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Trump Administration Sides With Hospitals Over Drug Makers in 340B Lawsuit

The Department of Health and Human Services (HHS) has filed for summary judgment in its favor regarding lawsuits on the 340B program, siding with hospitals over drug makers. This is consistent with the Biden administration. While I am not a fan of brand drug makers, it is clear that hospitals and some other providers are abusing the intent of the program. Trump is on the wrong side of this policy issue.

#340b #drugpricing #branddrugmakers

https://www.fiercehealthcare.com/ai-and-machine-learning/rfk-jrs-hhs-picks-biden-admins-legal-fight-against-340b-rebates

Major Medicare Advantage Advocacy Group Launches Ad Campaign

Better Medical Alliance (BMA), a prominent Medicare Advantage (MA) advocacy group, has launched a seven-figure digital ad campaign in an effort to avoid MA cuts and boost the proposed 2026 rate increase. Not counting risk score trends, MA rates saw a decline in 2024 and 2025. The Biden administration proposed just a 2.3% hike for 2026. This would lead to a third year of benefit cutbacks and geographic footprint reductions. The reductions have been caused by a new risk model that takes about 7% out of rates overall (it is being phased in over three years through 2026) as well as reductions in medical education funding.

BMA notes that both Milliman and PwC estimated medical cost trends in MA increased by 8% from 2023 to 2024. The trend continues into 2025 with the return of utilization. Plans are also facing higher costs in Medicare Part D due to the Biden administration’s and Democrats’ misguided and unfunded reduction in out-of-pocket costs in the Inflation Reduction Act (IRA).

The final rate hike is now at the Office of Management Budget (OMB) for approval and should be released publicly by April 7. MA plans are hopeful that rates are increased despite the spending cut push. This could come in a few ways: an increase in the cost trend, pushing out the final year of the risk model phase-in, and forestalling the phase-in of medical education funding reductions.

The ad campaign could also influence the potential reductions to MA in a budget reconciliation bill. Pressure is mounting to curb overpayments and reform risk adjustment in the program. This is due to commitments to avoid major Medicaid coverage reducions and the sheer size of spending cut targets. I feel like carefully phased-in and targeted risk adjustment reforms are not unreasonable, but also think rate relief is needed in 2026.

Additional articles: https://bettermedicarealliance.org/news/better-medicare-alliance-launches-new-ad-urging-trump-administration-to-protect-medicare-advantage-for-seniors/ and https://insidehealthpolicy.com/daily-news/ma-allies-launch-ad-campaign-cy-2026-ma-rate-notice-hits-omb

(Some articles may require a subscription.)

#medicareadvantage #overpayments #riskadjustment #rates

https://www.modernhealthcare.com/medicare/better-medicare-alliance-ads-medicare-advantage

Oz Dodges Medicaid Cuts But Signals Openness On MA Reductions

Dr. Mehmet Oz, nominee to be administrator of the Centers for Medicare and Medicaid Services (CMS), seems well placed to be confirmed. In a hearing, he dodged most questions on Medicaid cuts but signaled that he might favor reductions to Medicare Advantage (MA) overpayments. I have been saying this for some time now.

Oz said he is in favor of work requirements for Medicaid and removing undocumented individuals. He did not defend the Affordable Care Act (ACA) enhanced premium tax credits set to expire in 2025.

Oz appeared to agree with Sen. Elizabeth Warren, D-MA, and others at several points in the hearing that the MA program needs better reform and oversight, especially on payments. Even Sen. HELP Chairman Bill Cassidy, R-LA, appeared to agree and also raised denial of care by plans, on which Oz concurred.

Oz also said he would defend the Medicare drug price negotiation law in court, is open to international reference pricing for drugs, says pharmacy benefit manager (PBM) reform is needed, and that he has concerns on private equity’s role in healthcare.

Additional articles: https://insidehealthpolicy.com/daily-news/oz-vows-defend-medicare-price-negotiations-court-challenges-open-reference-pricing and https://www.medpagetoday.com/publichealthpolicy/medicare/114668 and https://www.beckershospitalreview.com/hospital-management-administration/dr-oz-vague-on-medicaid-cuts-in-nomination-hearing-6-notes.html and https://thehill.com/homenews/ap/ap-politics/ap-mehmet-oz-senate-hearing-cms/?tbref=hp and https://www.modernhealthcare.com/politics-policy/mehmet-oz-confirmation-hearing-cms and https://www.healthcaredive.com/news/dr-oz-cms-nominee-support-medicaid-work-requirements/742605/

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#oz #cms #healthcare #coverage #healthcarereform #medicare #medicareadvantage #medicaid #workrequirements #fwa #overpayments #priorauthorization #exchanges #obamacare #pbms #ira #drugpricing #branddrugmakers #privateequity

https://www.fiercehealthcare.com/payers/dr-oz-questioned-over-medicaid-cuts-promises-medicare-advantage-reforms

MedPAC Repeats Dubious Overpayment Number In Report

MedPAC, the congressional policy arm for Medicare, again has published a dubious overpayment number in a report to Congress. It says the federal government will spend $84 billion more in 2025 on Medicare Advantage (MA) enrollees than if they were enrolled in the traditional fee-for-service (FFS) program. This is about 20% more. This is slightly lower than MedPAC reported in 2024. 

MedPAC says two factors accounting for the majority of overpayments to MA plans are risk score coding intensity and favorable selection. It says risk scores for MA enrollees will be around 16% higher in MA vs. FFS, which accounts for $40 billion. It says that $44 billion is favorable selection.

Many MA proponents and I do not buy the favorable selection number or all of the risk score coding number. But I have admitted that some plans take advantage of risk adjustment and do overcode. They get a disproportionate amount of the overpayments. MedPAC notes a wide variation among plans as well. I agree with MedPAC that heath risk assessments (HRAs) and manual chart reviews account for a good deal of the increased scoring and should be removed or reformed.

Given all of this continuing negative publicity, I do think MA reductions and overpayments could appear in the budget reconciliation bill or pass later this year. See this blog on areas they could cut: https://www.healthcarelabyrinth.com/medicare-advantage-in-the-gunsight/

#medicareadvantage #healthplans #overpayments #riskadjustment

https://www.beckerspayer.com/payer/medpac-estimates-84b-in-medicare-advantage-overpayments-in-2025-10-notes.html

Government Shutdown Could Occur

Senate Democrats came out today and said they do not plan to vote for the House GOP-passed continuing resolution (CR) to fund the rest of this federal fiscal year (through September), instead demanding a 30-day CR to allow for additional negotiations. But there is some buzz that many Democratic senators could change their minds if the Senate GOP majority calls for a cloture vote later this week. The GOP is very unlikely to opt for a 30-day option.

One GOP senator, Rand Paul of Kentucky, is against any CR. That means eight Democrats would be needed to invoke cloture to end debate and pass the bill. Several senators have commented they are worried about the political fallout if they vote no. Others feel a government shutdown further empowers Elon Musk and his cost-cutting commission and efforts. A CR must be passed by Friday or there would be a government shutdown.

Additional article: https://thehill.com/homenews/senate/5189724-senate-democrats-government-funding-shutdown/?tbref=hp

#governmentshutdown #cr #congress #trump

https://thehill.com/homenews/senate/5191508-senate-democrats-vote-government-funding-30-day-cr

House Passes the FFY 2025 CR

The House passed the FFY 2025 continuing resolution (CR) today by a vote of 217 to 213. One Republican voted no and one Democrat voted yes. The bill’s passage came together when House Speaker Mike Johnson, R-LA, and Senate Majority Leader Jon Thune, R-SD, committed that a Medicare physician rate fix would be in the budget reconciliation bill slated for May. The commitment was made to Rep. Greg Murphy, M.D., R-N.C., co-chair of the House Doctors Caucus. He and others threatened to vote no, which might have sunk the bill. Murphy says how far-reaching the fix is – overturning this year’s reduction, adding to it for this year, or a permanent fix – is unspecified at this time.

The bill next goes to the Senate. Democrats want to vote en masse against the bill, which would deprive the CR of 60 votes and sink it. But they also are weary of the political fallout of voting against the bill. The Senate Democrats would clearly be blamed for any shutdown now. The most worried are Democrats from seven swing states. They also argue a government shutdown could make the Department of Government Efficiency (DOGE) commission initiatives even more far-reaching.

We will see what happens before Friday.

Additional article: https://www.fiercehealthcare.com/regulatory/speaker-johnson-releases-funding-patch-six-month-telehealth-extension-no-doc-pay-fix and https://insidehealthpolicy.com/daily-news/murphy-gets-promise-doc-fix-will-go-reconciliation and https://thehill.com/homenews/senate/5186882-government-funding-shutdown-senate-democrats/

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#budgetreconciliation #governmentshutdown #cr #healthcare #trump #congress #physicians #medicare

https://thehill.com/homenews/house/5189141-house-republicans-pass-government-funding-bill

House CR Unveiled With No Doc Fix

House Speaker Mike Johnson, R-LA, unveiled the FFY 2025 continuing resolution (CR) through the end of the fiscal year in September. If the bill passes the House, it goes to the Senate. At least one House GOP member has announced opposition, but the lack of a Medicare physician rate fix could mean others drop off. Passage in the Senate is unknown because 60 votes are needed and Democrats appear to be lining up against it. But moderate Democrats could have a change of heart. The bill also extends some critical healthcare programs that would expire on March 31. The House may vote on the bill Tuesday.

In other news, a bipartisan proposal to further extend telehealth, reform pharmacy benefits managers (PBMs), reverse Medicare physician pay cuts, and address the opioid crisis has failed to be called up in the Senate.

Additional articles: https://insidehealthpolicy.com/daily-news/providers-furious-house-continuing-resolution-omits-doc-pay-fix and https://www.modernhealthcare.com/politics-policy/spending-bill-medicare-doctor-pay and https://thehill.com/homenews/house/5184753-scott-perry-medicaid-coverage/ and https://www.fiercehealthcare.com/telehealth/senate-dems-push-long-shot-bill-pbm-reform-telehealth-extensions-and-35-doc-pay-fix

(Some articles may require a subscription.)

#governmentshutdown #trump #congress #ffy2025 #medicare #physicians #cr

https://www.fiercehealthcare.com/regulatory/speaker-johnson-releases-funding-patch-six-month-telehealth-extension-no-doc-pay-fix

Trump May Support Changes To Medicare Drug Negotiations

Big Pharma says that President Donald Trump and Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. are sympathetic to the drug lobby’s concerns regarding the Inflation Reduction Act’s (IRA) “pill penalty” provision within the Medicare drug price negotiations.

Drug makers say the law discourages research into small molecule drugs. Small-molecule drugs are exempt from Medicare drug price setting for nine years after FDA approval, while biologics are exempt for 13 years. Big Pharma has been lobbying to extend the small-molecule drug exclusivity period to 13 years.

Some congressional bills would extend the period before price negotiation can begin for small molecule drugs to match biologics.

(Article may require a subscription.)

#ira #drugpricing #branddrugmakers

https://insidehealthpolicy.com/daily-news/pfizer-ceo-trump-kennedy-sympathetic-pill-penalty-concerns

Paragon Says Improper Medicaid Payments Could Be Over $1 Trillion

The Paragon Health Institute is an extremely powerful think tank with the ear of the Trump administration and some in Congress. Its newest report, in conjunction with the Economic Policy Innovation Center, says that improper payments under Medicaid could be as much as $1.1 trillion over ten years. The Centers for Medicare and Medicaid Services (CMS) estimated improper payments at $543 billion over ten years, but Paragon says that does not include eligibility check errors.

The report urges Congress to cut funding to states found with greater than 3% erroneous payments based on eligibility errors. Many of the errors are tied to the suspension of eligibility checks during the COVID pandemic. The ineligible population includes people over income limits and illegal immigrants.

The report gives hope that the GOP Congress can reduce Medicaid spending and perhaps certain Medicare spending without fundamentally impacting coverage. This is a promise made by the president and congressional leaders in the House.

(Article may require a subscription.)

#medicaid #fwa #improperpayments

https://insidehealthpolicy.com/daily-news/paragon-epic-eligibility-errors-medicaid-improper-payments-top-11-trillion