Weekly StateVitals Update: Volume 14 (April 7, 2025)
National
Federal judge issues temporary restraining order on HHS effort to clawback $11 billion in state funds. Following the recent announcement from the U.S. Department of Health and Human Services (HHS) that they were pulling back $11.4 billion in appropriated funds for infectious disease purpose grants for state health departments, a coalition of 23 states sued to block the rescission. A federal judge late last week opted to issue a 14-day restraining order on HHS from clawing back those funds noting that, “the likelihood of success on the merits [by the plaintiffs] is extremely strong…” The states argue that HHS doing so would be illegal since the funds were already appropriated by Congress and that doing so would create a substantial risk to public health and safety. The funding was appropriated during the public health emergency related to the COVID-19 pandemic and, among other purposes, was meant to address COVID–19 health disparities for high-risk and underserved patients. This resulted in many of the funds to be utilized for vaccination and testing activities. While most of the funds have already been spent, state health departments were leveraging some of the remaining funds for other public health priorities, such as tracking the ongoing measles outbreak in Texas and other states.
Alabama
District court issues ruling on assisting individuals with out-of-state abortions. This past week, the Federal District Court for the Middle District of Alabama ruled that the state cannot prosecute doctors and reproductive health care organizations for helping patients travel out of state to obtain abortion care. Alabama Attorney General Steve Marshall (R) had originally sought authority to charge physicians with criminal conspiracy for recommending out-of-state abortion care. The Attorney General contended that his office retained the ability to prosecute a conspiracy taking place within his jurisdiction. District Court Judge Myron Thompson disagreed, finding that the Attorney General would be violating the First Amendment and an individual’s right to travel. The ruling is expected to be appealed.
Arkansas
State submits 1115 demonstration amendment to CMS. Following the state’s 30-day public comment period, Arkansas has now submitted its 1115 amendment application to the Centers for Medicare & Medicare Services (CMS) to implement a new version of Medicaid work requirements. The proposed amendment would require all individuals between 19 and 64 years of age who receive Medicaid through the new adult expansion group, with incomes ranging from 0 to 138 percent of the FPL, and are covered by a QHP to engage in either work, volunteer or caretaker responsibilities. Enrollees will not be required to report work requirements hours completed. The state will instead utilize data-matching algorithms to ensure that enrollees are participating in one of the allowed activities. If an enrollee fails to engage in one of those activities, they will have to engage with a success coach and develop a personal development plan to meet requirements of the program. Notably, failure to comply with these work requirements will not result in terminated coverage but suspended coverage instead. The proposed application has an implementation date of January 1, 2026.
House passes bill prohibiting PBMs from owning pharmacies. This past week, the Arkansas House of Representatives voted 89 to 4 to adopt HB 1150. The measure would specifically prohibit a pharmacy benefits manager (PBM) from having a direct or indirect interest in, or otherwise hold, a permit authorized in the state for the retail sale of drugs or medicines. The bill also would not allow a grandfathering process. Instead it provides the Board of Pharmacy the authority to either revoke any existing permit violating this provision if in existence or not renewing the permit. The bill does allow for a narrow exemption for this prohibition in the cases of certain rare, orphan, or limited distribution drugs that would otherwise be unavailable. The measure now heads to the Senate for consideration.
California
California Medical Association releases 2025 advocacy agenda and sponsored legislation. The California Medical Association (CMA) released its package of sponsored legislation this past week. The CMA includes seven pieces of legislation that focus on private equity oversight, workforce development and prior authorization. Those bills include:
SB 306: Establishes a gold carding program for physicians who provide any service of which the health plan approves more than 90% of the time.
SB 351: This measure would prohibit a private equity group from interfering with the professional judgment of physicians or dentists in making health care decisions. The measure also allows the Attorney General to investigate and enforce any penalties against private equity firms that violate the safeguards of the patient-physician relationship.
AB 489: This bill would prohibit companies from marketing artificial intelligence (AI) chatbots as licensed medical professionals.
AB 967: Establishes a streamlined licensing process for out-of-state physicians seeking entry to practice in the state.
AB 510: Requires that any denial of prior authorization is performed by a provider of the same or similar specialty.
AB 512: Requires health plans to respond to urgent prior authorization requests within 24 hours and nonurgent requests within 48 hours.
AB 539: Ensures that the validity of an approved prior authorization extends to at least one year.
Lawmakers are coming up on a spring recess in mid-April and will then come back in late April to continue its work before hitting committee deadlines beginning in May.
Georgia
Bill establishing protections for IVF enrolled and sent to the Governor. Following overwhelming support by the House and Senate, the Legislature enrolled HB 428 and sent it to Governor Brian Kemp’s (R) desk for signature. The bill establishes an individual’s right to in vitro fertilization in the state and has been a priority for House Speaker Jon Burns (R) this past session. Despite enrollment of HB 428, there have been attempts this session to advance a bill that would establish personhood at the point of fertilization. IVF providers in the state argue that such a measure would make it too significant of a liability to continue to render care in such a scenario. Given the waning days of session, it’s unlikely that such attempts will make their way to the House or Senate floor.
Indiana
House committee passes Senate Medicaid reform bill. This past week, the House Committee on Ways and Means opted to advance SB 2 out of committee with a favorable vote. The bill has since been amended on the House side to remove a cap on enrollment in the Medicaid expansion program, amend presumptive eligibility criteria to be retroactive eligible criteria, and to increase the eligible exemptions from the bill’s mandated work requirements for those enrolled in the expansion program, inclusive of full-time students. As it currently stands, key elements of the measure include:
Requires the Medicaid Oversight Committee to be provided an annual report on improper Medicaid payments and expenditures, recovered funds and other data elements pertaining to fraud.
Limits state agencies and contractors and other affiliated entities from marketing the Medicaid program, albeit recent amendments have created some exceptions to this.
Prohibits Medicaid applicants from providing only self-attestation of meeting eligibility criteria.
Requires the state to provide hospitals with performance standards that they may use in making presumptive eligibility determinations.
Establishes work requirements for the Medicaid expansion population of twenty hours per week, with certain alternative pathways provided relative to exemptions, volunteering or medical treatment programs.
Establishes a poison pill for the Medicaid expansion program that if federal financial participation ever falls below 90 percent, the program may be terminated.
Now that the bill has passed the House Committee on Ways and Means, it’s eligible for consideration on the House floor. If passed, it would need to go back to the Senate for concurrence.
Michigan
DHHS announces additional funding for Healthy Community Zones. This past week, the Department of Health and Human Services (DHHS) announced they were awarded $8 million to 20 different organizations in the City of Detroit and Chippewa and Saginaw counties to help build Healthy Community Zones (HCZs). HCZs intend to decrease racial disparities in health outcomes by supporting community-led initiatives focused on food security, infrastructure where people learn, live, work and play, enhance healthy children and youth opportunities, and build social cohesion. Funding is available for local organizations, including non-profits, provided such funding is used for the aforementioned initiatives. In this latest round of funding, organizations are planning to develop gardening education programs, create more accessible childcare centers and encourage active play, infrastructure improvements to increase access to healthy foods in schools, and multimedia campaigns to promote breastfeeding initiation and duration.
Mississippi
Governor vetoes Medicaid eligibility and reimbursement reform bill. Despite overwhelming support from the House and Senate, Governor Tate Reeves (R) opted to veto SB 2867. As passed by the Legislature, the bill would have expanded eligibility for providers for the state’s Upper Payment Limit program (currently inclusive of just one provider recipient in the state) and freeze the supplement payment methodology currently in place to maximize federal funding. Other provisions of note include:
Extended Medicaid coverage and eligibility for former foster care youth to the age of 26.
Required the Division of Medicaid to submit a waiver to Centers for Medicare & Medicaid Services (CMS) to require less frequent medical redeterminations for children who are eligible for Medicaid and have long-term or chronic conditions whose diagnosis do not change year-over-year.
Provided discretion to the Division of Medicaid to reimburse certified community behavioral health centers as they wish.
Established a perinatal risk-management services program for enrollees.
Expanded Medicaid coverage for autism spectrum disorder services, medications for chronic weight management, and nonopioid medications.
Provided a more tailored reimbursement rate for ambulance services of Medicaid enrollees.
These changes are among other reforms made by the bill. In his veto message, Governor Reeves noted his reasons for vetoing the measure is that the cost of the changes was estimated to be more than $40 million and the changes to the state’s supplemental payment mechanism to expand eligibility would unduly burden the University of Mississippi Medical Center.
Montana
Governor signs bill extending Medicaid expansion program. Recently, Governor Greg Gianforte (R) signed HB 245 into law. The bill removes the sunset date on the Medicaid expansion program that was originally set for the end of this year and largely keeps the program in-tact as it currently operates. Notably, the bill lifts any future termination date to make the program exist in perpetuity and also continues authorization for work requirements that were originally placed into the program in 2019. Those work requirements are still pending due to changes in federal administrations. In the past, the Governor has iterated his continued support for work requirements and it's highly likely the state will make a determination to move forward with a work requirements proposal in the near future.
Nebraska
Governor and Legislature intend to defund a recently created prescription drug donation program. Despite significant support from the Legislature over the past two years [LB 1035 (2024) & LB 10 (2025)], the Appropriations Committee voted to pull all funding for the program during a committee hearing last week. The program was intended to develop a partnership with an Iowa nonprofit called SafeNetRx, which performs similar services in Iowa, and would operationalize the drug donation process for the state. In 2024, the state had appropriated $530,000 for the program but it reached Governor Jim Pillen’s (R) list of possible cuts when he released his budget proposal this past January. The new proposed budget arising from the Appropriations Committee would claw those dollars back, which had been unspent up to this point, and would expect to save the state just over $1 million as the state faces a $457 million project budget deficit.
Nevada
Medicaid agency discusses possible solutions to the state’s $66 million budget shortfall. Following the trend of a handful of other states, the Nevada Medicaid Agency announced in recent weeks that the state is seeing a near $66 million budget shortfall for its Medicaid program for the current fiscal year. The budget hole is largely a result of cost inflation experienced by Medicaid managed care organizations. The state is now considering three options to close the gap: (1) audit the program for Medicaid enrollees who have moved out of state but are still on the Medicaid rolls, (2) pulling from an old budget surplus the state has, and/or (3) assume a $38 million savings due to expected federal changes to the public charge rule, which could allow healthcare services, like Medicaid, to be included in the calculation of one’s dependence on public benefits. While the federal Administration has not updated and revised the public charge rule since coming back into office, most observers expect them to do so and such language was already included in the House Republican budget framework passed in February of this year.
North Carolina
Senate considers CON repeal. This past week, the Senate Committee on Healthcare opted to vote favorably to advance SB 370. As it currently stands, the bill would repeal the state’s certificate of need (CON) requirements for most healthcare facilities and services. As expected, the North Carolina Healthcare Association provided testimony during the most recent hearing positioning themselves in opposition to the measure. Past efforts to repeal CON in the state legislature have largely fallen flat. However, sponsors of SB 370 believe there may be more interest this year given a recent supreme court directive.
Back in October 2024, the North Carolina Supreme Court issued a unanimous ruling requiring a lower court to undertake a broad trial to determine whether certificate of need laws in the state are unconstitutional. At issue is an ophthalmologist’s complaint that he could perform a certain cataract surgery for $1,800 while the local hospital charges $6,000 for the same procedure. However, the ophthalmologist contends he is prohibited from purchasing the equipment necessary to perform the procedure because certificate of need rulings have been issued iterating that only the hospital may perform such a procedure in the defined geographic area. The Supreme Court noted in its instructions back to the lower court that, “the complaint contains allegations that, if proven, could render the Certificate of Need law unconstitutional in all its applications.” The measure will now head to Senate Rules for consideration on the calendar to be voted on by the full Senate.
House committee favorably reports Medicaid work requirements bill. This past week, the House Health Committee opted to vote HB 491 favorably out of committee and to the full House floor for consideration. From a policy perspective, the bill does little beyond what existing law already requires – implementation of work requirements as a condition of Medicaid eligibility for the expansion program, provided such a plan were to be authorized by the Centers for Medicare and Medicaid Services (CMS). However, from a messaging perspective, the sponsors of the bill wanted to move forward with this language that would ensure a requirement on the state Department of Health and Human Services to implement work requirements as a condition of Medicaid eligibility if there is a program approved by CMS. The measure will now head to House Rules for consideration on the calendar to be voted on by the full House.
South Carolina
Governor’s nominee for Director of Public Health is rejected by a Senate Committee. South Carolina’s Senate Medical Affairs Committee voted to oppose Governor Henry McMaster’s (R) nominee for the state’s new Department of Public Health, Dr. Edward Simmer. Only one of the committee’s thirteen republicans voted to approve his nomination. Despite having voted with near unanimous approval back in 2021 to approve Dr. Simmer’s nomination to head the state’s old public health and environmental agency, criticism arose from legislators relative to Dr. Simmer’s handling of the COVID-19 public health emergency. Specifically, in that Dr. Simmer had encouraged and invested in resources to get residents vaccinated and how he would often wear masks after the pandemic had been on the decline. While the immediate committee vote isn’t the end of Dr. Simmer’s nomination, it would now require the full Senate to pull the nomination out of committee and send it to the full floor.
West Virginia
Medicaid expansion poison pill not expected to be considered this session. Despite quick introduction and discharge to the House floor, it is unlikely that HB 3518 will be considered by the House of Delegates. The bill would have required the state to withdraw Medicaid eligibility for the expansion population if the federal medical assistance percentage were to ever drop below 90 percent. Deputy House Speaker Matthew Rohrbach (R-Cabell) has indicated that House leadership opted to pull the bill after receiving confirmation from Congressional members that they were not planning to reduce the FMAP for the expansion population as part of the expected Medicaid cuts. Twelve other states currently have poison pills that aligned with what West Virginia was attempting to do.
Senate passes bill to further restrict abortion care medications. The Senate passed SB 85 this past week by a 28 to 5 vote. The bill would establish a felony if any individual were to either prescribe or distribute medications that are used for abortion care to individuals located in West Virginia. The bill would establish an exception for cases under state law where abortion care is legal, inclusive of medical emergencies and in cases of rape and incest. Part of the intent is to further prohibit the prescription of abortion care medication through telehealth, of which abortion care through telehealth is already outlawed in the state. The bill will now move to the House for consideration where it’s likely to receive a speedy review and consideration process.
