The Regulator

The federal government just opened $281 million in behavioral health grants across 15 programs, with the largest checks going to opioid treatment and school mental health. The Substance Abuse and Mental Health Services Administration announced the funding opportunities on July 6, 2026, as part of what it calls the Great American Recovery Initiative. The single largest pot, 68.2 million dollars, goes to Medication-Assisted Treatment grants for opioid use disorder; 55.7 million dollars funds Project AWARE school-based mental health programs; 40.6 million dollars goes to the National Child Traumatic Stress Initiative; and 34.7 million dollars funds first-responder overdose-reversal training under the Comprehensive Addiction and Recovery Act. States, tribes, counties, school districts, and community behavioral health providers are the primary eligible applicants, with application windows now open and closing on a rolling basis over the coming months. Confidence: High. Source: SAMHSA funding opportunity announcement.

A second insurer is now suing CMS over Medicare Advantage star ratings, arguing the agency is picking winners after a court forced a do-over. Elevance Health filed suit July 1, 2026 in the U.S. District Court for the Southern District of Georgia, saying CMS’s refusal to recalculate its 2026 star ratings the same way it recalculated Clover Health’s will cost Elevance roughly 115 million dollars in 2027 quality bonus payments across five Medicare Advantage contracts spanning Georgia, Kentucky, Ohio, Wisconsin, Texas, California, Iowa, and Arizona. The dispute traces to a May 27, 2026 ruling in which a federal judge found CMS exceeded its statutory authority using 20 specific measures to calculate Clover’s rating and skipped required notice-and-comment rulemaking on 10 of them; CMS recalculated Clover’s rating up two full tiers but declined Elevance’s June 22 request for the same treatment, refusing in writing on June 26. A separate panel of the same court went the other way for CMS on June 26, 2026, upholding the agency’s star-rating math for Blue Cross Blue Shield of Louisiana in a case over a contract consolidation. Confidence: High on the filings and dollar figures; Medium on how the split rulings resolve, since neither appeal is decided. Sources: Elevance Health, Inc. et al. v. HHS et al., Health Care Litigation Tracker, STAT News coverage of the Elevance filing.

CMS finalized a rule requiring the accreditors that inspect most U.S. hospitals to stop selling consulting services to the same facilities they grade, with public comment on the rule’s paperwork provisions due August 17. The rule, published in the Federal Register on June 16, 2026, bars accrediting organizations like the Joint Commission, DNV, and ACHC from fee-based consulting with any facility in the 12 months before an initial or repeat survey, requires their surveyors to complete the same CMS training state surveyors use, and phases out “look-back” validation reviews in favor of surveys where state agencies watch the accreditor’s work directly. The changes take effect June 16, 2027, giving deemed-status hospitals, ambulatory surgical centers, home health agencies, and hospices a year to adjust before CMS starts holding accreditors to the new conflict-of-interest and training rules. Confidence: High. Source: Medicare Program; Strengthening Oversight of Accrediting Organizations, Federal Register.

A federal appeals court kept Missouri’s 340B contract-pharmacy law standing, rejecting a drugmaker’s bid to block it while the underlying case continues. The 8th U.S. Circuit Court of Appeals ruled July 1, 2026 that Novartis was unlikely to win its claim that Missouri’s Senate Bill 751, which bars manufacturers from limiting how many contract pharmacies a 340B covered entity can use, violates the Constitution’s dormant commerce clause, since the law does not favor in-state businesses over out-of-state ones. The case now returns to the district court to litigate the merits, but for now Missouri hospitals and clinics keep the unlimited contract-pharmacy arrangements the law guarantees, a result 340B advocates expect to cite in similar manufacturer suits against comparable laws in roughly 20 other states. Confidence: High. Source: Eighth Circuit opinion, Novartis v. Missouri, via Courthouse News.

Colorado lawmakers opened a formal review of a Medicaid program now consuming 37 percent of the state’s operating budget, with recommendations due by December 11. The legislature’s newly created Commission on Medicaid, established by this year’s Senate Bill 26-187, held its first substantive meeting July 7, 2026, examining findings that the state’s Department of Health Care Policy and Financing budget grew 101 percent between 2015 and 2025, to 16 billion dollars, while Medicaid enrollment merely returned to roughly its 2015 level. The 10-member, bipartisan commission must issue a report with recommendations on spending, utilization, and administration to the General Assembly no later than December 11, 2026, a document expected to shape eligibility, provider-rate, and program-structure fights heading into the 2027 legislative session. Confidence: Medium on the budget-share figures, which come from a state-commissioned analysis rather than the commission’s own final report. Sources: Commission on Medicaid, Colorado General Assembly, SB26-187 bill text.

FDA and CDC are investigating a multistate E. coli outbreak tied to frozen organic blueberries sold at Publix, with 12 illnesses confirmed across two states so far. Frutas y Hortalizas del Sur S.A. of Chile recalled its GreenWise-brand frozen organic blueberries on July 3, 2026, after Florida health officials flagged a cluster of E. coli O145 infections to CDC on July 1; illness onset dates run from May 11 to June 5, 2026, with 11 cases in Florida and one in Georgia, including four hospitalizations and no deaths reported to date. The recalled 10-ounce bags carry lot code 60401 and a best-by date of February 9, 2028, and were distributed to Publix stores in Alabama, Florida, Georgia, Kentucky, North Carolina, South Carolina, Tennessee, and Virginia; FDA’s traceback investigation into the Chilean supplier remains open. Confidence: High on the case count and recall; Medium on the ultimate source, which FDA has not yet confirmed. Sources: FDA outbreak investigation, E. coli frozen blueberries, CDC investigation update.

A federal watchdog found Medicare and Medicaid together spent at least 12 billion dollars in 2024 on assisted living services, even though Medicaid still cannot pay for the room and board that keeps most seniors out of nursing homes. The Government Accountability Office report, requested by Senator Kirsten Gillibrand and released July 2, 2026, found traditional Medicare paid about 8.5 billion dollars and Medicaid at least 3.5 billion dollars for assisted-living-adjacent services, with 44 states covering some assisted living services under Medicaid as of March 2025. GAO identified Medicaid’s statutory bar on paying room-and-board costs as the primary reason federal dollars have not done more to expand access, a finding likely to feed the next push in Congress for a room-and-board waiver authority. Confidence: High. Source: Assisted Living Facilities: Information on Federal Spending and Medicaid Coverage, GAO-26-107884.