Weekly StateVitals Update: Volume 52 (January 20, 2026)

National

• Twelve States Sue HHS Over Policy Prohibiting Gender Affirming Care. This past week, a group of twelve states sued the U.S. Department of Health and Human Services (HHS) over its recently issued proposed rulemaking that would prohibit hospitals and other institutions from providing gender affirming care for minors as a condition of participation in Medicare and Medicaid. In the court filing, the attorneys general contend that HHS lacks authority to impose these conditions, as it would instead require statutory amendment to Title IX. Additionally, the proposed rulemaking violates the U.S. Constitution by overriding the power of the purse, which resides with Congress, in addition to existing Title XI protection from discrimination based on gender identity and procedural claims. The suit asks for an injunction to bar HHS from implementing any proposed rulemaking. Included in the coalition of states are California, Colorado, Delaware, Illinois, Michigan, Minnesota, Nevada, New York, Oregon, Rhode Island, Vermont, and Washington.

Arkansas

• Legislators Meet After CMS Rejection of Medicaid Dental Expansion Plan. Last Thursday, state officials from the Department of Human Services (DHS) met with members of the Administrative Rules Subcommittee to discuss options to increase Medicaid dental benefits, reimbursement rates, and diagnostic service coverage for patients with chronic pain. This comes in response to the Centers for Medicare and Medicaid Services’ (CMS) rejection in December of four bills that were passed last session to support Medicaid dental care. The rejected bills included:

  • SB 347, which increased reimbursement rates for children’s, oral surgeons’, and adults with special needs’ dental services and increased the annual reimbursement cap for adults with special needs.

  • SB 348, which increased the diagnostic laboratory services reimbursement cap for patients with chronic pain.

  • HB 1241, which required Medicaid to reimburse providers in a dental school for dental and anesthesia costs requiring high complexity oral health care for individuals 12 years or older.

  • HB 1840, which included sedation dentistry as a covered benefit.

  CMS instead gave Arkansas four different options for expanding Medicaid dental care. These included increasing the annual spending limit for all adults, creating a dental services waiver for individuals with special needs, tailoring all dental benefits around individuals with special needs, and splitting SB 347’s implementation to move forward with increasing service reimbursement rates for services provided for children or by oral surgeons and later implementing a raised annual cap for adults with special needs. DHS plans to discuss the presented options with CMS in the coming months, and subcommittee members indicated their support for pushing to implement SB 347.

Idaho

• Medicaid Coverage and Benefits at Risk in 2026. This past week, Governor Brad Little (R) highlighted elements of his proposed budget plan for 2026. As part of the proposed budget, the Governor is calling for $45 million in proposed Medicaid cuts to help balance the budget with reduced federal revenue and increased Medicaid expenditures under the existing system. The cuts will be made up of extending an already existing 4 percent cut to reimbursement rates that was made in 2025, and will provide the Legislature with a list of other options for cuts. Possible cuts that have been cited include adult dental services, home and community-based services, pharmacy benefits for adults who aren’t on Medicaid expansion, adult prosthetics and orthotics, adult in-home nursing services, adult chiropractic services, adult audiology services, adult vision services, hospice services, case management support, and services for physical, occupational, and speech therapy.

  House Speaker Mike Moyle (R) contends that $45 million may not be adequate and the Legislature may present a budget to the Governor with additional cuts. As of right now, a repeal of Medicaid coverage for the expansion population is not on the Governor’s list of recommended cuts to the Legislature. However, Speaker Moyle iterated this past week that a repeal of Medicaid expansion is up for consideration by the Legislature to present to the Governor. That comment comes after the Legislature’s DOGE committee this past interim cycle recommended repeal of the program. 

Kentucky

• Medicaid Oversight Board Issues Recommendations for 2026.  Recently, the Medicaid Oversight and Advisory Board finalized its recommendations to improve the efficiency and cut costs of the state’s Medicaid program. Highlighting the challenges created by the One Big Beautiful Bill Act (OBBBA), the Board remained concerned about the cost of care and is seeking additional information as to how providers and health plans are spending the dollars. As part of that, recommendations take a significant focus on increasing transparency in Medicaid spending and attempting to understand why clinical outcomes are remaining stagnant despite increased spending. Some of the key recommendations include: 

  • Tighten and modernize eligibility processes, including better data-matching and duplicate-enrollment checks, to reduce rework, error corrections, and conflicting eligibility determinations across programs. 

  • Create statutes required to codify federal law regarding Medicaid work/community engagement requirements.

  • Adopt a set of fiscal integrity and cost-control measures.

  • Require DMS to develop a detailed plan of action with solutions for the upcoming provider tax changes as a result of OBBBA. 

  • Require the development of a public, web-based transparency dashboard that centralizes Medicaid cost and utilization data and displays key health and performance indicators, as defined by the Medicaid Oversight and Advisory Board, for DMS and the MCOs.

  • Research and evaluate alternative Medicaid delivery models. 

  The Legislature is likely to consider some of the recommendations in the upcoming legislative session. 

Massachusetts

• Governor Healey Removes Prior Authorizations for Essential Care. Last Wednesday, Governor Maura Healey (D) announced that the Division of Insurance would be updating regulations to eliminate prior authorizations for routine and essential services. The regulatory changes eliminate prior authorization requirements for many services, including emergency and urgent care services, chronic care, primary care, occupational and physical therapy, and several prescription drugs. Moreover, these changes will eliminate duplicative claims submissions and simplify approval processes. With the regulatory updates, Governor Healey also announced the state’s new  Health Care Affordability Working Group. The Working Group also aims to reduce health care costs and improve access, and will provide recommendations to the state. 

Missouri

• State Supreme Court Upholds Ban on Gender Transition Care. The Missouri Supreme Court this past week unanimously upheld a 2023 law that implements a prohibition on gender transition surgeries and other gender-affirming care for minors in the state. Plaintiffs had argued that the ban interferes with minors’ parents’ ability to decide appropriate medical care for their children and that it was discriminatory in nature based on transgender status and sex. The opinion issued by the Court found that the law does not inherently discriminate based on status or sex, instead only establishes limitations based on age and medical use. Additionally, the court responded to the claim of infringing on a parent’s ability to make medical decisions for their children by iterating that there is nothing in the constitution that limits the ability of the Legislature to deem a medical procedure inappropriate for a population or that a parent has a fundamental right to ensure their child has access to what the Legislature deems an inappropriate medical procedure. This decision follows a recently upheld Tennessee law by the Supreme Court of the United States on banning gender affirming care for minors in the state. 

New York

• Governor Hochul Unveils New Healthcare Initiatives in State of the State. This past week, 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. Among others noted, key initiatives include:

  • Suicide Prevention and Well-Being: The Office of Mental Health will lead a three-year effort to develop a suicide prevention action plan for the state that raises awareness for key risk factors, including housing instability, financial insecurity, and a lack of culturally responsive care. 

  • Integrating Mental Health and SUD Care: The Governor’s office will work to establish a framework to allow clinics to provide mental health and substance use services under a single, jointly-issued license and create a new “Co-Occurring iCapable” designation for providers who meet the highest standards for treating complex cases. 

  • Behavioral Health Supportive Housing: $71 million dollars will be invested to increase rates for supportive housing programs. 

  • Center of Excellence for Medical Cannabis and Health Equity: Launch a first in the nation 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 it is expected that they will be taken up in the new legislative session. Beyond those initiatives listed, the Governor’s office also highlighted a number of other healthcare initiatives that they intend to seek with the new legislative session, including but not limited to:

  • The Department of Health will be asked to develop a consortium of healthcare and AI experts to share data and best practices and enhance cross-sector collaboration on building, testing and deploying AI tools for healthcare purposes. 

  • Expanding upon previous work to provide oversight of healthcare transactions, the Governor’s office is intending to file legislation to require ongoing reporting on the actual impact of closed material transactions, in addition to external review for high cost and high impact transactions. 

  • Although unclear what the specifics will exactly be, the Governor’s office is directing the Department of Health to make the certificate of need process in New York to be more efficient and targeted to improve experience of providers and expedite project development.

  • The Governor’s office will introduce legislation to minimize the role of workforce solutions companies in the state and ensure that permanent New York residents are employed in the workforce. Additionally, the Department of Health will develop guidance and share best practices on how providers should work with workforce solutions companies when they need to secure temporary staff. 

  • Reforming prior authorization processes to enhance transparency of formularies covered by insurers, extending prior authorization approvals for chronic conditions, continuance of prior authorization approval when an insured changes plans in limited circumstances, and expanding how insurers must report their claims processes. 

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.