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The new Medicaid work rules in President Trump's tax-and-spending law put states on a tight timetable for setting up systems to notify millions of recipients about the requirements — and to track if they're complying.

Why it matters: Previous efforts to set work rules in Georgia and Arkansas showed it could be a messy and expensive process that generally relies on outside vendors to set up the necessary infrastructure.

• Georgia spent nearly $100 million but in two years only enrolled a fraction of those eligible at a cost of $13,000 per enrollee.

State of play: The new law starting in 2027 will require states to condition Medicaid eligibility for able-bodied adults on working, volunteering or doing other qualifying activities for at least 80 hours per month.

• States have to verify recipients' eligibility monthly and do redeterminations at least twice a year. The new law provides $200 million to states for implementation.
• The technical requirements, and the compressed time frame for rolling out the rules, will likely leave many states scrambling or applying for extensions, Medicaid experts say.

The consequences of failing could be significant. Many of the nearly 12 million people expected to lose coverage under the law will do so because of red tape around work requirements and the inability to show they're complying.

• 64% of adults with Medicaid already work full time or part time, according to an analysis of census data by the Center on Budget and Policy Priorities.
• Another 32% are caretakers or are ill or disabled, attend school, or are retired.

Among the challenges is how to track someone's volunteer hours, or hours worked if an individual has a varying schedule, like a gig worker. There also are factors like determining the status of a behavioral health problem that could qualify for an exemption.

• "It sounds simple, but when you're talking about silos, talking to one another, it's just not," Andy Schneider, a Medicaid expert at the Georgetown University McCourt School of Public Policy.

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A federal judge in Texas vacated a Biden-era rule that would have removed medical debt from consumers' credit reports, agreeing with Trump administration and credit industry arguments that the policy change was regulatory overreach.

Why it matters: The rule would have wiped an estimated $49 billion from some 15 million Americans' credit reports and kept lenders from using medical information in their decisions.

• But the Trump administration joined credit reporting groups in challenging the rule, which was due to take effect at the end of this month.

Driving the news: U.S. District Court Judge Sean Jordan, a Trump appointee, ruled on Friday that the rule exceeded the Consumer Financial Protection Bureau's authority because it essentially rewrote the Fair Credit Reporting Act.

• State laws that prohibit credit reporting agencies from including coded medical information are preempted by the federal act, Jordan wrote.

Zoom in: Leading credit reporting agencies like Experian, Equifax, and TransUnion said the rule could have given lenders an inaccurate and incomplete picture when making loans.

• The American Medical Association has argued that medical debt isn't an accurate barometer of people's ability to repay other loans, because most bills are a one-time or short-term expense from a hospital stay or accident.

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Cases of COVID-19 are on the rise or likely rising across half of the U.S., including much of the South as well as on the West Coast, according to a weekly update from the CDC.

Why it matters: The data suggests another summer of illness could be in the offing as more people lose protection from vaccination, natural immunity wanes and the virus keeps mutating.

• A CDC report posted last week shows COVID circulation in the U.S. has had two consistent annual peaks — in late summer and winter — since 2020.

What they're saying: COVID-19 cases are growing in 25 states, including Florida, Texas, California and Ohio, per the CDC. They're likely growing in more than a dozen others.

• COVID-19 activity detected through wastewater surveillance and emergency department visits for COVID-19 remain low across the country, while influenza and RSV visits are "very low."

What to watch: The most dominant COVID variant circulating in the U.S. is NB.1.8.1, nicknamed "nimbus", per the CDC.

• The variant is more transmissible than prior variants and has been nicknamed "razor blade throat" by some, ABC News reported.

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Trump's new law and its nearly $1 trillion in Medicaid cuts are set to present new challenges — and opportunities — for startups serving program beneficiaries, Erin Brodwin wrote first on Pro.

The big picture: The venture-backed businesses that heavily courted Medicaid markets in the early 2020s face tightened budgets, reduced payments and fewer customers.

Context: The GOP tax bill decreases payments to hospitals or nursing facilities across at least 29 states, per a KFF analysis.

• It also makes immigrants with legal status who don't have green cards — including most refugees and asylum seekers — ineligible for Medicaid coverage.

Inside the room: Some Medicaid-focused startups have already seen direct fallout from the law in the form of paused payer contracts.

Case in point: One startup executive says it received notice last week from a not-for-profit insurer — and one of its largest Medicaid plan provider partners — that it was pausing all new contracts, meaning the company "will need to pivot from [its] main go-to market."

What they're saying: "The concern [about the bill] is genuine and warranted," says Medicaid startup adviser Shereese Maynard. "If I were leading one of these startups, I'd immediately re-run my revenue models, diversify my payer mix, and build a state-by-state advocacy plan."

What we're watching: Some of the most well-funded Medicaid startups, per PitchBook, include Cityblock Health, which provides primary care and other services to marginalized populations, and Unite Us, a tech company with services like eligibility verification.

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