Weekly StateVitals Update: Volume 23 (June 9, 2025)
California
Legislature Advances Three Prior Authorization BIlls. The Assembly and the Senate took action to advance three substantive measures out of their originating chamber in recent weeks. The three bills pertain to prior authorization and are part of a package of bills labeled as the Prioritizing Patients, Empower Physicians agenda from the California Medical Association. Notably, SB 306 would require insurers to implement a gold carding program, specifically exempting physicians from prior authorization requirements for services that were approved at least 90 percent of the time in the previous calendar year. Additionally, AB 512 would require that prior or concurrent authorization requests must be fulfilled within 48 hours for standard requests and 24 hours for urgent requests. Finally, AB 539 would require a prior authorization for a service to remain valid for at least one full year from the date of approval or throughout the course of prescribed treatment, if less than a year. Each bill has since been read for the first time in the opposite chamber and has either been assigned to a committee or is awaiting assignment.
Connecticut
Governor Amends Hospital Tax Increase Request Before End of Session. This past week, Governor Ned Lamont (D) asked the Legislature to amend his proposed $375 million hospital tax increase. The provision was included in the $55.8 bullion budget approved by the House and Senate for the next two fiscal years. The amended hospital tax increase as requested by the Governor would only generate $285 million in the upcoming fiscal year. The hospital industry had requested the reduction because the increased tax hike was likely to push them past the 6 percent (of net patient revenue) safe harbor limit and there was no guarantee from the Administration and Legislature that the majority of funds from the tax increase would go back directly to hospitals. The House and Senate were unable to make the requested change due to the timeline prior to enrollment of the budget but have iterated they will adjust it accordingly before the new assessment takes effect in July 2026. The budget bill now goes to the Governor’s desk.
Florida
Attorney General Issues Subpoenas in Probe on Health Price Transparency. This past week, Florida Attorney General James Uthmeier issued subpoenas to at least two hospital systems to ensure they are complying with state price transparency laws and not committing deceptive and unfair acts. The Attorney General claims that failure to publish prices by hospitals would be deceptive and unfair as an act of omission. The Attorney General said the probe is in alignment with president Donald Trump’s executive order on hospital billing practices. Specifically, the probe intends to look at patient charges, disclosures to those patients, billing practices, price transparency and surprise billing protections.
Florida Submits New 1115 Demonstration Application to CMS. The Centers for Medicare & Medicaid Services (CMS) announced this past week that Florida had submitted a new 1115 demonstration application, “Florida Health Care Workforce Sustainability.” The demonstration requests federal matching Medicaid funds for workforce programs that were authorized under SB 7016 and HB 5003 in 2024. Such programs include:
Training, Education and Clinicals in Health (TEACH) Funding Program: Funding to be made available to FQHCs, CMHCs, CCBHCs, and rural health clinics to offset the costs of training resident physicians and health care students who can become licensed providers rendering care to Medicaid recipients in underserved communities.
Florida Reimbursement Assistance for Medical Education (FRAME) Program: Repayment for educational loans for primary care physicians, physician assistants, mental health professionals, licensed practical nurses, registered nurses and advance practice registered nurses who serve Medicaid patients in underserved areas.
Florida Funding Initiative for the Recruitment, Sustainment and Training of Nursing (FIRST) Program: Semi-annual payments to eligibility public teaching hospitals to offset higher patient care expenses and increased complexity of cases resulting from nursing education.
CMS will accept public comments through July 2, 2025 on the demonstration application.
Illinois
Enrolled Budget Carries Through on Governor’s Ask Not to Fund Health Coverage for Immigrants Program. The final budget enrolled and sent to the Governor by the General Assembly two weeks ago left out funding for the Health Benefits for Immigrant Adults (HBIA) program. The program provides Medicaid-like healthcare coverage for immigrants without legal status and who are between the ages of 42 and 64. The likely reason for leaving funding for the program out of the final budget is due to a February auditor general report finding the HBIA program was found to have cost the state more than $485 million over the first two years, more than 284 percent above the original estimate for the program. The General Assembly did appropriate funding for the Health Benefits for Immigrant Seniors program, which provides Medicaid-like coverage for immigrants without legal status to individuals who are 65 years of age or older.
Massachusetts
Upper Payment Limits Bill Has Hearing in Senate Health Care Financing Committee. The Senate Health Care Financing Committee met on June 2 to hear S. 868, a wide reaching bill that includes a provision for the Health Policy Commission to set upper payment limits on prescription drugs (similar provisions have also been added to the Senate’s budget amendment). At issue during the hearing was whether price caps on prescription drugs, adopted in legislation passed last year (S. 3012) and not yet in effect, would accomplish the same goals as the bill pending before the committee. No vote was taken on the bill in the committee. The Budget Conference Committee has not yet released its report, but the budget must be approved by June 30. It’s unclear whether upper payment limits will stay in the final version.
Minnesota
Governor Calls for Special Session to Finalize Budget. Governor Tim Walz (D) called a special session for today, June 9, to vote on 14 already agreed upon and negotiated budget bills. The Legislature previously adjourned without touching the budget but Minnesota is required to pass a two-year budget by June 30. Notably, the Legislature will vote on a standalone bill that would eliminate eligibility for undocumented adults from coverage under the state’s Medicaid program. A goal of House Republican leadership, the agreement will leave children still eligible for the program. It’s estimated that more than 20,000 undocumented immigrants are currently enrolled in the program, with more than 76 percent of enrollees being above the age of 18. The Legislature is intending to wrap up its work by Tuesday, June 10th.
Nebraska
End of Session Prior Authorization Bill Gets to the Governor. At the end of the legislative session, the Legislature sent LB 77 to the Governor for his signature, which was signed into law shortly thereafter. As enacted, the bill establishes transparency and notification requirements that insurers must adhere to in order to implement new prior authorization requirements, requires that adverse determinations are made by a clinical peer, requires all reviews of appeals of adverse determinations are made by a physician, requires the development of a single uniform prior authorization request form for prescription drugs and other devices or equipment, and timelines that insurers must adhere to for responding to providers’ prior authorization requests, among other provisions. The bill is now in front of the Governor where he is expected to sign into law.
North Carolina
Healthcare Reform Measure Passes Senate. This past week, the Senate passed the House’s significant health reform measure (HB 434) and sent it back to the House with amendments. As amended by the Senate, HB 435 became a vehicle for key provisions beyond just prior authorization as was its original intent from the House. Provisions in the bill sent back to the House include:
Eliminates certificate of need requirements for rehabilitation facilities, diagnostic centers, and in-home hospice services.
Requires hospitals to report their most frequently reported Diagnostic Related Groups (DRGs) for inpatient encounters on a quarterly basis. In calculating that amount, hospitals must include charges for each billable item and service tied with the DRG regardless of whether the service is performed by a provider employed by the hospital.
Under most circumstances, it requires fair notice requirements for insured patients on services that may be received in a hospital setting or on a campus, nonparticipating network status of certain providers, consumer protections available to insured patients and emergency services at a non-participating hospital, among other situations.
Establishes a requirement that hospitals must provide patients with a good faith estimate and that the final bill may not exceed 5 percent of the original estimate for such services as included in the estimate.
Prohibits the charging of facility fees unless it is charged for services rendered in specific hospital settings.
Establishes timelines for when insurers must respond to urgent and non-urgent prior authorization requests, guidelines for appeals and review processes of appeals by insurers, transparency of prior authorization policy by insurers, prohibition on the use of AI as the sole basis for denial, and some limited continuity of care provisions related to prior authorization.
Oregon
Legislature Considers Amending Death with Dignity Act. This past week, the Senate Committee on Rules has held a public hearing and a work session on SB 1003, which intends to amend the state’s Death with Dignity Act. Notably, SB 1003 would amend the requirement that patients make two oral requests for their physician for medication to aid in dying, with both requests being at least 15 days apart. The bill would reduce that 15 day waiting period to seven days. It would also allow electronic transmission of prescriptions and filings and enforce disclosure requirements that hospices must provide on their physician-assisted death policies. Oregon is currently one of 11 states that currently allow terminally ill patients to choose to end their lives through assistance by a physician.
Pennsylvania
House Passes Insurance Mandate for Coverage of Contraceptives. The House of Representatives passed HB 1140 by a 116 to 87 margin this past week. Originating as a response to concerns about potential federal actions to limit access to contraceptive care, the bill was introduced with the intent to ensure insurers in the state would be required to continue such coverage. Specifically, the bill requires all insurers to cover all FDA-approved contraceptive medicines and devices, inclusive of emergency and over the counter contraceptives. The bill also includes a provision establishing patient confidentiality requirements and continues religious exemptions from the requirement so long as a contraceptive is elective in nature under the policy as opposed to being deemed medically necessary. The bill now heads to the Senate, where its fate before Senate Republican leadership is increasingly challenging.
Texas
Texas Enrolls Budget Bill With Implications for Healthcare. This past week, the Texas Legislature enrolled the state’s biennial budget. Coming in 5 percent higher than the previous biennial budget, the $338 billion spending plan includes myriad investments in or has implications for healthcare stakeholders, including: Medicaid rate increases for personal attendant services, nursing facilities, applied behavior analysis services, intellectual developmental disability nursing facilities, and others; $3 billion for the establishment and operation of the Dementia Prevention Research Institute of Texas; $5 million for expanding high-risk maternal care coordination services; and funding for hospital grant programs, inclusive of rural hospitals and essential access hospitals.
The budget bill also sets a target for the Health and Human Services Commission (HHSC) to develop and implement cost containment strategies to achieve savings of $550,000,000 in general revenue funds for the upcoming biennium. The initiatives are intended to examine fraud, waste and abuse and maximize federal flexibility under Medicaid, achieve administrative flexibilities, among other initiatives. Notably, budget language was incorporated that will require the HHSC to at least monthly verify the residency status of Medicaid and child health plan program enrollees.The budget will need to be approved by the State Comptroller to ensure the state can afford the Legislature’s spending plan. Once sign-off by the Comptroller is provided, it will then go to the Governor’s desk for signature.
