Weekly StateVitals Update: Volume 59 (March 9, 2026)

National

• CMS Extends Deadline for GENEROUS Model Application. On Monday, the Centers for Medicare and Medicaid Services (CMS) announced it would be extending the application deadline for prescription drug manufacturers to participate in the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model from March 31, 2026, to April 30, 2026. State Medicaid programs enrolled in the model will be able to purchase drugs at price points aligned with those of purchasers from other countries. Looking ahead, CMS is holding meetings with interested manufacturers, who can contact the program starting March 2nd, with meetings scheduled to begin on April 1, 2026. Additionally, CMS is scheduled to host a drug manufacturer town hall discussing the model’s details later this spring. Despite the application deadline extension, the final deadline for manufacturer participation is still June 30, 2026.

Colorado

• House Passes Behavioral Health Workforce Bill. At the end of last week, the House of Representatives passed HB 26-1002 by a 51 to 13 margin, which is intended to strengthen Colorado’s behavioral healthcare workforce and save patients money spent out of pocket on care. Specifically, the measure includes the following provisions: 

  • Beginning January 1, 2027, insurers must confirm a mental health or substance use disorder provider’s intent to stay in-network and accept new patients if the insurer has not received a claim submitted by the provider in the past 12 months. 

  • Establishes a prelicensure process for providers and psychiatric nurses to be reimbursed as in-network providers by private health insurers if they are working under the supervision of a participating mental health or substance use provider. 

  • Requires that to be licensed as a clinical social worker, such licensees must complete 3,000 post-master’s hours of practice over 2 to 5 years. 

  • Requires that insurers must credential mental health and substance use disorder providers and make a determination as to whether they can join the insurer’s network within 60 calendar days. 

  While not a verbatim match of the bill language, elements of this bill have been enacted in recent years in Oklahoma, New York, New Jersey and Illinois. The bill now heads to the Senate for consideration.

• Committee Strikes Down Bill to Enhance Oversight of Health Care Transactions. This past week, two democrats on the Senate Committee on Health & Human Services opted to join all Republicans in voting not to recommend adoption of SB 26-041. Notably, the bill would have established pre-merger notification requirements for certain health care transactions that are subject to federal antitrust review. Additionally, the measure would have expanded the authority of the Attorney General to review, enforce and take action against covered transactions that may harm competition in health care markets. The committee opted to also take a vote (6 to 3) to indefinitely postpone consideration of the bill for the remainder of the session. If the intent of the measure is to move forward, it will need a new vehicle to do so. 

Florida

• Department of Health Cuts AIDS Drug Assistance Program. This past week, the Florida Department of Health issued cuts to the AIDS Drug Assistance Program (ADAP) through an emergency rule. The Department lowered ADAP eligibility from 400% of the federal poverty level (or $62,600/year for a one-person household) to 130% (or $20,345/year). Moreover, the rule restricts ADAP insurance coverage for Biktarvy, an antiretroviral medication used to treat individuals with HIV. These coverage changes are estimated to restrict access for 16,000 to 30,000 enrollees; however, the new emergency rule is only in effect for 90 days. To implement these changes beyond the 90-day timeframe, state officials would still need to propose a rule in alignment with Florida’s administrative rulemaking process. 

Iowa

• Legislature Enrolls Prior Authorization Reform Measure. The Iowa Legislature passed HF 2635 over the past week and sent it to Governor Kim Reynolds (R) for her signature. A sweeping overhaul to the prior authorization process utilized by insurers, the measure requires insurers to adhere to the following: 

  • Allows utilization review organizations to use AI-based algorithms for the initial review of a prior authorization request, but prohibits using AI as the sole basis for denying, delaying, or downgrading a prior authorization request that is based on medical necessity. 

  • Establishes new requirements for health carriers regarding claim payments and audits, including setting payment deadlines, limiting retroactive claim denials, and requiring carriers to reimburse providers for audit-related administrative costs.

  • Prohibits health carriers from penalizing providers for making out-of-network referrals and from enforcing provider contract terms that were not subject to negotiation.

  • Requires that a health carrier's denial of a prior authorization request be made by a physician or other health care professional in the same or a similar specialty as the requesting provider.

  • Exempts certain services from prior authorization requirements, including specified cancer-related screenings and treatment for life-threatening conditions that develop during an inpatient stay.

  The Governor is expected to sign the measure into law. 

Minnesota

• Attorney General sues CMS and HHS for withholding $243 million in Medicaid payments. Last Monday,  Attorney General Keith Ellison and the Minnesota Department of Health filed a lawsuit against CMS and the Department of Health and Human Services (HHS) to block the withholding of $243 million in Medicaid spending. The lawsuit calls for a temporary restraining order to immediately block the funding deferral. This comes after CMS’s announcement last week that it would withhold $259.5 million in funds to prevent payment of questionable claims during the ongoing Medicaid fraud, waste, and abuse investigation. The $243 million challenged in the lawsuit relates to what CMS identified as “unsupported or potentially fraudulent Medicaid claims,” which represents approximately 7% of Minnesota’s quarterly federal Medicaid funding. As of January 6th, CMS has threatened to defer over $1 billion in federal Medicaid matching funds from Minnesota over the next calendar year if the state fails to carry out its existing corrective action plan as intended by CMS.

• Hospitals Report over $1.3 Billion in 340B Revenues. The Minnesota Department of Health recently released its 340B Covered Entity Report, focusing on net 340B revenue generated by providers participating in the federal program. Within the 2024 calendar year, covered entities reported $3.04 billion in reimbursements, $1.53 billion in acquisition costs, and $165 million in operational expenses, resulting in a net revenue of $1.34 billion. Notably, this figure represents over double the $630 million generated in 2023. Critically, the 2024 report provides a more complete view of 340B revenue than the previous year, including both pharmacy-dispensed and office-administered drugs. Yet, due to difficulties in reporting on office-administered drugs, the department estimated that the $1.34 billion still underrepresents the true net revenue generated by these entities. 

New York

• Attorney General Orders Hospital to Resume Gender-Affirming Care to Transgender Youth. Last week, Attorney General Letitia James instructed one of New York City’s largest hospital systems to resume providing gender-affirming care, after it had stopped treatments amid funding threats from the federal government. Last month, NYU Langone announced it would phase out gender affirming treatments to patients under the age of 19 due to the “current regulatory environment” and the departure of a medical director. AG James stated the hospital’s decision violated state anti-discrimination laws by “jeopardizing access to medically necessary healthcare for some of the most vulnerable New Yorkers.” Moreover, AG James promised there would be further action if the hospital did not immediately resume providing hormone therapies, puberty blockers, and other care to transgender youth. According to the Attorney General’s health care bureau chief, Darsana Srinivasan, the series of proposals released by HHS to cut federal Medicare and Medicaid funding to hospitals providing such care to minors did not officially change federal law, and hence did not impact “medical institutions’ existing duties and obligations under New York law.” Several other hospitals, including those in Colorado, Virginia, and DC, have paused providing gender-affirming care for transgender youths following an executive order from last year that stated research and education grants would be withheld. NYU Langone has until March 11 to demonstrate compliance.

Tennessee

• Measures Prohibiting Co-Ownership of PBMs and Pharmacies Advance in Committees. This past week, HB 1959 and SB 2040 both took next steps to advance to a final committee vote, potentially in the week or two ahead. Both measures would prohibit a PBM, or its affiliate, from owning, controlling or holding a beneficial interest in a pharmacy licensed to operate or dispense in Tennessee. The measures also require pharmacy license applicants and holders to annually file a disclosure with the Board of Pharmacy identifying any PBM ownership, control or influence. In both bills, there is an exemption from this prohibition for entities that dispense certain rare, orphan or limited-distribution drugs. HB 1959 was passed out of subcommittee this past week and is on the calendar to  be considered by the full House Insurance Committee on March 10. SB 2040 was recommended for passage by the Senate Health and Welfare Committee and has since been referred to the Senate Finance, Ways and Means Committee.

Texas

• Attorney General Declares Gender-Affirming Care Ban Applies to Mental Health Providers. Last Monday, Attorney General Ken Paxton issued a legal opinion that the prohibitions in SB 14, which ban health care providers from facilitating “transition” procedures for minors, also apply to mental health care providers licensed by the Texas Behavioral Health Executive Council. The bill itself went into effect in 2023 and bans gender-affirming care, particularly the use of puberty blockers, hormone therapy, and surgeries. Attorney General Paxton clarified that SB 14 also applied to “indoctrination by activists providing mental ‘health care’ designed to confuse children about their gender.” His opinion forbids licensees who provide banned care from receiving public funding for such efforts and specifies that providers also risk losing their licenses if they are found violating the law. Over the past couple of years, several legal challenges have been posed against state bans on gender-affirming care for minors. In 2024, SB 14 was challenged in court, with the Texas Supreme Court upholding its constitutionality. Moreover, last year, the U.S. Supreme Court upheld state bans after hearing arguments concerning Tennessee’s ban.

South Dakota

• Legislature Enrolls Legislation to Clarify Abortion Ban. Last week, the Senate passed HB 1257 to clarify that treatment for an ectopic pregnancy or miscarriage, a procedure that intentionally results in the death of an unborn child, or removal of a deceased unborn child from the uterus, is not considered an abortion under the state’s total abortion ban. The bill now heads to Republican Governor Larry Rhoden’s desk for his signature. One of the bill’s sponsors, Senator Tamara Grove (R), described the bill as addressing misinformation around care and providing clarity. The bill follows a trend of states specifying exceptions to strict abortion bans, including legislation enacted in 2025 in Arkansas, Kentucky, Tennessee, and Texas.  

Virginia

• Lawsuit Filed Challenging Reproductive Rights Constitutional Amendment. Recently, a county supervisor filed a lawsuit arguing that the abortion ballot initiative recently passed by the General Assembly is invalid because the House of Delegates did not distribute it to circuit court clerks to be posted for public inspection prior to the 2025 House of Delegates election. In Virginia, measures to amend the state constitution must pass the legislature in two separate sessions with a House of Delegates election in between, which lawmakers successfully did with resolutions passed this and last year.  The lawsuit cites statutes on the duties of the clerk of the House of Delegates that require the clerk to publish proposed constitutional amendments to the clerk of the circuit court of each county and city for posting three months before the next House of Delegates election, and further claims that the proposal was not distributed to at least three circuit courts after the 2025 session and therefore not posted.  

Washington

• 340B Reform Bill Passes out of House Committee. This past week, SB 5981 passed out of the Committee on Appropriations with a party-line split vote in the House. The measure would prohibit drug manufacturers from limiting the acquisition of 340B drugs by a covered entity or contract pharmacy while also establishing transparency and reporting requirements on 340B covered entities. Republican lawmakers raised concerns during the committee hearing that enactment of such a measure is likely to tie the state up in litigation for the near future. At the same time, proponents of the majority party argued that such a measure was important to ensure stability for safety net providers. The bill has now been referred to Rules to determine whether it should be moved to the floor for a full vote.

Wyoming

• Legislature Passes Fetal Heartbeat Abortion Ban. Despite a state supreme court ruling earlier this year that struck down a near-total abortion ban, the legislature has passed another attempt at banning abortion in the state. Last Thursday, the legislature enrolled HB 126 to prohibit abortions if a fetal heartbeat is detected, typically around 6 weeks of gestation, with an exception for a medical emergency necessary to prevent death or impairment of the pregnant person. In response to the state supreme court ruling, the bill specifies the intent of the bill to justify restrictions on abortion and provides that while the state constitution recognizes the right to make health care decisions, the state has a compelling interest to protect unborn life, promote childbirth, and safeguard the general welfare. The bill now heads to Governor Mark Gordon (R) for his signature.

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.