Weekly StateVitals Update: Volume 82 (August 24, 2026)
National
CMS Issues Final Rule Banning Federal Medicaid and CHIP Funding for Gender-Affirming Care. Recently, the Centers for Medicare & Medicaid Services (CMS) released a final rule, effective October 13, 2026, which prohibits the use of federal Medicaid funds for “sex-rejecting procedures” (SRP) for beneficiaries under 18 years old. Additionally, the rule bans the use of federal funding to cover SRP for youth under the age of 19 who receive coverage under the Children’s Health Insurance Program (CHIP). The federal Medicaid and CHIP funding will be available for minors receiving SRP for six months after October 13; children who have not started treatment will lose access to federal funding by the effective date unless states allocate separate non-federal funds to provide coverage. Mental health services for minors under Medicaid and CHIP are still eligible for federal funds.
Arkansas
Secretary of Human Services is Confident CMS will grant a Two-Year Extension of ARHOME. This past Monday, the Arkansas Legislative Council’s Hospital, Medicaid, and Developmental Disabilities Study Subcommittee met with Arkansas Secretary of Human Services Janet Mann. During the meeting, Secretary Mann told legislators she was confident that the Centers for Medicare & Medicaid Services (CMS) would grant the state's recent request for a two-year extension of ARHOME, the state’s Section 1115 waiver program that covers its Medicaid expansion program. The program is set to expire on December 31, 2026, after CMS rejected a five-year renewal. Since the denial, state officials have been working to retain coverage for expansion enrollees as they prepare to transition members to either a managed care or fee-for-service model. Secretary Mann said she expects the more than 215,000 people covered by ARHOME to retain some form of health coverage. She also said that if CMS denies the two-year extension request, all ARHOME recipients could move to fee-for-service coverage on January 1, 2027. The legislature is expected to discuss next steps for transitioning members during the upcoming session in January. Secretary Mann’s overview of the state of the ARHOME waiver request provided during the meeting is available here.
Colorado
Department of Health Releases RFI on Medicaid Medical Frailty Exemptions. Recently, the Department of Health Care Policy and Financing (HCPF) released a request for information (RFI) to research organizations that could provide medical frailty determination services to determine Medicaid work requirement exemptions. In particular, the RFI asks for recommendations on best practices, operational models, approaches to staffing, reporting capabilities, technology solutions, as well as other considerations. Last Monday, HCPF posted an additional document to the solicitation, covering common questions from stakeholders regarding the department’s request. HCPF is currently reviewing responses to the RFI.
Delaware
Hospital Cost Review Board Releases Draft Guidance for 2027 Annual Reporting Requirements. Last Tuesday, the Diamond State Hospital Cost Review Board released draft guidance on updated reporting requirements that go into effect in 2027. The board reviews the information to determine whether the state has satisfied the state’s health-care spending policy directives. In particular, the board compares hospitals’ spending relative to the state benchmark, which was established at a benchmark of 4.2% per capita growth for 2025 and 4.9% for 2026. The initial review cycle will consider multiple measures, including patient revenue, expenses, and costs; hospitals whose fiscal year ended on December 31, 2025, will be evaluated against the 4.2% benchmark, while those with fiscal years ending on June 30, 2026, will be assessed against a 4.55% benchmark. Notably, the Board has not released guidance or regulations on the Benchmark Compliance Plan process, meaning the plans will be excluded from the initial review cycle. The guidance serves as a request for information for the 2027 filings; the Board is accepting comments through September 1, 2026.
Idaho
Attorney General Labrador Appeals Ruling Against Abortion Ban. Last Thursday, U.S. District Court Judge B. Lynn Winmill ruled that Idaho’s “Defense of Life Act” and “Fetal Heartbeat Act,” which create a near-total abortion ban, violate the 14th Amendment’s Due Process Clause and Equal Protection Clause. Judge Lynn’s decision prompted Attorney General Raúl Labrador (R) to immediately file a notice of appeal to the Ninth Circuit Court. Dr. Stacy Seyb filed the lawsuit against the state’s laws, arguing that the bans were unconstitutional because they do not allow abortions in cases to protect a mother’s health, preserve her future fertility, or address a risk of self-harm due to her mental health. Idaho’s current laws allow abortion to prevent death, treat ectopic or molar pregnancies, or in reported cases of rape and incest in the first trimester, and authorize criminal penalties for providers who provide abortions outside of those exceptions and civil penalties for abortions occurring after six weeks or once fetal heartbeat activity is detected. Arkansas, Mississippi, Oklahoma, and South Dakota have similar bans in place that only grant exceptions for the life and not the health of the mother.
The state also has a ballot measure for this November, which, if approved, would create a statutory right to reproductive freedom and privacy, including the right to an abortion before fetal viability, rolling back Idaho's near-total abortion ban. Joining Idaho, both Virginia and Nevada voters will consider constitutional amendments to guarantee the right to abortion, while Missouri will vote on whether to reinstate a previously overturned ban on abortions and youth gender-affirming care. Challenges to Idaho’s ban have risen to the U.S. Supreme Court before. In 2024, the Biden Administration sued the state, requiring it to acknowledge the Emergency Medical Treatment and Active Labor Act (EMTALA) with regard to terminating emergency room patients’ pregnancies to prevent infection and other adverse health conditions. However, the court sent the case back to the Ninth Circuit in April 2024 without ruling, noting it was too early for the justices to consider a ruling, and the Trump Administration later dropped it. Critically, Judge Winmill’s ruling marks the first since the U.S. Supreme Court’s Decision in Dobbs v. Jackson in 2022 that finds the U.S. Constitution includes a right to abortion access in certain situations. As a result, the ruling could potentially impact exceptions for abortion bans nationwide and prompt the Supreme Court to revisit the issue.
Department of Health and Welfare Releases RFI on FWA Prevention. Recently, the Idaho Department of Health and Welfare (DHW) issued a request for information (RFI) on ways to strengthen fraud, waste, and abuse (FWA) prevention in public benefit programs. Specifically, DHW is looking to apply advanced data analytics, data mining, artificial intelligence (AI), pattern and anomaly detection, and other technologies to identify cases for review. DHW staff currently utilize complaints, tips, and their own fraud referrals; adopting AI and FWA prevention tools would help them prioritize the most pressing cases. Currently, DHW is exploring pairing human expertise and technology to develop cases and route high-priority ones to investigators. More broadly, Idaho’s efforts reflect a growing push to adopt AI for Medicaid FWA prevention, including notable pilot programs in Indiana and Ohio. Comments on the RFI are due to the state by August 31, 2026.
Maryland
Department of Health Releases RFI on Expanding Medicaid Food is Medicine Initiative. Last Wednesday, the Maryland Department of Health (DOH) released a request for information (RFI) concerning proposed Medicaid food and nutrition services in 2028, through an In Lieu of Services and Settings (ILOS) authority. The 2028 proposal would expand on the state’s current Food Is Medicine initiative, which includes Medically Tailored Meals and operates in six counties. Additionally, DOH is expected to launch the Produce Prescription program later this summer. The Medicaid ILOS approach will be informed by these programs as well as the implementation of the state’s Rural Health Transformation Program. RFI Responses are due to the state by October 14, 2026.
Nebraska
SUD Section 1115 Demonstration Receives CMS Approval. Recently, the Centers for Medicare & Medicaid Services (CMS) announced it approved an amendment for Nebraska’s Substance Use Disorder (SUD) Program Section 1115 Demonstration. With the amendment, the state can now establish a demonstration initiative for serious mental illness and serious emotional disturbance. Under the initiative, the state will be able to provide services to Medicaid-covered short-term residents in facilities that meet the definition of an Institution for Mental Diseases. The demonstration is effective through June 30, 2030.
New Jersey
Governor Sherrill Enacts Shield Law for Reproductive and Transgender Healthcare. This past Thursday, Governor Mikie Sherrill (D) signed S 2260 into law, which creates a new crime of interference with reproductive health care services, including physical obstruction and intimidation. In particular, the shield law includes treatment regarding gender identity and expression in its definition of “reproductive health care services.” To provide protections from other states, the bill includes the following provisions:
Authorizes civil action against a person who unlawfully interferes with another person's reproductive health care services or causes a reasonable person to suffer damage on the basis that they provide, volunteer, assist with, or receive reproductive health care services.
Establishes that a law that authorizes a person or government entity to bring a prosecution, civil action, or any other legal action to deter, prevent, sanction, or punish any person engaging, aiding, or assisting in providing or prescribing any reproductive health care activity is against the public policy of the state.
Prohibits such laws from being applied to any matter heard in a state court or administrative tribunal.
Establishes protections for persons who participate in reproductive health care activity, including prohibiting arrest and the issuance of subpoenas, search warrants, and orders for wiretapping in connection with proceedings in another state.
Establishes that such protections apply to reproductive health care activity in accordance with state law, including telemedicine and telehealth services.
The law, which passed the legislature in party-line votes, is effective immediately.
South Dakota
Governor Rhoden Awards $90 Million for Rural Health Transformation Technology and Data Grants. Last Wednesday, Governor Larry Rhoden (R) announced the state awarded $90 million for rural health technology and data improvements as part of its Rural Health Transformation Program (RHTP). The awards cover 82 grants to accelerate digital health modernization, strengthen cybersecurity, and enhance interoperability across rural and underserved communities. In particular, the major funded initiatives will support rural communities and rural health care organizations and providers by:
Creating digital referral and care coordination platforms
Providing vulnerability assessments, technical support, and workforce training
Supporting remote patient monitoring, virtual reality clinical training, and aging‑in‑place technologies
Accelerating technology adoption, simulation-based workforce readiness, and testing emerging clinical solutions through advanced digital health innovation labs
The state will continue to provide Rural Health Transformation initiative guidance, collaboration opportunities, and technical assistance as additional digital modernization funding cycles become available.
New Mexico
Rural Health Transformation Program Stakeholder Advisory Committee Opens Applications. This past Wednesday, the New Mexico Health Care Authority (HCA) opened applications for the Rural Health Transformation (RHT) Program Stakeholder Advisory Committee. The committee will guide the state’s work under the Rural Health Transformation Program (RHTP) and is part of HCA’s efforts to engage communities within its plan. To be eligible, applicants must live in New Mexico; vendors and organizations receiving RHT funding or contracts are not eligible to serve on the committee. Applications are due to HCA by September 10, 2026.