciary, Armed Services, and Homeland Security Committees, also have conducted markups and approved their respective portions of the reconciliation bill.
Connect With Us
These steps are part of the ongoing process to finalize the budget and reconciliation legislation for FY 2025. Our federal policy experts with Leavitt Partners and across 红领巾瓜报 are monitoring the legislative policies and ongoing negotiations in Congress and with the administration. They work with healthcare organizations and industry to plan for the range of scenarios and policies Congress is debating.
For more information about the impact of these policies, contact our featured federal policy experts聽below.
The 2025 Maryland General Assembly session closed on April 7th. While the budget deficit consumed a large portion of legislative bandwidth, there was significant action on health-related programs, including supporting the implementation of the Centers for Medicare & Medicaid Services (CMS) All-Payer Health Equity Approaches and Development (AHEAD) Model, expanding access to care, paving a way for Prescription Drug Affordability Board (PDAB) expansion and increasing access to affordable insurance. The AHEAD Model is an innovation in healthcare finance that drives improvements in population health through increased investments in activities likely to improve health outcomes, and benefits hospitals that participate by providing stable funding through hospital global budgets.
Budget Deficits and Federal Funding Fears Limited New Spending
After intense debate and discussion, House and Senate fiscal leaders reached a budget agreement on the final day of session. From the beginning, significant projected general fund shortfalls existed in the current and future fiscal years. Primarily these shortfalls were due to higher than anticipated Medicaid enrollment and growth in obligations to fund K-12 education under the Blueprint for Maryland鈥檚 Future. Through a combination of actions including budget cuts, increasing hospital assessments to cover Medicaid costs, shifting costs to counties, and new taxes and fees, the budget passed along party lines. Due to concerns about the potential harm from federal budget cuts, particularly in the Medicaid program, the final plan includes a trigger provision requiring the Governor to engage lawmakers on solutions should federal funding to the state fall by $1 billion.
The State Readies for the AHEAD model
Despite fiscal concerns, the General Assembly established two new funds, the Population Health Improvement Fund, and the Maryland Primary Care Program Fund, to support the implementation of the AHEAD model. Revenues to both funds are collected through an increase in hospital assessments.
The Population Health Improvement Fund will support efforts to reach statewide population health targets under the AHEAD model.
The Maryland Primary Care Program Fund will support the implementation of a Medicaid advanced primary care model and support primary care providers through investments in reimbursements for evaluation and management codes, care management fees to eligible practices, and quality incentives.
Supporting Access to Care
Lawmakers passed several bills aimed at increasing or protecting access to care.
The Preserve Telehealth Access Act of 2025 makes permanent provisions of law requiring reimbursement parity between telehealth and in-person services and includes 鈥渁udio-only鈥� services as telehealth under certain circumstances.
Legislation passed to address children and youth boarding in hospital settings beyond medical necessity. The bills define a 鈥減ediatric overstay鈥� and requires the Maryland Department of Health and the Maryland Department of Human Services to establish a pediatric overstay coordinator in each department to ensure that each patient is served in the least restrictive environment.
Several pieces of legislation passed to address behavioral health and substance use disorders including:
Eliminating the prohibition on using 9-1-1 trust fund dollars to support the 9-8-8 suicide prevention hotline, improving coordination between 9-1-1 and 9-8-8.
Establishing a buprenorphine training grant program to support training paramedics to administer the drug.
Further delineating uses of opioid restitution fund dollars and creating additional reporting requirements for the Office of Overdose Response.
Since the Dobbs decision, rolling back protections for abortion care in states, Maryland has been on the forefront of protecting reproductive freedom. Legislation passed establishing the Public Health Abortion Grant Program and Fund to support eligible organizations providing equitable access to abortion care services.
Regulating Prescription Drug Prices
Maryland established the Prescription Drug Affordability Board (PDAB) in 2019 joining ten other states in regulating the cost of prescription drugs through affordability boards. The goal of PDABs is to address high prescription costs by setting upper payment limits (UPLs) for drugs that cause or are likely to cause affordability challenges. Currently, Maryland鈥檚 PDAB is authorized to set UPLs for prescription drug products purchased by or on behalf of a unit of state or local government. Legislation passed creating a pathway for the PDAB to set UPLs on prescription drug products paid for by additional state regulated payors if the board determines that the product has led or will lead to an affordability challenge.
Access to Affordable Health Insurance
The General Assembly made permanent the State-Based Young Adult Health Insurance Subsidy program and requires the Maryland Health Benefit Exchange in consultation with the Maryland Insurance Commissioner to establish and implement a state-based health insurance subsidy program for all individuals. The Maryland Health Insurance Protection Commission was reestablished to monitor federal changes that could impact coverage.
Change in Leadership at the Maryland Department of Health
During the busy legislative session, Secretary Laura Herrera Scott, MD, announced she was stepping down from her position as leader of the Maryland Department of Health. Former CMS administrator, Meena Seshamani, MD, was announced as Dr. Scott鈥檚 successor and sworn in on April 9th. Secretary Seshamani will be tasked with leading the transition from Maryland鈥檚 Total Cost of Care model to the AHEAD model and leading the department through a period of uncertainty and expected budget shortfalls.
Maryland State of Reform Conference to Cover Many of these Issues
These issues and more will be covered at the on June 12th at the Baltimore Marriott Waterfront. The day will include a panel of legislative leaders as well as sessions focused on the AHEAD Model, value-based care, behavioral health, public health, and prescription drug costs.
