Healthcare professionals know that delivering high-quality care isn’t just a clinical concern, it’s also about how programs are funded and managed. The recent guidance from the Centers for Medicare & Medicaid Services (CMS) on strengthening oversight of Medicaid financing offers a timely reminder of how value-based care depends on sustainable, transparent systems.
Why this matters for value-based care
Value-based care hinges on aligning incentives so that providers, payers, and patients all benefit from healthier outcomes rather than more services. If financing mechanisms shift costs incorrectly or obscure accountability, the signal to invest in prevention, coordination, and quality weakens. CMS’s new guidance aims to tighten the link between funding and program integrity by limiting certain health care-related taxes and closing a financing loophole that moved costs to the federal side without improving care.
What CMS is doing
Starting with state fiscal years in 2026, there will be new thresholds on provider taxes, taxes enacted and imposed as of July 4, 2025, as part of the reforms. States must unwind practices that allow shifting of federal matching funds in ways not aligned with intent. Transition periods are already in place: states have until the end of their 2026 fiscal year for managed care-organization taxes, and until the end of their 2028 fiscal year for other tax classes.
What this means for you, the care team
As a care team member, you may not be directly involved in financing mechanisms, but you are impacted by them. When funding is managed responsibly, programs aimed at care coordination, population health, and health equity receive the support they need. Conversely, unstable financing can lead to fewer resources or increased administrative burden—drawing attention away from patients. A stable system means you can focus on doing what you do best: delivering care that improves lives.
What to keep an eye on
- Watch how your state’s Medicaid program responds to the guidance. What changes might affect your workflow, covered services, or incentives for preventive care?
- Stay engaged in value-based efforts such as Accountable Care Organizations (ACOs), patient-centered medical homes, or integrated behavioral-physical health models. Funding integrity supports these models.
- Highlight outcomes and quality metrics in your work. Demonstrating value aligns with the broader purpose of these reforms.
When the plumbing of healthcare financing is solid, clinical care rises to its potential. By understanding and staying aligned with these changes from CMS, you help ensure care is not only delivered—but delivered well, sustainably, and equitably.