Weekly StateVitals Update: Volume 9 (March 3, 2025)
Arizona
House adopts measure limiting AI’s use in claims and prior authorization. The House of Representatives unanimously approved HB 2175. Following in the same mold as legislation from California that passed in 2024, the legislation would prohibit insurers from using artificial intelligence (AI) to either deny a claim or a prior authorization for medical necessity, experimental status or any other reason that involves the use of medical judgment. The bill specifies that a provider must review each claim or prior authorization involving medical necessity. Other states are currently considering similar measures, including New York, Tennessee and Massachusetts, where the issue is receiving bipartisan support. Arizona HB 2175 will now move to the Senate for consideration where it’s expected to have a receptive audience.
House committee signs off on Medicaid expansion reform. The House Committee on Appropriations voted 10-8 to advance HB 2926 in recent weeks to reform Medicaid expansion. Notably, it would create a “poison pill” that if federal funding for the expansion program were to dip below 90 percent, it would discontinue the eligibility of expansion enrollees. Additionally, it would require that the expansion program is terminated if the state fails to:
Implement a work requirement for able-bodied adults working at least 20 hours per work or engaging in a qualifying participating activity or is otherwise exempt from those requirements;
Maintain a medicaid improper payment rate of 5 percent or less;
Implement a life benefit limit of sixty months for the expansion program;
Implement biannual redeterminations for certain populations; and
Implement limitations to hospital presumptive eligibility determinations for children and pregnant women.
The bill will likely be on the calendar for consideration by the full House in the near future. Given the divided government in Arizona, it’s unlikely that the Governor’s office would sign this legislation into law and it would not be likely that the Legislature would have the numbers to override a veto if necessary. However, one consideration providing pause to that belief, the lifetime coverage limit for certain adults and work requirements proposals falls in line with what the Arizona Health Care Cost Containment System has proposed in its latest 1115 waiver application to the Centers for Medicare & Medicaid Services.
Connecticut
General Assembly passes a bill establishing an emergency CON process. Last week, the General Assembly sent HB 7067 to the Governor’s desk for signature. The measure is an omnibus that includes everything from motor vehicle tax to the state’s special education excess cost grant but it also includes a provision establishing an emergency pathway for certificate of need applications to be approved for transfers of ownership of hospitals in limited circumstances. The pathway is specific for hospitals that are subject to ownership transfer have filed for bankruptcy protection and the potential purchase has been or is required to be approved by a bankruptcy court. If both elements arise, the purchaser may apply for an emergency certificate of need. The Office of Health Strategy would then be required to conduct an analysis on costs, quality and access, with enhanced scrutiny provided for for-profit purchasers, before being required to render a decision within 60 days. The measure was the result of a for-profit hospital system that owned three hospitals in the state, had filed for bankruptcy and any resolution for those hospitals has since been held up with an identified purchaser looking to back away from an acquisition of the hospitals. This is intended to make the process of acquisition more enticing for potential purchasers.
General Assembly signs off on mifepristone stockpile. Despite Governor Ned Lamont (D) iterating a month ago that the state would not stockpile mifepristone in the wake of the change of administrations in Washington, D.C., the General Assembly opted to include an $800,000 appropriation to do just that in an emergency legislative measure passed last week. The funds are expected to be directed to the Planned Parenthood of Southern New England and while funding will be at the discretion of the organization, at least part of it will be used towards stockpiling mifepristone. Connecticut’s actions follow those of New Jersey and other states seeking to protect access to the drug in advance of any changes to its access nationally.
Florida
Legislators to consider enhancing scopes of practice for clinicians. In advance of the legislative session beginning this March, House committees are actively reviewing and pushing forward legislation to broaden scopes of practice for clinicians to mitigate workforce shortages. Notably, HB 21, which establishes a new licensure and title protection for dental therapists was passed out of subcommittee of the House Health and Human Services committee by a 14 to 1 vote. The measure would require dental therapists to work under the direct supervision of a licensed dentist in most settings, except they may be authorized to work in a general supervision capacity if services are performed in a mobile dental van setting. The Florida Dental Association expressed concern at the measure noting that it would authorize dental therapists to perform sometimes irreversible procedures, such as extractions. Other measures in Florida pertaining to scope to be considered this year involve optometry (HB 449) and the scope for certified registered nurse anesthetists, authorizing them to practice independently (SB 718 and HB 649).
Idaho
New Medicaid reform bill introduced. Following House passage of HB 138 by Rep. Jordan Redman (R-Coeur d’Alene) which stands to repeal Medicaid expansion unless eleven reforms are met, Rep. Redman has introduced a new version of the measure. HB 328 was introduced and assigned to the House Health and Welfare Committee this past week and is intended to be part of the negotiation process that Rep. Redman has engaged in with Senate and House leadership. The new measure would eliminate a number of the eleven reforms found in HB 138 and instead would require the following to control Medicaid costs, among other provisions:
Require cost-sharing from enrollees as a condition of participation at levels developed by other states and up to the maximum charged by other states.
Transition of the Medicaid program to managed care.
Establish work requirements for able-bodied adults enrolled in Medicaid expansion, requiring 20 hours or more of work per week, averaged monthly, inclusive of numerous exempted populations.
Establishes site-neutrality requirements, ensuring that reimbursement rates for hospital outpatient departments and hospital-acquired physician practices are reimbursed at the same rate as physician-owned medical practices for equivalent outpatient services.
Given the substantive nature of the changes, it’s unknown what the reception by industry stakeholders and members of the Legislature will be. However, if Rep. Redman is correct in that these reflect amendments requested during negotiation by legislative leadership, then it may be fast-tracked for consideration prior to session ending.
Illinois
Audit released on two state-sponsored healthcare programs intended for noncitizens. This past week, the Illinois Office of the Auditor General released an audit on the Health Benefits for Immigrant Seniors (HBIS) and Adults (HBIA) programs. The two programs intend to provide Medicaid-like health care coverage for qualifying noncitizens. Originally estimated to cost approximately $4 million, the actual cost for the HBIS program (noncitizens aged 65 and older) was found to be in excess of $67 million. For the first three years of its implementation, the HBIS program cost $412 million, 84 percent more than original estimates. The HBIA program (noncitizens between the ages of 44 to 64) was found to have cost the state more than $485 million over the first two years, more than 284 percent above the original estimate for the program. A contributor to the ballooning costs were approximately 7,000 enrollees ineligible for either program that were found to be enrolled and were high utilizers of care.
Moving forward, it remains likely both programs will receive substantive debate about appropriations for the next fiscal year. Gov. Pritzker has already proposed his budget which cuts funding entirely for the HBIA program while leaving funding in place for HBIS.
Montana
Senate gives final approval on extending Medicaid expansion. A coalition of Republicans and Democrats advanced HB 245 this past week by a 30 to 20 vote, enrolling a measure that would remove the sunset date on the Medicaid expansion program for the state. Governor Greg Gianforte (R) has iterated his support in the past for leaving Medicaid expansion in place, and most observers expect him to let the bill become law. The final version of the bill does include language that calls for screening of enrollees for any probable barriers to employment and a requirement that the state must assist the enrollee by providing workforce development services. This likely accommodates for a desire by Republican leadership, inclusive of Gov. Gianforte, who have all iterated that cost controls need to be appropriately implemented for the program. The bill is now in front of the Governor.
New Hampshire
Governor Ayotte proposes premiums for Medicaid enrollees. In rolling out her proposed budget, Governor Kelly Ayotte (R) included a requirement for certain Medicaid enrollees to begin paying premiums as a condition of eligibility for the program. Specifically, families with children covered by Medicaid would be required to pay up to 5 percent of their annual income in premiums if they make 225 percent of the federal poverty line (FPL) or more. Individual adults enrolled in Medicaid expansion would be responsible for the same premium if they are at or above 100 percent of the FPL. For Medicaid enrollees below those income thresholds, pharmacy copay increases would be applied going up to $4 for a copay. It’s estimated that these proposals would save the state $27.8 million over two years.
Also included in the Governor’s budget is a proposal to reduce by 25 percent the expenses for program services contracts, inclusive of the use of a pharmacy benefit manager(s) for the Medicaid program, quality review, care management actuarial services, managed care medical loss ratio audits and other services. It’s likely the Governor’s budget runs into barriers with legislative leadership, given differing opinions on the rate of revenue growth over the next two years. However, given these actions are cost-saving in nature, there’s a high likelihood that they remain for considerable consideration during the legislative process.
New Mexico
Governor Lujuan Grisham signs behavioral health reform bills. Governor Michelle Lujan Grisham announced this past week that she has signed two significant bills that were priorities of Senate leadership into law. Intended to initiate a reform of behavioral health care resource delivery and investment in the state. Finding widespread bipartisan support, the two bills would:
SB 1: Establishes a new Behavioral Health Trust Fund with an appropriation of $1 billion and a separate Behavioral Health Program Fund in the State Treasury.
SB 3: Establishes behavioral health regions and authorizes the development of new standards for behavioral health services that are tailored to the region in which they’re being provided.
A third bill that was originally intended to be part of the package, SB 2, awaits consideration in the House. It would appropriate $140 million to 13 state agencies for grants and assistance for housing service providers and other social service entities that may render treatment or services for behavioral health patients.
New York
State Senate passes bill to lower prescription drug prices. As part of a sweeping package, S. 438, the Prescription Drug Supply Chain Transparency Act, was passed by the Senate and sent to the House for consideration. The measure would require pharmacy services administrative organizations, switch companies and rebate aggregators to register with the Dept. of Financial Services to operate and conduct business in the state of New York. Additionally, the measure requires those newly registered entities to provide certain disclosures to the state, inclusive of ownership, ownership and organizational structure, and audited financials. Nearly all of the disclosed information will be made publicly available by the Department in a searchable database. The measure now heads to the House for consideration where it is expected to receive serious consideration.
Governor Hochul touts new network adequacy rules for behavioral health. Under new regulations finalized this past week, consumers in New York utilizing commercial health insurance plans will be entitled to receive an initial appointment for behavioral health care within 10 business days of the request. Governor Kathy Hochul (D) touted these new regulations, finalized by the Department of Financial Services as a means to create a “speedy and effective process” for consumers. Beyond the initial appointment wait time standards, the finalized rule will standardize other appointment wait times for accessing behavioral health services, including requiring that plans accommodate for an appointment following hospital or emergency room discharge within seven calendar days. Additionally, the regulations will:
Require plans to apply in-network cost-sharing rates for out-of-network care accessed by enrollees, if those plans were unable to find an in-network provider within the required wait time standards;
Requires plans to include additional information in their provider directories, inclusive of provider affiliations with facilities and any restrictions on a provider’s scope of practice (i.e., age of patients or mental health conditions that they may treat); and
Requires plans to submit annual certification regarding their access plan that includes requisite data illustrating access to accommodate these new regulations and evidence of continued monitoring of its behavioral health network.
These new regulations for commercial plans are effective July 1, 2025. The Department of Health has proposed identical regulations for HMOs, inclusive of Medicaid managed care plans, child health plus and the essential plan.
Utah
Legislature sends bill to Governor’s desk to ban fluoride in water. This past week, the Utah Legislature sent HB 81 to the Governor’s desk for signature. The measure would make Utah the first state to prohibit any individual or entity of state or local government from adding fluoride to water in or intended for public water systems. The measure also establishes the requirement that guidelines must be developed for pharmacists to prescribe fluoride, and authorizes pharmacists to prescribe as such. It’s not entirely clear how Governor Spencer Cox will respond to the bill on his desk. Similar to other hearing processes that have played themselves out elsewhere, the dental community was largely opposed to the measure, speaking of the increased risk for poor health outcomes, while water conservancy districts largely spoke in favor of the bill. A similar measure was voted down in Arkansas while other states are still considering how best to navigate similar bills in their own committee work.
Virginia
General Assembly sends PDAB bill to the Governor's desk. Following the same script from last year, the General Assembly passed HB 1724, sponsored by Del. Karrie Delaney (D-Fairfax) authorizing the establishment of a Prescription Drug Affordability Board (PDAB). The measure passed the Senate, with some Republican support by a vote of 26-14 to get over the hurdle. Under the legislation, the bill creates a stakeholder council to assist the PDAB in making decisions relative to drug cost affordability. The bill also provides upper payment limit setting authority for the PDAB but limits it to no more than 12 UPL amounts annually. Governor Glenn Youngkin (R) vetoed a nearly verbatim measure last year and observers expect he is likely to similarly veto this measure.
Prior Authorization reform sent to Governor’s desk. The Virginia General Assembly sent three bills (SB 1215, HB 2525, and HB 2099) impacting prior authorization to the Governor’s desk. Notably, HB 2099 and SB 1215 would establish time limits (72 hours for expedited requests and seven calendar days for non-expedited requests) that insurers must adhere to for responding to prior authorization requests, require insurers to provide rationales for any denials, and require insurers to make a list of prior authorizations required available on their website, among other elements. The bill also prohibits insurers from modifying or denying a prior authorization, among other actions, once it has been approved with a determined timeline of approval. Those bills await final action by the Governor.
West Virginia
House committee votes down a repeal of CON. Despite it being a core tenet to new Governor Patrick Morrisey’s (R) policy agenda this session, the House Health Committee voted 13-12 against recommending HB 2007 for adoption. A committee substitute for HB 2007 up for consideration before the committee would have repealed the certificate of need (CON) program for healthcare services, while establishing protections for antitrust concerns pertaining to cooperative agreements. Under the committee substitute, the Attorney General would have had supervision authority of entities acting under a defined agreement and required periodic reporting requirements for cooperative agreement entities. Despite this shift, the committee still voted the measure down twice, including a motion to reconsider. The Senate has yet to call its CON repeal companion bill, SB 453, up for consideration but may do so at any time and Gov. Morrisey has indicated that he intends to continue advocating for the CON repeal.
Wyoming
Governor Mark Gordon signs a measure that limits procedural abortion care. This past week, Governor Mark Gordon (R) signed HB 42 into law. The measure would require that any healthcare clinic providing procedural abortion services must meet the qualifications for and be licensed as an ambulatory surgical center. The inability to meet those requirements will likely result in the lone clinic providing such services in the state to cede providing such services, unless an effort through the state court system is successful. Notably, the bill mandates that any clinic rendering these services must ensure that its physicians have admitting privileges for their patients at a hospital no more than 10 miles away from the clinic site. The clinic at issue has already announced their intent to file suit, similar to a legal dispute that has been playing out in court for the past year when Gov. Gordon vetoed similar legislation passed by the Legislature.
