Paragon Proposes Reforms
The influential Paragon Health Institute released a new report calling for federal funding cuts or tax reforms impacting all health plan lines of business and coverage areas. People pay attention to what Paragon says given its influence and impact on government regulations since 2025 as well as in the One Big Beautiful Bill Act (OBBBA).
In summary, Paragon wants to see the following changes:
- Cuts to the federal matching rate in Medicaid, especially equalizing matching rates for historic and expansion populations and lowering the floor to 40%
- Further cuts to Medicaid provider taxes, state directed payments, and intergovernmental transfers
- State and Medicaid managed care penalties for fraud or improper billing patterns
- Site neutral payments in Medicare
- Better target various hospital subsidies
- Redesign the 340B program
- Reversing the 2022 Part D redesign, which destabilized the standalone Part D (PDP) program and to some degree Medicare Advantage (MA)
- MA risk adjustment, benchmark, and quality bonus changes to reduce payments
- Reform Medigap
- Minimum premium payments in the Exchanges
- End automatic re-enrollment into Exchange coverage
- Broker and agent reform in the Exchanges
- Fund cost-sharing reduction subsidies in the Exchanges to save dollars
- Reform Exchange premium tax credits
- Relax medical loss ratio requirements
- Cap the tax exclusion for employer-sponsored health insurance
#medicare #medicaid #exchanges #employercoverage #healthcarereform #healthcare #coverage
Balkanization of Star Ratings
We are quickly seeing the balkanization of Star calculations for SY 2026. Elevance Health filed a suit against CMS today arguing that it should have used the Clover’s judge’s measures for recalculation rather than one created by the agency. Elevance says it lost out on $115 million in bonus payments as a result.
Elevance has a point. How can one contract get the judge’s ruling while others receive the “better of” a brand new interpretation from CMS or the original SY 2026 rating? CMS is likely attempting to preserve its chances to overturn the ruling in part. But it could lead to more lawsuits from those contracts that would have benefited from the Clover judge measures vs. CMS’ interpretation.
CMS now has on its hands as many as three calculations:
- Original
- Clover CMS
- Clover Judge
The agency almost assuredly now must offer the “better of” these two or three options in SY 2027 as well.
Healthcare policy group KFF also reports that the share of Medicare Advantage enrollees in plans that qualified for federal quality bonus payments dropped to 68% in 2026, its lowest point since 2018. The number of MA contracts achieving at least a four-star rating fell to 209 in 2026 from 261 the prior year. Two million fewer people are in highly rated plans. Quality bonus program payments will total $13.4 billion in 2026, up from $12.7 billion in 2025. This is 2.3% of all MA payments.
Here is the list of the plans with the biggest bonuses in 2026. Some of this is driven by sheer enrollment and not Star performance:
- UnitedHealth Group — $3.9 billion
- CVS Health — $2 billion
- Humana — $1.5 billion
- Kaiser Foundation Health Plans — $1.2 billion
- Elevance Health — $462 million
- Health Care Service Corp. — $323.8 million
- Centene — $21.5 million
Additional articles:
https://www.healthcaredive.com/news/elevance-sues-cms-medicare-advantage-stars-recalculation/824411/ and https://www.beckerspayer.com/legal/elevance-sues-cms-over-2026-star-ratings-following-clover-win/ and https://www.beckerspayer.com/payer/medicare-advantage/share-of-medicare-advantage-enrollees-in-bonus-eligible-plans-falls-to-68/ and https://www.beckerspayer.com/payer/medicare-advantage/payers-ranked-by-medicare-advantage-bonus-payments-in-2026/
(Some articles may require a subscription.)
#cms #medicareadvantage #stars #quality
https://www.modernhealthcare.com/insurance/mh-elevance-cms-medicare-advantage-star-ratings-2026
Major New Rules Impacting Hospitals, Home Health
In two new rules, the Trump administration is continuing its efforts to reform the 340B drug discount program, move toward site neutral payments, and combat fraud.
Hospitals quickly opposed two major changes. First, 340B hospitals would see its Medicare reimbursement for drugs drop by about 40% to keep hospitals from charging markups on discounted drugs. The Centers for Medicare and Medicaid Services (CMS) says the change would save not only Medicare $4.6 billion but consumers $1.1 billion next year in cost-sharing because such costs are factored based on pre-discount pricing. That is $800 a year in co-payment savings on average. CMS would raise outpatient payments for non-drug services by an equivalent amount. CMS would also accelerate a recovery of $7.8 billion in extra non-drug payments hospitals received under the prior 340B policy from 2018 through 2022, with the full recovery by 2029.
Second, site-neutral payments would expand to imaging. CMS is proposing to pay physician office rates for imaging without contrast (such as X-rays and MRIs) delivered in excepted off-campus provider-based departments. This would reduce Medicare Part B spending by about $190 million, $70 million in lower beneficiary premiums, and $70 million in lower cost-sharing. Rural sole community hospitals would be exempt.
Hospitals and ambulatory surgery centers would get a 2.4% rate hike next year.
Further, the inpatient-only list would continue to shrink, with the removal of 638 more services. Prior authorization will also apply to botulinum toxin injections, which have seen a 42.8% jump in claim volume from 2017 to 2024. This would save $17 million in net annual savings.
The rule would reweight the Hospital Star Ratings toward safety of care measures.
CMS also is proposing new fraud initiatives, including revocation of participation of providers, in a home health rule.
Additional articles: https://www.medpagetoday.com/publichealthpolicy/medicare/122045 and https://www.beckershospitalreview.com/finance/cms-targets-340b-site-neutral-pay-in-2027-outpatient-rule-8-things-to-know/ and https://www.cms.gov/newsroom/press-releases/cms-acts-strengthen-care-quality-cut-drug-costs-slash-out-pocket-expenses-medicare-beneficiaries and https://www.cms.gov/newsroom/fact-sheets/calendar-year-2027-hospital-outpatient-prospective-payment-system-opps-ambulatory-surgical-center and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-home-health-prospective-payment-system-proposed-rule-fact-sheet-cms-1844-p and https://www.cms.gov/newsroom/press-releases/cms-proposes-updates-strengthen-medicare-program-integrity-combat-fraud-expand-access-home-health and
#medicare #siteneutral #340b #drugpricing #fwa
GLP-1 Bridge Starts
The Centers for Medicare and Medicaid Services (CMS) launched the GLP-1 Bridge program, which allows certain eligible Medicare beneficiaries to obtain access to certain GLP-1 medications for $50 per month via the BRIDGE program. It is aimed at those who have obesity and not other qualifying conditions to access the drugs. The program will run through December 31, 2027.
As well, the president’s 100% drug tariffs begin to go into effect on covered patented drugs on July 31. Many drug companies are exempt as a result of investments in the U.S. and price concessions.
Additional article: https://www.medpagetoday.com/publichealthpolicy/medicare/122008 and https://www.cms.gov/newsroom/press-releases/cms-launches-medicare-glp-1-bridge-expanding-access-glp-1-medications
#drugpricing #glp1s #weightlossdrugs #tariffs
https://www.fiercehealthcare.com/payers/cms-goes-live-glp-1-bridge-program-part-d-beneficiaries
Timely Access Saga
MedPage Today covers the seven-year saga of attempting to pass the Improving Seniors’ Timely Access to Care Act. Proponents are still hopeful it will pass. But after all these years most of the authorization and transparency reforms have been put into regulations, which contibute to why the bill today has no cost impact as it had in the past.
#medicareadvantage #priorauthorization
https://www.medpagetoday.com/publichealthpolicy/medicare/122051
Death Rate Lowest Ever
The Centers for Disease Control and Prevention (CDC) says the death rate fell to a record low in 2025. The death rate was 689.2 per 100,000 people, which is a 4.6 percent drop from 2024. Heart disease and cancer led the way as the top reasons for death.
#cdc #deathrate
https://thehill.com/policy/healthcare/5952060-us-death-rate-2025-record-low/
— Marc S. Ryan
