Health Policy Rollup: State Action We Watched in December 2025
Key Takeaways
Delaware legislators are considering SB 213, which would change state healthcare policy by removing the Diamond State Hospital Cost Review Board’s authority over hospital budgets, following legal challenges to Delaware HB 350.
A federal court found that Florida’s Medicaid termination notices violated due process, requiring the state to pause benefit terminations and improve its communication with beneficiaries.
A North Carolina ophthalmologist has appealed a trial court decision upholding the state’s certificate of need laws, with the appellate court expected to weigh in on this state healthcare legislation within the next year.
Governor Hochul’s recent proposals in New York include new investments in the care delivery system and initiatives to improve consumer access to healthcare, some of which will require legislative action.
Utah became the first state to implement an AI prescription program, allowing autonomous prescription renewals for chronic conditions within its AI regulatory sandbox, highlighting ongoing state AI policy legislation and the growing number of AI regulatory sandbox states.
Delaware Hospital Budget Authority Changes
On December 30th, Delaware legislators introduced SB 213, which eliminates the Diamond State Hospital Cost Review Board’s authority to prospectively approve or modify hospital budgets. This is in response to an agreement between Governor Matt Meyer (D) and Delaware’s largest hospital to pause a lawsuit over HB 350, which the legislature passed in 2024. The plaintiffs claimed HB 350 violated state statutes and the constitution by seizing decision-making authority from private non-profit hospitals and giving it to a state board. Critically, legislators have until the end of the month to enact SB 213, or the lawsuit may resume.
Florida Federal Court Halts Medicaid Terminations Over Unconstitutional Notices
U.S. District Judge Marcia Morales Howard found that Florida’s misleading Medicaid termination notices violated beneficiaries' constitutional rights. Florida sent the notices to terminate people’s Family-Related Medicaid benefits during its redetermination process from March 2023 to March 2024, after the end of federal COVID-19-related funding. In response to these notices, Howard ordered the state’s Medicaid agency to immediately pause any benefit terminations for financial-eligibility reasons until it provides adequate notices that address the significant due process violations. Additionally, the court ruled that the State provide previously terminated enrollees the opportunity to appeal.
North Carolina Ophthalmologist Appeals CON Law Ruling
On January 6th, a North Carolina ophthalmologist filed an appeal following a trial court’s ruling that upheld the constitutionality of the state’s certificate of need (CON) laws for healthcare services and facilities. The ophthalmologist’s appeal is the latest development in his year-long legal battle over having to send patients to another hospital that holds the region’s only CON for most surgeries. Back in October 2024, the North Carolina Supreme Court issued a unanimous ruling requiring this trial court to undertake a broad trial to determine whether certificate of need laws in the state are unconstitutional. It is expected that the appellate court will issue its opinion on the case within the next 6 months to a year.
New York Governor Announces Mental Health, Cannabis, and Healthcare Access Initiatives
Governor Kathy Hochul (D) unveiled a multitude of proposals impacting consumer access to healthcare and the state’s investment in its care delivery system as part of her state of the state address. Her address covered key initiatives to develop a statewide suicide prevention plan, create a single jointly-issued mental health and substance use services license for physicians, invest $71 million in supportive housing programs, and launch the nation’s first Center of Excellence for Medical Cannabis and Health Equity to train clinicians on cannabis pharmacology, evidence-based care, and patient counseling. Some of these initiatives will require legislative engagement and will likely be taken up in the new session.
Utah Launches Nation's First AI Prescription Renewal Program for Chronic Conditions
Utah became the first state to implement an AI program to autonomously renew prescriptions for patients with chronic conditions, enabling the AI system to legally prescribe routine refills. This program operates within Utah’s AI regulatory sandbox, or its framework for testing AI technology. However, Utah is not the only state with an AI sandbox; Arizona and Texas have also implemented them, and Wyoming is in the process of developing its own.
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