https://medicalxpress.com/news/2026-06-nursing-home-staffing-declined-states.html

Nursing home staffing declined in states that protected facilities from COVID-19 malpractice lawsuits, study finds
By Gretchen McCartney, University of California, Los Angeles
June 2, 2026

Nursing homes across the country had less staffing in states where legislatures granted the facilities immunity from COVID-19-related lawsuits filed by patients and their families, according to findings from a new UCLA-led study.

Study links immunity laws to staffing

Researchers examined data from 13,205 skilled nursing facilities; those in states with litigation immunity reduced staffing by 2.5% compared to facilities in states that did not pass similar protections for nursing homes. That reduction translated to an average of almost eight hours per day of staff conducting clinical care and other duties per nursing home. The data were collected from 2018 to 2023.

"During the pandemic there was a lot of understaffing. It was even worse in these states with immunity from lawsuits," said Jill Horwitz, an Emerita Professor of Law at the UCLA School of Law, where she began the research published in the Journal of the American Medical Association.

She also is an expert on health policy and continued to work on the study at Northwestern University's law and medical schools, where she is now based.

Widespread adoption of tort immunity

Researchers were surprised by the numbers, they said. "These policy changes are not associated with a defined monetary reward or fixed staffing target," said Dr. David S. Zingmond, corresponding author and professor-in-residence at the UCLA David Geffen School of Medicine's Division of General Internal Medicine and Health Services Research. "So the robust magnitude of change was surprising."

Across the country, 86% of states enacted some kind of tort immunity for nursing homes during the pandemic. Some of the laws had an end date and others were indefinite; 23 states had retroactive immunity covering a period before the legislation was passed.

The scramble to pass legislation was sparked by an anticipated deluge of medical malpractice lawsuits alleging that negligent care caused patients to contract the virus or to die from it.

However, medical malpractice law also can help protect quality of care by deterring negligence, the authors wrote in the research.

Staffing cuts hit CNAs hardest

"Relaxing medical liability results in a worse staffing environment," Zingmond said. "Lower staffing negatively impacts care, and nursing home residents are among the most vulnerable patients."

The study found that certified nursing assistants (CNAs), who provide direct clinical care for patients, made up the primary group that saw reduced staffing. Hours worked by registered nurses (RNs), who often serve in administrative roles, stayed consistent in their staffing rates.

Researchers acknowledged the financial challenges and the general instability of health care staffing during COVID-19, which at nursing homes would have compromised the amount of time caregivers could devote to patients. But the numbers suggest that facilities with reduced tort exposure "may have been less likely to employ nursing staff or work to find replacements during shortages," the authors wrote.

Questions remain about care quality

The study did not chronicle the clinical effects of reduced staffing, and that kind of analysis could be the next step in painting a full picture of nursing home care during the pandemic, Zingmond said.

"Nursing home staffing is a predictor of quality of care that we could not directly measure with the data used in this study," he said. "We would like to see how these policies are related to measurable quality and clinical outcomes."

The information analyzed was from two data systems operated by the Centers for Medicare and Medicaid Services (CMS): the Nursing Home Compare (NHC) quality initiative and the Payroll Based Journal Daily Nurse Staffing dataset.

Publication details

Jill R. Horwitz et al, Tort Immunity and Nursing Home Staffing, JAMA Health Forum (2026). DOI: 10.1001/jamahealthforum.2026.1534

Journal information: Journal of the American Medical Association , JAMA Health Forum

https://www.justice.gov/usao-edmi/pr/feds-charge-foreign-nationals-working-national-institutes-health-smuggling-monkeypox

Feds charge foreign nationals working at the National Institutes of Health with smuggling monkeypox into the United States and lying about it
For Immediate Release - Tuesday, June 2, 2026
U.S. Attorney's Office, Eastern District of Michigan

DETROIT - Vincent Munster and Claude Kwe, both researchers with the National Institutes of Health (NIH) at the Rocky Mountain Laboratory were charged today in a criminal complaint with conspiracy to smuggle monkeypox into the United States and giving false statements to federal law enforcement, United States Attorney Jerome F. Gorgon Jr. announced.

Gorgon was joined in the announcement by Jennifer Runyan, Special Agent in Charge of the Federal Bureau of Investigation, Detroit Field Office, Marty Raybon, Director of Field Operations, U.S. Customs and Border Protection and Special Agent in Charge Marcus L. Sykes of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

According to the criminal complaint, Vincent Munster, a citizen of the Netherlands, 53, is the Chief of the Virus Ecology Section, Laboratory of Virology at the Rocky Mountain Laboratory in Hamilton, Montana. Claude Kwe, a citizen of Cameroon, 38, is a research fellow in Munster’s section. The work of both men is focused on “emerging viral pathogens” and how those pathogens “cross the species barrier.” They work at a Biosafety Level 4 laboratory, which employs the highest level of biosafety precautions for scientific research of known and potential human pathogens.

On January 25, 2026, Munster and Kwe arrived at the McNamara Terminal at Detroit Metropolitan Airport with travel originating from Brazzaville, Republic of Congo, where an outbreak of monkeypox was occurring. Monkeypox is an infectious virus that can result in painful rash, enlarged lymph nodes, fevers and other ailments.

Munster and Kwe were inspected and interviewed by Customs and Border Protection (CBP) officials upon their arrival. CBP officers observed Kwe and Munster traveling with a large black plastic case. Munster and Kwe falsely told CBP officers that the black case contained diagnostics and testing equipment. But subsequent investigation by CBP and FBI agents revealed that the case actually contained 113 vials in Styrofoam coolers. As of the date of the complaint, the FBI has tested 20 of the 113 vials. Seventeen of them contained deactivated monkeypox virus, one contained the Chickenpox virus, and two contained only human DNA.

“These NIH experts apparently broke our laws by smuggling viral pathogens on a packed commercial airplane from an outbreak in the Republic of Congo. Let that sink in,” United States Attorney Gorgon stated.

“No researchers should believe their positions, credentials, or professional status place them above the law,” said Jennifer Runyan, Special Agent in Charge of the FBI Detroit Field Office. “The allegations in this case are serious. They involve the dangerous and unlawful smuggling of deactivated Mpox virus into the United States and alleged efforts to mislead our federal agents. I am grateful for the outstanding and diligent work of the FBI Detroit JTTF, FBI Billings’ Missoula Resident Agency, the U.S. Customs and Border Protection team at Detroit Metro Airport, and the U.S. Department of Health and Human Services – OIG, for keeping our communities safe.”

“The arrest of these individuals on serious federal charges sends a clear and unmistakable message that no one—including HHS employees who have an obligation to safeguard our federal programs—is above the law. Any deliberate effort to conceal and smuggle biological materials into the United States without proper authorization is a breach of the public’s trust and could have placed the public at risk,” said Special Agent in Charge Marcus L. Sykes of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG will continue to work alongside our law enforcement partners to ensure that anyone who is entrusted with protecting the health and well-being of the public is held fully accountable.”

“We have zero tolerance for anyone who attempts to exploit our research frameworks, circumvent our border enforcement processes, or deceive investigators,” said CBP Director of Field Operations Marty C. Raybon. “Along with our law enforcement partners, we will remain fiercely vigilant in neutralizing biological threats—or otherwise— and continue to hold accountable those who jeopardize the safety and security of the American people.”

Munster and Kwe face a maximum sentence of five years in prison.

The investigation is being conducted by the Detroit Field Office of the Federal Bureau of Investigation, the U.S. Customs and Border Protection Detroit and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).

A complaint is only a charge and not evidence of guilt. The defendants are presumed innocent until proven guilty. It will be the government’s burden to prove guilty beyond a reasonable doubt.

https://www.hhs.gov/press-room/hhs-unveils-plan-to-combat-lyme-disease.html

HHS Unveils Sweeping Plan to Combat Lyme Disease and Advance Treatment
For Immediate Release

May 29, 2026

CONCORD—MAY 29, 2026—U.S. Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr. today announced a series of major initiatives to strengthen the nation’s response to Lyme disease and other tick-borne illnesses. HHS actions include a multi-million-dollar pilot program focused on tick control, up to $2.5 million in innovation challenges, funding for NIH researchers to combat Alpha-gal syndrome, and a public-private collaboration to help patients connect with experienced providers.

Secretary Kennedy delivered these announcements during a press conference in New Hampshire — one of the states hardest hit by Lyme disease — after convening a roundtable with state lawmakers and Lyme disease advocates as part of his “Take Back Your Health” tour.

“Millions of Americans battling Lyme disease and other tick-borne illnesses have spent years searching for answers, treatment, and support,” said Secretary Kennedy. “Today, the Trump Administration is launching one of the most ambitious federal efforts ever to combat Lyme disease by accelerating research, expanding innovation, and improving care for patients and families. We are going after this disease at its source, driving faster diagnostics and new prevention strategies, and delivering the urgency and action Americans deserve.

”Lyme disease remains one of the nation’s fastest-growing vector-borne health threats. More than 476,000 Americans are diagnosed with Lyme disease each year, and recent data show emergency room visits for tick bites reached their highest springtime level in nearly a decade.

As part of the Department’s broader strategy to address tick-borne diseases, HHS announced a new multi-million-dollar pilot program led by the Centers for Disease Control and Prevention (CDC) and HHS in collaboration with leading tick-control researchers. The initiative will develop and deploy practical strategies to target and eliminate ticks on wildlife before they can spread disease to humans.

The effort will begin with researchers at the New England Center of Excellence in Vector-Borne Diseases and will build on existing community collaboration, including collaboration with the Indian Health Service (IHS) and the Wampanoag Tribe in Massachusetts. By reducing tick populations and disrupting breeding cycles, the initiative aims to slow disease transmission and protect more Americans from infection.

The Department also reaffirmed its goal of reducing Lyme disease cases by 25 percent by 2035 compared to 2022 levels.

HHS continues to support robust research into Lyme disease and other tick-borne illnesses. The National Institutes of Health currently invests nearly $50 million annually in Lyme disease research and approximately $122 million annually in broader tick-borne disease research, including efforts focused on prevention, diagnostics, and treatment.

HHS also announced new actions to combat Alpha-gal syndrome, a tick-associated condition that can trigger potentially serious allergic reactions to red meat and other mammalian products. According to CDC estimates, nearly 500,000 Americans are living with Alpha-gal syndrome, though emerging evidence suggests the true number may be significantly higher.

Through ongoing discussions with private-sector innovators, NIH has preliminarily identified promising products that may help protect individuals from developing Alpha-gal syndrome following a tick bite. Under the anticipated collaboration, participating companies would provide candidate products while NIH would support and fund the clinical research needed to evaluate their effectiveness. HHS expects to provide additional details on the initiative in the coming months as part of its broader effort to accelerate innovation and improve outcomes for Americans affected by tick-borne illnesses.

HHS also announced three new LymeX innovation challenges, offering up to $2.5 million in total prize funding to accelerate breakthroughs in public awareness, treatment, and patient care.

The new challenges include:

• LymeX Visible Voices Prize, offering up to $250,000 to support educational tools and public awareness campaigns developed with input from patients, clinicians, and advocates.
• LymeX Healthathon Innovation Sprint, offering up to $250,000 to identify promising frontline solutions, including novel uses of existing medicines and drug repurposing strategies.
• TOPx HHS Tech Sprint for AI and Invisible Illness, offering up to $2 million — including a $1 million grand prize to harness artificial intelligence and open data to help patients with Lyme disease and other invisible illnesses receive answers and access care more quickly.

These initiatives build on the success of the LymeX Innovation Accelerator, the public-private collaboration between HHS and the Steven & Alexandra Cohen Foundation that was originally launched during President Trump’s first term.

Through LymeX, HHS recently launched a $10 million Diagnostics Prize aimed at accelerating the development of faster, more accurate next-generation Lyme disease tests. Over the past two years, two improved FDA-cleared Lyme disease diagnostics have reached the market through the LymeX innovation ecosystem.

In addition, HHS announced a new public-private collaboration with the International Lyme and Associated Diseases Society (ILADS). Through hhs.gov/lyme, patients will be able to access ILADS’ clinician locator tool, helping connect individuals and families with experienced providers and educational resources related to Lyme disease and associated chronic conditions.

Secretary Kennedy also reiterated his support for reauthorization of the bipartisan Kay-Hagan Tick Act, which established the nation’s first coordinated federal strategy for preventing and controlling vector-borne diseases.

The legislation was signed into law by President Trump in 2019 and recently advanced unanimously through the House Energy and Commerce Committee.

HHS’ Lyme disease initiatives reflect the Trump administration’s ongoing commitment to improving prevention, accelerating research, fostering innovation while ensuring patients receive timely and effective care.

For more information, visit hhs.gov/lyme.

Contact:
HHS Press Office
202-690-6343

https://www.michigan.gov/mdhhs/inside-mdhhs/newsroom/2026/06/01/medicare-fraud-prevention-week-highlights-need-to-combat-fraud-and-abuse

https://www.mass.gov/news/ag-campbell-sues-united-healthcare-for-defrauding-masshealth-out-of-100-million

AG Campbell Sues United Healthcare for Defrauding MassHealth Out of $100 Million
Lawsuit Alleges that United Manipulated and Misrepresented Member Health Statuses to Obtain Higher Payments from MassHealth
Office of the Attorney General for immediate release - May 29, 2026

BOSTON — Massachusetts Attorney General Andrea Joy Campbell today filed a lawsuit in Suffolk Superior Court against UnitedHealthcare Insurance Company, d/b/a UnitedHealthcare Community Plans of Massachusetts (United), alleging the company falsely manipulated the health status of MassHealth members enrolled in its Senior Care Options (SCO) plan to secure higher payments from the Commonwealth. The complaint estimates that the scheme defrauded MassHealth, the state’s Medicaid program, of at least $100 million.

“The state’s managed care plans need to act in good faith on behalf of their members and the financial resources of our state’s Medicaid program. Our investigation found that United Healthcare knowingly violated these obligations by manipulating health assessments to increase its profits,” said AG Campbell. “This lawsuit sends a clear message that no company is above the law, and my office will hold companies accountable for exploiting vulnerable residents and misusing taxpayer dollars.”

MassHealth’s SCO program serves eligible members age 65 or older living in designated service areas across Massachusetts. Enrollees must receive a comprehensive in-home clinical assessment to determine the member’s health status and assign them one of three levels of care, ranging from least serious and lowest payment rate (Level 1) to most serious and highest payment rate (Level 3). United is the largest provider of SCO plans in Massachusetts.

The Attorney General’s Office (AGO) alleges that United manipulated the health statuses of its members to increase profits in three principal ways. First, United submitted assessments of members in the United SCO Plan that led to their classification as Level 2, which is reserved for members with behavioral health or substance use disorders. United classified members by identifying, in its submissions to MassHealth, that members had diagnoses like depression or anxiety, even though those members lacked any corresponding diagnosis or treatment associated with behavioral health or substantive use disorders.

Second, the AGO further alleges that United improperly assessed many members in the United SCO Plan with health conditions satisfying Level 3, reserved for members with the most serious health conditions, even though those members did not qualify for Level 3 services. Beginning in 2018 and continuing into 2019, United became aware through a series of internal reviews that many of its members at Level 3 had been improperly classified. United never disclosed to MassHealth that it had been improperly paid at higher rates for these members prior to their being downgraded, nor has it repaid MassHealth for any of the improperly inflated payments United received while the members were incorrectly classified at Level 3.

Third, United submitted assessments to MassHealth for members in the United SCO Plan that represented that those members needed daily skilled nursing services. Despite these representations, most of those members did not need or receive daily skilled nursing services. As a result, United received higher payments from MassHealth for these members than it should have.

The AGO alleges that these were intentional failures, the result of a “growth at all costs” strategy employed by United that incentivized and encouraged its field nurses to code MassHealth members as sicker or less able than they were.

This matter is being handled by Assistant Attorneys General Kevin O’Keefe and Mary-Ellen Kennedy, Senior Data Scientist William Welsh, Senior Healthcare Fraud Investigator Christine Barker, and Investigator Rachel Wiesler, all of the AGO’s Medicaid Fraud Division. MassHealth provided substantial assistance with the investigation.

The AGO’s Medicaid Fraud Division is a Medicaid Fraud Control Unit, annually certified by the U.S. Department of Health and Human Services to investigate and prosecute health care providers who defraud the state’s Medicaid program, MassHealth. The Medicaid Fraud Division also has jurisdiction to investigate and prosecute complaints of abuse, neglect and financial exploitation of residents in long-term care facilities and of Medicaid patients in any health care setting. Individuals may file a MassHealth fraud complaint or report cases of abuse or neglect of Medicaid patients or long-term care residents by visiting the AGO’s website.

The Massachusetts Medicaid Fraud Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,458,176 for federal fiscal year 2026. The remaining 25 percent, totaling $2,152,724 for FY 2026, is funded by the Commonwealth of Massachusetts.

Nevertheless, you should know what benefits a national health care database could create:

https://www.realclearhealth.com/articles/2026/05/29/taking_back_control_1185651.html

Taking Back Control
A Rallying Cry for Health Care in America
By Lynn Barr - May 29, 2026

There ought to be at least one issue in American life that rises above partisan reflex: the health of the American people.
Republicans, Democrats, and independents may disagree on taxes, spending, regulation, and the size of government. But every one of us should want the same basic things from our healthcare system: better access, better outcomes, lower costs, and more confidence.

Yet in the wealthiest nation on earth, despite building the most expensive healthcare system in history (costing more than $15,000 per person per year, nearly one-fifth of our national economy) Americans live shorter lives than those in peer nations. Preventable disease remains rampant. Medical debt remains one of the most common financial shocks in American life, and care is often delayed because families can’t afford it.

It is an embarrassing systemic failure that demands honesty, innovation, and significant reform.

The seeds have been planted for a movement in which Americans take back control from a healthcare system that costs too much, delivers too little, and leaves too many feeling anxious, angry, and powerless.

Specifically, the first reform is the most obvious one. America needs a standardized national healthcare database — a transparent backbone for accumulating claims and outcomes data across all payers, public and private.

Not government-run healthcare. Not eliminating private insurance. Not rationing care.

Just a modern system of accountability in a $4.5 trillion sector that today operates without a single, transparent set of books.

Only about 10% of Americans — those in traditional Medicare — have claims data that can be systematically analyzed for waste, fraud, cost, and outcomes. For the other 90%, healthcare claims are scattered across more than a thousand private insurers, each operating under different rules, formats, and systems.

Imagine if the federal government tried to track tax revenue using a thousand incompatible accounting systems. That is how we run healthcare.

It is financially draining us and, too often, costing lives.

Administrative costs consume about 10% of total healthcare spending — far higher than in many peer nations. Providers must submit bills to countless insurers. Employers struggle to compare prices. Patients are left guessing what anything costs until the bill arrives.

We do not just spend more because Americans are sicker. We spend more because the system is opaque, fragmented, and built to obscure prices.

Perhaps most unconscionably, prevention has never become the national priority it should be. We spend trillions managing avoidable illness on the back end while underinvesting in the transparency, data, diagnostics, and accountability that could help prevent suffering in the first place.

This is not a failure of doctors, nurses, or hospitals. American medicine is innovative and world-class. The failure is structural.
A national database would allow modern analytics and AI tools to detect fraud, overbilling, and pricing disparities in real time. It would give patients real price transparency instead of marketing slogans. It would help employers and families understand what they are paying for. It would give researchers the ability to study outcomes across the entire population, not just a sliver of it.

Imagine having tens of millions of records to compare the best treatments for diabetes, heart disease, cancer, maternity care, and chronic illness. That is how a system begins moving from treating sickness late to preventing illness earlier.

Patients would retain the right to opt out of data exchange, just as they do with electronic health records. But most Americans want lower costs and better results, not higher prices and more secrecy.

If transparency, fraud detection, administrative simplification, and better prevention helped reduce U.S. healthcare costs by even one-third, the savings could reach roughly $1.5 trillion per year — nearly equivalent to the annual federal deficit – easing pressure on both families and businesses.

That’s not marginal reform. It is economic oxygen.

Better still, reform should not be framed as punishment, but as leadership.

Hospitals, insurers, pharmaceutical companies, and providers that voluntarily embrace data integration and cost reduction should be publicly recognized for doing so. Congress, or an independent bipartisan commission, should establish a “Healthcare Patriot Award” honoring those who materially lower costs, improve outcomes, and share data in the national interest.

Prestige and public trust matter. Employers would favor recognized institutions. Patients would seek them out. Investors would reward them. Transparency would become a competitive advantage rather than a regulatory burden.

Healthcare should never have become a partisan issue. Transparency is neither liberal nor conservative. Efficiency is not ideological. Patriotism is not political.

Taking back control begins with knowing what we are paying for, what is working, what is failing, and who is willing to help fix it.
The American people deserve, and need, a renewed national health strategy.

In the approaching midterm elections, voters should apply a simple litmus test: is a candidate merely talking about healthcare reform, or are they prepared to advance a new national health paradigm — one that makes wellness, prevention, early diagnostics, and rooting out fraud central to the way America thinks about health because a system devoted mainly to treating illness after it appears will never be as strong, affordable, or humane as one designed to help prevent it in the first place.

Lynn Barr, MPH, is the Founder of Caravan Health and a Health Policy Expert

These private insurers are exempt from the normal federal limits on fees that states can claim to finance Medicaid services. Routing money through these firms also makes funding much harder to track, letting states obtain billions of dollars in federal aid every year for purposes Congress never approved.

Chris Pope, a senior fellow at the Manhattan Institute, has studied these middlemen's contracts and produced an interesting report.  His cover story:

https://www.city-journal.org/article/medicaid-managed-care-organizations-insurance

https://www.medicaid.gov/Medicaid/downloads/michigan-mcp.pdf

https://media4.manhattan-institute.org/wp-content/uploads/reining-in-medicaid-managed-care.pdf

Medicaid’s Costly Middleman
States subcontract with private insurers to side-step limits on federal funding.
By Chris Pope - May 29, 2026

Medicaid was established in 1965 as a system of federal matching funds for states to deliver health care to low-income Americans. Initially, all states paid directly for medical services, but they increasingly subcontracted with private insurers, known as Managed Care Organizations, to administer and procure care. By 2024, 42 states employed MCOs to deliver Medicaid benefits to 78 percent of the program’s enrollees—at a cost of $491 billion.

That arrangement raises uncomfortable questions. Why do states subcontract Medicaid to private insurers if the government provides all the money, tells the insurers what they must cover and how much they have to pay for it, and doesn’t competitively bid the contracts? What’s the point of these middle men?

The answer, as I show in a new Manhattan Institute report, is that private insurers are exempt from normal limits on fees that states can claim from the federal government to finance Medicaid services. Routing money through these firms makes funding much harder to track—in turn letting states obtain billions of dollars in federal aid every year for purposes Congress never approved.

Managed care was originally meant to reduce needlessly high prices and volumes of health-care services. For Medicare, for example, the federal government’s Medicare Advantage program effectively gives beneficiaries a voucher to buy managed-care plans from private insurers. This arrangement in turn motivates insurers to procure cost-effective medical procedures and to encourage the use of preventive care services. For Medicare, the managed-care approach has worked well: it has helped avoid expensive hospitalizations, yielding better medical outcomes at lower cost.

But management by private insurers fits more awkwardly into Medicaid. Plans cannot compete for enrollees by reducing premiums since the government provides all the funding. Insurers must accept every eligible beneficiary who seeks to enroll, which creates a strong incentive for them to skimp on quality medical services that could attract seriously ill (and therefore expensive) beneficiaries. The program’s benefits and payments to providers are therefore specified in detail by law, which leaves little room for innovation.

The resultant system often works poorly. It’s hard for states to specify, regulate, and assure the quality of access to medical care indirectly through contracts with insurers. They often fail to enforce adequate provider networks as required by law, and denials of care due to prior authorization are much more common in Medicaid Managed Care (13 percent) than in Medicare Advantage (6 percent), due to the absence of federal oversight.

The government can more effectively (and efficiently) assure satisfactory access to care if it pays for it directly. That is also true of preventative care services, such as vaccinations or care coordination assistance, which are supposedly the strength of managed care. But Medicaid patients with major disabilities, who need the most care coordination assistance, are often specifically exempt from managed care by states.

As my new report details, the savings promised during Medicaid Managed Care’s expansion over the past four decades have consistently failed to materialize. Medicaid already pays very low rates for hospital care, physician services, and drugs, due to mandatory discounts. Few additional savings can be gained from further narrowing provider networks.

The involvement of private insurers tends to add another layer of administrative costs to Medicaid. These firms must negotiate contracts with providers, finance required capital reserves, advertise themselves to beneficiaries, and generate profits for shareholders. The government must police overpayments to plans and to providers. Payments to plans are often inflated. Three quarters of states pay Medicaid insurers without competitive bidding due to a concern that the winner of such bidding would be the insurer that most underestimated the cost of delivering care to beneficiaries.

To mitigate this risk of insolvency, the federal government requires that state Medicaid payments to insurers exceed their expected medical costs. But, as states typically sign three-to-five-year contracts with insurers, this effectively locks them into a higher level of expenditure and prevents them from reining in commitments when program costs increase. This arrangement also undermines the central point of managed care by encouraging insurers to inflate the volume of medical services they fund in order to increase the payments that states must give them.

Given all this, why do most states subcontract Medicaid to private insurers? The answer is that doing so expands access to free-flowing federal dollars.

Medicaid allows states to claim up to $9 in federal funding for every $1 they spend on services covered by the program—without any upper limit. But payments to private insurers are exempt from normally tight limits on fees and services that states can use to claim this enormously lucrative federal matching aid. By routing payment for Medicaid services through private insurers, states can greatly inflate the funding they obtain from Washington.

Such “Medicaid money laundering” schemes have become notorious in recent years. Subcontracting with private insurers allows states to lump together expenditures for different services, obscuring how the funding gets used. A 2021 federal investigation found that only eight states provided complete and accurate data on the utilization of medical services, the data on which states base Medicaid payments to plans.

The workarounds can be elaborate. California obtained $19 billion in federal funding by taxing insurers it used to cover Medicaid patients—claiming that this represented an increase in the program’s costs. Various states use Medicaid MCOs to expand welfare benefits from housing to food under the pretext that doing so yields incidental health benefits. The federal government estimates that the exemption of managed-care plans from limits on Medicaid payments for services will account for $145 billion in Medicaid spending this year alone.

Last year’s One Big Beautiful Bill Act sought to curb such practices. But Medicaid Managed Care still makes it easy for states to develop similar schemes in the future, which will likely enable them to side-step whatever restrictions emerge.

Importantly, having part-time legislators does NOT mean Texas has fewer healthcare laws, fewer regulations, less government overreach, or less self-serving industry. These, unfortunately, are universal to state governments and healthcare everywhere.

As witness the unfiltered testimony in this week's eight (8) hour health policy committee hearing.

https://senate.texas.gov/videoplayer.php?vid=22702&lang=en

Non-health bills are italicized; health policy bills are in bold.

Thursday, June 4, 2026       9:00 AM

AGENDA

HB 5123 (Rep. Harris)
Communications: video services; definition of video service; modify.

HB 5124 (Rep. Snyder)
Communications: video services; requirements for video services reports; modify.

SB 102 (Sen. Wojno)
Counties: employees and officers; request for transcript and abstract of paper or record; modify.

HB 5812 (Rep. Thompson)
Human services: food assistance; authorization for waiver of work requirements for SNAP benefits; require.

HB 5813 (Rep. Woolford)
Human services: medical services; reporting of error rate regarding Medicaid; require.

HB 5506 (Rep. Kuhn)
Public employees and officers: ethics; certain local officials acting as lobbyists outside of the course and scope of the official's office; prohibit.

OR ANY BUSINESS PROPERLY BEFORE THIS COMMITTEE

While dropping acceptable levels to an impossible low, the first bill also stabilizes policy by installing a current-CDC-standard override.

Call me fanciful, but this bill list gives me a vibe of "last hurrah before campaign season."

Wednesday, June 3, 2026     9:00 AM

AGENDA

HB 4864 (Rep. Rogers)
Health: children; definition of elevated blood lead level; modify.

HB 4865 (Rep. Jaime Greene)
Food: other; testing of baby foods for heavy metals; require.

HB 5303 (Rep. Farhat)
Human services: medical services; Medicaid managed care contract with pharmacy benefit manager; modify.

HB 5709 (Rep. Roth)
Health facilities: certificate of need; certificate of need requirements for certain outpatient imaging centers; modify.

HB 5773 (Rep. Cavitt)
Health occupations: health professionals; referral of patients to a diagnostic center for fetal alcohol spectrum disorder; require under certain circumstances.

HB 5774 (Rep. Young)
Health: children; referral of certain children to the early on program; require.

HB 5975 (Rep. Fox)
Children: health; referral of certain children with elevated blood lead levels to the Early On program administered by the department of lifelong education, advancement, and potential; require.

HB 6022 (Rep. VanderWall)
Mental health: other; authority for prescreening individuals for mental health services; modify.

OR ANY BUSINESS PROPERLY BEFORE THIS COMMITTEE