Newsfeed

Clover Wins Star Suit

In a stunning decision, a federal judge in Georgia ruled in favor of Clover Health in its lawsuit challenging its 2026 Medicare Advantage (MA) Star Ratings. What’s more the judge seemingly has thrown out 20 measures in the program. The judge ordered just Clover’s 2026 ratings, impacting 2028 payments, to be recalculated. But it is hard to see how this could not impact all contracts if the ruling is upheld.

Clover’s ratings dropped considerably in Star Year 2026, with 93% of its members enrolled in plans with ratings below four. This cost Clover $120 million in bonus revenue. Clover’s two-prong argument that the court agreed with was that the Centers for Medicare and Medicaid Services (CMS) did not have the authority to collect data and score some measures and did not adequately notice changes for others.

The Supreme Court recently threw out the so-called Chevron doctrine in the 2024 Loper decision. Chevron gave wide deference to executive agencies in rulemaking. I argued that Chevron usurped policymaking from Congress. The question now is did the judge take the Loper decision too far? CMS is asking for the decision to be reconsidered and will undoubtedly appeal.

The suit’s decision is here: https://litigationtracker.law.georgetown.edu/wp-content/uploads/2026/01/Clover-Insurance-Company-v.-Department-of-Health-and-Human-Services-et-al_2026.05.27_ORDER-ON-MOTION-FOR-SUMMARY-JUDGMENT.pdf

(Article may require a subscription.)

#cms #stars #quality #medicareadvantage

https://www.modernhealthcare.com/insurance/mh-clover-health-medicare-advantage-star-ratings-lawsuit

Non-Network Plans Could Thrive

Non-network plans have been approved as qualified health plans on the Exchanges under a new rule and a number of prominent healthcare companies, including Sidecar Health, may offer such plans in the future. Non-network plans do not hold contracts or negotiate prices with hospitals and doctors, but outline for enrollees how much they will pay for specific services. Usually, such prices are based on average local prices.

The Trump administration has argued that such plans encourage innovation and lower costs. Opponents argue that such plans will boost costs for other enrollees if such plans end up as benchmark plans in the Exchanges. Further, they say healthier people could be attracted to such plans and increase risk in more comprehensive ones. Last, they also say such plans could end up being expensive for many due to limited benefits.

States do have the choice to approve the offering of such plans on the Exchange in their states. To qualify under the new regulation, non-network plans must demonstrate that a sufficient range of providers accepts the plan’s benefit amount as full payment.

Additional article: https://www.modernhealthcare.com/insurance/mh-cms-aca-exchanges-non-network-plans/

(Some articles may require a subscription.)

#exchanges #trump #regulation #healthplans

https://www.beckerspayer.com/payer/aca/non-network-insurer-eyes-aca-exchange-as-cms-clears-the-way/

KHN Covers Alternative Insurance

As traditional insurance coverage premiums spike, many are turning to alternative insurance coverage. Kaiser Health News looks at the issue. These policies are not qualified health plans under the Affordable Care Act (ACA) and often have limits and gaps. This coverage is different from cheaper, qualified coverage on the Exchanges, such as catastrophic coverage as well as reforms made by a recent rule proposed by the Trump administration. One popular alternative as premiums spike are so-called sharing initiatives, many of the Christian-based.

#healthcare #coverage

https://kffhealthnews.org/health-industry/alternative-health-plans-growth-sharing-ministries-short-term-aca-premiums/

Feds To Use AI To Audit States

The Department of Health and Human Services (HHS) will use artificial intelligence to review state audits of federal funding recipients, including Medicaid agencies. HHS told governors that its new Audit Enforcement and Risk Oversight initiative will review the previous five years’ worth of audits of state agencies. The agencies are required to conduct audits of state programs and grantees if expenditures of federal funds are over $1 million.

(Article may require a subscription.)

#fwa #trump #hhs

https://www.modernhealthcare.com/politics-regulation/mh-hhs-ai-medicaid-audit-states-funding

340B Hospital Lawsuit: The Pot Calling The Kettle Black

Three health systems – Mount Sinai in New York, Michigan Medicine, and University of Kansas City Health — have filed federal lawsuits against CVS Health. The hospitals allege that CVS and sister companies diverted about $250 million from 2020 and 2025 in savings generated through the 340B drug pricing program.

The 340B program requires brand drug makers to offer discounted prices to hospitals and safety net providers. Oftentimes, various healthcare entities are part of the adjudication and documentation process. The complaint alleges that CVS health companies used a series of intercompany service transactions to divert the funds and retain them when they should have been given to the hospitals.

I have argued that vertically integrated companies use all sorts of inter-company transfers to retain dollars within the family. So, I don’t doubt that what is alleged is possible. At the same time, the lawsuit is ironic. Substantial evidence exists concluding that hospitals benefit from the discounts but do not pass enough of the savings through as lower costs to needy consumers. In fact, 340B hospitals are found to have higher overall prices than those who are 340B qualified. So, the suit is a bit of the pot calling the kettle black.

Additional articles: https://www.fiercehealthcare.com/payers/hospitals-allege-contracted-cvs-health-subsidiaries-pocketed-their-340b-savings and https://www.modernhealthcare.com/providers/mh-cvs-340b-lawsuit-mount-sinai-michigan/

#drugpricing #340b #hospitals #cvshealth

https://www.beckerspayer.com/legal/health-systems-sue-cvs-over-alleged-250m-340b-scheme/

— Marc S. Ryan

Second Provider Tax Rule Issued Under OBBBA

Under a proposed rule implementing aspects of the One Big Beautiful Bill Act (OBBBA) Medicaid reductions, state-directed payments would be capped at 100% of Medicare rates in states that expanded Medicaid and 110% in non-expansion states. The rule saves more than $775 billion over 10 years, including $510 billion in federal savings.

Another rule that was finalized in April ends states’ ability to use certain provider taxes to generate additional federal Medicaid matching funds. That rule bans states from imposing higher tax rates on Medicaid business than on non-Medicaid business and blocks indirect tax structures designed to bypass those limits.

The proposed rule would apply to hospital inpatient and outpatient services, skilled nursing facility services, and qualified practitioner services at academic medical centers. The policy would be expanded to all services in 2029. Certain payments are temporarily grandfathered, although they will be reduced by 10% a year starting in 2028 until they reached Medicare rates.

CMS also proposes to eliminate uniform payment increases. States could establish minimum or maximum fee schedules beginning in 2028 as long as they do not exceed the Medicaid rate limit without CMS approval. Such payments rose considerably after the Biden administration set the upper limit to average commercial health insurance reimbursements for hospitals and nursing facilities.

CMS said provider taxes generate more than $24 billion annually for state budgets, with one state bringing in more than $13 billion. 

In other news, Democratic lawmakers in the Senate and House introduced resolutions that seek to roll back new Medicare prior authorization requirements under the Wasteful and Inappropriate Service Reduction (WISeR) model.

Further, Senate Democrats unveiled a policy roadmap calling for increased access to affordable long-term care services, including a proposal to establish a home care guarantee for people with Medicare. Medicare currently only has short-term nursing facility stays. Medicaid covers long-term chronic care but is usually only for the lower income.

Additional articles: https://www.fiercehealthcare.com/regulatory/legislators-introduce-resolution-seek-congressional-disapproval-cms-wiser-ai-prior-auth and https://www.fiercehealthcare.com/payers/democratic-senators-share-plans-medicare-home-care-benefit-long-term-care-reform and https://www.modernhealthcare.com/politics-regulation/mh-cms-medicaid-state-directed-payments/ and https://www.healthcaredive.com/news/senate-democrats-roll-back-medicare-ai-prior-authorization-pilot-wiser/820728/ and https://www.beckershospitalreview.com/finance/cms-to-cap-state-medicaid-payments-to-save-775b-7-things-to-know/ and https://www.beckerspayer.com/payer/democrats-ramp-up-efforts-to-repeal-medicare-prior-authorization-pilot/

(Some articles may require a subscription.)

#medicaid #providertaxes #obbba #medicare #priorauthorization #homecare

https://www.fiercehealthcare.com/regulatory/cms-proposes-rule-aimed-limiting-medicaid-state-directed-payments

— Marc S. Ryan

Exchange Enrollment Likely To Decline By Millions This Year

Healthcare policy group KFF finds that enrollment in Exchanges could decline to 17.5 million people this year. About 23.1 million enrolled as of January 1, which was already down from 2025 by 1.2 million. KFF used data from a Wakely Consulting study.

Just 86% of people enrolled in an individual market plan as of January 2026 paid their first month’s premium. If such trends continue, enrollment in the Exchanges could decrease between 17% to 26% over the course of 2026. The fall would include future unpaid premiums, mid-year attrition, and other impacts.

KFF also looked at all the cost impacts of expiring premium studies. Earlier it estimated that premiums would increase 114% if all enrollees stuck with their same plan. The new analysis finds that premiums in the aggregate actually increased by 58% for enrollees, which accounts for people switching to lower cost plans. That includes subsidized and unsubsidized individuals. The average actual filed premium hike from 2025 to 2026 as 26%.

Additional articles: https://www.fiercehealthcare.com/payers/aca-exchange-enrollment-likely-decline-least-17-year-kff and https://thehill.com/homenews/5885476-aca-marketplace-tax-credit-loss-enrollments/ and https://www.modernhealthcare.com/insurance/mh-aca-marketplace-enrollment-premiums-2026-kff/ and https://kffhealthnews.org/insurance/eroding-aca-enrollment-higher-insurance-rates/

(Some articles may require a subscription.)

#exchanges #healthcare #coverage

https://www.kff.org/affordable-care-act/what-we-know-so-far-about-2026-aca-marketplace-enrollment-premiums-and-deductibles/

More Drugs On TrumpRx

President Trump announced that more than 600 generic drugs will be available through the TrumpRx website and billionaire entrepreneur Mark Cuban of Cost Plus Drug was there to celebrate with him.

Some are critical of the initiative, arguing that lower prices may be available through insurance or elsewhere. But there is no denying that Trump’s many drug price reform initiatives are redefining drug price in the nation.

#drugprices #trump

https://thehill.com/policy/healthcare/5884064-trump-adds-600-generic-drugs

CMS Finalizes Sweeping Exchange Rule

The Centers for Medicare and Medicaid Services (CMS) finalized its sweeping 2027 Affordable Care Act and Exchange rule today. While a few items were not finalized, most of the major items that will dramatically change offerings were.

The agency says the rule is an effort to bring down premiums, increase choice, and address fraud. Critics say it will erode enrollment and benefits.

The changes include:

• Policies for tighter eligibility verification requirements, reformed marketing and enrollment practices, and fraud measures
• Extending a ban on a special enrollment period for those below 150% of poverty
• Expansion of access to catastrophic coverage due to hardship. This would apply to individuals who are ineligible for premium and cost-sharing reduction subsidies (those below 100% or above 250% of poverty) when they experience changes in their household income.
• Multi-year catastrophic coverage policies
• Value-based preventive benefits in multi-year coverage that will be covered pre-deductible.
• Non-network plans can qualify as essential benefit plans
• Changes to cost-sharing parameters to increase flexibility for issuers designing individual bronze and catastrophic plans.
• Repeal of standardized benefit options and no limits on non-standardized plans
• States get greater authority over plan oversight
• Lower user fees on plans to lower premiums
• Beginning in plan year 2028, states will be required to defray the cost of benefits they mandate that are in addition to essential benefits.

(Article may require a subscription.)

#exchanges #aca #obamacare #trump #regulations #coverage #healthcare

https://www.modernhealthcare.com/politics-regulation/mh-cms-aca-exchange-rule-2027-final

Internal CMS Memo Shows Growing Exchange Falloffs

NOTUS obtained an internal Centers for Medicare and Medicaid Services (CMS) memo that says more Americans are dropping out of Exchange coverage than usual. The memo says more than one in five people who enrolled in health insurance through the federal Exchanges during open enrollment and in the weeks following were dropped from coverage for failing to pay their first month’s premium. This rate is significantly higher than the rate from last year, which was 12%.

The administration attributes most of the drop to efforts to root out fraud. That could be some of it, but companies also report dropping enrollment since January due to non-payment. Premiums surged when enhanced subsidies lapsed. This occurred for those subsidized as well as more generally as companies increased rates across the board to mitigate an anticpated increase in risk and surging utilization costs.

(Article may require a subscription.)

#exchanges #coverage #healthcare

https://www.notus.org/healthcare/aca-healthcare-dropped-insurance-numbers-subsidies