Weekly StateVitals Update: Volume 15 (April 14, 2025)
National
Ruling issued in nursing home staffing levels case. On Monday, a federal court sided with plaintiffs claiming that federal regulations mandating nursing home staffing levels adopted under the Biden administration are beyond the scope of the Centers for Medicare & Medicaid Services (CMS). The rule mandated an increase in the total hourly direct patient care requirements and stipulated that all nursing homes nationwide have a registered nurse (RN) on staff at all times. Rural providers expressed strong opposition, particularly regarding the RN staffing requirement, citing that some U.S. counties currently have only one RN working in any healthcare setting. Prior to the ruling’s release, the current administration voiced support for the rule, but it remains unclear if it will continue with the case and appeal the decision. Further, opponents of the rule from both sides of the aisle have indicated that legislation prohibiting implementation is possible.
CMS to stop providing federal match for 1115 authority DSIP and DSHP initiatives. This past week, The Centers for Medicare & Medicaid Services (CMS) issued a state medicaid director letter that announced their intent to no longer approve certain expenditures for designated state health programs (DSHPs) and designated state investment programs (DSIP). Currently, approved DSHPs and DSIPs expenditures from states include non-medical in-home services, such as housekeeping, grants to extend high-speed internet to rural healthcare providers, and grants to labor unions to reduce the cost of health insurance for childcare providers, among other uses. In most cases, DSHPs are part of 1115 Medicaid Demonstrations. CMS noted that due to states having paid for such expenditures without a federal match prior to inclusion under their 1115 authority, CMS has concerns about the appropriateness of federal funding for such programs. CMS does not intend to approve new state proposals through 1115 expenditure authority for DSHP or DSIP funding or renew existing demonstrations.
Alabama
PBM reform passed unanimously by the House following Senate vote. The House of Representatives joined the Senate in passing SB 252, sponsored by Senator Billy Beasley (D-Clayton) who is a community pharmacist, concerning pharmacy benefits managers (PBMs) and altering the mechanism by which independent pharmacists are reimbursed. Specifically, this legislation prohibits pharmacists from being reimbursed at a rate lower than the Medicaid reimbursement rate. This rate includes a $10.64 dispensing fee. The legislation also includes various provisions regulating PBMs and eliminates gag clauses between pharmacists and consumers. In House committee, the committee removed a sunset provision from the bill as well as a private cause of action from the legislation. This legislation now moves to Governor Kay Ivey’s desk for signature.
Medicaid presumptive eligibility bill heads to the Governor. The Alabama Legislature sent SB 102 to Governor Kay Ivey’s (R) desk this past week. As enrolled, the bill would authorize qualified providers to make a determination on the basis of preliminary information that a pregnant woman is eligible for Medicaid coverage for at least sixty days before a determination of eligibility is made. Republican co-sponsors endorsed the bill as pro-life throughout its legislative journey, which followed the same messaging from Mississippi and Arkansas that have recently passed similar presumptive eligibility laws. Importantly, it also allows the state to claim a significant win to combat infant and maternal mortality rates in the state. The Governor is expected to sign the bill.
House passes bill to authorize association health plans. The Alabama House of Representatives passed HB 477 this past week, which would authorize the Alabama Farmers Federation to sell an association health plan to its membership. Passed by a margin of 98 to 1, the bill would authorize the Federation to sell this type of coverage but not be recognized or regulated as an insurer which enables them to skirt around meeting certain federal requirements. For instance, the health coverage product would allow them to deny coverage based on pre-existing conditions, not cover essential health benefits, and have prohibitive out-of-pocket amounts. Approximately 10 other states have passed similar legislation via their own state farm bureau organizations. Unique to Alabama, the bill would require minimum coverage, if eligible, to provide ambulatory patient services, inpatient hospitalization services, emergency services, lab services, mental health care, substance use treatment, and prescription drugs. The bill would also establish a 1.3 percent tax on premiums. The measure now heads to the Senate for consideration.
Arkansas
Legislature enrolls bill prohibiting PBMs from owning pharmacies. This past week, the Arkansas Senate voted 26 to 9 to enroll HB 1150. Previously passed two weeks earlier by the House of Representatives, 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 Governor’s desk.
Idaho
Governor signs bill limiting access to public benefits for undocumented immigrants. Recently, Governor Brad Little (R) signed HB 135 into law. Notably, the measure repeals an allowance that previously allowed undocumented immigrants to access public health assistance for immunizations and testing and treatment of symptoms of communicable diseases. The measure also repeals an allowance for undocumented immigrants to receive prenatal and postnatal care not to exceed 12 months. The bill would not prohibit federally-required care to be rendered, such as emergency medical services, based on legal status. The bill also included a provisions repealing an allowance for undocumented immigrants to obtain food assistance for a dependent child under 18 years of age and paid for by the state, which caused a multitude of non-healthcare specific stakeholders to oppose the bill, inclusive of the Idaho Association of Commerce & industry.
Illinois
Federal district court rules Illinois right of conscience law is unconstitutional. This past week, the U.S. District Court for Northern Illinois issued a ruling finding a 2016 Illinois law violates a constitutional right to free speech by compelling anti-abortion medical professions to render information about abortion care to patients. Signed by Governor Bruce Rauner (R) back in 2016, the law required healthcare providers to discuss the benefits of abortion and to refer clients to abortion care providers if requested. If providers adhered to those requirements, they received legal protections for conscientious objection. The ruling found that making a liability shield contingent on a discussion about the risks and benefits of childbirth and abortion is a violation of the first amendment. However, the ruling did find that the referral requirement was constitutional. It’s unknown whether the Attorney General will consider appealing the decision at this time.
Indiana
House passes Medicaid reform measure. After clearing through the House committee process the previous week, the House voted 66 to 28 to pass SB 2. The measure, as has been previously summarized in past editions, would enhance oversight on improper Medicaid payments and expenditures, limit marketing of the Medicaid program, restrict what the state may consider for eligibility redeterminations, establish work requirements for the expansion population, and implement a poison pill to cut the expansion program if federal funding ever dips below 90 percent. Given amendments in the House, it now heads back to the Senate for concurrence.
Maryland
Maryland’s PDAB will now have UPL setting authority. Maryland’s prescription drug affordability board will have authority to limit what commercial health plans pay for certain drugs in the state under a bill passed by the legislature on April 7. HB 424, sponsored by Delegate Bonnie Cullison (D-Montgomery) builds on the 2019 law that set up the Maryland Prescription Drug Affordability Board by expanding the caps for state-run health plans to also apply to any health payer in the state. The legislation, if signed by Gov. Wes Moore (D), will take effect Oct. 1, 2025, and would have Maryland join Colorado, Minnesota, and Washington with the ability to set upper payment limits on prescription drugs. The bill also amends the makeup of the Stakeholder Council that must be consulted prior to the establishment of UPLs.
Nebraska
340B legislation goes to Governor despite opposition from an Elon Musk-backed PAC. LB 168, sponsored by Health and Human Services Chair Sen. Brian Hardin (R-Gering), passed the legislature 42-5 and was signed into law by Governor Jim Pullen (R) this past week. It prohibits 340B Program drug manufacturers from interfering with or denying sales of such drugs to hospitals, clinics or pharmacies that manufacturers contract with. The federal program requires drug manufacturers to provide discounts to eligible entities caring for uninsured or low-income patients in exchange for their participation in Medicaid and Medicare. No federal or state tax dollars are used for the program. The bill had been targeted by a political action committee (PAC) backed by Elon Musk, claiming the bill would expand the program and undermine President Trump’s effort to “fix 340B”.
New York
Legislature passes bill prohibiting for-profit hospices. The New York Legislature enrolled legislation (S. 3437 / A. 565) this past week that would prohibit the establishment of hospice facilities by for-profit entities. Beyond prohibiting any future establishment of a hospice facility by a for-profit entity, the bill also prohibits any request for increase in capacity for an existing hospice facility operated by a for-profit entity. Similar legislation has been introduced since 2022, with a bill having been enrolled in 2022 only to receive a veto by Governor Kathy Hochul (D) at the time. In her veto message, the Governor contended she wanted the Master Plan for Aging Council to assess services rendered by a for-profit hospice entity and to then issue a recommendation. It’s believed those conversations have since occurred and the Governor is unlikely to veto this measure.
Oregon
Senate committee advances measure on hospital facility fees. The Oregon Senate Committee on Health Care voted by a 4 to 1 margin to advance SB 539 this past week. The measure would implement a number of limitations on hospitals’ processes for charging facility fees and establish new reporting requirements, inclusive of:
Requires hospitals to annually report to the Oregon Health Authority information regarding the facility fees that are charged or billed for patient encounters at hospital-based facilities.
Requires hospitals to provide a patient with advance notice of the facility fee that may be incurred for a visit, inclusive of a billing statement that includes facility fee information.
Limits hospitals from charging, billing or collecting a facility fee to only services provided on a campus or at a facility that includes an emergency department.
During the committee hearing, the Hospital Association of Oregon spoke in opposition to the measure, arguing that limiting facility fees diverts resources away from patient care and that facility fees are vital to sustain hospital services. Insurers and consumer advocacy organizations testified in support of the bill. The measure now goes back before the full Senate for consideration.
Vermont
Certificate of need bill has crucial hearing in the Senate. During the hearing of the Senate Health and Welfare Committee concerning H. 96, a Certificate of Need (CON) bill, the Vermont Association of Hospitals and Health Systems (VAHHS) expressed their support for the proposed legislation. In addition to backing the bill, VAHHS put forth two key recommendations. The first was to incorporate an exemption specifically for projects that receive state funding. The second recommendation was to mandate that the Green Mountain Care Board factor in inflation when determining the jurisdictional thresholds outlined in the bill. For its part, the Green Mountain Care Board provided background information to the Committee on the CON process, but stopped short of offering a position on this bill. As it currently stands, the bill would increase the dollar thresholds that would trigger a CON requirement and would also exempt certain health care services and health facility projects from CON requirements, if those services or facilities were the result of a contract awarded by the state.
Washington
Prior authorization reforms go into effect later this summer. Governor Bob Ferguson (D) signed a number of healthcare related bills, including HB 1706, sponsored by Tarra Simmons (D-Kitsap). It aims to align Washington's prior authorization processes for health care services and prescription drugs with federal guidelines, enhancing efficiency in decision-making and notifications for providers. Effective July 27, 2025, health carriers must comply with specific time frames for electronic and non-electronic prior authorization requests, with the goal of significantly reducing wait times and ensuring that requests are addressed promptly. The legislation also mandates the establishment of interoperable application programming interfaces to automate prior authorization processes.
