Last week, I wrote about Medicaid work requirements and the idea that every new requirement eventually becomes someone’s responsibility. This week, a smaller group of states began revealing where implementation pressure, administrative burden, and operational demand may concentrate first. New York and Connecticut rose above the broader landscape because each exposed a different part of the machinery required to move policy into practice.

FIELD NOTES

I spent part of today (Monday) listening to a policy workgroup debate transportation failures, peer support requirements, credentialing standards, reporting structures, contractor oversight, and governance processes. On the surface, it sounded like one of those meetings healthcare produces in endless supply, full of acronyms, policy references, and administrative language capable of draining the life from a room in record time.

Then somebody asked whether transportation performance standards were actually being met.

The question landed with a kind of simplicity that instantly changed the conversation. For years, members have complained about missed rides, delayed pickups, and appointments lost to logistics. Everyone in the room understood the problem. What followed was an answer about monitoring requirements, contractor responsibilities, reporting pathways, and oversight mechanisms.

Listening to the exchange, I found myself thinking about how often healthcare ends up arguing over entirely different versions of the same reality. A member misses dialysis because transportation never arrives. A contractor misses a performance target. A state agency identifies a compliance issue.

Three descriptions of a single event, each becoming more abstract as responsibility expands outward from the person experiencing the consequence.

The farther a problem travels from the point of impact, the more it transforms.

A missed ride becomes a transportation issue. A transportation issue becomes a contractor issue. A contractor issue becomes a reporting issue. A reporting issue becomes a governance issue.

Eventually the original event survives only as a data point moving through a system designed to understand thousands of similar events at once.

Later in the day, while discussing reimbursement and healthcare innovation, I heard the same pattern from another angle. One conversation revolved around expertise, relationships, trust, and service quality. Another revolved around attribution, documentation, reimbursement pathways, procurement requirements, and compliance. Both conversations were trying to answer a larger question healthcare rarely asks directly:

How does a useful idea survive success?

Because success changes the nature of the problem.

A service helping twenty people can run on relationships.

A service helping twenty thousand people runs on infrastructure.

Because while everyone I talk to these days believes in social care,

the complicated reality is that every layer added to preserve a service also creates distance from the reason the service exists.

Healthcare spends enormous energy searching for innovation. Far less attention goes toward a harder problem. Once an innovation succeeds, how much structure can accumulate around it before the structure becomes the dominant feature of the thing itself?

I left the meeting wondering whether every successful healthcare intervention eventually faces the same test.

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PULL STATES

WINDOWS

Places where pressure, funding, procurement, implementation, or operational demand is becoming visible.

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California is entering a decision period that will influence how healthcare buyers evaluate social care over the next several years.

This week, DHCS opened a 30-day public comment period on renewal of the CalAIM Section 1915(b) waiver. The renewal preserves existing CalAIM authorities while advancing integration of specialty mental health and substance use disorder services into a unified delivery structure.

For healthcare executives, the significance is operational. Managed-care organizations, ACOs, providers, and social-care operators are increasingly concentrating investment around programs that improve utilization control, strengthen quality performance, support retention stability, and operate inside accountable reporting environments.

Read on for more on:

• what California’s waiver renewal signals operationally

• which social-care categories are gaining procurement strength

• where procurement pressure is increasing

• how organizations should reposition strategy over the next 90–180 days

• and which capabilities are becoming most durable inside managed-care economics.

Read more

Good morning,

This week’s signals point to a healthcare market placing greater emphasis on operational control infrastructure across post-acute care, Medicaid administration, and duals coordination.CMS froze new Medicare enrollment for home health and hospice providers as part of an expanded anti-fraud initiative, increasing scrutiny on provider validat…

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The RFI, published February 13, 2026 (responses due March 5, 2026), explicitly solicits feedback on:

• Case management caseload ratios

• Technology and care coordination models

• Strengthening plan relationships with skilled nursing facilities and assisted living providers

• Program integrity requirements

These inputs directly inform how the August RFP will structure operational intensity, coordination expectations, and compliance burden.

AHCCCS’ bidders library outlines the procurement timeline for RFP YH27-0001:

• RFP publish date: August 4, 2026

• Proposal due date: September 24, 2026

• Award: January 2027

• Contract effective date: October 1, 2027

That timeline creates two clocks:

1. Immediate: RFI responses due March 5, 2026

2. Structural: RFP requirements harden August 4, 2026

Once the RFP publishes, caseload ratios, care coordination expectations, and integrity reporting structures will be fixed for pricing and subcontract alignment.

Exposure is measurable. AHCCCS reports 75,509 ALTCS members as of February 1, 2026, a high-cost LTSS population where adjustments in case management intensity or post-acute coordination expectations flow directly into PMPM assumptions and subcontract repricing. In this phase, design decisions determine operational cost structure before the bid window opens.

Where This Hits Pricing and Positioning

The implications for PMPM assumptions, subcontract margin exposure, and competitive advantage sit below.

Paid subscribers receive:

• Pricing sensitivity scenarios
• Margin compression risk mapping
• Vendor advantage analysis
• Recommended posture before March 5

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On February 11, 2026, Utah implemented PRISM update C4-1.21 establishing a Community Health Worker (CHW) provider type within its justice-involved 1115 waiver population.

The change includes:

• A formal CHW enrollment pathway

• Defined service scope

• Claims adjudication logic

• Recognition across contracted ACO plans

This is an operational change at the payment architecture level.

While it activates billing it doesn’t expand waiver authority or introduce new benefit categories.

And since authorization alone doesn’t necessarily move Medicaid performance, today we talk about whether this activation will translate into measurable, financially material claim flow inside managed care.

Across other states with CHW reimbursement, enrollment scaled gradually, billing conversion took time, and financial materiality was conditional.

Most states did not see visible acceleration within the first 12–18 months.

Utah enters Year 0 with a live payment rail and defined adjudication rules.

This edition evaluates:

1. What changed structurally under PRISM

2. Why prior CHW billing states did not produce immediate financial lift

3. The specific execution benchmarks that would make Utah financially material

OPENING

Mercer – Sr. Government Healthcare Data Consultant

Strategy & Consulting
US – Hybrid (3 days in-office)
$88,000–$176,000

Define and execute healthcare data strategy for government consulting engagements, supporting senior actuarial staff and project leads. Analyze and validate large Medicaid and government healthcare datasets using SAS and SQL. Identify data anomalies, assess downstream actuarial and policy impacts, and communicate implications to client teams. Conduct peer review of technical analyses and mentor junior staff. Support project scoping discussions and advise on analytic approach flexibility.

For people who: Want to sit at the data-actuarial interface shaping Medicaid rate setting, risk modeling, waiver evaluation, and government program performance analytics.

APPLY HERE

Also just added roles on our job board : Senior Consultant, Medicaid Policy (HCBS) at BerryDunn, Senior Advisor of Healthcare Programs & Policy at Ripple Effect, Senior Manager of Payer STARS/Quality Clinical Consultantation at PwC, and Director of HEDIS Business Operations at Clover Health.

WHAT JUST SHIFTED

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A Medicaid CFO doesn’t start the week by asking about equity.

They start by asking what moved.

Did a contract lane formalize?
Did a waiver reopen financing logic?
Did a procurement lock?
Did a benefit clear administrative review?
Did a denominator slip?

This week, all of it moved.

New Jersey formalized housing inside Medicaid contracting.
Indiana fixed the runway for a $68B rebid.
Florida reopened behavioral financing authority.
Michigan closed a $4.9B procurement window.
North Carolina began defining metrics before competition.

At the same time, a Blue Shield job posting quietly made something explicit:

Community Resource Centers are no longer “programs.”
They are portfolio assets measured by KPI alignment, cost-benefit modeling, and sunset discipline.

And underneath that shift sits the theme of this week:

Pediatric, maternal, and family SDOH have crossed from mission language into administrative logic.

Externally, they are still described as equity investments.

Internally, they are being evaluated as near-term revenue protection mechanisms.

Plans are not purchasing isolated maternal or pediatric outcomes.

They are purchasing continuity across life stages because discontinuity shows up as:

• NICU volatility

• Pediatric ED spikes

• Postpartum readmissions

• Stars slippage

• Enrollment churn

• PMPM erosion

This collapses maternal, pediatric, and family models into one procurement equation:

When family continuity holds, revenue variance narrows.
When continuity breaks, exposure surfaces inside the same contract year.

IN THIS EDITION

This week’s map shows which states have already embedded family continuity into contract logic and which are about to.

• Capital: NJ Housing Gate

• Governance Job Signal

• Social Work Is Infrastructure

• Rebid Runway Logic

• Waiver Financing Reset

• Procurement Lock States

• Administrative Gate Map

• Pediatric Continuity Equation

• Revenue Variance Control

• 90-Day Money Windows

CAPITAL

UnitedHealthcare NJ Selects Upside

UnitedHealthcare Community Plan of New Jersey has selected Upside to deliver Pre-Tenancy, Tenancy Sustaining, and Move-In Supports under NJ FamilyCare’s Housing Supports Program.

New Jersey has formalized housing stability within Medicaid and requires managed care organizations to contract with qualified housing support providers. The benefit is defined, structured, and integrated into care management workflows.

What cleared:

• State-authorized housing benefit

• Mandatory MCO contracting

• Defined service categories

• Documentation and accountability protocols

• Workforce requirements (licensed housing specialists/social workers)

This signals that housing supports in NJ have moved from discretionary SDOH spending to compliance-routed infrastructure.

For capital, the implication is material.

Upside is now positioned as a Medicaid-aligned infrastructure operator rather than an SDOH pilot vendor. Named MCO selection within a mandated state lane reduces volatility risk and supports durability underwriting.

For competitors, New Jersey is no longer an awareness market. It is a qualification market requiring protocol discipline, integration capacity, and audit-ready documentation.

Broader pattern: capital in 2026 is flowing toward administratively defensible social care embedded inside payer workflows.

OPENING

Director, Program Development & Evaluation – Blue Shield of California (Promise / CRCs)

Posted: 02/06/2026
CA – Hybrid (Long Beach or Woodland Hills)
$170,280–$255,530 (CA) | $191,952–$288,052 (Bay Area)

Lead the strategy, evaluation, and operational alignment of 14 Community Resource Centers across Los Angeles County in partnership with L.A. Care Health Plan. Own program design, testing, scaling, and sunsetting decisions using KPIs, dashboards, and cost-benefit analysis tied to Medi-Cal and community impact. Serve as the day-to-day payer partnership lead, ensuring CRC investments align with joint strategic priorities. Build and manage a high-performing team across programming, evaluation, member engagement, and community engagement.

For people who:
Shape payer-backed social care infrastructure, translate community programs into decision-grade metrics, and sit at the intersection of Medicaid strategy, equity investment, and operational performance.

Find more high-impact healthcare openings on the Pull Job Board

SOCIAL WORK IS A CONTROL LEVER IN POST-DISCHARGE PERFORMANCE

Post-discharge outcomes are shaped as much by patient context as by clinical care. Health systems that perform consistently after discharge manage both.

Social work functions as operational infrastructure during the transition from inpatient care to home or community settings. Its value appears downstream—in utilization patterns, discharge durability, and documentation integrity—rather than as a discrete line item on a claims report.

Across high-risk populations, post-discharge performance improves when social risk is identified, resolved, and documented before patients leave the system. Housing stability, caregiver capacity, medication access, cognitive load, and isolation materially influence recovery trajectories. When these factors are addressed during discharge planning, care plans hold.

Systems that integrate social context into care transitions see more predictable utilization, cleaner episode closure, and reduced variance in readmissions and emergency department returns. These gains concentrate in cohorts where medical optimization alone produces diminishing returns and where unmanaged social risk drives avoidable escalation.

From a leadership perspective, social work contributes to performance stability across multiple domains: readmission exposure, discharge success, escalation and grievance risk, and audit readiness. Because this work does not sit neatly within service lines or reimbursement categories, its impact is often realized indirectly—as reduced downstream volatility rather than direct revenue generation.

For executives focused on margin protection and operational defensibility, this function operates as loss prevention. It reduces utilization variance that finance, compliance, and quality teams otherwise absorb later in the reporting cycle.

High-performing organizations align staffing and workflow decisions to downstream utilization outcomes, not discharge speed alone. Clear ownership of socially driven post-discharge risk improves accountability and strengthens systemwide performance.

When social context is treated as core discharge infrastructure, post-discharge outcomes stabilize. Organizations that integrate this capability achieve more consistent utilization performance and greater operational resilience in an increasingly risk-based environment.

Full talk with the Coalition of Social Work and Health here.

WHAT JUST SHIFTED

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Good morning,

Yesterday’s poll surfaced a consistent signal: internal resistance is the most common constraint on scaling social care initiatives.

Across organizations, technical capability is rarely the limiting factor. Programs reach an inflection point where progress depends on whether decision logic, ownership, and operating structure are sufficiently defined to support expansion.

This issue tracks several live signals that reinforce that dynamic.

Indiana has revised how HCBS budget increases are reviewed, shifting emphasis toward documented justification. Minnesota continues to tighten program integrity controls, affecting payment timing and market entry.

The sections that follow map where buying conditions are open, where they are constrained, and how different stakeholders are adjusting in practice. They also flag an emerging workforce planning consideration tied to authorization reliability.

Scaling depends less on proving concept and more on sustaining scrutiny.

WHAT ACTUALLY STOPS SOCIAL CARE FROM SCALING

Half of respondents in yesterday’s poll pointed to internal resistance above every other factor.

Despite ongoing emphasis on data, funding and early attribution issues, the more common constraint is whether organizations are actually structured to absorb social care initiatives once they exist.

WHAT JUST SHIFTED

Indiana Tightens HCBS Budget Approvals | CIH Funding Becomes Documentation-Gated

Indiana revised how HCBS waiver budget increases are reviewed. Starting Feb 5, CIH providers must justify requests above objective allocations with formal documentation.

↳ HCBS dollars are still available, but approval velocity now depends on documentation quality, not service need. Poorly prepared requests will stall or fail inside Q1–Q2 cycles.

THE MAP SHIFT — WHAT THIS DOES TO THE LANDSCAPE

• Indiana moves toward procurement-style discipline.
  HCBS funding behaves less like entitlement expansion and more like gated budget approval.

• Minnesota hardens program integrity statewide.
  Payment timing and market entry are now explicit risk variables.

• Operational readiness matters more than expansion plans.
  States are rewarding defensibility, not ambition, in 2026 allocations.

WHERE BUYING IS OPEN VS CONSTRAINED

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Good afternoon,

There was a time when money followed programs.

If a service showed promise, funding came later.
If documentation lagged, it was fixed after.
If audits failed, remediation followed.
Risk lived downstream.

That system ended this week.

This week, rules were funded before services.
Cash moved before care expanded.
Eligibility locked before vendors entered.
Payment required survival, not intention.

That sequence has never been this clear.

Not across states.
Not across programs.
Not across payer types.

This is the first moment where control gates activated together.

Here’s the lesson:

In 2026, you don’t win by delivering care.
You win by clearing the gate that decides what counts.

If you manage risk for a living, this is your unlock.
The chaos now has a map.
The rules are forming early.
The windows are visible.
The wrong moves are cheaper to avoid than to fix.

This edition shows where those gates are live.
It names the programs where cash is already routing.
It separates active money from scheduled authority.
It removes noise from signal.

Everything here is date-bound.
Nothing relies on speculation.
Each line holds under scrutiny.

Read this edition to:

• See which gates are already active

• Understand where spend is being rerouted

• Identify risk before it shows up in results

• Avoid backing work that can’t pass review

This will shape how you budget in 2026.
It will change how you diligence partners.
It will inform what you fund first.

Moments like this don’t repeat often.
Control consolidates once per cycle.
Those who see it early set the rules later.

Let’s walk the gates.

“I support your work because you break down parts of our industry that we all operate by using the same terms, processes, and procedures that the people who have historically controlled the industry use too.”

-Jason, a recent subscriber.

WHAT JUST SHIFTED

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Good afternoon,

For most of the last decade, “tech-enabled” social care lived in referral platforms, dashboards, closed-loop tools that felt adjacent to the real money. They were innovative, useful and easy to cut. What’s emerging quietly, unevenly, and state by state, is a different framing: tech-enabled systems are becoming the infrastructure that determines whether healthcare dollars are kept or clawed back. It’s about survivability in an enforcement era where money is embedded into rates, contracts are live, waivers are hardening, and documentation failure has become a financial event.

In 2026 terms, tech-enabled models are not care delivery. They are the systems that make care legible to payers, auditors, and regulators. Their job is brutally specific: translate activity into encounters, normalize documentation across vendors and settings, defend attribution and identity under scrutiny, and make dollars already earned provable, auditable, and retainable. This is where many organizations are already hurting. Pilots that “worked” are being cut anyway. High-trust programs are failing renewal. QA teams are drowning in manual cleanup. Withholds are missed for reasons no one can clearly explain. Vendors are blamed for problems they didn’t create. What changed is where the burden of proof sits. Once dollars move inside capitation, ambiguity becomes risk and risk becomes loss.

And while public data is everywhere—SDP pages, RFP trackers, CMS releases—clarity is not.

👉🏽 The only question that matters right now: where are tech-enabled systems becoming financially mandatory, and why?

Inside, you’ll find a live, state-by-state map of where documentation failure is already expensive, clear separation between open, withhold-driven, and locked-but-still-spending markets, concrete January 1, 2026 triggers, and buying logic that explains how money actually enters tech vendors (even without RFPs).

It’s a field guide for the next 90 days.

TAXONOMY

These vendors (and those like them) sit between social care delivery and payment, translating SDOH activity (housing, food, transportation, utilities, respite) into auditable encounters, normalizing documentation across fragmented vendors, and protecting attribution under enforcement.

Their value is brutally specific: not engagement or insight, but preventing revenue already in the system from being lost to encounter rejection, audit findings, or contract penalties. As dollars move into rates, withholds, and managed care contracts, this infrastructure becomes the control layer that decides which SDOH programs survive procurement — and which get clawed back.

You don’t spot these systems during pilots. You spot them under pressure.

• They convert social care activity into encounters, proof, and audit-ready records

• They are funded to avoid loss, not create upside — through rate embedding, withhold recovery, and QA replacement

• They simplify operations under scrutiny by reducing manual QA, vendor sprawl, and audit failures

• They become difficult to remove once embedded, because removal increases financial risk

The states below are where SDOH documentation failure is already expensive, driven by:

• Go-lives → onboarding and encounter normalization

• Locked contracts → compliance spend replaces procurement spend

• Withholds → proof budgets replace pilot budgets

• Plan churn → data hygiene windows open even without a rebid

HERE IS EVERYWHERE TECH ENABLED SDOH INFRASTRUCTURE PULLS RIGHT NOW

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Before we dive in, today offered a clear data point reinforcing the fundamentals Pull has been tracking. Reema Health’s $19M Series B paired with Havarti Risk’s actuarial validation aligns directly with the engagement, activation, and cost-movement metrics embedded in the core scorecards here. It’s a measured reminder that the market continues to reward these exact levers you read about here.

👉🏽 Here’s why Reema Health’s $19M Series B mark the beginning of delegated navigation infrastructure in Medicaid.

Everyone in healthcare is chasing the same thing: predictable margins, fewer preventable losses, and a way to keep high-risk members from slipping through the cracks.

Foundational Needs Models are the fastest way to get there. They intercept the exact failures that drain budgets, crash Stars, trigger corrective actions, and erode renewal leverage. They turn chaotic, avoidable spend into controlled, measurable, contract-grade performance lift.

When you invest in, procure, or partner with them you’re buying smoother discharges, stabilized chronic members, cleaner encounters, higher follow-up rates, and millions in recovered withholds, Stars bonuses, and SNF/readmission cost avoidance. These models transform your risk pools by reducing the friction that keeps your highest-need members from completing the basics: getting to an appointment, having power on at home, accessing food, staying housed long enough to recover, or maintaining a treatment plan.

If you want:

• Fewer readmissions you can’t explain.

• Fewer members lost to churn or non-adherence.

• Fewer Stars measures hanging by a thread.

• Fewer exec-level surprises at renewal.

• More predictable performance and more predictable revenue.

This guide is for you.

They make clinical care billable, measurable, and financially viable.

→ For payers, foundational needs models give you encounter integrity, withhold recovery, and Stars resilience.

→ For providers and ACOs, they give you total-cost-of-care control and capacity stabilization.

→ For investors, they give you the only part of care delivery where the ROI consistently shows up in a single cycle.

In this edition I’m going to show you where in the country you can buy these outcomes, how they’re funded, and where the dollars are already in motion.

👉🏽 I’m releasing the full 2026 Foundational Needs Playbook on Friday. It’s the state-by-state, contract-ready version of this analysis for leaders who need to act fast and it will be available to paid subscribers.

Market Landscape

SDOH models are not a national market.

They are forty micro-markets, each with:

• Different reimbursement rules

• Different encounter requirements

• Different procurement cycles

• Different audit expectations

• Different political ceilings

So the question is no longer:

“Does this model work?”

But rather:

“Can it be bought here, under this state’s rules, in this funding window, with this audit risk?”

For the purpose of this breakdown, there are four types of states/Medicaid landscapes.

• Open Reimbursement States (Buy Now)

• Procurement & Withhold States

• Infrastructure-Building States

• Politically Constrained / Hospital-Only States

Each tier has its own buyer logic, ROI window, and contracting posture.

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If everything feels harder right now, it’s because multiple states are tightening LTSS, pediatric access, BH oversight, and encounter rules at once. Not because your operations suddenly got worse.

This week’s map shows three distinct forms of pressure in U.S. contracting: system redesign (NV/OR), service-line rebalancing in LTSS and pediatric care (WI/MI/TN), and margin-defense environments shaping future Stars and withhold cycles (TX/FL).

What Changed This Week

• Nevada’s Kids BH Specialty Plan officially entered early vendor discovery; several national BH operators requested pre-bid briefings.

• Wisconsin’s GSR 3 LTSS procurement published its first set of clarifications, signaling high bidder interest and early protest risk.

• Michigan HKD added provider-adequacy guidance for network validation — tightening what plans must document before Jan 11.

• Texas confirmed the CFO consulting RFP will inform STAR+PLUS 2026 readiness, increasing the strategic importance of this small but influential

Top Three Windows This Week (Highest stakes, highest pressure, highest operational risk, highest margin impact.)

1. Nevada | Medicaid MCO Statewide Expansion

Window: Oct 1–Dec 26, 2025
Why it matters: Nevada is consolidating rural and urban Medicaid under one statewide managed-care model. Plans face immediate pressure to stabilize network adequacy, encounter timeliness, and BH access ahead of Jan 1, 2026 go-live. This is the quarter’s most material shift in capitation and operational exposure.

2. Wisconsin | Family Care & Partnership (GSR 3) LTSS RFP

Window: Oct 28–Jan 16, 2026
Why it matters: A rare, multi-year LTSS/duals contract opening in a historically protest-heavy market. The 9-figure book will shape HCBS capacity, caregiver support contracts, and tenancy-support models through 2034.

3. Michigan | Healthy Kids Dental Rebidding

Window: Nov 15–Jan 11, 2026
Why it matters: Nearly 1 million pediatric lives and strict network adequacy + encounter accuracy requirements. High visibility with providers and strong advocacy pressure make this one of Q4’s most consequential procurement events.

[Paid subscribers get the 90-day contracting forecast and downstream margin impact]

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This week’s Window States brief tracks where healthcare contracting and budget flows are active within the next 90 days across Medicaid, Medicare Advantage, and ACO markets. Six states—Michigan, Tennessee, Massachusetts, California, Arizona, and Ohio—are currently driving roughly $3–4 billion in health-system movement that will shape the Q1 2026 margin cycle.

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This week: One state’s D-SNP Transition Window and another state’s Quality Withold Sprint create SDOH-compatible environments.

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What was wrong: The $100M figure materially overstated the vendor-influenceable portion of the pool. By mid-2026, it became clear that a significant share of the withhold was either auto-earned, locked behind plan-specific performance floors, or inaccessible to subcontractors.

Why: I used gross withhold exposure, not marginal, contestable dollars. The decision-relevant opportunity was meaningfully smaller.

Impact: Overstated the realistic revenue upside a new vendor could capture in Indiana.

This analysis represents the author’s interpretation of publicly available information. All forward-looking assessments involve uncertainty and risk. Readers should conduct independent research and consult qualified professionals before making business or investment decisions. This content is for informational purposes only.

In This Edition

Free Reads:

• Indiana’s quiet math signal

• Procurement window: 2026–28

• Bonus pool mechanics explained

Premium:

• $95M–$125M scenario bands

• County-level ROI signals

• Risk & headwinds dashboard

• Vendor entry playbook

• Investor translation & timing

Also for you:

• A video (18 mins) on how experience hubs drive outcomes and ROI.

• A $15K bounce-back starts with a missed question: “Has your address changed?”

Why Indiana Matters

Indiana is the quietest of the Window States. Not loud like Florida, not political like Texas, not experimental like Arizona.

It’s quiet math and margin defense, and arguably the most investable:

• Procurement clarity: All major programs rebid between 2026–2028.

• Built-in bonus pools: ~2% of plan payments are withheld and only earned back if plans hit measurable outcomes.

• Transparent math: Indiana publishes per-member payments, letting you size the statewide bonus pool at ≈$95M–$125M.

• Margin compression: With HIP (Healthy Indiana Plan) losing its historical rate premium in 2024, bonus recovery is the lever left to protect margins.

Procurement Window: 2026–28

The next 18–24 months are the proof period. Subcontract now to show encounter hygiene and measure lift; compete for displacement when rebids open.

Bonus Pools: How They Work

Indiana withholds ~2% of annual payments. Plans earn it back by moving hard measures, especially:

• FUH/FUA: Follow-up after mental health hospitalization (FUH) and after ED visits for substance use (FUA).

• New-member screenings.

• Medication adherence.

• Care assessments & member experience.

Directionally, FUH/FUA and screenings are the largest statewide levers.

Upgrade to paid to unlock Indiana’s county ROI signals, scenario bands, and vendor playbook →

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What was wrong: The Stars pressure did not produce visible external contracting at the scale implied. Plans largely handled the swing through inte…

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In This Edition

• Double-High SDA Baselines – Harris and Nueces under pre-HR1 conditions: where avoidable costs were already highest.

• Market Share Concentration – Which incumbents dominate, and why concentration makes them procurement targets.

• Stars & QBP Exposure – No bonus cushion for major Texas D-SNPs going into HR1.

• CHW Infrastructure – SDA-level density patterns that decide who can scale interventions without new hiring.

• Compliance Memory – Sanctions from 2023–25 that incumbents can’t shake when procurement reopens.

• Procurement Lens – How to frame margin defense and credibility in Texas’ post-HR1 contracting environment.

Also check out:

- This week on The Frontline Strategist: A video on how I teach healthcare professionals to turn human moments into measurable financial value.

- Listen to Grapevine's Dr. Lisa Fitzpatrick on how healthcare tech fails when it ignores trust and real human connection.

The injunction on HR1 may have paused procurement in Texas, but it hasn’t erased the scoreboard.

The performance gaps, market share concentrations, compliance hits, and local capacity imbalances documented in 2023–24 remain the baselines HHSC will use when procurement reopens. In fact, under HR1’s tighter financing rules and rate compression, these baselines are even more valuable.

Performance Baselines: Harris & Nueces

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In this edition:

• Where digital health capital is concentrating
• How to spot “Window States” using real procurement signals (RFP cycles, Stars mandates, CHW infrastructure)
• The 4 states where contracting is still in motion and how to position before Q4
• What vendors, funders, and CBOs should be doing now to align with the next wave of Medicaid-backed care

SNAPSHOT

2021: $29.1B in U.S. digital health funding: historic peak
2022: Non-binding pilots became standard entry point to raise
2023: Funding dropped 63% from 2021; lowest since 2019
2024: $10.1B raised; adjusted for inflation, flat with 2019
2025: Capital demands outcomes, not optimism

From 2021 to 2022, U.S. digital health startups raised over $29.1B, much of it flowing to pre-revenue companies backed by pilots, founder narrative and logos, not contracts. Seed investors prioritized vision; MA plans and health systems ran dozens of non-binding pilots.

“Get a pilot, then raise” became the norm.

But by 2023, that model collapsed. Annual funding dropped to $10.7B, the lowest since 2019, with 81% of 2021-era startups failing to secure a new labeled round.

Founders leaned on extension rounds, unlabeled raises (44% of all 2023 deals), and silent insider top-offs, buying time to chase procurement traction or outcomes data. Investors began shifting decisively toward PMPM modeling, burn discipline, and contract-aligned financial logic.

In 2024, funding fell further to $10.1B across 497 deals. Adjusted for inflation, it matched 2019 levels in real-dollar terms. Late-stage check sizes shrank (Series C/D medians dropped to $50M/$55M), and M&A activity hit a decade low at 118 deals. Capital clustered around mega-funds like a16z and General Catalyst, with outsized bets on AI, nonclinical workflow, mental health, and obesity care. As late-stage players struggled to scale beyond pilot mode, 2025 marks a new filter: displace a vendor, lift Stars, and survive a 12–18 month sales cycle or get left behind.

As John Gorman, former MA architect and founder of Nightingale Partners, put it: “If it doesn’t pass actuarial muster, you’re not getting paid.” Learn how he skipped the pilot era entirely and bet early on CHWs, broadband, and food as medicine here.

With H.R.1 stripping out federal social care supports and MA plans absorbing downstream risk under 8.5%+ medical cost inflation, procurement math decides who gets funded.

Every capital decision now sharpens around a single triage logic:

Displace a vendor, lift Stars, survive the cycle

Or get left behind.

That’s our thesis of the midyear.

MACRO SHIFTS THAT NOW DEFINE FUNDABILITY

Stars Bonus Volatility

While specific CMS projections of a 12–17% reduction in Stars bonuses remain unpublished, public analysis shows that Medicare Advantage bonus payments are expected to total at least $12.7B in 2025, yet growth is effectively held flat at +3.7% overall payment growth, signaling compressed margin capacity in light of inflation and risk adjustments.

Medicaid RFP Window Tightening

Across multiple high-impact states, Medicaid managed care contracts are either:

• Delayed by litigation (Texas)

• Awarded but under protest (Florida, Arizona)

• Actively transitioning to new models (Illinois)

These RFP cycles will define vendor access through 2026–2030, but final awards, implementation, and partner configurations remain fluid.

• Texas: New STAR/CHIP contracts remain on hold due to a court-ordered injunction delaying implementation until summer 2025. As of August, final awards have not yet been made, and legal action continues.

• Florida: Contracts were issued in April 2024, with Feb 1, 2025 rollout dates. However, multiple active protests and administrative appeals may still impact which plans and subcontractors ultimately serve key populations.

• Illinois: The state is preparing for a December 2025 MMAI sunset, with procurement activity ramping for a new duals model. Meanwhile, HealthChoice Illinois (HCI) contracts remain active through 2026, with new RFPs emerging in mid‑2025 for a 2027 start.

• Arizona: Awards for ALTCS-EPD were made in December 2023, but protests remain unresolved as of August 2025. CMS approvals for directed payments have proceeded, but full implementation remains under scrutiny.

These states represent the strategic terrain where vendor displacement, Stars-linked contracting, and value-aligned delivery models are still being negotiated. Even in “closed” states, the real opportunity lies in post-award performance, subcontracting, and outcome-driven rebundling.

H.R.1 Federal Pullback on Social Care

Proposed budget cuts under H.R.1 threaten vital programs like Meals on Wheels, SNAP, and Medicaid with reported impacts forcing local programs to reduce client intake or close services altogether.

Amid these national headwinds, four states stand out as the most active, strategic, and fundable terrains for social care contracts in 2025. We’ll call them The Window States: the four markets with the clearest timing, most aligned infrastructure, and highest near-term potential for social care contracts.

2025 Medicaid Procurement Series : The Window States

These Are The States Where Social Care Vendors Can Secure Contracts in 2025

For the next 4 weeks, we’ll deep dive on the states with the most strategically visible, high-leverage, and timely for procurement-based entry in late 2025 and early 2026.

Week 1 (Next Week): Florida

Week 2: Texas

Week 3: Arizona

Week 4: Indiana

WHY THESE STATES

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