The Regulator

246: that is the number of billions of dollars the federal government expects to cut from Medicaid spending over the next decade under a rule whose public comment period closes today. The Centers for Medicare and Medicaid Services (CMS) will close public comments today, September 21, 2026, on a proposed rule (CMS-2452-P) rewriting how much states can raise through “provider taxes,” the fees states levy on hospitals, nursing homes and now health insurers to help fund their share of Medicaid without losing federal matching dollars. The rule replaces a single nationwide 6 percent “indirect hold harmless” threshold with state- and tax-class-specific limits based on what each state’s taxes looked like as of July 4, 2025, implementing Section 71115 of this year’s Working Families Tax Cut law; it takes effect October 1, 2026, with a further phasedown to 3.5 percent by federal fiscal year 2032 for most tax classes in Medicaid expansion states starting October 1, 2027. CMS’s own Office of the Actuary estimates the changes will cut federal Medicaid spending by $246 billion from 2026 through 2035, money states currently draw down using provider taxes; hospitals and nursing homes that rely on the financing mechanism face the tightest squeeze. Confidence: High. This run reviewed CMS’s own fact sheet and the Federal Register notice directly. Sources: Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes Proposed Rule (CMS-2452-P), Centers for Medicare and Medicaid Services, Medicaid Program; Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes, Federal Register.

CMS’s newest Medicaid drug-pricing experiment just got every state, Washington D.C. and Puerto Rico to apply, with nine days left for the holdouts to sign on. The CMS Innovation Center said this week that all 50 states plus D.C. and Puerto Rico have applied to the GENEROUS Model (GENErating cost Reductions fOr U.S. Medicaid), which asks drug manufacturers to sell covered outpatient drugs to state Medicaid programs at most-favored-nation prices tied to what other wealthy countries pay, with CMS passing manufacturer rebate savings back to states through adjusted federal matching rates; 40 states and Puerto Rico have already signed participation agreements, and the rest have until September 30, 2026 to finalize. CMS’s Office of the Actuary projects the five-year model, which launched in January 2026, will save $64.3 billion in federal and state Medicaid drug spending over ten years. Confidence: High. This run reviewed CMS’s own press release directly. Sources: CMS Announces Participants in Landmark Medicaid Drug Payment Model to Bring Down Drug Costs, Centers for Medicare and Medicaid Services.

CMS resolved a hospital-accreditation cliff nine days before it hit, renewing the authority that lets one of only two companies that inspect most U.S. hospitals keep doing so. CMS published a Federal Register notice September 17, 2026 approving DNV Healthcare USA Inc.’s application for continued recognition as a national hospital accrediting organization, granting the maximum six-year term, effective September 26, 2026 through September 26, 2032, just as DNV’s prior term was set to expire. DNV’s accreditation substitutes for a direct Medicare Conditions of Participation survey for every hospital it accredits nationwide, so a lapse would have forced those hospitals onto CMS’s own survey queue or into an accreditation scramble; the approval followed a public comment period that closed May 11, 2026. Confidence: High. This run reviewed the Federal Register notice directly. Sources: Medicare and Medicaid Programs; Application From DNV Healthcare USA Inc. (DNV) for Continued CMS-Approval of its Hospital Accreditation Program, Federal Register.

Medicaid enrollees and physician groups sued the federal government last Friday over the same rule provision that more than 20 states already tried, and failed, to block in court. Five Medicaid beneficiaries, the City of Columbus and six provider organizations, including the American College of Physicians, the American Academy of Pediatrics, the Society for Adolescent Health and Medicine and Doctors for America, filed suit against the Department of Health and Human Services (HHS) and CMS on or around September 18 to 19, 2026, alleging the agencies’ interim final rule on Medicaid work requirements unlawfully narrows who counts as “medically frail” by requiring a qualifying condition also “significantly impair” a person’s ability to comply with the work requirement, a standard the plaintiffs say Congress never wrote into the underlying law. It is the second suit over the same provision; a 25-state coalition sued in June and lost its bid for a preliminary injunction in July, and this new case, with plaintiffs represented by the legal group Democracy Forward, seeks a declaration that the rule violates the Administrative Procedure Act and a permanent injunction against enforcing it. Confidence: Medium. This run could not independently retrieve the filed complaint or a primary court docket; this account relies on trade-press and legal-alert reporting that describe the filing directly. Sources: Medicaid work requirement lawsuit targets CMS exemption rules, HFMA, Weekend Update, Ermer and Suter PLLC.

Connecticut just approved smaller, but still double-digit, health insurance rate hikes for the second year running, and its insurance commissioner said the trims still aren’t enough. The Connecticut Insurance Department issued final decisions September 11, 2026 on five rate filings from four insurers covering roughly 220,000 individual and small-group Affordable Care Act market enrollees, approving an average 11.3 percent increase for individual plans and 15.1 percent for small-group plans, down from the 16.2 percent and 17.8 percent insurers originally requested. Commissioner Josh Hershman said “there are no winners when healthcare costs continue to rise at this pace,” as the trimmed increases still mean higher premiums when 2027 open enrollment begins October 23, 2026. Confidence: High. This run reviewed the Connecticut Insurance Department’s own final rate chart directly. Sources: 2027 ACA Final Rate Chart, Connecticut Insurance Department, Health Insurance Rate Filings and Decisions, Connecticut Insurance Department.