In this update:
- Federal Shutdown
- Shutdown Continues, Reports of Negotiations Increase
- Judge Intervenes After White House Fires HHS Staff in Response to Shutdown
- Reimbursement Confusion Expands Amid Shutdown
- Federal Agencies
- CMS Releases 2026 MA Star Ratings
- USDA Sends SNAP OBBBA Guidance to States
- Other Updates
- Study Shows Insurers Paying More at HOPDs than ASCs
- AstraZeneca Makes Drug Pricing Deal with Trump Administration
- Democratic Governors Form Public Health Alliance
- Commonwealth Fund Announces 2025 State Medicare Scorecard
- New York State Updates
- DOH Proposes SPA to Extend Pediatric Specialized Nursing Eligibility to Age 36
- OMH to Hold Forum Series on Recent Federal Actions
Federal Shutdown
Shutdown Continues, Reports of Negotiations Increase
The federal government enters the third week of a shutdown with Democrats unwilling to vote for a “clean” continuing resolution (CR) without an extension of the Affordable Care Act enhanced premium tax credits, and Republicans saying any discussion of an extension can only happen under a re-opened government. However, there are reports that some House Republican leaders have met with White House officials to begin developing a framework for an eventual deal. The policy options currently reported to be under consideration include:
- Imposing an income limit on tax credit qualification (at an amount still to be determined);
- Eliminating $0 premium plans so that all enrollees must make some monthly payment (amount to be determined);
- Grandfathering current recipients of the enhanced tax credits but eliminating the enhanced credits for new enrollees; and
- Imposing new restrictions on abortion coverage.
In the meantime, Republicans are trying to move a “mini-bus” of regular-order appropriations bills through the Senate. Majority Leader Thune (R-SD) is pushing to move FY 2026 spending bills for Agriculture-FDA, Military Construction-VA, and the Legislative Branch. It is uncertain whether Democrats will be willing to engage in this debate given ongoing negotiations on the CR, and President Trump’s efforts to rescind congressionally-appropriated dollars.
Judge Intervenes After White House Fires HHS Staff Amid Government Shutdown
On October 10th, the White House terminated between 1,100 and 1,200 employees from HHS.
President Trump and an HHS spokesperson confirmed the cuts, saying they were a direct consequence of the government shutdown. More than 32,000 HHS employees have already been furloughed because of the shutdown, and the Department as a whole has already been substantially reduced this year under previous efforts by the Trump administration to reduce the size of the federal government.
On October 11th, sources within HHS shared that many employees who received reduction-in-force notices will not actually be terminated and that an unspecified number were mistakenly fired through a “coding error.” Those being rehired, they said, are staff who work on the Morbidity and Mortality Weekly Report, in the director’s office of the Global Health Center, and on measles and Ebola responses in the Democratic Republic of the Congo.
On October 15th, a California District Judge issued a temporary restraining order to halt layoffs at federal agencies. Judge Susan Illston cited evidence that the administration had exceeded its authority and failed to follow legal requirements for reductions in force, calling the layoffs potentially politically motivated.
The judge’s order is available here.
Reimbursement and Programmatic Confusion Amid Shutdown
On October 15th, CMS issued a “Claims Hold Update” indicating that it has instructed all Medicare Administrative Contractors (MACs) to “continue to temporarily hold claims with dates of service of October 1, 2025”, noting that this includes “all claims paid under the Medicare Physician Fee Schedule, ground ambulance transport claims, and all Federally Qualified Health Center claims.” Typically in a shutdown, CMS would impose a claims hold for expired provisions but not for all Medicare claims. Hours later, CMS reversed this position, saying they would only hold claims for expired programs.
The update also noted that limitations on telehealth services in place prior to the pandemic took effect again beginning October 1st, and encouraged providers offering telehealth services to “evaluate providing beneficiaries with an Advance Beneficiary Notice of Noncoverage.”
In addition, health systems participating in the Hospital at Home program, which expired on October 1st, are facing confusion on how to proceed with patients already receiving acute care at home. Health systems have seemingly taken three different approaches: 1) continuing to offer acute care at home for all patients, assuming the program will be extended and claims will be reimbursed; 2) continuing acute care at home for patients with private insurance, but not for those with Medicare; or 3) putting such services on hold altogether.
The Claims Hold Update is available here.
Federal Agencies
CMS Releases 2026 MA Star Ratings
On October 9th, CMS released the 2026 Medicare Parts C and D Star Ratings. The report highlights that approximately 64.7% of enrollment is in 4+ Star contracts, a slight increase from 64.0% in 2025. Receiving 4 Stars triggers a 5% increase in benchmark payments, and payers are more likely to close plans that do not meet this threshold. Enrollment trends vary across states; for example, Wyoming, Massachusetts, and Utah experienced notable increases in 4-star enrollment, whereas West Virginia, Illinois, Oklahoma, and West Virginia saw significant declines. Several payers, including Elevance, Centene, and UnitedHealthcare, increased their share of 4+ Star enrollment, while others maintained their positions.
MA Star Ratings are available here.
USDA Sends SNAP OBBBA Guidance to States
On October 3rd, the USDA added additional implementation guidance to a previous September 5th memorandum describing the Supplemental Nutrition Assistance Program Provisions (SNAP) provisions of the One Big Beautiful Bill Act (OBBBA). The memo gives state agencies additional information on implementing Section 10102(a) of the OBBBA, which changes exceptions from the Able-Bodied Adults Without Dependents (ABAWD) time limit. These changes include:
- Increase of Upper Age Limit: OBBBA raises the age subject to the ABAWD time limit from 54 to 64. Individuals aged 18 to 64 are now subject to the time limit unless they qualify for an exception. However, those aged 60 or older remain exempt from general work requirements, including mandatory SNAP Employment and Training, maintaining the existing elderly protections.
- Changes to the Exception for Children in the Household: OBBBA narrows the exception for parents or household members responsible for dependent children from children under 18 to children under 14. Adults in SNAP households with children aged 14 to 17 are subject to the ABAWD time limit unless they qualify for other exceptions.
- End of Exceptions Implemented by the Fiscal Responsibility Act of 2023: The temporary ABAWD exceptions for homeless individuals, veterans, and individuals aging out of foster care introduced by the Fiscal Responsibility Act of 2023 have been removed. These groups are again subject to the ABAWD time limit unless they meet other qualifying exceptions.
- New Exceptions: The OBBBA introduces new ABAWD exceptions for specific Native American groups, including federally recognized Indians, Urban Indians, and California Indians as defined under the Indian Health Care Improvement Act. State agencies must immediately apply these criteria in screening applicants.
State agencies are also required to screen all SNAP applicants and recertifications for eligibility under the modified exceptions. They must provide consolidated written and oral notices explaining applicable ABAWD and work requirements, including mandatory SNAP Employment and Training where relevant.
The full memorandum is available here.
Other Updates
Study Shows Insurers Paying More at HOPDs vs. ASCs
On October 6th, a study published in Health Affairs found that commercial insurers pay more for procedures done at hospital outpatient departments than ambulatory surgical centers. The researchers compared payments of three insurers (UnitedHealthcare, Cigna, and BlueCross BlueShield) for 13 common procedures.
Overall, in 2024, commercial prices were $1,489 (78%) higher in HOPDs than in ASCs, and Medicare prices were $633 (97%) higher. However, site payment differentials varied substantially across payers: Cigna had the lowest differentials between HOPDs and ASCs ($327), whereas United had the highest ($1,673). Cigna achieved this through provider selection, contracting with only 14% of HOPDs in applicable markets, compared with an average of 76% for United and BlueCross BlueShield. The study authors note that if United and BlueCross BlueShield paid Cigna’s average HOPD rates for these procedures, together they would save approximately $1.4 billion a year.
The study is available here.
AstraZeneca Makes Drug Pricing Deal with Trump Administration
On October 10th, the Trump administration announced a drug pricing deal with AstraZeneca. AstraZeneca is the second pharmaceutical company, after Pfizer, to make a deal with the administration to lower drug prices.
AstraZeneca will give the U.S. Medicaid program drug prices that are in line with other major developed countries and launch new drugs at the “most-favored nation price.” The company, which recently launched its own direct-to-consumer site, will also offer some primary care drugs via TrumpRx.gov, including asthma drug Airsupra, COPD treatments Bevespi and Breztri, and diabetes medicine Farxiga. In return, the Trump Administration will give AstraZeneca a three-year reprieve on pharmaceutical tariffs.
Of note, AstraZeneca has pledged to invest $50 billion for manufacturing and R&D in the U.S. One day before the announcement of the deal, on October 9th, AstraZeneca broke ground on a new $4.5 billion manufacturing plant in Virginia. AstraZeneca generates about 43% of its revenue in the U.S.
An article about the deal is available here.
Democratic Governors Form Governors Public Health Alliance
On October 15th, fifteen Democratic governors announced the formation of the Governors Public Health Alliance, a nonpartisan, non-profit coalition of governors working together to protect public health. The Alliance provides a platform for governors to “exchange best practices, align policies, and coordinate on issues like vaccine access, emergency response and health security.” The Alliance members are California, Colorado, Connecticut, Delaware, Guam, Hawaii, Illinois, Maryland, Massachusetts, New Jersey, New York, North Carolina, Oregon, Rhode Island and Washington, representing one in three Americans. The group plans to monitor disease outbreaks, establish public health policy guidance, prepare for pandemics and buy vaccines and other supplies. The initiative is being coordinated by Governors Action Alliance, a bipartisan and nonprofit group.
More information is available here. The New York State press release is available here.
Commonwealth Fund Announces 2025 State Medicare Scorecard
On October 16th, the Commonwealth Fund announced the latest results of its nationwide survey of state health system performance for recipients of the Medicare program in traditional Medicare and managed care plans. Across 31 measures, New York ranked 35th overall.
The full report is available here.
New York State Updates
DOH Proposes SPA to Extend Pediatric Specialized Nursing Eligibility to Age 36 for Medically Fragile Young Adults
On October 15th, the New York State (NYS) Department of Health (DOH) issued public notice in the State Register announcing plans to submit a Medicaid State Plan Amendment (SPA) that would allow medically fragile young adults residing in pediatric specialized nursing facilities to remain in those facilities until the age of 36. Under current regulations, residency in pediatric specialized facilities typically ends at age 21. The amendment would take effect November 1st. The proposal implements legislation passed in 2024 and included in the 2025-2026 NYS Enacted Budget. The State estimates a resulting $9.8 million increase in Medicaid expenditures for 2025-2026, rising to $28.6 million annually thereafter.
Additional information is available in the State Register here. Public comment may be submitted to spa-inquiries@health.ny.gov.
OMH to Hold Forum Series on Recent Federal Actions
Throughout November, the NYS Office of Mental Health (OMH) will host a series of forums to discuss recent federal actions and a plan for potential impacts on New York’s mental health system. The forums are designed to gather feedback from provider agencies, associations, advocacy organizations, and county leadership. One virtual forum will be held for each OMH region and there will be one in-person discussion in Albany. Each forum will feature the same content, featuring an opening presentation followed by small break-out group discussions. Topics of discussion will include helping clients maintain coverage and access to care and supporting provider agencies with sustaining revenue streams.
Attendance will be limited and advanced registration is required. Registration links for each region are provided below. Questions may be directed to planning@omh.ny.gov.
- Western New York– November 3rd, 10am-12pm (registration here)
- Hudson River – November 6th, 9:30am-11:30am (registration here)
- New York City – November 10th, 10am-12pm (registration here)
- Long Island – November 12th, 10am-12pm (registration here)
- Central New York – November 21st, 10am-12pm (registration here)
- Albany (in-person) – November 19th, 9:30am-11:30am (registration here)