Weekly StateVitals Update: Volume 75 (June 29, 2026)

*Due to the July 4th Holiday, the StateVitals Weekly Update will not be published on Monday, July 6th. We will return with publication on Monday, July 13th. 

National

• Department of Justice Launches 2026 National Health Care Fraud Takedown. This past Tuesday, the U.S. Department of Justice (DOJ) announced it had charged 455 defendants for alleged participation in health care fraud and opioid abuse schemes. The charges come as part of a nationwide effort titled the “2026 National Health Care Fraud Takedown,” which includes coordination from all 50 state Medicaid Fraud Control units. In its announcement, the DOJ stipulated that the Centers for Medicare & Medicaid Services (CMS) suspended 1,079 providers and revoked billing privileges for 1,403 providers. Moreover, CMS will provide cloud computing space in the Integrated Data Repository environment to the DOJ’s National Fraud Enforcement Division to deploy advanced data analytics algorithms and artificial intelligence tools to enhance fraud detection.

Alabama

• Alabama Medicaid Pauses Implementation of Stricter ABA Autism Therapy Referral Requirements. Recently, the Alabama Medicaid Agency paused the implementation of new requirements placed on pediatricians when referring children to applied behavioral analysis (ABA). The original notice issued on June 15 specified that pediatricians would now need to receive an ABA specialty designation to make autism-related referrals. To receive the designation, pediatricians must submit a written request to Alabama Medicaid that includes their name, National Provider Identifier (NPI), Alabama Medicaid provider number, and the service location access. Despite the pause, providers still must submit billing in accordance with Medicaid’s rules, regulations, and billing manual. The requirements were set to go into effect on July 1, 2026, though the state did not specify how long the implementation would be paused.

Kansas

• Seven Rural Hospitals Form Clinically Integrated Network. Recently, seven rural Kansas Hospitals formed the Kansas High Value Network (KS-HVN), a clinically integrated network (CIN) serving 190,000 patients. While the hospitals will work together to expand access to care, share best practices, and control purchasing costs, the announcement specifies that the hospitals will remain independent. The CIN builds on smaller collaborations, including cooperative arrangements on service lines, and the KS-HVN intends to bring in other rural hospitals in the state.

Florida

• Attorney General Utmeier Launches Investigation into Alleged Anticompetitive Practices. Last Tuesday, Attorney General James Utmeier (R) announced he issued a Civil Investigation Demand to CVS Health Corporation and its subsidiary and pharmacy benefit manager, CVS Caremark. The investigation examines whether CVS/Caremark steers patients, reimburses affiliated pharmacies more than independent pharmacies for identical prescriptions, imposes audits that claw back payments, and enforces restrictive contracts on small businesses. As part of the investigation, CVS will be required to submit documents and sworn testimony, with compliance required by July 28, 2026.

Illinois

• Governor Pritzker Signs Abortion Medical Information Protection Law. Last Wednesday, Governor JB Pritzker (D) signed into law HB 5295, which prevents out-of-state entities from accessing patients’ abortion-related medical information, shielding them from potential retaliation. Additionally, the bill protects information from medical diagnosis codes that are associated with gender dysphoria. While signing the law, Governor Pritzker stated the state’s work in protecting abortion access is never finished and that it was another step in the state's mission to protect healthcare restricted in other states. Looking ahead, the law is set to go into effect July 1, 2027.

Indiana

• State Partners with CMS to Launch AI Medicaid FWA Prevention Pilot. This past Wednesday, the Indiana Family and Social Services Administration announced they would be partnering with the Centers for Medicare & Medicaid Services (CMS) and Oracle to implement AI and machine learning to enhance Medicaid fraud, waste, and abuse (FWA) prevention. In particular, the pilot’s objectives are to:

  • Identify suspect Medicaid billing  patterns before claims are paid.

  • Provide recommended claim edits, prepayment controls, and prior authorization triggers.

  • Create a shared analytics platform for collaborative fraud investigation.

  • Utilize AI-generated investigation case packages to speed up enforcement.

  • Determine whether the program can be expanded to different state medicaid programs.

  • Identify technical, legal, and privacy barriers to largescale AI FWA prevention.

  • Deliver a final proof of concept report for CMS to use for future program decisions.

  Notably, Indiana’s partnership comes within the same week as CMS’s announcement of its national health care fraud takedown. CMS plans to support AI and cloud computing technology with the Department of Justice’s National Fraud Enforcement Division, indicating a larger nationwide shift toward applying AI within health care fraud prevention efforts.

Iowa

• Iowa Becomes First State to Fully Allocate RHTP Funding. This past Monday, Governor Kim Reynolds (R) and U.S. Representative Mariannette Miller-Meeks (R) announced that Iowa was the first state to fully allocate its first-year funding given through the Rural Health Transformation Program (RHTP). The $209 million was allocated to cancer research and prevention, workforce development, hospital grants, and other health initiatives. Additionally, Governor Reynolds announced a $49.5 million investment into expanding physician residency training programs, following approval from the Centers for Medicare & Medicaid Services (CMS). The funding is projected to support training for an additional 128 physicians.

Maryland

• DOH Extends Pause on Medicaid Behavioral Health Provider Enrollments. Last Wednesday, the Maryland Department of Health (DOH) announced it was extending a temporary suspension on new Medicaid behavioral health provider enrollments as it continues to combat fraud, waste, and abuse (FWA). The moratorium applies to four behavioral health programs/services licensed for community health programs. Specifically, Psychiatric Rehabilitation Programs (PRP); Psychiatric Rehabilitation Programs (Health Home); Level 2.5 Partial Hospital Programs (PHP); and Level 2.1 Intensive Outpatient Treatment Programs (IOP). DOH noted these areas had experienced rapid growth since the state moved to an accreditation-based provider licensing model and that the temporary pause served as a potential program integrity safeguard. Moreover, the moratorium applies to 10 counties/cities in the state and will stay effective until January 1, 2027.

Montana

• Budget Shortfall Leads to Elimination of Medicaid Provider Pay Increase. Recently, Governor Greg Gianforte (R) and the Department of Public Health and Human Services (DPHHS) opted to withhold a 3% pay increase for Medicaid providers. The decision came as a solution to resolve a $7 million shortfall for the state’s Medicaid program. While DPHHS officials stated they were considering removing other optional Medicaid services, eliminating the 3% pay increase was enough.

Vermont

• Governor Scott Enacts Legislation to Expand Optometrist Scope of Practice. Recently, Governor Phil Scott (R) signed S.64 into law, authorizing optometrists to perform several laser procedures after completing required training. Beginning on July 1, 2028, Vermont optometrists will be able to perform laser capsulotomy, laser peripheral iridotomy (LPI), laser trabeculoplasty (SLT), corneal cross-linking, removal of certain eyelid and periocular lesions, repair of minor eyelid injuries, and periocular injections for medications and anesthesia. With Governor Scott’s signature, Vermont became the 17th state to expand optometrists' scope of practice to include ophthalmic lasers, following Tennessee’s expansion in April and one in Kansas in March.

West Virginia

• Governor Morrisey Releases RHTP Funding for Worksite Clinics. Last Wednesday, Governor Patrick Morrisey (R) released $2.4 million in Rural Health Transformation Program (RHTP) funding to expand access to worksite-based healthcare services as part of the Health to Prosperity (HTP) initiative. Grantees will be expected to build new or expand clinics on an accelerated timeline, with initial operations expected to begin within 90 days of receiving an award. The worksite clinics are intended to provide services and support for preventive screenings, health risk assessments, occupational health, work readiness, care coordination,  primary care referrals, behavioral health, recovery, and management of chronic conditions impacting workforce participation. Interested applicants may apply through the state’s procurement and grants management system, and additional information will be shared in an upcoming AFA release webinar.