Federal court vacates HHS Section 504 community integration rules nationwide

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Federal court vacates HHS Section 504 community integration rules nationwide

Plus: CMS partners with 37 states to overhaul Medicaid quality measurement. The day's rules, money, and enforcement, sourced and tiered below.

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A federal court vacated HHS's Section 504 community integration rules nationwide this week, erasing the 2024 regulations that told providers receiving federal funds how to keep disabled patients out of nursing homes.

The consent decree in Texas v. Kennedy, approved Sept 24, was proposed by DOJ and five states. Olmstead and the ADA remain law, but the regulatory underpinning of HCBS waiver compliance requirements, tied to $145B in Medicaid spending, is vacated.

Record

CMS and 37 states launched a partnership Thursday to stop measuring Medicaid quality by whether providers check process boxes and start tracking whether 73 million enrollees are actually getting healthier.

CMS will cut 450 reporting requirements across roughly 260 quality measures. Workshops begin later in 2026. Participation is voluntary. Plans in value-based contracts should expect Medicaid quality benchmarks to shift toward outcomes metrics.

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