OCTOBER 2025 Medicaid & Medicare Newsletter: Compliance and Policy Updates
- HiQuity Solutions
- Oct 13, 2025
- 4 min read
Updated: Mar 15
Mental Health • Substance Use • Social Services
Summary
This month’s developments underscore the ongoing volatility in Medicaid and Medicare policy. At the federal level, CMS is preparing implementation of Medicaid work requirement exemptions and Part D redesign, while congressional negotiations over FY 2026 appropriations introduce risks of capped funding. A September 24, 2025, federal court ruling struck down a CMS financing rule on provider taxes, sending shockwaves through state Medicaid financing models.
At the state level, Georgia announced extensions and modifications to its “Pathways to Coverage” work-based Medicaid program on September 30, 2025, and North Carolina officials confirmed reimbursement rate reductions on September 20, 2025, due to budget shortfalls. Texas’s 1115 waiver remains approved through 2030, providing ongoing behavioral health directed payment opportunities.
Providers should concentrate on preparing eligibility workflows, negotiating with payers, and creating contingency plans for limited federal and state budgets.
Federal Policy & Legislation
Medicaid Work Requirements – Exemptions & Guidance
CMS is finalizing guidance on exemptions under the One Big Beautiful Bill framework. Draft rules (September 2025) suggest exemptions for pregnant and postpartum individuals, those with chronic conditions, caregivers, and full-time students (KFF Medicaid Waiver Tracker).FY 2026
Appropriations & Block Grant Proposals
Congress has until December 20, 2025, to finalize appropriations. Draft House language (September 2025) includes up to 10 states piloting capped Medicaid block grants, restrictions on federal matching funds for undocumented populations, and freezes in Medicare outpatient behavioral health rates. Cuts to SAMHSA/HRSA discretionary grants are proposed as offsets (MarketWatch).
CMS Rule on Provider Taxes Overturned – Sept 24, 2025
On September 24, 2025, a federal judge in Texas invalidated CMS’s rule limiting state use of provider taxes to fund Medicaid, ruling that CMS exceeded its authority. The decision applies nationwide and could threaten state financing models that depend on provider assessments and supplemental payments (Reuters).
Medicare Part D Redesign – Implementation in 2026
CMS confirmed Part D redesign details in late September 2025, including a $2,000 annual out-of-pocket cap, expanded True Out-of-Pocket (TrOOP) calculations, and the Prescription Payment Plan (PPP) option. (CMS Fact Sheets)
State-Level Changes – Strategic Spotlight
Texas – 1115 Transformation Waiver
Texas’s Medicaid 1115 Transformation Waiver remains active and approved through September 30, 2030, including behavioral health directed payment programs (DPP BHS). On September 24, 2024, CMS approved technical corrections to the waiver, extending postpartum coverage to 12 months and updating supplemental payment structures (Medicaid, Texas HHSC).
Georgia Pathways to Coverage Extended (Sept 30, 2025)
On September 30, 2025, Georgia announced modifications to its limited Medicaid expansion, Pathways to Coverage. Updates include exemptions from work requirements for parents of young children and a shift from monthly to annual reporting of qualifying work hours. (AP News).
North Carolina – Medicaid Rate Cuts (Sept 20, 2025)
On September 20, 2025, North Carolina officials announced Medicaid provider reimbursement cuts ranging from 3% to 10% due to a $319M shortfall. (AP News).
Medicare Advantage & Part D Stability – CMS Report (Sept 30, 2025)
CMS announced on September 30, 2025, that Medicare Advantage and Part D programs are projected to remain stable in 2026, with average premiums expected to hold steady or decline slightly. (CMS Press Release).
Practical Updates for Providers
EHR Integration: Add exemption documentation fields to prepare for work requirement rules.
Financial Planning: Run stress tests for capped block grant funding and state budget shortfalls.
Payer Engagement: Review Texas-directed payment eligibility & North Carolina contract amendments.
Patient Education: Begin Medicare Part D redesign outreach and clarify stability in 2026 MA/Part D premiums.
Funding & Grant Opportunities
Federal Opportunities: Monitor Grants.gov for active SAMHSA, HRSA, and CMS innovation grants, particularly those supporting rural behavioral health, SUD, and justice-involved populations.
State-Specific: Texas HHSC periodically posts directed payment program amendments and stakeholder funding announcements. Providers should subscribe to HHSC alerts.
Private Foundations: National funders (e.g., Robert Wood Johnson Foundation) continue to issue opportunities focused on behavioral health equity and Medicaid innovation.
Leadership Action Checklist
Action | Target Due Date |
Train staff on Medicaid exemption documentation workflows | Oct 31, 2025 |
Run financial models under capped funding and reduced rates (NC) | Nov 15, 2025 |
Review Texas 1115 waiver amendment notices for DPP opportunities | Nov 30, 2025 |
Prepare patient education for Medicare Part D redesign | Dec 15, 2025 |
Launch advocacy strategies on block grant and reimbursement cuts | Dec 2025 |
Executive Call to Action: From Policy Brief to Strategic Mandate
The sweeping reforms outlined in the One Big Beautiful Bill and the state-level behavioral health integration (ex. FL’s SMMC 3.0, NJ’s Phase 1) are not merely policy updates—they are opportunities for administrative preparedness and strategic alignment that can help prevent lost revenue, jeopardized service delivery, and missed opportunities for strategic expansion. Decisive C-Suite action requires a transition from information consumption to execution, making proactive policy integration a core strategic pillar going forward.
For a custom executive foresight briefing or to benchmark your readiness across interoperability, resilience, and equity metrics, contact us at ask@hiquitysolutions.com.
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