RISE summarizes recent regulatory-related headlines and reports.
Minnesota files lawsuit over Medicaid funds
Minnesota has sued the Trump administration to block the withholding of $243 million in Medicaid payments, arguing the federal government imposed retroactive and unclear conditions and violated due process by failing to provide evidence of noncompliance The administration had paused funding over alleged Medicaid fraud concerns, part of a broader anti-fraud crackdown, but Minnesota officials said the action would force cuts to health care for low-income residents despite the state's strong record on fraud enforcement, the Associated Press reports. The lawsuit challenges both the legality and political motivation of the funding freeze, which represents about 7 percent of Minnesota’s quarterly Medicaid support.
Meanwhile, the administration has announced it is widening its anti-fraud efforts with a Medicaid probe in New York. According to a second AP article, Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services (CMS), said that there are concerning trends in New York’s Medicaid program, particularly a high proportion of Medicaid beneficiaries who receive personal care services related to daily living activities, and state officials must provide details about their handling of fraud, waste and abuse within 30 days or risk deferred payments.
More than 100 organizations urge CMS to revise 2027 MA rates
A coalition of 110 organizations representing physicians, nurses, health systems, community-based organizations, employer groups, supplemental benefit partners, and beneficiary advocates is urging CMS to revise key provisions in the proposed CY2027 Medicare Advantage Advance Notice to protect seniors from higher costs, reduced benefits, and continued market instability.
The letter, led by Better Medicare Alliance and sent to CMS Administrator Dr. Mehmet Oz, follows a recent analysis by BRG, which found that key provisions in the Advance Notice would significantly reduce payments to Medicare Advantage plans. They asked CMS to revise rate levels in the CY2027 Final Rate Notice to account for rising utilization and care costs, exercise a cautious and collaborative approach to policy changes, and prioritize beneficiary access and affordability.
“Medicare Advantage is a lifeline for millions of seniors,” said Mary Beth Donahue, president and CEO of Better Medicare Alliance, in an announcement. “When payment rates do not keep pace with rising health care costs, the consequences are real—with higher premiums, scaled-back benefits, and plan exits in communities across the country. After several years of instability, CMS must ensure the Final Rate Notice provides adequate funding to protect affordability and preserve access for seniors.”
MA insurers support proposed coding rule to avoid bigger changes to risk adjustment
Despite concerns with proposed payment rates, major Medicare Advantage insurers, including UnitedHealth and Humana, have endorsed CMS’ proposal to exclude unlinked chart reviews from risk scoring, because they are concerned about more sweeping changes to the Medicare Advantage risk-adjustment methodology, Modern Healthcare reports. CMS is considering a future model that bases payments solely on encounter data, a shift that could significantly limit coding-driven revenue gains. While insurers are willing to give up chart reviews as “low-hanging fruit,” experts told the publication that removing them may impede proactive patient management and disadvantage smaller plans lacking resources to link clinical documentation.
Federal fraud enforcement ramps up
Federal agencies have sharply increased health care fraud enforcement, filing more cases and using artificial intelligence to identify suspicious billing and coding patterns, according to Modern Healthcare. The Justice Department initiated a record number of fraud lawsuits, while the Centers for Medicare & Medicaid Services and the White House launched new initiatives—including the CRUSH program—to expand investigations beyond whistleblower tips. The publication reports that health systems are bracing for rising compliance costs as civil subpoenas, data analytics, and scrutiny of joint ventures, Medicare Advantage coding, and lab billing continue to grow. Industry experts warn that while combating fraud is essential, aggressive enforcement can penalize providers for minor technical violations and drive up legal and operational expenses.
Medicaid work mandates pose costly burden for states
New federal Medicaid work requirements set to begin January 1 will require millions of adults to document work, education, or volunteer activities, but states must first invest heavily in upgrading outdated eligibility systems. The Associated Press reports that states may collectively spend more than $1 billion to comply, far exceeding the $200 million federal allotment earmarked for implementation. The rules are projected to save the federal government $388 billion over a decade but could lead to coverage losses if states struggle with verification processes, technology changes, and added administrative workload.
CMS extends deadline for GENEROUS drug-pricing model applications
CMS has extended the application deadline for drug manufacturers to join the GENEROUS Model, a new program that allows Medicaid to purchase certain drugs at internationally aligned prices. Companies now have until April 30 to join the model. The initiative aims to reduce drug costs, expand access to critical medications, and strengthen Medicaid program sustainability. CMS leaders said the extension responds to manufacturer feedback and will support broader participation, especially among small and midsize companies.
CDC acting director urges measles vaccination amid rising outbreaks
Jay Bhattacharya, acting director of the Centers for Disease Control and Prevention, is urging families to vaccinate their children amid growing measles outbreaks nationwide. In a video statement posted on X, Bhattacharya said that the MMR vaccine provides 97 percent lifelong protection and is the most effective safeguard against the virus. The U.S. has recorded more than 1,100 cases this year, putting the country at risk of losing its measles-elimination status. Public health officials warn that falling vaccination rates continue to fuel outbreaks and jeopardize public health.
Study links nurse understaffing to higher mortality and readmissions
A large retrospective cohort study from Japan that was published in JAMA Network Open found that hospital nurse understaffing—particularly during day shifts—was associated with higher in-hospital mortality, increased readmissions, and longer hospital stays. Drawing on more than 77,000 admissions, the study showed even small reductions in nurse hours per patient-day increased adverse outcomes, aligning with evidence from the U.S. and other countries. In an accompanying commentary, Karen B. Laster, Ph.D., R.N., and Linda H. Aiken, Ph.D., R.N., from the Center for Health Outcomes and Policy Research, School of Nursing, University of Pennsylvania, said that the findings highlight the need for enforceable staffing standards. Chronic understaffing may contribute to missed care, inadequate discharge preparation, and preventable deaths.