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Insurers Say PA Reforms Taking Hold

The two main insurer trade groups say definitive progress is being made to implement voluntarily agreed-upon prior authorization (PA) reforms. AHIP and the Blue Cross Blue Shield Association released a report that found leading health plans reduced prior authorizations for an array of services by 11% since the pledge was made. This equates to 6.5 million fewer prior auth requests for patients. Reductions in Medicare Advantage were 15%.

The insurers say that PAs were removed where there were clear clinical guidelines and consistent utilization trends for providers. The groups say insurers have introduced more consumer-friendly language and appeals steps.

About 50 plans signed on to the initiative, including all six of the largest, publicly traded plans.

#priorauthorization #healthplans

https://www.fiercehealthcare.com/payers/insurers-have-eliminated-11-prior-authorizations-under-reform-pledge

2027 Final Rates Out! A Modest Increase Added

The Centers for Medicare and Medicaid Services (CMS) released its Final Announcement for calendar year (CY) 2027 rates for Medicare Advantage (MA). I had predicted that rates would end up between 2% and 3% as the Effective Growth Rate (EGR) would increase markedly between the advance and final notices. The EGR rate actually did not increase much — 0.36%. But rates before risk score trends will go up by 2.48% (vs. 0.09%) because CMS will not implement further changes to the v28 risk model for CY 2027.

In its advance notice, CMS proposed to update the Part C risk adjustment model using more recent underlying original Medicare data (updated from 2018 diagnoses and 2019 expenditures to 2023 diagnoses and 2024 expenditures). This would recognize more current costs. Instead, for CY 2027, CMS will continue to use the 2024 MA risk adjustment model which was calibrated with original Medicare 2018 diagnoses and 2019 expenditures data that was fully implemented in CY 2026.

The nearly 2.5% hike will mean about $13 billion in additional payments to plans in 2027. CMS fairly noted that MA plans were hit by the impacts of the v28 model from 2024 to 2026. It is a small recognition of the churn and volatility in the industry right now. CMS officials say that the rule aims to balance immediate challenges in the program with the agency’s goals of promoting long-term stability for MA. CMS said the decision on updating the v28 model is indefinite and it is monitoring plans. The agency said it is still focused on addressing insurer behaviors on risk adjustment upcoding and overpayments.

For risk score calculation for CY 2027, CMS is finalizing the exclusion of diagnoses from audio-only encounters and diagnoses from chart reviews not linked to actual encounters, with an exception to include diagnoses from unlinked chart reviews for beneficiaries who switch from one MA organization to another. Insurers lobbied hard for this.

The industry is not totally happy as the hike is still very low in a very high utilization environment. But roughly 2.5% is better than an approximate zero. And the chart changes do not impact the industry equally, pushing the hike for some to about 4%.

Expect my full analysis next week in a blog.

Additional articles: https://www.fiercehealthcare.com/regulatory/cms-gives-medicare-advantage-rates-248-bump-2027-plan-year-final-rule andhttps://www.modernhealthcare.com/politics-regulation/mh-cms-medicare-advantage-payments-2027/ and https://www.cms.gov/newsroom/press-releases/cms-finalizes-2027-medicare-advantage-part-d-payment-policies-strengthen-accountability-long-term and https://www.cms.gov/newsroom/fact-sheets/2027-medicare-advantage-part-d-rate-announcement

#medicareadvantage #rates #margins #cms

https://www.beckerspayer.com/payer/medicare-advantage/cms-hikes-medicare-advantage-rate-2-48-for-2027-6-notes/

White House Wants To Reduce HHS Budget

In a long-delayed budget blueprint for federal fiscal year 2027, the White House is asking Congress for a $15.8 billion discretionary budget cut for the Department of Health and Human Services, which is 12.5% lower than this year and eliminates many programs. Major reorganizations are again proposed. A major change would be the move of the growing 340B program to the Centers for Medicare and Medicaid Services (CMS). That is a fair change given the out-of-control nature of the program and the nexus to government program payments at CMS. A new agency, the Administration for a Healthy America, would be established and oversee health priorities currently managed by multiple agencies. That, too, is not a bad idea and should be considered.

The administration says the cuts will eliminate “bloated, woke and inefficient programs” and refocus on core priorities. But Senate Appropriations Chair Susan Collins, R-ME, essentially declared the cuts dead on arrival, criticizing the proposed eliminations and reductions to domestic program spending. The proposed reductions are about half requested last year.

What is driving the reductions? A $445 billion, or 42%, increase in military spending, bringing it to $1.5 trillion. Overall non-defense discretionary spending reductions amount to $73 billion, or 10%. Healthcare would increase at the Department of Veterans’ Affairs, with a proposed $1.5 billion or 9% increase. Major investments in electronic medical records (EMR), AI, and automation are planned.

MedPage Today, Becker’s and Modern Healthcare do a good job in the articles below of detailing cuts throughout HHS and related agencies. The cuts would reduce $129 million from the Agency for Healthcare Research and Quality.

In addition, Healthcare Dive published two articles on the major staff losses at HHS and related agencies and the impacts as an aggressive overhaul agenda rolls out. It says HHS has lost more than 18,000 employees under Trump 47. Experts complain about too little staff to carry out the mission, but my experience in government suggests staff bloat is a real issue and can often actually work against efficiency. The truth is always somewhere in the middle.

Last, President Trump announced that Vice President JD Vance will become the fraud czar. Main focus: benefit rich Blue states.

Additional articles: https://www.fiercehealthcare.com/providers/white-house-floats-125-budget-cut-hhs-fy2027-reiterates-reorganization-plan and https://www.healthcaredive.com/news/cms-tackles-big-policy-changes-with-diminished-workforce/815937/ and https://www.healthcaredive.com/news/one-year-after-hhs-layoffs-a-department-in-disarray/815906/ and https://thehill.com/homenews/senate/5815864-collins-criticizes-trump-budget/?tbref=hp and https://www.medpagetoday.com/publichealthpolicy/healthpolicy/120647 and https://www.beckershospitalreview.com/hospital-management-administration/trump-budget-targets-15-8b-in-hhs-cuts-9-things-to-know/ and https://thehill.com/homenews/administration/5814748-vance-crackdown-democrat-fraud/?tbref=hp

(Some articles may require a subscription.)

#trump #congress #hhs #cms #budgets #healthcare #veterans #fwa

https://www.modernhealthcare.com/politics-regulation/mh-trump-budget-request-hhs-340b-cms

CMS Finalizes 2027 MA And Part D Rule

The Centers for Medicare and Medicaid Services (CMS) finalized the 2027 Medicare Advantage (MA) and Part D rule. Next week, I will publish a detailed blog on the changes between the draft and final rules. The major Star ratings changes were adopted, including the cancellation of the Excellent Health Outcomes for All (EHO4all) reward while maintaining the Reward Factor as well as the sunset of numerous measures. All of the proposed measure terminations were adopted except the Diabetic Eye Exam measure was maintained. Depression Screening will also be added. Most changes occur in Star Year 2029.

In other news, CMS announced Maximus will no longer be the Part C Independent Review Entity (IRE). C2C will take over, which also is the Part D IRE.

Additional articles: https://www.beckershospitalreview.com/legal-regulatory-issues/cms-finalizes-2027-medicare-advantage-and-part-d-rule-10-notes/ and https://www.beckerspayer.com/payer/medicare-advantage/cms-awards-ma-independent-review-contract-to-new-vendor/ and https://www.cms.gov/newsroom/fact-sheets/contract-year-2027-medicare-advantage-part-d-final-rule

(Some articles may require a subscription.)

#medicareadvantage #stars #quality #cms

https://www.modernhealthcare.com/politics-regulation/mh-cms-medicare-advantage-star-ratings-2027

Elevance Gets A Reprieve

Elevance Health avoided sanctions for now, including an enrollment and marketing freeze, after the Centers for Medicare and Medicaid Services (CMS) granted the Medicare Advantage (MA) plan an extension to make up for incorrect risk adjustment data reporting. Elevance has until May 30 to remediate the issues.

At the same time, a bipartisan group of senators is urging CMS to work with Congress to crack down on overpayments in MA.

Further, a lawsuit alleging Elevance Health’s Carelon Behavioral Health misled beneficiaries about the scope of its provider network was allowed to move forward by a judge.

Additional article: https://www.healthcaredive.com/news/elevance-sidesteps-medicare-advantage-sanctions-cms/816324/ and https://www.fiercehealthcare.com/payers/blue-cross-plan-accused-perpetrated-fraud-ghost-network-class-action-lawsuit and https://www.modernhealthcare.com/insurance/mh-carelon-behavorial-ghost-network-lawsuit-elevance/

(Some articles may require a subscription.)

#medicareadvantage #riskadjustment #overpayments #elevancehealth

https://www.healthcaredive.com/news/bipartisan-senators-cms-crack-down-medicare-advantage-overpayments-upcoding/816336

Gallup Finds Healthcare Affordability Tops Concern List

A new Gallup Poll finds that Americans are more concerned about the availability and cost of healthcare than any other domestic issue. It is now issue number 1 in Americans’ minds. This has not happened since 2020.

About 61% of the 1,000 adults surveyed said they worry a “great deal” about accessing and affording healthcare, while 23% expressed a “fair amount” of concern. About 51% of respondents said they were concerned a “great deal” about the economy and 50% said the same about inflation.

The change comes as premiums surge throughout healthcare and enhanced Exchange subsidies expired.

In other news, healthcare tech company Cedar surveyed 4,150 patients across the U.S. and analyzed 1.5 billion patient interactions. Nearly 40% of healthcare collections now come from uninsured patients, up 54% in the past three years.

Also, states are paying contractors such as Deloitte, Accenture, and Optum millions of dollars to help them comply with the One Big Beautiful Bill Act (OBBBA) new mandates, including work requirements in Medicaid.

Additional articles: https://www.fiercehealthcare.com/finance/uninsured-patients-drive-nearly-40-healthcare-collections-cedar-survey and https://www.fiercehealthcare.com/regulatory/states-pay-deloitte-others-millions-comply-trump-law-cut-medicaid-rolls

#healthcare #coverage #uninsured #medicaid #workrequirements

https://thehill.com/policy/healthcare/5808929-healthcare-concerns-top-issue

CMS Announces Final Exchange Enrollment

The Centers for Medicare and Medicaid Services (CMS) announced final Exchange enrollment nationwide as well as premium hike statistics. Total enrollment fell nationwide from 24.3 million in 2025 to 23.1 million in 2026. This is far less than anticipated, but some say rolls will slip further due to the inability to afford the surges in premiums as well as lower subsidies. Current 2026 enrollment is still 1.7 million higher than in 2024.

About 15.8 million enrollees obtained coverage through the HealthCare.gov platform, while 7.4 million were enrolled through a state-based Exchange. New customers dropped 13% year over year. Enrollees with an advanced payment premium tax credit dipped from 92% to 87%, while the portion with cost-sharing reductions dropped from 51% to 37%. The latter figure may indicate that many low-income individuals dropped coverage.

Average premiums increased 58% for those on subsidies because enhancements expired. This is lower than a healthcare policy group projection that premiums would jump 114%. KFF indicated its projection was based on everyone staying in current plans. Consumers are paying on average $780 per year more for coverage in 2026.

As CMS noted, enrollment in low-premium, high-deductible bronze plans jumped due to premium surges. Enrollment in bronze plans jumped from 30% in 2025 to 40% in 2026. Silver plans dropped from 56% in 2025 to 43% in 2026.

Additional articles: https://www.fiercehealthcare.com/payers/cms-years-open-enrollment-brought-fewer-signups-higher-premiums-fewer-silver-sign-ups and https://www.healthcaredive.com/news/aca-premiums-enrollment-bronze-plans-2026-cms-data/816067/

(Some articles may require a subscription.)

#exchanges #coverage #healthcare

https://www.modernhealthcare.com/insurance/mh-aca-customers-2026-cms-data/

State Hospital Price Caps

Modern Healthcare has a good article on various state initiatives to regulate hospital prices. Proposals range from hard caps to looser standards. Coincidentally, I had a blog on Thursday covering many of the same states and initiatives. Check it out here: https://www.healthcarelabyrinth.com/states-attack-healthcare-costs-and-hospital-prices/

In related news, healthcare policy group KFF issued a briefer on hospital competition in the U.S. The analysis examines the competitiveness of markets for hospital care based on RAND Hospital Data and American Hospital Association (AHA) survey data. 

It found that one or two health systems controlled the entire market for inpatient hospital care in nearly half (47%) of metropolitan areas in 2024. In more than four of five metropolitan areas (83%), one or two health systems controlled more than 75% of the market. Nearly all (97% of) metropolitan areas had highly concentrated markets for inpatient hospital care.

KFF also says that most hospital markets in metropolitan areas (80%) became less competitive from 2015 to 2024 or were controlled by one health system over that entire period.

Additional article: https://www.kff.org/health-costs/one-or-two-health-systems-controlled-the-entire-market-for-inpatient-hospital-care-in-nearly-half-of-metropolitan-areas/

(Some articles may require a subscription.)

#hospitals #rates #coverage #healthcare

https://www.modernhealthcare.com/providers/mh-hospital-price-cap-legislation-indiana-vermont

GOP May Run Another Reconciliation Bill

Republicans may run another budget reconciliation bill to advance a number of President Donald Trump’s stalled priorities, including funding for the war, a voting bill, and to fund the Department of Homeland Security. Within the bill likely will be more healthcare cuts to meet spending rule and deficit mandates. Not all of the initiatives would pass the Byrd rule, which limits what can be in such a bill.

Among the healthcare cuts that could be included are:

• Implementing aggressive site neutrality in Medicare.
• Funding cost-sharing reductions in the Exchanges (to save on premium tax credits).
• Further reining in Medicaid eligibility for some populations.
• Aspects of Trump’s healthcare plan, including expanding ICHRA reimbursement and small business healthcare tax credits, Exchange benefit package changes, replacing Exchange subsidies with Health Savings Account (HSA) contributions, and codifying TrumpRx.
• Requiring greater price transparency from health insurance companies and providers.

(Article may require a subscription.)

#congress #trump #reconciliation #exchange #coverage

https://www.modernhealthcare.com/politics-regulation/mh-gop-budget-reconciliation-bill-medicaid-aca

Senate Deal On Private Coverage Insulin Costs

Sens. Jeanne Shaheen, D-NH, Susan Collins, R-ME, Raphael Warnock, D-GA, and John Kennedy, R-LA, reached a deal to limit out-of-pocket costs for people with diabetes by waiving any deductibles and limiting cost sharing to the lesser of $35 or 25 percent of the list price per month. This could lead to the passage of the legislation in the upper chamber.

The bill would also require pharmacy benefit managers (PBMs) to pass through 100% of insulin rebates and other compensation to insurers. A pilot program in 10 states would also be set up to identify uninsured people with diabetes and providing them with $35 monthly insulin.

#drugpricing #insulin #diabetes

https://thehill.com/policy/healthcare/5800233-insulin-cost-cap-legislation