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California lawmakers are staring down a $1.1 billion hole in next year’s health budget after failing to come up with a way to replace the state’s 'managed care organization tax' on health insurance plans that serve Medi-Cal managed care recipients. It’s a hole big enough that state Gov. Jerry Brown recently used it as a reason to veto 15 health care and other bills sent to him by the state legislature. And unless it’s filled, Brown, a Democrat, is expected to issue a preliminary state budget in January with sizeable cuts to health and human services programs. (Feder Ostrov, 11/25)

The Minnesota Department of Human Services's recent competitive bidding of its public health programs could save the state hundreds of millions of dollars, but prompted lawsuits and accusations of unfairness from health plans that came out on the losing end of the bid process. Now the Office of the Legislative Auditor, in a preliminary review of the program, has concluded DHS followed applicable laws in how it formulated and scored the health plan bids for the state's MinnesotaCare and Medicaid programs. But the review said changes to state law are needed to address problems that emerged in the bidding process. (Montgomery, 11/24)

Five people, including a former hospital executive and two surgeons, are charged with a massive kickback scheme that resulted in billing $580 million to the government and insurance companies, authorities announced Tuesday. Two already pleaded guilty and the others have agreed to plead guilty in connection to the scheme, which involved paying tens of millions of dollars to dozens of doctors, chiropractors and others to refer patients to two Southern California hospitals for spinal surgeries, according to a statement from the U.S. attorney's office. (11/24)

State officials said Tuesday that federal officials are satisfied with the progress made at Washington state's largest psychiatric hospital, which had been at risk of losing millions of dollars in federal funding later this week over concerns about patient safety. Officials with the state Department of Social & Health Services said regulators with the Centers for Medicare & Medicaid Services visited the Lakewood facility this week before determining that the hospital will be able to move forward on long-term improvements. (11/24)

Five Florida nurseries were selected Monday to cultivate and distribute the first legal marijuana in the state, opening the door to the sale of the noneuphoric strains to treat patients with seizure disorders and cancer by June. The decision moves the state closer to implementing the 2014 law that allows for marijuana extracts that are low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabidiol, or CBD. The law was intended to treat patients with intractable epilepsy and people with advanced cancer. To qualify for the low-THC-based cannabis treatment, patients must obtain permission from a qualified doctor and be added to the Compassionate Use Registry. (Kias, 11/24)