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Please note: The following updates are current as of July 13, 2026, and are subject to change given the fluid nature of the legislative process. For any questions, please email admin@caresourcemission.com.
Federal policymakers have remained active on healthcare issues throughout the second quarter of 2026. The Trump Administration has released major rules impacting the health care sector, including implementing regulations for H.R. 1, the One Big Beautiful Bill Act (OBBBA), and rules related to surprise billing.
While Congress has been less active on major healthcare legislation recently, ongoing oversight activities will continue to influence healthcare policy in the months ahead.
As statutorily required, the Centers for Medicare & Medicaid Services (CMS) published an interim final rule (IFR) on Medicaid community engagement requirements for the expansion population on June 1, 2026. The rule includes a much narrower definition of medical frailty than initially indicated to stakeholders. Beneficiaries must not only have an identified condition, but that condition must significantly impair their ability to comply with the requirements.
While Managed Care Organizations (MCOs) cannot determine whether beneficiaries meet community engagement requirements, they may assist states through beneficiary outreach, education, and data sharing.
States must implement community engagement requirements by January 1, 2027, although CMS may grant certain states a six-month good-faith implementation extension. CMS is accepting public comments on the rule through July 31, 2026.
CMS also issued a proposed rule that would significantly reshape State Directed Payments (SDPs) in Medicaid managed care. States use SDPs to offset historically low Medicaid reimbursement rates, helping to support priorities such as access to care, safety-net providers, and higher-quality, value-based care.
If finalized, the rule would implement provisions of OBBBA to limit SDP payment rates at 100% of Medicare in expansion states and 110% in non-expansion states for four provider service types, with phased reductions for grandfathered arrangements.
Beyond the OBBBA, CMS also proposes to extend statutory limits to all SDPs in all states and territories by January 1, 2029, and prohibit uniform rate increase SDPs and “grey area” payments routed through third-party entities. The rule would also add significant reporting, pre-approval, and compliance requirements in addition to ongoing claims-based verification that overpayments have not been made.
Because SDPs are an important financing mechanism for providers and states, stakeholders across the healthcare industry are closely evaluating the potential impact of these changes. CMS is accepting comments through July 21, 2026.
The Departments of Health and Human Services, Labor, Treasury, and the Office of Personnel Management finalized new regulations governing the Federal Independent Dispute Resolution (IDR) process under the No Surprises Act. Providers (including air ambulance providers), healthcare facilities, and health plans use the IDR process to resolve payment disputes for certain out-of-network services.
The final rule overhauls the federal IDR process to address the high volume of payment disputes and operational inefficiencies. It introduces standardized claim communication, structured open negotiation workflows, mandatory IDR portal usage, enhanced data disclosures, and formal registration requirements.
The final rule represents a major operational tightening of statutory compliance, shifting IDR from a loosely structured process to a highly standardized, auditable workflow.
In Q2, President Trump signed two executive orders with potential implications for the healthcare sector.
The first directs the Centers for Disease Control and Prevention and its Advisory Committee on Immunization Practices to review a scientific assessment conducted by the Department of Health and Human Services on childhood immunization recommendations, comparing current U.S. practices with those of peer nations.
A second executive order focuses on artificial intelligence innovation and cybersecurity. The order is intended to promote innovation and protect critical infrastructure, including rural hospitals, utilities, national security systems, and defense and civilian federal government information systems.
In early June, the House Appropriations Subcommittee advanced its Fiscal Year 2027 funding bill on a party-line vote. This bill will likely become the vehicle for health care policy in the House of Representatives for the remainder of the year, particularly as Congress works to fund the government in September and likely again in December.
Congressional committees have also focused on Medicaid oversight and healthcare affordability. In May, the Task Force on Defending Constitutional Rights and Exposing Institutional Abuses held a hearing titled: Universal Basic Fraud: Vulnerabilities in Medicaid Waiver Programs.
The hearing focused on fraud in Ohio’s Home and Community-Based Services (HCBS) waiver, which allows states to cover non-medical personal care services such as cooking, cleaning, and companionship. The House Energy and Commerce Committee is expected to continue examining the issue in future hearings.
Separately, the House Energy and Commerce Subcommittee on Health held a hearing on legislation aimed at lowering healthcare costs and increasing transparency. The hearing is the first step in the legislative process. Some of the bills under consideration may be rolled into the year-end government funding bill, including measures to:
Federal healthcare policy remains highly active as agencies continue implementing the OBBBA and advancing regulatory changes and restructuring. We continue to monitor developments from CMS that could impact healthcare policy, affordability, and care delivery for the members and communities we serve.
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