Medicaid Work Rules Surprise States

[Editor’s note: This transcript was generated using both transcription software and a human’s light touch. It has been edited for style and clarity.] 

Julie Rovner: Hello, from KFF Health News and WAMU Public Radio in Washington, D.C. Welcome to What the Health? I’m Julie Rovner, chief Washington correspondent for KFF Health News. And, as always, I’m joined by some of the best and smartest health reporters covering Washington. We’re taping this week on Thursday, June 4, at 10:30 a.m. As always, news happens fast, and things might have changed by the time you hear this. So, here we go. Today, we are joined via video conference by Margot Sanger-Katz of The New York Times. 

Margot Sanger-Katz: Hello, everybody. 

Rovner: Alice Miranda Olstein of Politico. 

Alice Miranda Ollstein: Hi, there. 

Rovner: And we welcome to our podcast panel this week Liz Essley Whyte of The Wall Street Journal. Happy to have you join us. 

Liz Essley Whyte: Thanks for having me, Julie. 

Rovner: Later in this episode, we’ll have my interview with my colleague Lauren Sausser, who wrote the latest KFF Health News “Bill of the Month.” It’s about a woman with a temporary memory problem who probably wishes she could forget about a $59,000 hospital bill. But first, this week’s news. 

So, it’s been almost a full year since President [Donald] Trump signed the big budget bill that would reduce Medicaid spending by nearly a trillion dollars over the next decade, and this week we got the much-anticipated regulation outlining what states have to do in order to implement the new Medicaid work requirements for low-income adults on the program by next Jan. 1. And it’s safe to say that these rules — which are interim final rules, by the way, so that means they technically take effect immediately — are not what states were expecting. I want to break this down in pieces, but first, let’s talk about what a heavy lift this was going to be for the 43 states that are required to put these rules into effect. Alice, you wrote about it before the rules came out, right? 

Ollstein: Yes, this is being pitched as a massive money saver, that was how it was framed. It’s being scored that way in the original bill in order to pay for a bunch of other things: tax cuts, etc. 

Rovner: I would say it is a money saver for the federal government, right? 

Ollstein: Well, that is the promise, that it will save money by reducing the number of people covered by Medicaid. And so proponents of this frame it as cracking down on waste, fraud, and abuse, arguing that the only people who are going to get booted off of Medicaid are the people who deserve to be booted off of Medicaid, because in this piece of it they’re not working or volunteering or going to school or caring for a sick relative. We looked at, yes, this is aimed at saving federal money, but it is currently costing states millions or tens of millions of dollars to implement. It is extremely expensive to implement. States are having to hire a lot of people, they’re having to create, you know, brand-new tech systems that, or upgrade their old tech systems that they didn’t have before. And a lot of state officials told us that this is coming at really the worst time for them. They’re already losing other federal funding, they are really struggling, they’re having to make lots of cuts to social services. And so there just isn’t a lot of extra money to go around. And yet they have to spend all this money to implement these rules. And, especially, Democratic officials were telling us that, Look, we wouldn’t mind having to invest this money if it were going to lead to covering more people or offering people better, more comprehensive coverage. But they really resent having to spend this money in order to cover fewer people in the future.  

Rovner: So, let’s get to the rules themselves. As I like to explain, there are two big things that states are going to have to do here: first, to determine which Medicaid recipients are exempt from that community engagement requirement — to work, volunteer, or attend school 80 hours per month — and second, to determine if those who are not exempt are actually meeting the requirements. And these new rules make both of those harder for states, right, Margot? 

Sanger-Katz: Yeah, I think it’s been like this huge freak-out among states over these last few weeks, because there were a lot of rumors flying around, but I think there was just this concern, like, Whoa, if they make major changes right now, it’s going to be even harder for us to implement. And for states that were, as Alice said, some of these blue states that were trying to minimize the coverage losses under the Medicaid work requirement, I think they were worried, Well, they’re only going to make it stricter; they’re only going to make it harsher. Why would they be changing things now? And so, when we saw the rule this week, it turns out that is, in fact, what they did, that there were a number of policy choices where they decided to apply a stricter standard than what states had been told before this week. 

So what are the biggest examples of this? I think there are two. One is that the work requirement doesn’t apply to everyone. The Republicans in Congress basically said we want people, adults without young children and without disabilities, to be engaged in their communities — to work, volunteer, go to school a minimum number of hours each month if they want to stay eligible for Medicaid. But we understand that there are certain people who are going to have trouble doing that, and so we want to have exceptions for those people. So not everyone has to do the work requirement, a bunch of people don’t have to. And the biggest category of this was a category that Congress called “medical frailty.” The idea was these are people who have medical problems that, like, might make it hard for them to work, or who might really suffer if they lost their health insurance. So, depending on who you talk to, that was what Congress was trying to protect with that exception. And what CMS [the Centers for Medicare & Medicaid Services] had been telling states over these last few months is: Put together a list of diagnoses of serious illnesses, and you can data match, you know, you have people in your Medicaid system already. OK, if they had cancer, if they have HIV, if they have Parkinson’s disease, that’s a serious illness. Those people are medically frail. You can just automatically exempt them, and then you don’t have to check their work hours. 

Rovner: That’s what Nebraska is already doing, right? Because they’re one of the states that have started this early. 

Sanger-Katz: Correct. Yeah, so Nebraska is already live with its work requirement. And, again, Nebraska, even more so than these other states, got tons of guidance from CMS, because they were so excited to go first, and they wanted to do everything right. They wanted to be a good example. And I think CMS wanted them to demonstrate, OK, you can like do this policy. Yeah, they had a list, I think they had like 300 pages of diagnostic codes, you know, like all these diseases. If you have these diseases, we’re gonna exempt you, then you don’t have to demonstrate work hours. If you don’t, OK, like, then you’re gonna have to prove that you’re working or volunteering or going to school. 

So what the rule said is, like, that’s not good enough. It is not good enough to have cancer — that in order to be exempted from having to demonstrate that you are working, you have to prove that you have cancer, and that your cancer is creating a problem that would make it hard for you to work. And the rule creates a standard where states are going to have to evaluate not just what diseases people have, which might be easy to do using medical records, for at least people who are already enrolled and who have been getting medical care, but instead that they have to make something like a disability determination, which is something that the states were really not ready for, that they don’t really have the staff to do or the training to do, and that cannot be easily automated on the back end right now. I think there’s not an easy way for them to go into the medical record and decide whether or not someone’s illness is serious enough that it would impair their ability to work. And the language that they use in the rule, the standard, is not actually really like the standard in other programs that have work requirements, so the states have no experience with the standard.  

And, as it turns out, doctors don’t really have any experience with this standard either. So, you know, when you are making a workman’s comp claim, for example, like the doctors have forms, there’s a system, they understand what it means to be too sick to work because of an injury that would preclude you from workman’s comp. And in SNAP [Supplemental Nutrition Assistance Program], it turns out, there’s also a standard if you’re unable to work, you could get out of the work requirements. But that is slightly different. And so I think there is this real concern by states that they just like actually don’t know how to do this. There might be some AI [artificial intelligence] solution where they’re data mining in the medical records and trying to figure out if they have these codes, and these codes, like, maybe there’s a way to prove that someone is sick enough. What most people that I’ve talked to said is that basically this is going to be a system that’s largely going to be achieved with doctors’ notes. Doctors have to be willing to do this thing that they’ve never done before, and they’re, you know, having to sign that someone can’t work, and that’s going to be a lot of frictions in that process. And then there’s going to have to be a caseworker on the other end who is going to have to look at those doctors’ notes and is going to have to read them and decide whether the doctor has specified the impairment such that it is in compliance with the work requirement. 

So this is just a lot of like administrative headache. I think there are reasonable arguments for wanting to have this standard given what Congress’ intent was, that they wanted to have a work requirement. The point was they wanted people who could work to work, and they wanted people to be exempted who could not work. I think not everyone in Congress agrees with that, but I think some of them do. But I think the reality of how you actually do this in real life is much, much more complicated than that. There is no, like, godlike state that can just see how sick you are and can make these determinations. And so I think that states are really worried about this. They’re worried about how they’re going to get in compliance with this, they’re worried about all the changes they’re going to have to make to the systems that they’ve already built. And I think that a lot of advocates for people with Medicaid, and a lot of disease groups, advocates for people with serious illnesses, are very worried that many, many more people are going to lose coverage, and particularly people who are medically frail. You know, if you think about, say, a person with HIV, they may be in treatment and getting their medicines, and they might even have undetectable levels of HIV in their blood, and they are perfectly capable of working right now. But if they lose their health insurance and they lose their access to their prescription drugs, they fall out of treatment, their health condition could worsen pretty substantially. And I think we can all think of lots of other diseases that are like that. I think cancer is a good example. You know, some people are living with cancer, and it’s kind of like a chronic disease, but it’s because they’re getting regular care. If they lose their treatment … they lose their treatment for many other diseases we can think of that are like this. Depression, you know, certain kinds of mental health problems, if people fall out of treatment, that actually could impair their ability to work, and that causality could run in the opposite direction. So, I think this is a big change. 

And then the other change that they made is more technical, but it was like, how are people going to prove various things under this law? And a lot of states were just expecting people would be able to sign a statement and say, I am caring for a disabled relative … you can trust me, I’m signing under penalty of perjury. This is what I’m doing. Or I volunteered 12 hours last month, you know, I’m just going to sign this under penalty of perjury. Because there’s not a good way to check. 

Rovner: And for the first year, that’s OK, right? They’re taking these attestations … 

Sanger-Katz: For the first year, they’re going to allow it. And then after the first year, they’re going to allow it for medical frailty only — once. So if you sign up for Medicaid in 2028 and you claim that you’re too sick to work, you can sign a form that says that, but then, within the next six months, before you renew your coverage, you’re going to have to come back with some kind of medical record with some kind of doctor’s note that proves it. So you know these are some pretty big changes, and Trump administration officials said, you know, our view is this is consistent with [what] the law is for, which is to ensure that people are working and are engaged in their communities if they’re capable of doing it. They also said that this prohibition on people just signing statements is a way to avoid fraud, because why wouldn’t people just sign a statement saying that they didn’t have to do this work requirement if they could? But I think this is going to have real implications in the real world. It’s going to create a huge administrative headache for states. It’s probably going to impair a lot of people from getting coverage who would have otherwise been covered if CMS had stayed the course with what it had been telling states before. 

Rovner: So, I know my inbox is full of reactions from groups across the medical spectrum. Alice and Liz, I assume you guys are hearing lots of feedback about this, too. 

Ollstein: Absolutely. I mean, just like Margot said, there just isn’t really a good way to do this, trying to automate it and base it on medical claims, like 1) States don’t have that built yet, the different systems don’t, quote unquote, “talk to each other” in that way. But also, you know, just because someone used a certain number or kind of health services in a year doesn’t necessarily tell you whether they can work or not. You know, lots of people who are too sick to work maybe haven’t had the medical services, and someone who had a lot of medical services maybe can work fine. But then again, leaving it up to individual doctors who are not trained to make this determination, who don’t have the time to have a bunch of extra appointments just to do this, and who are more used to doing this for — Margot gave a few examples, but something some doctors brought up to me was like short-term disability, like evaluating, like, this is the number of weeks someone needs to recover from X surgery. So like that’s a determination a doctor feels qualified to make. Whether someone can work any job, I mean, that’s just not really something they can confidently say. I mean, working a job in a factory is not the same as working an email job, and what kind of jobs are available in this person’s area? It’s just a huge mess. 

Rovner: So, is there any chance the administration is going to back off? There is public comment being taken now until, I think, July. Or will Congress perhaps step in and say this is not what we intended, or does somebody get to sue here? I mean, or this is what’s called an interim, I’m saying, an interim final rule, so it’s not set in concrete yet. 

Sanger-Katz: I mean, I would not be at all surprised if we see lawsuits, but I think we’ll see something else happen first, which is: The law says the states have to get ready to go by … Dec. 31, 2026, to be ready to go live in January. But it says if they encounter a hardship, if they’ve been making good-faith effort towards getting ready for the work requirement, and they’ve encountered some hardship, and they, like, can’t make the deadline, they can apply for a waiver, basically a two-year extension from CMS. The Trump administration has been extremely clear to states about this all the way along, basically saying, You are not going to get these, we are not going to grant them, like, you know, maybe if there’s like a volcano that goes off in your state and the entire mainframe that holds your Medicaid enrollment system is melted, like, we’ll talk. But I think a lot of states now, especially some of these blue states that are really concerned about this stuff, I think that they are going to apply now, which they might not have done before. And I think if they are denied, I could see some lawsuits around that waiver process to just say, Look, like, you just changed the rules very late. There’s no practical way that we can get this done in time. We have been proceeding in good faith, and, you know, we need more time. So, I think that there could be litigation. I also think they did have this temporary policy for 2027 around self-attestation, which I think does help states get out of some of these, like, really tricky technical issues in the first year. I don’t know, like maybe there could be some further extension of that. But I don’t know. I’m curious, Alice, what, or Liz, what you think. But I am not holding out much expectation that Congress is going to make major changes here. 

Ollstein: Well, and because of the January deadline, making changes could solve one problem and create another. Because states already feel like they don’t have enough time, and they already feel like the rules of the game are being changed in the middle of the game. You know, what they had been spending months preparing for now has to change because of this guidance. If it changes yet again, and they have even less time to adapt and make a new change … like you said, they’re making hires, they’re trying to make contracts based on this, and so even as advocacy groups, and even states ask for additional changes, additional changes could make it even harder to implement in time. 

Rovner: All right, well, let us move on, because there’s lots more news. Speaking of new regulations, a proposed rule from the Office of Management and Budget would basically make all grant funding from the U.S. Treasury subject to political appointee approval. Currently, most grant-level awards are determined by career scientists and peer reviewers, who make decisions based on scientific merit. Under this new policy, grants would have to, quote, “demonstrably advance the president’s policy agenda.” At the same time, the new 400-page document includes many new rules for grant recipients, including universities and other entities, including limiting their ability to engage in so-called issue advocacy and allowing the revocation of grant funds if recipients take actions that are not deemed by administration political officials to be in, quote, “the public interest.” Now, all this isn’t totally new. Office of Management and Budget Director Russell Vought has been talking about this literally for years. It was laid out in Project 2025 as well as in several executive orders that have been issued by President Trump, which is why I think it’s getting relatively little attention, given the pretty earth-shaking changes that it envisions. Still, putting it out in an actual proposed regulation raises the stakes here, doesn’t it? 

Whyte: Yeah, I would echo that. This has been on Russ Vought’s radar for many years. If you talk to folks, you know, who know him and know his thinking, this all comes down to this thinking about the executive branch and its role in the Constitution, and how there shouldn’t really be independent agencies or branches of the executive branch that aren’t doing what the president wants. And so that is manifested in this regulation that says you can’t promote anti-American values, contribute to illegal immigration, things like that, that are policy priorities of this administration, and a new filter that’s going to be applied to all federal grant-making, once this is finalized. And it’s a distillation of that theory about the executive branch that is now coming out in practice. 

Rovner: Although going back to what we were just talking about with the Medicaid work requirements, I mean, the idea of having to have a political appointee involved at this extremely micro level in the hundreds of thousands of grants that the federal government issues every year. I mean, some of it is the ideology, but some of it is just the logistics. I know that this has been part of the problem of getting money out the door at the National Institutes of Health — is that normally money that just sort of flowed when it was approved by career workers now has to wait for the approval of a political appointee, and there are not enough political appointees to approve all of these things, and people aren’t getting their money. So, I mean, this is a logistical logjam, as well as an ideological one, right? 

Sanger-Katz: And we’ve seen some evidence of this. The Department of Homeland Security has had an informal policy like this, where the director was personally approving any expenditure, I think, more than 100 —now, I’m forgetting. 

Rovner: $100,000, yeah, I think it was. 

Sanger-Katz: There was some threshold, and it did lead to this huge backlog, because you know this is a busy person who has a lot of other things to do. And it was leading to a lot of money not getting spent that had been authorized by the staff members who thought it was appropriate. And I think there’s also potential for corruption with this kind of system, where you have these bottlenecks where very few people are making all the decisions about where money goes, because then there is an obvious focus on where you send your lobbying efforts to try to get favorable outcomes in contracting and in grant-making. 

Whyte: Yeah, the concern from the science and public health organizations is that the merit of the scientific grant will no longer matter, that how good the science is won’t be the chief thing. 

Rovner: Yeah, that this is all about, you know, promoting the president’s agenda. I’m just wondering what Republicans will feel about this when Democrats, you know, take back the administration and try to do the same thing. 

Whyte: I think that’s exactly the concern that a lot of conservatives on the Hill have, which is, you know, all of this is fine and well, but you’re not going to like it when the tables turn. 

Rovner: Yeah, that was — that’s what I said, you know, when the Affordable Care Act passed, I said, there’s an awful lot of places where it says the secretary shall, or the secretary may, or the secretary will. I said, you know, the secretary’s not always going to be somebody who supports this. That … turned out to be a correct prediction.  

Moving on, the idea of this administration playing down its vaccine skepticism was so last month. Last Friday, President Trump issued an executive order basically endorsing Health and Human Services Secretary [Robert F.] Kennedy [Jr.]’s revamp of the childhood vaccine schedule, and ordering the CDC [Centers for Disease Control and Prevention] to review it and, quote, “take any appropriate steps to update said schedule.” What happened to “This isn’t popular, so we’re not going to push it,” or is doing this on a Friday afternoon how the administration is trying to placate the MAHA [Make America Healthy Again] movement, but not really make big headlines here? I also — this is another story that I think kind of flew below the radar. 

Whyte: Yeah, it’s funny because HHS can’t really say anything about this executive order due to their litigation ongoing, and so it’s just kind of out there. But it’s totally unclear to everybody why or what it’s expected to do, given that the court has put everything regarding the Advisory Committee on Immunization Practices on hold, and there currently is no ACIP. So what exactly the White House was intending with this remains pretty opaque, I think. 

Rovner: Like a lot of things, although I have started to, you know, like, pay attention on Friday afternoons again. Meanwhile, our podcast colleague Lauren Weber has a story about how the anti-vax movement is trying to achieve its goal through the courts by arguing that vaccine mandates that lack religious exemptions are unconstitutional. And one of those cases is likely to reach the Supreme Court at some point in the not-too-distant future. What would it mean to public health if the court were to actually strike down the ability of states to impose vaccine mandates, which is one of the possible outcomes here? Or, as the groups claim, is this just about getting the five states that don’t have religious exemptions from vaccines into alignment with the rest of the states? 

Sanger-Katz: I think there is pretty strong evidence from the studies of state policies over the years that having really limited exemptions on mandatory vaccination really increases the number of kids who get vaccinated, that the more ways there are to kind of wiggle out of the requirement, the more parents will choose one of those options. And the narrower the exceptions, the fewer will. So, there are clearly some parents who really, really care about this issue and who do qualify for one of these exemptions. But I think there’s a larger number of parents who are maybe ambivalent or have kind of weakly held preferences not to vaccinate; if they’re not really being forced to do it, they won’t do it. If they are really being forced to go through a lot of administrative burden to prove that they need an exception, then they tend to vaccinate. And so I think this is an exception that almost every state already has, but I think that the evidence is relatively clear that opening up more exceptions in those states that don’t have them now, probably on the margin, will lead to fewer kids getting vaccinated in those states. 

Whyte: Yeah, the five states that don’t allow religious exemptions to vaccine mandates are West Virginia, California, New York, Connecticut, and Maine. So that would be, you know, an immediate effect there. But then I think we can expect from a Supreme Court precedent, if one is set, that other states, state legislatures, local school districts would perhaps expand the religious exemptions they have now, or make them easier. We’ve seen that how much friction there is when you get a religious exemption really matters. So, like, do you have to just sign a form, click a box, or do you have to go meet with someone and prove that you, you know, have sincerely held beliefs on this matter? And those kind of friction points matter a lot too. 

Rovner: Yeah, I just, I couldn’t help thinking, as I was reading this story, about going back to the Dobbs case, the abortion case, which was not originally intended or filed as one that was going to overturn Roe, and makes me wonder what the Supreme Court might do, even if the question that’s raised is, you know, about these religious exemptions, could they go on and overturn — I think that precedent was from 1905 that said that states can have vaccine mandates — and wondering whether a) that’s possible, and b) that’s likely. 

Sanger-Katz: It’s always hard to predict what the Supreme Court is going to do. 

Rovner: Always. 

Sanger-Katz: It’s really up to them. They’re an idiosyncratic group of people who get the final say on a lot of things. 

Whyte: I thought it was interesting, Lauren’s story was great, and one of the things it pointed out is that what the Supreme Court did is specifically give instructions to this lower court to go back and look at this question about religious exemptions for vaccine mandates using a case that happened in Maryland, where the Supreme Court found that the school district could not mandate that kids participate in lessons with LGBTQ content that would conflict with their parents’ religious beliefs. So in other words, the families had a religious right to not have to participate into that in school. And the Supreme Court is asking, is there a similar right that a family would have to not have to participate in vaccination to attend school? So that’ll be an interesting question, and it could, as we said, you know, have big impacts across the states and how school districts handle vaccine mandates for kindergartners. 

Rovner: Although I think this will take a while to play out. And before we leave the subject of vaccines, an update to our discussion from a couple of weeks back about the global vaccine alliance known as Gavi, which the U.S. owes some $600 million appropriated by Congress. That’s money that’s been held up by HHS Secretary RFK Jr. At a hearing of the Senate Foreign Relations Committee on Tuesday, Secretary of State Marco Rubio said his agency, which has historically been in charge of Gavi for the U.S. government, said that it is, quote, “sort of at a stage where we are going to re-engage. We need to drive this to an outcome.” Was that his polite way of saying that he plans to give Gavi the money that Congress allocated to it, and RFK Jr.’s concerns be damned? 

Whyte: I think a lot of people are reading it that way. You know, the State Department has a very practical view on these things. I also thought the way that Rubio phrased how they were giving Secretary Kennedy a large amount of deference because of his strongly held views on this matter was a very interesting insight into how the Cabinet works and how Trump has instructed his top officials to work together. And I think part of the problem here is that they’re just running into the practicalities of not having an Ebola vaccine. And so the State Department is going to have to do what it feels must be done. 

Rovner: Yeah, it was just a little peek behind the curtain of this intra-agency squabble that’s going on. We’ll wait and see if that happens. 

Whyte: I should say that they don’t have a vaccine for this newest outbreak that is going on. They, you know, the older Ebola vaccine, it was not appropriate to treat this one or to prevent this. 

Rovner: All right. We’re going to take a quick break. We will be right back. 

All right. Our theme this week seems to be federal rulemaking. So, here’s another one. The Trump administration has issued final rules attempting to fix the arbitration system created in the, quote, “No Surprises Act” — that it is safe to say has not worked as it was designed by Congress. Margot, remind us what went haywire with the process that’s actually in practice [to] dramatically increase what providers get paid, and will these new rules make it all better?  

Sanger-Katz: So this is a system supposed to solve the problem of surprise medical billing when you, say, go to the emergency room and some doctor treats you, and it turns out that that doctor didn’t take your insurance and sends you a huge bill. So the law did away with that, basically said no one is allowed to send you a huge bill in that situation, and then it created a system on the back end for the insurance company and the doctor to kind of fight it out and figure out what the doctor was going to get paid if they didn’t have a contract with that insurance company. And the expectation of Congress was that this is a system that would be used fairly rarely, that most of the time this would be negotiated between the parties; they would just decide on a price and work it out, but every once in a while there would be a rare case where they would need to litigate their dispute. And it would go, they set up this arbitration system where a neutral arbiter, usually a lawyer, but not always, would hear arguments from each side and decide who had the more reasonable position, and would have to choose between the two bids. They couldn’t negotiate any further, but, you know, the doctor would say, This was a very complicated case, I deserve $10,000. And the insurance company would say, No, no, no, like, normally for this kind of visit we pay $500. And the arbitrator would have to decide which is more reasonable: $10,000 or $500. 

What’s happened, I think, to the surprise of a lot of people, is that instead of 17,000 of these cases going to arbitration, which is what CMS expected when the law passed, more than a million are going through a year. There has just been an explosion of cases coming through the system. Lots and lots of medical disputes are now being decided using this process, and the doctors are winning almost all of the time. I think in the last quarter for which there is data, 88% of these arbitration claims are being decided in favor of doctors. And because of that, the doctors, in many cases, have started getting more aggressive in what they ask for. Because they keep winning, there is not really an incentive to say that price is normally $500. They’re much more likely now to ask for $10,000 than early on in the system, where maybe they were asking for $1,000. And so we’re seeing some really eye-popping awards. Not all of them; there are a fair number of awards that are, you know, within a reasonable number of multiples of what the normal price is. But there are an increasing number where doctors are just getting huge, huge, huge increases over what you would expect. And my colleague Sarah Kliff and I wrote a story a few weeks ago about a plastic surgeon in New York and New Jersey who was routinely collecting fees of hundreds of thousands of dollars for breast reduction surgeries that he had previously accepted payments of around $10,000 from the same insurer prior to this law going into place. So big problems. Lots of complaints from insurers, as you can imagine, and also from employers who, in many cases, are actually paying the bills for their workers’ health insurance directly, because they have these self-insured ERISA [Employee Retirement Income Security Act of 1974] plans. 

This rule that just came out is not getting at the real, like, meat of the system, how the arbitration works, and what … how the arbitrators make their decisions. But it’s dealing with, like, a lot of, like, technical issues about, you know, how do you submit paperwork? What kind of information do you provide? Is it all in one computer system? How can you make sure that you have identified the right insurance company? And what are the administrative fees that you pay when you want to initiate one of these claims? And so this is a very hot issue. I wrote this one story, and, like, everyone is just really worked up about it. The doctors are really worked up about it, the insurers are really worked up about it, the arbitrators are really worked, you know, everyone feels strongly about this law, and whether it’s going well or not well, or what changes or they want or don’t want. Everybody loved this rule. As far as I can tell, there have been, like, basically no complaints about this rule. The one complaint I’ve seen is that they lowered the fee to file a new case, and so I think people who feel like there are too many of these cases would like it to be a little harder to file a new case. But, in general, it seems like these were expected, helpful, technical upgrades that are just going to make the process work a little bit more smoothly and deal with some of the annoying administrative headaches. 

Rovner: But not address the deeper problem. 

Sanger-Katz: The bigger issues, I think, really do require the involvement of Congress. If Congress wants to revisit the law and change the way that this overall system is structured, they’re probably going to have to write new legislation. And I’m not sure how large the appetite is for that right now. 

Rovner: Yeah, I’m not going to hold my breath on that one. All right, that’s as much news as we have time for this week. Now, we will play my “Bill of the Month” interview with Lauren Sausser, and then we will come back and do our extra credits. 

I am pleased to welcome back to the podcast KFF Health News’ Lauren Sausser, who reported and wrote the latest “Bill of the Month.” Hi, Lauren. 

Lauren Sausser: Hi. 

Rovner: So, this month’s patient got caught in one of those fights between the insurance company and the hospital, and, of course, it turned out to be harder to untangle it than it should have been. Tell us who she was, what happened to her, what kind of care she needed. 

Sausser: Sure, so Jan Anderson is a 65-year-old woman who splits her time between Arizona and Washington state. And Jan was hiking with her husband about a year ago in Arizona. They were in Sedona. And later that afternoon — it might have even been pushing into early evening — she started repeating herself. So she asked her husband, Did we hike today? And he said, Yes, we hiked. And then a few seconds later she asked the exact same question, Did we hike today? And it was clear almost immediately that Jan needed to be seen. So her husband drove her to a freestanding ER in the Sedona area, and that facility assessed her but was not equipped to deal with patients who might be experiencing stroke. They didn’t know what was happening with Jan at this point, so she was airlifted to a hospital in the Phoenix area, where she was admitted. And they ran a bunch of different tests and images, and it turns out she wasn’t having a stroke, she was having, she was experiencing an episode of something that’s called temporary [transient] global amnesia — which, the good news is, is benign, and as the name suggests, temporary. But her hospital bill ended up being quite a lot, even though it was less of an emergency than they originally thought. 

Rovner: Well, of course, that’s what they always tell you: If you’re having symptoms, you should go to the emergency room. So, she did have insurance, right? So, why did the hospital in Phoenix think that she didn’t? And how much was the bill? 

Sausser: OK, so the total bill was $59,181. That’s just for the care she received at the hospital in the Phoenix area. She did have insurance. She was insured through Molina [Healthcare], and it was a plan that she had purchased through the federal healthcare.gov marketplace. For some reason, though, her insurance information was not transferred from that freestanding ER in Sedona to the facility where she was airlifted in the Phoenix area. So it was a mistake, but that second facility billed her as if she was a self-pay patient with no health insurance. 

Rovner: Now, once the hospital did figure out that she had insurance, why did the insurance company then still reject the claim? 

Sausser: It took a while to get some answers on this, but eventually Jan learned that Molina was not going to cover the cost of that care she received in Phoenix, because the Phoenix hospital had not sought prior authorization for her to be admitted. Now, under the federal No Surprises Act, emergency services are supposed to be paid for in-network without prior authorization. In this case, the insurer was saying Yes, we do cover emergency services without prior authorization, but in this case her care team was recommending that she be admitted. And the insurer argued that the insurance company needed to be notified before that happened. 

Rovner: So, I know I ask this question all the time: Why didn’t the No Surprises bill [Act] get the patient out of the middle of this obvious insurance company hospital dispute?  

Sausser: This … in this case, the No Surprises Act kind of worked. Jan received a bill pretty early on saying she owed about $15,000 of that $59,000 total charge. After she told the hospital that she did indeed have coverage, that bill was suspended. There was no one technically knocking on her door pressuring her to pay any amount of the charges she had accumulated in the Phoenix hospital. But every time she would log on to her patient portal, she would see these outstanding charges. The hospital didn’t understand why the insurance company wouldn’t pay. The insurance company was saying she needed to have had prior authorization, and these charges just weren’t disappearing, and so eventually she started reaching out to insurance commissioners, lawmakers, trying to get someone to pay attention, because she was worried at some point she might owe the hospital $59,000. She couldn’t get these charges resolved, and didn’t understand why. 

Rovner: And what eventually happened? 

Sausser: Well, she eventually contacted us. And, as is often the case when journalists get involved with these health insurance issues, the ball started moving. So Molina started talking to the hospital in the Phoenix area, the Phoenix-area hospital has assured Jan that she will not be billed for any of the $59,000. Even if Molina doesn’t pay, the hospital has assured her that they will write off the balance and that she will not be billed. Jan has asked for that assurance in writing. As of the last time I spoke to her, she hasn’t gotten that, but she has been told she will not have to pay any of it. 

Rovner: So, what’s the takeaway here? I mean, it sounds like, you know, she did everything right, and it seems to be resolved. 

Sausser: It seems to be resolved, although the last I heard the $59,000 in charges haven’t necessarily gone away. I spoke with a patient billing expert about this, and the advice that she gave in a situation like this, you know, when you have a hospital stay, you get all sorts of paperwork in the mail afterward. You get paperwork from the insurer, you get paperwork from the provider. This billing expert recommends that you look at the patient responsibility portion of your explanation of benefits. Now that’s a document that you will get from your insurance company. It should list the charges that the hospital has billed, but it should also list the portion of those charges that the patient is responsible for. In Jan’s case, her explanation of benefits clearly stated that she was not responsible for any of it. Now, that didn’t mean that those $59,000 in charges was automatically disappearing, as this story shows. More than a year later, it’s still not resolved. But it shows you that the insurance company is saying you are not responsible for this bill, in this case. The billing expert that I spoke to recommended that the patient mail or email the explanation of benefits from the insurer to the hospital and show that the patient responsibility is zero, in order to get that balance cleared.  

Rovner: We’ll see if this happens. Lauren Sausser, thank you so much. 

Sausser: Of course, thanks for having me. 

Rovner: OK, we’re back. It’s time for our extra-credit segment. That’s where we each recognize a story we read this week we think you should read, too. Don’t worry if you miss it. We will post the links in our show notes on your phone or other mobile device. Alice, why don’t you start us off this week? 

Ollstein: Yeah, I have a very interesting piece from The New York Times by Simar Bajaj, and it’s called “The Return of Blaming and Shaming in Public Health.” And it is about the trend we’re seeing under the MAHA movement, largely, you know, expressed by Secretary Kennedy, back towards putting a lot of focus on personal responsibility, personal lifestyle choices, and less focus on policy and environmental factors. And it’s, you know, digging into the history of that on a few different fronts, both with, you know, infectious diseases, but also with things like obesity. And it is talking about basically how we’re seeing a return to a system that didn’t really work before, which is, you know, basically browbeating and shaming people into healthier behaviors that did not work in the past. And yet we are sort of attempting to revive that, and part of that is a reaction to the fact that trying to move away from that also hasn’t seemed to work either. So it really explores these, the different history of these approaches in public health. 

Rovner: That’s why public health will continue to be studied. Margot. 

Sanger-Katz: I want to suggest an article in ProPublica from Alec MacGillis called “‘No One Is Watching’: How Trump Reversed Biden’s Crackdown on Gun Trafficking.” I’ve been interested in the public health problem of gun deaths for many years, and I have to admit that Alec in the story has tackled an issue that I just wasn’t watching. I think it’s, like, one of these other things that has a little bit slipped beneath the radar, because the Trump administration makes so much news. But they, through the ATF [Bureau of Alcohol, Tobacco, Firearms and Explosives], which regulates firearms and firearms dealers, has really loosened up a lot of the restrictions that the Biden administration had put in place to try to prevent the trafficking of illegal guns onto the streets of American cities, where a lot of crime happens. And the story sort of looks at those policy changes and what it means for gun dealers and for people who buy guns. And I think it is too soon to tell whether these policy changes will have an effect on violence and gun deaths on the streets. I think it takes, in many cases, a long time for illegal guns to kind of get out there and be used for crimes. But we have been in this period of really merciful reduction in the crime rate and the murder rate in many American cities for the last few years, and I do think that Alec raises the question that if we are seeing more guns on the streets of the future, whether those declines can be sustained.  

Rovner: Liz. 

Whyte: My choice is from my colleagues Anna Wilde Mathews and Christopher Weaver at The Wall Street Journal, and it’s entitled “The Autism-Therapy Business Is Booming — And So Is the Billing Abuse.” And it’s a really great look at how there are all these providers that have really exploited this new and growing segment of therapy for kids with autism, which is obviously a growing diagnosis, such that you have, you know, this mom in New Jersey who hears that she can get a no-out-of-pocket-cost treatment for her son and has someone come a few days a week, three or four hours of therapy, and winds up with a bill for more than $900,000, which is obviously a nightmare. So we had previously looked, The Wall Street Journal had, [at] Medicaid billing abuse with these autism therapy services, and found that it was a huge issue. And then this is a look at kind of the private insurance sector, where all these providers are charging private insurance a lot, and when an insurer says, No, we’re not going to pay that, some of these bills end up falling on the families, which is really tragic. About 40 large employers, covering 3.5 million people, their expenses for autism therapy doubled from 2021 to 2025, to $108 million. The Wall Street Journal looked at a bill that was $30,000 for one kid to get autism therapy for one day; it’s actually quite insane. So, kudos to my colleagues for writing about this.  

Sanger-Katz: Can I share one fact from this article that really struck me? 

Rovner: Sure. 

Sanger-Katz: One of the things that these reporters did that I thought was so smart is they documented the growth in the autism services workforce. So, the number of people who are providing this kind of behavioral therapy to children with autism is now larger than the workforce of the U.S. Postal Service. That’s according to a tweet from Derek Thompson, who compared the numbers. But it is kind of astonishing, the growth, not just in the Medicaid spending, not just in private insurance spending, not just in some of these unjustifiable bills that individuals have faced, but also that this is now a huge part of the American workforce is serving in this specific industry right now.  

Rovner: And if this story sounds familiar, it’s because we had a different autism therapy abuse story last week as one of our extra credits. It was written by Margot here, and Sarah Kliff. Yeah, a burgeoning source for reporters to plumb. My extra credit this week is a joint investigation between my colleagues here at KFF Health News and the AP. It’s called “Festering Infections to Untreated Cancer: ICE Detainees Describe Medical Neglect Across US.” The team of six reporters and analysts dug through court records to document that hundreds of immigration detainees in 33 states have filed suit, charging that they were denied adequate medical care. Quoting from the story, “Requests for help went unanswered for weeks, blood sugars rose, infections festered, cancers remained untreated, detainees collapsed and had seizures.” And there’s not even anyone to complain to. Officially, the administration shut down the office of the Immigration Detention Ombudsman earlier this year. The story is really infuriating and worth reading in its entirety. 

OK, that is this week’s news. Thanks to our editor this week, Stephanie Stapleton, and our producer-engineer, Francis Ying. We also had production help this week from Taylor Cook. A reminder: What the Health? is now available on WAMU platforms, the NPR app, and wherever you get your podcasts — as well as, of course, kffhealthnews.org. Also, as always, you can email us your comments or questions. We’re at [email protected]. Or you can still find me on X @jrovner, or on Bluesky @julierovner. Where are you guys hanging these days? Alice. 

Ollstein: I am on Bluesky @alicemiranda, and on X @AliceOllstein. 

Rovner: Liz. 

Whyte: I am @lizessleywhyte.bsky.social, and on X @l_e_whyte, and Signal: JournoLiz.80. 

Rovner: Margot. 

Sanger-Katz: I am @sangerkatz at all the places, and on Signal. If you want to send me tips, I’m @sangerkatz.01. 

Rovner: We will be back in your feed next week. Until then, be healthy.