HCBS News 2026June19

HHS OIG Focus: Duplicate VA and Medicaid Payments.

On June 10, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced a new workplan project focusing on the potential for duplicative payment by Medicaid for covered services in the Veteran’s Administration (VA) Community Care Benefit. Because Medicaid is the payer of last resort, VA should be billed for services where a veteran is dually eligible for VA and Medicaid benefits. While it is unlikely that provider members receive reimbursement from both programs, it is foreseeable that a provider would select to bill Medicaid instead of VA because of challenges with service authorizations and the VA’s third-party administrators. This creates a challenge for the VA and state Medicaid agencies, though could also have provider-level implications. We will watch for more from the OIG on this work-plan item. 

New Section 1115 Guidance Released. 

On June 11, CMS released a state Medicaid director's letter on budget neutrality and section 1115 waivers. One-third of Medicaid spending runs through section 1115 waivers. HR 1 required that the CMS Chief Actuary certifies that Medicaid section1115 waivers are budget neutral compared to the cost of running a Medicaid program absent the waiver. CMS says in the letter: "Overall, CMS’s intended approach to implementing section 1115(g) is tied to CMS’s current policy goals: ideally, section 1115 demonstrations should deliver better outcomes and operate as, or more, efficiently than the existing Medicaid program. This includes an approach to budget neutrality that is expected to reduce overall expenditures in section 1115 demonstrations, thereby reducing federal outlays." This appears to deviate from the existing approach of budget neutrality with a greater focus on achieving cost savings, but CMS notes there will be additional guidance, details and technical assistance prior to their change in approach which starts Jan 1, 2027. LeadingAge is reviewing the letter in more detail and will provide more analysis as needed.

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