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With Friends Like These: No Love From GOP For Medicare Advantage

At a House Ways and Means Committee’s joint oversight and health subcommittee hearing, GOP lawmakers declared that the Medicare Advantage (MA) program needs an overhaul and private plans need to be reined in. The primary complaints were risk adjustment upcoding and prior authorization abuses. They also argued MA is not saving money as promised.

The hearing was contentious and could lead to either accelerated reforms from the Centers for Medicare and Medicaid Services (CMS) or possible inclusion of cuts in a future budget bill. But admittedly, so far Congress has not wanted to pull the trigger on MA reforms given the popularity among seniors.

In other news, a good article on the Trump administration proposal to begin some site neutral payment reform in Medicare. Some hospital-owned outpatient facilities (just off-campus outpatient facilities) would be paid the same to administer medications as physicians. CMS projects that Medicare would save $210 million and that beneficiaries would save $70 million in out-of-pocket costs next year. Clinic visits at on-campus outpatient departments could be the next area of reform.

These are baby steps. Congress is working on broader measures. Congressional policy arm MedPAC proposes very deep changes. Of course, hospitals will fight all site neutral measures because they simply do not want to reform and be efficient. But the time seems to be coming – finally.

Site neutral on Medicare fee-for-service (FFS) would help MA and commercial products as well.

(Some articles may require a subscription.)

Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-medicare-advantage-house-hearing-upcoding/ and https://www.modernhealthcare.com/politics-regulation/mh-site-neutral-payment-cms-2026/

#hospitals #medicare #siteneutral

https://www.healthcaredive.com/news/medicare-advantage-house-hearing-upcoding-prior-auth/753726

Oscar Health Slashes Earnings Guidance

The trend continues of large health plans surprising The Street with major slashes in guidance with little or no notice. While its Q2 investor call is not until August 6, Oscar Health announced today it is slashing its full-year guidance by about half a billion dollars. The insurer expects a loss from operations of $200 million to $300 million just months after estimating earnings from operations of $225 million to $275 million. Elevated utilization is a big culprit. Oscar’s medical loss ratio is climbing to between 86% and 87%, more than 5% higher than initially forecast.

Oscar had an operating loss of about $230 million in Q2, when analysts expected an operating profit of $55.5 million.

Oscar is a 100% Exchange plan. Revenue and margin concerns likely will continue given the expiration of the enhanced premium subsidies and enrollment tightening in a new rule and the budget reconciliation bill. Enrollment is slated to drop in 2026.

Additional articles: https://www.fiercehealthcare.com/payers/oscar-health-cuts-full-year-guidance-estimates-2025-loss-aca-marketplace-stumbles and https://www.modernhealthcare.com/insurance/mh-oscar-health-aca-marketplace-obamacare/

(Some articles may require a subscription.)

#oscar #exchanges #healthplans #margins

https://www.beckerspayer.com/payer/oscar-health-is-latest-insurer-to-cut-earnings-guidance/

Final Budget Score In From CBO: 10 Million To Lose Coverage

The One Big Beautiful Bill Act that President Donald Trump signed into law on Independence Day will add $3.4 trillion to the national debt from 2025 to 2034. This is from the final scoring of the bill from the Congressional Budget Office (CBO). The estimated deficit rise reflects $1.1 trillion in cuts to direct spending and a $4.5 trillion government revenue loss due to extended and new tax cuts.

CBO also projects the number of uninsured individuals will increase by 10 million by 2034 due to the Medicaid and Exchange reductions in the bill. This is about 2 million less than previously estimated due to some provisions being ruled unallowable by the Senate parliamentarian. Adding the expected 4.2 million to lose coverage when the enhanced Exchnage subsidies expire December 31 as well the 900,000 to lose coverage due to the just finalized Exchange rule, a total of just over 15 million will lose coverage as opposed to about 17 million.

Healthcare cuts are about $1.1 trillion over ten years, with $964 billion cut from Medicaid and $124 billion from the Exchanges.

In terms of Medicaid, limitations, and phasedown on provider taxes as well as limits on state directed payments save $392 billion and work requirements save $326 billion.

In addition, more than half of Americans — 57 percent — said in a new CBS/YouGov poll that they think the GOP’s budget bill will increase their health-care costs.

Additional articles: https://www.modernhealthcare.com/politics-regulation/trump-tax-law-medicaid-cbo/ and https://thehill.com/business/5412262-biden-bill-adds-3-4-trillion-deficits/?tbref=hp and https://thehill.com/policy/healthcare/5411435-gop-megabill-health-care-costs-survey/

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#budgetreconciliation #trump #congress #spending #medicaid #coverage #exchanges

https://www.beckershospitalreview.com/hospital-management-administration/one-big-beautiful-bill-to-add-3-4t-in-debt-cbo

Humana Loses Stars Lawsuit

Humana’s lawsuit on Star calculations was thrown out of court this week. The judge indicated that the plan did not exhaust internal appeals processes at the time of the filing and thus the suit did not have standing. The suit could be refiled, though. The Centers for Medicare and Medicaid Services (CMS) later rejected Humana’s appeal.

Humana’s suit was far-reaching and pointed. It said CMS did not follow its own regulations in its methodology for calculating ratings and said the agency does not provide plans the necessary data to calculate aspects of Star ratings. As an example, Humana said it could not replicate 60% of CMS’ cut point calculations.

Humana’s average Star score fell from 4.37 in 2024 to 3.63 for 2025.

Despite the lawsuit outcome, Humana is not wrong in its premise that inadequate data and a lack of transparency pervades the Star process. While the agency has gotten better about releasing and explaining aspects of the complex Star calculations, aspects remain a black box.

Additional articles: https://www.modernhealthcare.com/insurance/mh-humana-medicare-advantage-lawsuit-dismissed/ and https://www.beckerspayer.com/legal/judge-dismisses-humanas-medicare-advantage-star-ratings-lawsuit/ and https://www.healthcaredive.com/news/humana-medicare-advantage-star-ratings-lawsuit-dismissed/753455/

(Some articles may require a subscription.)

#stars #cms #humana #medicareadvantage #quality

https://www.fiercehealthcare.com/payers/humana-joins-chorus-lawsuits-over-sinking-star-ratings

Democratic States Challenge Exchange Rule Finalization

Democratic states sued the Trump administration today over the finalization of the Exchange rule that will significantly tighten the enrollment season and dampen eligibility. Provisions in the budget reconciliation bill will further clampdown on enrollment.

The states are arguing that the administration did not follow all regulatory rules before finalization and that the rule is arbitrary and capricious. They also argue that the changes will boost the uninsured rate and cost states a great deal of money.

In related news, the administration supplied data on improper enrollments in government programs. Analyzing 2024 enrollment data, the administration found 1.2 million enrolled in Medicaid or the Children’s Health Insurance Program in multiple states, and 1.6 million enrolled in one of those programs and an Exchange plan. Data-sharing and procedural requirements in the budget bill seek to further address this issue.

As well, the Centers for Medicare and Medicaid Services (CMS) said it won’t approve or renew state programs to promote multiyear, continuous Medicaid enrollment or health professional workforce development. Nine states have continuous enrollment waivers for children and eight states have them for adults. 

Last, some lawmakers want to help out Medicare doctors by revisiting the Medicare rate fix in the budget reconciliation bill. The House version had a better solution (although it was by no means perfect), but it was watered down by the Senate to a one-time override increase for 2026. Some suggest Medicare Advantage (MA) upcoding in risk adjustment could help pay for any changes.

Additional articles: https://www.modernhealthcare.com/legal/mh-aca-final-rule-lawsuit/ and https://thehill.com/policy/healthcare/5407442-democratic-ags-sue-trump-administration-obamacare-changes/ and https://www.beckerspayer.com/payer/cms-2-8m-people-have-enrolled-in-medicaid-aca-plans-in-multiple-states/ and https://www.modernhealthcare.com/politics-regulation/mh-1115-waivers-medicaid-enrollment-cms/ and https://www.beckerspayer.com/payer/cms-to-end-medicaid-continuous-eligibility-waivers-5-things-to-know/ and https://www.fiercehealthcare.com/payers/cms-warns-states-new-medicaid-waiver-expectations and https://www.modernhealthcare.com/politics-regulation/mh-medicare-doctor-pay-tax-law/

(Some articles may require a subscription.)

#medicaid #exchanges #chip #1115waivers #coverage #healthcare #cms #budgetreconciliation #medicare #providers #primarycare

https://www.fiercehealthcare.com/payers/states-challenge-aca-final-rule-cms-rolls-out-new-duplicative-enrollment-data

Employers Could Transfer Costs to Employees

While there has been some increased costs for employees the past few years, employers attempted to shelter much of the huge trend in employer healthcare costs from their employees. Given ongoing trends, that is likely about to change.

Analysts at Mercer polled 711 employers and found that 51% said they are likely or very likely to shift costs to employees in 2026. That’s up from 45% in 2025. About 19% said they were very likely to shift costs and 33% said they were likely to do so in 2026.

More than half of employers are likely or very likely to make plan design changes that will shift more cost sharing to employees in 2026.

Additional article: https://www.fiercehealthcare.com/payers/mercer-survey-employers-may-make-return-healthcare-cost-shifting-strategies

#employercoverage #healthcare #coverage

https://www.beckerspayer.com/payer/employers-plan-to-shift-more-healthcare-costs-to-employees-2026-10-things-to-know

CMS Issues Additional Payment Reform Rules

After publishing a far-reaching rule Monday, the Centers for Medicare and Medicaid Services (CMS) issued today a proposed reform rule as well as proposed rates for outpatient hospitals and ambulatory surgery centers. Outpatient rates for hospitals would increase by 2.4% in 2026. Ambulatory surgery centers also would increase by 2.4% in 2026.

Most important, CMS proposes important reforms to reduce the costs in Medicare over time. Many of these were proposed earlier during Trump 45, but the Biden administration rescinded the proposals upon coming to office. The reforms include:

— Phasing out the inpatient only list over a 3-year period and allowing the services to be performed in a hospital outpatient setting or ambulatory surgery center.

— Reforming the ambulatory surgery center list by updating its general criteria and shifting five exclusion criteria into a new, nonbinding section to allow the expansion of services, including inclusion of codes from the inpatient only list. 

— Updating the hospital price transparency rule with more requirements.

— Applying the Physician Fee Schedule payment rates to a broader swath of services at hospital outpatient and hospital owned settings, especially drug administration. This is a modest but good step toward site neutrality.

Additional articles: https://www.fiercehealthcare.com/providers/cms-floats-24-annual-outpatient-asc-pay-bump-alongside-price-transparency-site-neutrality and https://www.cms.gov/newsroom/press-releases/cms-proposes-bold-reforms-modernize-hospital-payments-strengthen-transparency-and-put-patients-back and https://www.cms.gov/newsroom/fact-sheets/calendar-year-2026-hospital-outpatient-prospective-payment-system-opps-and-ambulatory-surgical

#medicare #hospitals #siteneutral #ascs

https://www.beckershospitalreview.com/finance/cms-pitches-2-4-outpatient-pay-bump-for-hospitals-in-2026-5-things-to-know

Medicare Physician 2026 Rate And Reforms

The Centers for Medicare & Medicaid Services (CMS) released its 2026 physician fee schedule on Monday evening, announcing an increase of 3.62% over the 2025 rate. The budget reconciliation bill increased rates for that year by 2.5%. The added amount was due to other changes in the rate-setting system. Physicians in alternative payment models will see an increase of 3.83%.

CMS also unveiled a series of rate and other reforms, including rewarding certain physicians for avoiding hospitalizations, coordinating better with primary care, and early intervention. CMS also proposed removing 10 quality measures that do not improve patient health outcomes and introduced five new ones, with an emphasis on preventive services and expanding Medicare diabetes prevention.

Additional articles: https://www.fiercehealthcare.com/regulatory/cms-proposes-36-pay-bump-docs-takes-aim-chronic-conditions-physician-fee-schedule and https://www.beckershospitalreview.com/finance/cms-pitches-2026-physician-pay-plan-with-2-conversion-factors-8-things-to-know/ and https://www.beckershospitalreview.com/finance/cms-proposes-2026-medicare-rule-6-notes/ and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-pfs-proposed-rule-cms-1832-p and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-proposed-rule-cms-1832-p-medicare-shared and https://www.cms.gov/newsroom/press-releases/cms-proposes-physician-payment-rule-significantly-cut-spending-waste-enhance-quality-measures-and

(Some articles may require a subscription.)

#cms #medicare #regulations #providers #physicians #acos

https://www.modernhealthcare.com/politics-regulation/mh-medicare-physician-pay-cms-2026

Mergers and Acquisitions Down

Due to the major healthcare reductions in the budget reconciliation bill, mergers and acquisitions between hospitals and health systems were down in Q2 2025 against recent years. Eight transactions were announced in the second quarter, the lowest in the quarter since at least 2017.

Another report says that employers need to brace for continuing increases in healthcare costs. This is in part due to underlying utilization trends but also the probable price hikes providers will demand due to the losses in other lines of business under the reconciliation bill as well as the threat of tariffs. Hospital uncompensated care costs are expected to grow by $443 billion over ten years.

Additional article: https://www.healthcaredive.com/news/hospital-health-system-ma-falls-q2-medicaid-cuts-2025/752685/

#employercoverage #manda #mergers #acquisitions

https://www.beckerspayer.com/payer/why-2026-may-hit-employers-with-a-one-two-punch-on-healthcare-costs

PAYGO Politics

President Donald Trump and Republicans said they would not cut Medicare, but the budget reconciliation could very well do that. Since the bill actually increases the deficit in future years, what is known as PAYGO sequestration kicks in to address the increase. Medicare is one program that can be cut under the law to a cap of 4%. On an earlier version of the bill, the Congressional Budget Office (CBO) said about $500 billion in cuts could be triggered beginning in 2026.

PAYGO can be overruled but the Senate Democrats would have to join Republicans to overrule PAYGO by 60 votes. In this political world, will that happen this time as it has in the past? Will Democrats blame Republicans for passing the budget bill and not overrule or would that then put the blame on Democrats?

See my blog this week for all the details of the budget bill: https://www.healthcarelabyrinth.com/saga-over-big-beautiful-bill-has-passed-for-good-or-bad/

(Article may require a subscription.)

#budgetreconciliation #medicare #deficit

https://www.modernhealthcare.com/politics-regulation/mh-tax-law-medicare-cuts-paygo-law