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Impact Of OBBBA Cuts

Two new analyses describe the looming impacts of the Medicaid and Exchange cuts in the One Big Beautiful Bill Act (OBBBA).

Upcoming statutory limits on providers’ state-directed payments (SDPs) in Medicaid are expected to cost states tens of billions of dollars for state match and lower spending by double that or more. The analysis published in Health Affairs says 17 hard-hit states could see impacts of 10% to 25% of total annual Medicaid spending. The analysis outlined at least $51.8 billion in reductions across 36 states. A proposed rule would expand reductions beyond what is outlined in the OBBBA to all such SDPs.

Federal policy changes and budget cuts are forcing states to scale back Medicaid benefits for immigrants. Because of looming cuts, California, Colorado, Illinois, Minnesota, New York, Washington and the District of Columbia have scaled back state-funded coverage for immigrants. The changes will also have major impacts on revenue of Medicaid-dominant health plans Molina and Centene, among others. Insurers project losing more than $1 billion in Medicaid revenue.

Additional article: https://www.modernhealthcare.com/insurance/mh-molina-centene-state-medicaid-cuts-immigrants/

#medicaid #exchanges #obbba

https://www.fiercehealthcare.com/providers/obbbas-state-directed-payment-caps-will-trim-some-states-medicaid-spend-quarter-study

States Turning To Managed Care For Medicaid Long-Term Care

An excellent Modern Healthcare article on Medicaid long-term care. Twenty-four states contract with Medicaid managed care organizations to cover people who need long-term services and supports. This is a remarkable shift from decades ago when managed care covered largely only TANF welfare and related populations. States have turned to private delivery to save costs and reduce trends.

However, some states are actually rolling back long-term managed care. Indiana and Nebraska recently ended insurer contracts amid provider concerns.

#medicaid #longtermcare #managedcare

https://www.modernhealthcare.com/insurance/mh-medicaid-managed-care-long-term-services

Cuban Offers Ideas On Affordability

Entrepreneur Mark Cuban, founder of Cost Plus Drugs, appeared before the Texas Legislature with affordability and reform ideas. They include:

• Patients should be able to access drugs at the lowest possible cost, even if that’s outside of their health plan. Laws should allow such cash pay expenses to count toward deductibles or out-of-pocket maximums.
• Standardized contracts should be adopted for both pharmacy benefits managers and third-party administrators.
• Transparency in pricing is key and must be mandated. That includes transparency into rebates, fees, affiliate compensation, and any other guarantees.
• Elimination of gag clauses that may prevent employers or other plan sponsors from speaking more openly about their contracts. This would also drive transparency and better contract terms.
• And government of laws and regulations enforcement should have teeth.

#healthcare #healthcarereform #cuban

https://www.fiercehealthcare.com/regulatory/mark-cubans-recipe-affordable-healthcare-includes-these-5-policy-changes

Hospitals Say Revenue Losses Will Mount With More Changes

Hospital lobbies are turning up the heat on lawmakers given multiple funding reductions that threaten hospital finances. Impacts of the One Big Beautiful Bill Act will be $340 billion through 2034. But new rules proposed by the Trump administration would reform site neutral payments for imaging and enact reductions to drug reimbursement in Medicare for those with 340B status. That would mean another $681 billion loss over ten years.

While I favor site neutral payments and some 340B reforms, it seems clear that all the reductions threaten to undermine providers.

#hospitals #obbba #340b #siteneutral #medicaid #exchanges

https://www.politico.com/news/2026/09/02/hospitals-say-coming-regulations-worse-than-medicaid-cuts-01060086

More Crippling News On Employer Healthcare Costs

I told you about a number of business surveys projecting huge increases in healthcare costs in 2027. The bad news continues. A new survey underscores the trend.

Marsh, formerly Mercer, says employers’ healthcare costs are projected to spike again in 2027. Without intervention, the hike would be 11%. With benefit adjustments and other interventions, the hike will be 8.2%.

This echoes the Aon survey which said costs will rise 9.5%.

In other news, only 60% of employer health plans cover GLP-1 drugs for obesity, down from 72% last year. This is from the Business Group on Health.

Additional articles: https://www.fiercehealthcare.com/payers/employers-health-benefits-costs-could-rise-82-2027-marsh-survey and https://www.modernhealthcare.com/insurance/mh-employer-health-plans-glp-1-coverage/

#employercoverage #healthcare #coverage #costs

https://thehill.com/policy/healthcare/6066452-employer-health-costs-spike-2027

United To Cut 1,700 Codes From PA

To fulfill its commitment to eliminate 30% of prior authorizations, UnitedHealthcare says it will make 1,700 codes exempt from the process as of October 1. Most of the eliminations are in commercial and individual plans.

Additional article: https://www.fiercehealthcare.com/payers/unitedhealthcare-nix-prior-auth-1700-services-oct-1 and https://www.modernhealthcare.com/insurance/mh-unitedhealthcare-prior-authorization-requirements-codes/

#unitedhealthcare #healthplans #priorauthorization

https://www.beckerspayer.com/policy-updates/unitedhealthcare-to-drop-prior-authorization-requirements-for-1700-services/

Trump Strikes New Drug Deals

Nine additional pharmaceutical companies will offer significant drug price concessions, including agreeing to introduce new drugs at most-favored nation (MFN) pricing and extending such lower costs to the Medicaid program. The nine new companies represent mid-size biotech and drug companies.

The new agreements with the Trump administration mirror earlier deals, including selling at discounts on the TrumpRx website. A Harvard Medical School and Urban Institute analysis estimates the Medicaid program could save states more than $8 billion annually if applied to 82 high-cost brand-name drugs.

The companies will not be subjected to MFN in Medicare (at least immediately) or new tariffs. They too will invest in America and provide active ingredients directly to the U.S.

The White House says the 26 companies so far represent 90% of the domestic pharmaceutical market. It also took credit for prescription drug prices falling 3.1% over the 12 months ending in July, the steepest annual drop in more than six decades. While critics have criticized the deals, there is little doubt that President Trump has done more for lowering drug costs than other presidents:

• His drug discounts with companies
• Medicaid MFN discounts
• MFN new drug introductions
• Medicare MFN pilots
•  Enhanced Medicare drug negotiations

While I support the overall program, it is important to accelerate savings in both Medicare and introduce lower prices in the commercial world.

Additional articles: https://www.fiercepharma.com/pharma/white-house-unveils-next-round-mfn-pricing-deals-9-midsized-drugmakers and https://www.modernhealthcare.com/politics-regulation/mh-trump-medicaid-drug-price-deals/ and https://thehill.com/policy/healthcare/6061821-trump-medicaid-drug-pricing/

#drugpricing #branddrugmakers #trump #trumprx #medicaid #medicare

https://www.beckershospitalreview.com/pharmacy/trump-administration-strikes-pricing-deals-with-9-more-drug-makers/

Proactive Enrollment Caps Could Be Used in MA in 2027

The Centers for Medicare and Medicaid Services (CMS) is now allowing Medicare Advantage (MA) plans to file for prospective enrollment caps in 2027 that could be used as a way to limit financial exposure. It could be yet another tool in the toolbox for plans seeking to stay in an area but fearful of too much risk. CMS says it will help stem further exits in areas.

It appears existing regulatory authority is being used, perhaps more expansively. Previously, CMS only approved caps after an insurer’s enrollment ballooned to a point at which members’ health and safety was jeopardized.

Network Health has applied for such a cap in 2027. Several protections exist in the regulation.

#medicareadvantage #enrollment

https://www.modernhealthcare.com/insurance/mh-medicare-advantage-enrollment-caps-2027-cms/

Prominent Health Plan, PBM, And Provider Fraud Lawsuits

A number of alleged fraud lawsuits have been filed recently, including the following:

The Villages (Fla.) Health, a primary and specialty care provider group, has agreed to pay $541.5 million to resolve allegations it violated the False Claims Act (FCA) by submitting improper Medicare Advantage (MA) diagnosis codes.

Similarly, Monogram Health agreed to pay $2.4 million to resolve allegations that it violated the FCA by submitting false diagnosis codes to increase payments in MA.

Maryland’s attorney general filed a lawsuit against UnitedHealth Group and Optum, seeking $380 million in damages stemming from alleged issues administering Medicaid behavioral health.

Florida’s attorney general sued Express Scripts and Prime Therapeutics, alleging arrangements between the two pharmacy benefits managers allowed Prime Therapeutics to improperly cut pharmacy payments by up to 20% and pass on savings to Express Scripts.

Additional articles: https://www.beckerspayer.com/legal/villages-health-to-pay-541-5m-to-settle-medicare-advantage-fraud-allegations/ and https://www.beckerspayer.com/legal/maryland-sues-unitedhealth-for-380m-over-medicaid-administration-issues/ and https://www.healthcaredive.com/news/the-villages-health-medicare-overbilling-settlement-doj-humana/828915/ and https://www.modernhealthcare.com/insurance/mh-express-scripts-prime-therapeutics-florida-antitrust/ and https://www.modernhealthcare.com/legal/mh-villages-health-system-doj-settlement/ and https://www.fiercehealthcare.com/hospitals/villages-health-reaches-541m-false-claims-act-settlement-doj

#healthplans #providers #pbms #regulations #fwa

https://www.justice.gov/opa/pr/medicare-advantage-provider-monogram-health-agrees-pay-24m-settle-false-claims-act-suit?utm_source=chatgpt.com

— Marc S. Ryan

Plans, Providers Urge Rejection Of State-Directed Payments Rule

Health plan and provider groups are joining together to oppose the Trump administration’s draft regulation implementing state-directed payment reforms and limitations in Medicaid. Changes were made in the One Big Beautiful Bill Act (OBBBA), but opponents say the draft rule goes well beyond what the statute outlines.

The plans and providers may be right about the rule exceeding statutory authority. At the same time, the use of state-directed payments have been abused and do need to be reined in.

#medicaid #obbba #coverage

https://www.modernhealthcare.com/politics-regulation/mh-cms-medicaid-state-directed-payments-rule-pushback/