CMS Understood Rate Impact on MA
More evidence that the Centers for Medicare and Medicaid Services (CMS) understood the potential impact of a zero-rate hike on Medicare Advantage (MA) benefits and cutbacks in 2027. The agency raised the rate hike to about 2.5% by amending its proposal for more aggressive risk adjustment and v28 model changes. This means payments will move from basically a zero increase to $13 billion, just over half of what 2026 will see.
CMS clearly listened to plan complaints about the proposed model changes. Plans argued cost recognition would not be correct if the model were adopted. CMS could still adopt this in the future.
And as I noted, most plans will see more than 2.5% because the unlinked chart change that was adopted hits big plans much more given their risk adjustment practices. Experts say UnitedHealthcare faces a $5 billion reduction and Humana $2 billion.
Still, plans and industry trade groups are not necessarily ecstatic given utilization trends. A fourth year of cutbacks is still likely.
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#medicareadvantage #rates
https://www.modernhealthcare.com/insurance/mh-cms-medicare-advantage-payment-risk-adjustment
New Healthcare Reform Proposal
The center-left Center for American Progress released healthcare reform ideas. Some of this could be used by Democrats in the future. It attempts to seek reforms in the payer and provider world. Among the reforms proposed include:
- Banning prior authorization (PA) and replacing it with independent clinical reviews.
- Limiting excessive premiums from insurers in part by monitoring and reining in arrangements between payers and providers, pharmacy benefits managers (PBMs) and pharmacies owned by one common corporate parent. This is known as vertical integration.
- Limiting self-insured fund (ERISA) administrative and other fees by insurers.
- Reforming and reining in outlier hospital prices to reduce employer plan deductibles by half in markets that are very concentrated as well as decrease family premiums in employer plans by $1,308 each year by 2032.
The proposals seem reasonable. The PA one could be very expensive, though. I would also undertake a phase in of Medicare site neutral payments.
#healthcare #healthcarereform
Americans Still Look To Providers For Advice
A new Pew survey finds that 85% of U.S. adults still get information from providers “at least sometimes.” This is despite the advent of healthcare chatbots. Healthcare providers received the best ratings for the quality of information given, with 55% saying information is easy to understand and 52% saying it is personalized.
#healthcare #ai #providers
Digital Health Investments
Digital health startups received $4 billion in venture capital funding in Q1 2026, $1 billion higher than Q1 2025. Digital health companies raised $3 billion across 122 deals. Average deal size climbed to $36.7 million; the highest average Rock Health has tracked in a single quarter since Q4 2021. Twelve companies captured 59% of total quarterly funding.
#digitalhealth #healthcare
ICHRAs Grow But May Struggle
Employers are turning to Individual Coverage Health Reimbursement Arrangements (ICHRAs) to reduce healthcare costs, but rising premiums and instability in the Exchanges are creating headwinds.
The HRA Council says ICHRA adoption has grown continuously across employer sizes since the mechanism launched in 2020.
#ichras #hsas #healthcare #healthplans
— Marc S. Ryan
