Section 6411(a) of the Affordable Care Act enacted in 2012 requires states and territories to establish Medicaid RAC programs. Currently, only providers who bill services through the state’s Fee-For-Service Medicaid program and are paid under Title XIX of the Social Security Act are subject to the requirement for review by the RAC. However, by statute, a state may request to be excepted from some or all Medicaid RAC contracting requirements by submitting a written justification to the Centers for Medicare and Medicaid Services (CMS) for review and approval through the State Plan Amendment (SPA) process. 

On June 24, Rep. Gus Bilirakis (R-FL) introduced the Medicaid RAC Improvement Act (H.R. 9422) to tighten federal oversight of state RAC programs, requiring more detailed reporting on audits, overpayments, and recoveries. The bill also expands RAC requirements to Medicaid managed care payments. The lynchpin provision is to discontinue the Medicaid RAC exception policy in 2029. This bill was included package of 14 program integrity bills released by House Committee on Energy and Commerce Chairman Brett Guthrie (R-KY) on September 29.

However, 36 states, the District of Columbia, and all the territories have exceptions to the RAC requirement, arguing high levels of managed care participation makes the RAC limitations unworkable as a Medicaid program integrity strategy. Instead, they have developed alterative program integrity processes which should be reviewed and expanded where they have merit.

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Under the One Big Beautiful Bill Act (H.R. 1), the federal share of SNAP administrative costs for states will be reduced by 50% from 50% to 25% of the total, requiring states to cover 75% of SNAP administrative costs starting October 1, 2026, the start of federal fiscal year (FFY) 2027. The USDA estimated in its Regulatory Impact Analysis that federal administrative spending on the SNAP program will decrease by about $16.9 billion over FFYs 27 to 31 and assumes the shift will have a negligible impact on SNAP benefit spending and participation. In other words, USDA assumes that administration spending will be absorbed by states with no effect on low-income SNAP recipients including how quickly states process applications.

Nearly 70% of states (37 states) that have increased their SNAP administrative funding in response to the law are still below the USDA’s estimated annual increase in state spending for SFY 27. Nine states still have not increased their SNAP administrative funding for SFY 27 (19%), while two states and territories have made increases, the amount of which is unclear due to lack of information from the state government. See full analysis below.

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