In this update:
- Federal Funding
- Government Shutdown Continues
- Federal Agencies
- CMS Issues Guidance on Emergency Medicaid
- Trump Administration Makes New Vaccine Announcements
- OIG Publishes Report on Limited and Inaccurate Behavioral Health Networks in MA and Medicaid
- Other Updates
- Judge in Marketplace Rule Case Denies Injunction, but Separate Stay Still Stands
- Survey Shows Wide Support for Extending ACA Enhanced Tax Credits
- Six Former Surgeons General Issue Warning about Secretary Kennedy
- Coalition Sues Trump Administration over H1B Visa Fee
- New York State Updates
- DOB Approves 2.6% COLA for Mental Health Outpatient Services
- DOH Relaxes the 12-Week Rule for Foreign Medical Graduates and Limited Permit Holders
Federal Funding
Government Shutdown Continues
The federal government shutdown continues into its second week, after Senators rejected both Republican and Democratic funding deals for the seventh time on Thursday. Democrats are holding firm that they will not vote to re-open the government until the funding bill includes an extension of ACA enhanced premium tax credits. Republicans continue to argue that the government must be re-opened before they will engage in negotiations over the tax credits. Some moderate Democrats may be considering including an income limit on the tax credits, but no deal has been reached. Active-duty military members will miss their first paycheck on October 15th, and most other federal employees will miss a paycheck today, ramping up pressure to close a deal. Senators will vote again today on the dueling funding deals, though no progress is expected, likely sending the shutdown into its third week.
Federal Agencies
CMS Issues Guidance on Emergency Medicaid
On September 30th, CMS announced an updated interpretation of section 1903(v) of the Social Security Act, which authorizes federal financial participation (FFP) for care and services necessary for treatment of an emergency medical condition for non-citizens that are ineligible for full Medicaid benefits. The guidance emphasizes that states must restrict their Medicaid payments, managed care contracts, and claim submissions to cover only services necessary for emergency medical conditions and to exclude other types of care. States are required to update their contracts and reporting practices, including FFP claim submissions on Form CMS-64, to ensure their compliance. CMS has offered to work with states during a transitional period of one year to help them implement these changes without penalty.
The guidance is available here.
Trump Administration Makes Several Vaccine Announcements
This week, the Trump Administration made several announcements on vaccines. On October 6th, the CDC updated its immunization schedules to include individual-based decision-making, via shared clinical decision-making, for Covid-19 vaccination and to recommend standalone chickenpox immunization for toddlers. ACIP’s recommendation for the change in chickenpox vaccination was due to an increased risk of febrile seizures with the combined measles, mumbles, rubella, and varicella vaccines (MMRV). Like most routine recommendations, the new guidance also requires that almost all insurers provide full coverage without cost-sharing. Of note, ACIP’s recommendations diverge from an earlier decision by Secretary Kennedy to stop recommending that pregnant women get vaccinated for Covid-19. It is unclear whether ACIP was aware that their new recommendations are in conflict with Kennedy’s previous comment.
Also on October 6th, Acting CDC Director Jim O’Neill reposted a message by President Trump on X and called on vaccine manufacturers to “develop safe monovalent vaccines to replace the combined MMR and ‘break up the MMR shot into three totally separate shots.’” Neither post gave a reason, nor referred to any evidence, for breaking up the shot into three.
Two days later, on October 8th, the CDC posted a document to its website announcing the formation of a “Childhood and Adolescent Immunization Schedule Workgroup” under ACIP. The Workgroup has been established to “to review data, as well as clinical and scientific knowledge related to the childhood and adolescent immunization schedule to help develop childhood and adolescent immunization schedule policy options for ACIP consideration to formulate recommendations to the Director of the CDC.”
The CDC immunization announcement is available here. The X post is available here. The Workgroup announcement is available here.
OIG Publishes Report on Limited and Inaccurate Behavioral Health Networks in MA and Medicaid
On October 7th, OIG published a report on behavioral health networks for MA and Medicaid enrollees. OIG’s investigation found that most provider networks were highly limited, and many directories included inactive providers. MA plans on average included 16 percent of the counties’ behavioral health workforce in their networks, while Medicaid plans included an average of 31 percent. Of these, a significant percentage were “ghost” providers who did not see any patients from the plan during the year. OIG recommends monitoring of provider networks and additional steps to improve the accuracy of network directories in Medicare Advantage, working with states to improve the accuracy of network directories in Medicaid managed care, and exploring how a nationwide directory could reduce inaccuracies and increase administrative efficiencies for providers and patients.
The report is available here.
Other Updates
Judge in Second Marketplace Rule Case Denies Injunction, but Separate Stay Still Stands
On October 1st, U.S. District Court Judge Nathaniel Gorton of Massachusetts denied a motion for a preliminary injunction in a case challenging the Trump administration’s 2026 Marketplace Integrity rule. The legal challenge will proceed, but the judge declined to pause implementation of the rule during the proceedings. The suit, filed by 20 Democratic attorneys general and Pennsylvania Governor Josh Shapiro, argues that the rule will make it unduly difficult for individuals to enroll in health insurance through the Affordable Care Act’s Marketplaces.
However, on August 22nd, a judge in the U.S. District Court for the District of Maryland partially stayed seven provisions of the same Marketplace Integrity rule while a separate challenge proceeds. The nationwide stay in this case remains in effect, despite the ruling in the Massachusetts case, meaning several provisions of the rule remain blocked from taking effect. The Maryland case was filed by the cities of Chicago, Columbus, and Baltimore, Doctors for America, and the Main Street Alliance. The administration’s appeal of the stay was denied on September 18th; the rule remains paused as the legal challenge proceeds.
The ruling in the Massachusetts case is available here.
Three-Quarters of Americans Surveyed Support Extending ACA Enhanced Tax Credits
On October 3rd, the Kaiser Family Foundation released the results of its latest Health Tracking Poll, finding that 78% of Americans want Congress to extend the enhanced Affordable Care Act premium tax credits that are set to expire on December 31st. Overwhelming majorities of Democrats (92%) and Independents (82%) support extending the credits, while support was less robust among Republicans (59%) and Make America Great Again (MAGA)-Republicans (57%). Over 60% of Marketplace enrollees report having heard “little” or “nothing at all” about potential changes due to tax credit expiration.
Full survey results are available here.
Six Former Surgeons General Warn Nation About Secretary Kennedy
On October 8th, six former U.S. Surgeons General, serving under both Democratic and Republican administrations, published a joint opinion piece warning the nation about current HHS Secretary Kennedy. The Surgeons General assert that Kennedy’s policies, including promoting vaccine misinformation, firing trusted members of the public health workforce, and undermining evidence-based health programs, endanger trust in health institutions. They call for leadership that upholds scientific integrity and transparency to protect America’s health.
The op-ed is available here.
Coalition Sues Trump Administration Over H1B Visa Fee
On October 3rd, a coalition of religious organizations, health care providers, unions, higher education professionals, and others sued the Trump Administration over the $100,ooo fee on new H1-B visas for highly skilled international workers proposed on September 19th. The lawsuit was filed in the U.S. District Court Northern District of California. H1-B visas are valid for three years and can be extended up to six. In 2005, Congress capped H1-B approvals at 65,000 per fiscal year but granted an additional 20,000 approvals for workers with advanced U.S. degrees. According to the lawsuit, the majority of H1-B workers work in the technology sector. However, a third of workers with an H1-B visa are nurses, teachers, physicians, scholars, priests and pastors.
The lawsuit is available here.
New York State Updates
DOB Approves 2.6% COLA for Mental Health Outpatient Services
On September 25th, the New York State (NYS) Office of Mental Health (OMH) issued guidance to Mainstream Medicaid Managed Care Plans, Health and Recovery Plans, HIV Special Needs Plans, and Medicaid Advantage Plus Plans (collectively “MMCPs”) that the Division of Budget (DOB) approved the 2.6% cost-of-living adjustment (COLA) for eligible mental health outpatient services rates. This adjustment, referred to as a “Targeted Inflationary Increase” in the 2025-26 Enacted NYS Budget, is effective retroactive to April 1, 2025.
MMCPs are required to review and reconcile payments to ensure that all services dated on or after April 1, 2025 are reimbursed at the adjusted rate. These activities must be completed as soon as possible, but no later than December 24th.
The OMH Memorandum published on September 25th is available here. Updated rate schedules for eligible services are available here. Note that the 2.6% COLA for Children’s Home and Community Based Services (HCBS) is still pending DOB approval.
DOH Relaxes the “12-Week Rule” for Foreign Medical Graduates and Limited Permit Holders
On October 8th, the NYS Department of Health (DOH) adopted amendments to Section 405.4 of Title 10 of the New York Codes, Rules, and Regulations, modifying the “12-week rule” for foreign medical graduates and creating targeted flexibility for certain limited permit holders in public hospitals.
Previously, foreign medical graduates whose clinical clerkships exceeded 12 weeks were required to have completed those clerkships at one of 17 medical schools pre-approved by the NYS Education Department. The amendment establishes an additional qualification pathway. Under the amendment, foreign medical graduates meet eligibility requirements if they complete a post-graduate training program accredited by the Accreditation Council for Graduate Medical Education or the American Osteopathic Association and are eligible for a fellowship, even if their extended clerkships were not completed at an Education Department-approved institution.
The amendment also allows limited permit holders – both U.S. and foreign-trained – working at a public hospital to practice without the currently required additional residency years, provided they are supervised by a New York State–licensed physician credentialed by the hospital. According to DOH, these changes are intended to “ease physician staffing shortages in hospitals, with guardrails to ensure that physicians educated outside of the U.S. still meet an appropriate education and oversight bar.”
In response to public comments, DOH clarified that physicians do not need to be directly employed by the public hospital to practice with the new flexibility conditions. The changes take effect on October 8, 2025.
The final regulations are available here.