Weekly StateVitals Update: Volume 51 (January 12, 2026)

National

• CMS Awards Rural Health Transformation Program Grants. On December 29, the Centers for Medicare & Medicaid Services (CMS) announced that all 50 states would be receiving funds under the Rural Health Transformation Program. The $50 billion in funding is split across five years, with $10 billion being awarded in 2026. As per the One Big Beautiful Bill Act, 50% of the funding is distributed equally among states, while the other 50% is allocated based on individual state metrics covering rurality and their rural health systems, state policy actions covering access and quality of care for rural communities, and applications for initiatives that have the greatest potential impact on the health of rural communities. In its announcement, CMS indicated states’ priority areas within improving rural health care, including:

  • Expanding access to preventative, primary, maternal, and behavioral health services. This priority area also includes fitness and nutrition programs, food-as-medicine initiatives, chronic disease prevention models, and improved EMS communication, treat-in-place options, and coordinated transfers.

  • Supporting clinical workforce training, residencies, recruitment, retention, and incentivizing the development of the workforce through educational pathways.

  • Investing in rural health infrastructure and technology, modernizing rural health facilities and equipment, improving cybersecurity, and expanding telehealth, remote patient monitoring, and digital tools. This priority area also includes the use of AI scribes and clinical workflow improvement tools.

  • Implementing structural efficiency improvements to streamline operations, enhance care and resource coordination, and build state and local care partnerships.

  • Testing new primary care and value-based care models, strengthening partnerships among rural and other providers, and promoting regional collaboration to improve health sustainability and patient outcomes.

  On average, CMS awarded states $200 million each for 2026. States that received the highest amounts of funding include Texas ($281.3 million), Alaska ($272.2 million), and California ($233.6 million). States that received the lowest amounts of funding include New Jersey ($147.3 million), Connecticut ($154.2 million), and Rhode Island ($156.2 million). StateVitals will continue to monitor ongoing state engagement on the Program and provide any updates as they are finalized. 

• CMS to Negotiate GLP-1 Drug Pricing and Coverage. The Centers for Medicare and Medicaid Services (CMS) recently announced the BALANCE (Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth) Model, which is intended to increase access to GLP-1 medications among Medicaid and Medicare enrollees. As part of the model, CMS will negotiate drug pricing and coverage for GLP-1s on behalf of state Medicaid agencies and Medicare Part D plan sponsors. Currently, drug manufacturers, state Medicaid agencies, and Part D plans that are interested in participating had until January 8, 2026, to notify the agency. As it stands, CMS has not indicated which GLP-1s will be covered under the BALANCE model. State Medicaid agencies will be able to join the model beginning May 2026, and Part D plans will be able to join in January 2027. 

• HHS Revises Childhood Vaccine Schedule. This past Monday, the Department of Health and Human Services (HHS) announced a new childhood vaccine schedule. Notably, the schedule cuts down on recommended vaccines for all children by over a third. In 2024, the Centers for Disease Control and Prevention (CDC) recommended that children be vaccinated against 18 diseases. Now, the CDC revised its guidelines to cover 11 diseases, including measles, mumps, rubella, polio, pertussis, tetanus, diphtheria, Haemophilus influenzae type B (Hib), pneumococcal disease, human papillomavirus (HPV), and varicella (chickenpox). Additionally, the guidelines span across three categories, referring to recommendations for either all patients, certain high-risk groups, or individualized cases with shared clinical decision-making. When it comes to recommended vaccines, states still have the authority to mandate vaccinations for children to enroll in schools or childcare centers. As states reconvene in the coming weeks, it’s possible that bills loosening vaccine requirements may have greater pull than they did last year. An example of such is Florida’s reintroduction of HB 917, which prohibits healthcare providers from discriminating against patients based on vaccination status. However, other states that have implemented new statutory and regulatory authority over federal vaccine recommendations may instead choose to refer to the previous, more inclusive childhood vaccine schedule.

• HHS Authorized to Share Limited Personal Data of Medicaid Enrollees with ICE.  As a result of a federal district court’s decision in recent weeks, the U.S. Department of Health and Human Services (HHS) is now authorized to begin sharing limited Medicaid enrollee personal information with Immigration and Customs Enforcement (ICE). The decision came after 22 plaintiff states had sued for an injunction, and the district court responded by placing a temporary injunction until the federal government could issue such a directive through a normative guidance process. HHS issued such guidance in December and, as a result, the district court ruled that HHS was authorized to utilize that guidance as a legal basis to share basic biographical, location, and contact information about immigrants living in the U.S. illegally. 

California

• California Ends Medicaid Coverage of GLP-1 Drugs. As of January 1st, California’s Medicaid program ended coverage of GLP-1 medications prescribed solely for weight loss or weight-loss indications for adults. Additionally, Wegovy, Saxenda, and Zepbound are no longer covered regardless of the indication while seven other GLP-1 drugs (Ozempic, Rybelsus, Mounjaro, Victoza, Byetta, Bydureon, and Trulicity) are still covered for the treatment of type 2 diabetes. These actions come in response to rising pharmaceutical costs and Medicaid cuts, with several other states including New Hampshire, Pennsylvania, and South Carolina also discontinuing coverage for adult GLP-1 prescriptions for weight loss this month. Moreover, Michigan, Rhode Island, and Wisconsin have indicated they may restrict coverage, although they have not confirmed this change. With CMS’ announcement of the BALANCE act earlier this week, states and drug manufacturers will have the option to participate in the plan to lower the costs of GLP-1s for Medicaid and Medicare enrollees.

Colorado

• Joint Budget Committee Discuss Concerns over Medicaid Spending. Last Monday members of the legislature’s Joint Budget Committee met with the Department of Healthcare Policy and Financing to discuss the rising costs of the State’s Medicaid program. Over the past seven and a half fiscal years, the state’s Medicaid spending has risen by almost 60%. Additionally, Colorado’s revenue is limited by its Taxpayer Bill of Rights or TABOR, which caps state revenue to the rate of population growth plus inflation, requiring excess revenue to be given back to taxpayers. So, while many states face the pressure of rising healthcare costs and decreased Medicaid funding, Colorado is in somewhat of a unique position due to TABOR restricting its revenue. As it stands, Colorado’s Medicaid spending has grown almost twice as fast as their revenue, and now represents around a third of the State’s general fund spending. Additionally, Governor Jared Polis’ budget plan for FY 2026-2027 only funds the State’s Medicaid program to less than half of its projected growth. While the committee has not put forth any final proposals, they discussed potentially cutting back spending on long-term care, instituting tiered reimbursement rates for behavioral health services, and directing beneficiaries to outpatient treatment for substance use disorders. In the next couple of months, the committee is expected to develop the state budget in preparation for voting by the legislature later this year. 

Delaware

• Legislation Introduced to Weaken State Hospital Oversight Board. 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 represents the latest chapter of a legal battle challenging the state hospital review board’s authority to approve private hospitals’ budgets. After the legislature passed HB 350 in 2024 to establish the board in response to rising healthcare costs in the state, Delaware’s largest hospital sued, claiming the law violated state statutes and the constitution by seizing decision-making authority from private non-profit hospitals and giving it to a state board. Then, in October 2025, Governor Matt Meyer (D) and the hospital agreed to pause the lawsuit if the legislature introduced a bill that removes the authority to modify hospital budgets and rework the compliance plan requirements. Under the agreement, hospitals are still required to disclose financial information, service utilization data, and spending and revenue data. Crucially, legislators have until the end of January to enact SB 213, or the lawsuit may resume.

Florida

• Federal Judge Rules Florida Violated Constitutional Rights of Residents Dropped From Medicaid. This past Tuesday, U.S. District Judge Marcia Morales Howard found that Florida Medicaid termination notices “border on the incomprehensible” and violated beneficiaries' constitutional rights. The class action lawsuit covered residents who lost their benefits after March 2023 or who could still lose benefits due to determinations that they do not meet income-eligibility requirements. Judge Howard described the people receiving the Medicaid coverage as “among the state’s most vulnerable citizens” and that the notices were “vague, confusing and often incorrect and misleading.” Florida sent the notices to terminate people’s Family-Related Medicaid benefits during its redetermination process from March 2023 to March 2024. This period came after the end of the federal COVID-19 public health emergency, which had provided the Medicaid program with additional funding if it did not drop people. 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. 

Georgia

• Study Committee on Cancer Care Releases Report. Recently, the House Study Committee on Cancer Care Access released a final report detailing how to increase access to care for cancer patients across rural parts of Georgia. Among the recommendations include expanding the state’s Physician Loan Repayment Program to include specialists practicing in rural areas and increasing the amount of loan forgiveness available. Under current law and appropriations, the state offers $150,000 over four years to qualifying physicians in rural counties. The Committee also recommends increasing the percentage of tobacco settlement funds appropriated for cancer prevention and screening, in addition to increased funding for mobile screening units to accommodate for the shortage of rural providers. 

Maryland

• Governor Moore Announces Legislation to Establish State Vaccine Authority. Last Thursday, Governor Wes Moore announced the VAX Act as part of his 2026 legislative agenda. The bill will create new authority within the Maryland Department of Health to issue recommendations for immunizations, screening, and preventative services. Additionally, the bill will decouple the State’s vaccine authority from the federal government, allowing the State to take into account independent recommendations from other medical and public health organizations in addition to other state and federal bodies. Moreover, the legislation will mandate insurance coverage and pharmacist administration for the recommended vaccines. Governor Moore’s announcement comes in response to the CDC’s updated childhood vaccine schedule posted earlier this week. Maryland is set to resume its legislative session on Wednesday, January 14th.

Mississippi

• House Public Health and Services Committee Passes CON Bill. Last Wednesday, the Mississippi House Public Health and Services Committee approved the certificate of need (CON) bill, HB 3. This bill contains the same language from the previous session’s version, besides a single provision that led Governor Tate Reeves (R) to veto it (granting of a CON application to build a new behavioral health hospital in Jackson). The bill’s main provisions increase capital expenditure thresholds required for a CON requirement and narrow CON exemptions for the University of Mississippi Medical Center, requiring the university to get state approval before opening educational facilities outside a designated area within Jackson. By voting on the bill early, the committee will have more time to propose additional changes to the bill during the session. Legislators aim to get the bill to Governor Reeves as quickly as possible, with the bill currently in the hands of the State Affairs Committee before an expected House vote.

New Jersey

• Governor Signs Legislation Banning Copay Accumulators. This past week, Governor Phil Murphy (D) signed A. 5217 / S. 3818 into law. The measure prohibits health insurers and pharmacy benefit managers (PBMs) from using copay accumulators. The intent is to prevent PBMs and insurers from limiting the ability of copay assistance coupons from counting towards a patient’s out-of-pocket costs. The bill arises as the state has done significant work in recent years to establish caps on costs for insulin, asthma inhalers, epinephrine, hearing aids, and cochlear implants. Concerns arose that the use of copay accumulators may have been mitigating the intended effect of such price caps. 

North Carolina

• Ophthalmologist Files Appeal After Trial Court Upheld State CON Laws. This past Tuesday, 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 court had dismissed a complaint that the law violated a practitioner’s ability to render care in what was otherwise a “monopoly.” 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. At issue is the 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 stating that only the hospital may perform such a procedure in the defined geographic area. It is expected the appellate court will issue its opinion on the case within the next 6 months to a year.

Utah

• AI Pilot Program Begins Prescribing Medication Renewals. Last Tuesday, Utah became the first state to implement an AI program to autonomize prescription medication renewals for patients with chronic conditions. This program comprises a public-private partnership with the state and gives the AI system the ability to legally prescribe routine refills for these patients. The pilot itself will be evaluated in terms of medication refill timeliness and adherence, patient access and satisfaction, cost impacts, safety outcomes, and workflow efficiency. 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.

Wyoming

• Wyoming Supreme Court Strikes Down Abortion Ban. This past Tuesday, the Wyoming Supreme Court ruled that two laws banning abortions, including a 2023 law that made Wyoming the only state to explicitly ban abortion pills, were unconstitutional. In a 4-1 decision, the Court found the State could not prove that the laws were written as narrowly as possible to protect the state’s interest in protecting prenatal life without unjustifiably restricting a woman’s constitutional right to decide whether to continue or terminate a pregnancy. This follows the trial court's previous decision, which also found both laws unconstitutional. Immediately following the ruling, Governor Mark Gordon (R) expressed his discontent with the Court’s decision and urged the legislature to pass a constitutional amendment this session. Moreover, he asked the attorney general’s office to file a petition for rehearing, which the office confirmed it will submit within the 15-day deadline.

For additional information and updates on state activity this past week relative to state COVID-19 vaccine guidance, StateVitals Subscribers can check out our guidance tracker.