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Trump Admin Proposes Major Medicare FFS Reform Rule

The Trump administration continues its efforts to reform Medicare and make its mark on healthcare reform. A new Medicare fee-for-service (FFS) reform proposal will significantly impact many areas of the sprawling traditional program.

The proposed rule would make changes to Medicare accountable care organizations (ACOs), transition away from the physician Merit-based Incentive Payment System (MIPS) to an enhanced value-based care (VBC) pathways program, and update physician payment policies to better reflect modern clinical practice.

In part the ACO changes would establish more predictable spending targets to improve planning and participation as well as increase some shared saving rates and make benchmark and other calculation adjustments. Notable quality reporting changes are also proposed.

The MIPS successor would also have three new value-based pathways on diabetes, hypertension, and hospital-based care.

Physician reimbursement would generally shrink a bit in 2027. Remote patient monitoring would also be substantially reformed and reined in.

Additional articles: https://www.cms.gov/newsroom/press-releases/cms-proposes-transformational-medicare-reforms-expand-accountable-care-modernize-physician-payment and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule-cms-1848-p-medicare-shared and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule

(Some articles may require a subscription.)

#medicare #acos #physicians

https://www.modernhealthcare.com/politics-regulation/mh-cms-medicare-physician-pay-2027

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Another Stars Lawsuit — This Time From Alignment

High-performing MA plan Alignment Healthcare has joined the lawsuit fray on the Clover decision. Alignment has the same argument as Scan. Both indicated CMS erred by including ten measures in the CMS Recalculation scenario when a judge ruled these measures did not go through the correct regulatory vetting process.

Alignment says three of its contracts currently rated 4.0 should be at 4.5, netting an additional $50 million.

If you are adding up the numbers from lawsuits, here is the total:

–Clover = $120M
–Elevance Health = $115M
–Scan = $125M
–Alignment = $50M

TOTAL = $410M

I had earlier estimated the total costs to be over $1 billion.

Alignment lawsuit: https://lnkd.in/entBMgHn

#cms #stars #quality #medicareadvantage

https://www.healthcaredive.com/news/scan-alignment-sue-cms-ma-star-ratings-recalculation-clover-lawsuits/825091

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Scan Now Sues Over Clover Lawsuit And CMS Recalculations

A new lawsuit has been filed by non-profit Scan Health Plan. Scan argues that CMS inappropriately recalculated Star Rating for 2026 after the Clover Health decision. Clover received an exact calculation based on the judge’s ruling throwing out 20 measures based on two legal arguments (10 measures were not statutorily allowed and another 10 measures were not properly promulgated via regulation). However, CMS’ recalculation measure set adopted part of the ruling by throwing out some of the judge’s measures, while retaining others. As well, CMS removed some measures not even struck by the court.

Elevance Health was the first to sue, arguing it is entitled to a calculation based exactly on what the judge ruled for Clover on the 20 measures. Scan’s suit appears different. Scan argues the court should force CMS to remove the ten measures that CMS failed to promulgate by regulation. That meant two of Scan’s contracts received 4s instead of 4.5s, costing the plan $125M in 2027. Scan does not address whether it also wants some measures removed by CMS restored. If not, Scan’s argument is much like what I said in a recent blog was a “Clover Strict” reading of the judge’s ruling — not the “Clover Specific” measure ruling. Therefore, as I wrote (and is underscored in the Scan lawsuit), we have at least four potential ratings scenarios before us:

–“Original Measure Ratings” (45)
–“Clover Specific” ruling directing a recalculation based on the measures Clover sued on (25)
–“Clover Strict” reading of the lawsuit striking all but HEDIS, CAHPS and HOS along with those that failed notice and promulgation provisions (17)
–“CMS Recalculation” that was implemented by the agency for all contracts but Clover’s main one (27)

While the 25 and 27 counts look close, the actual measures are very different — just 17 measures are common between Clover Specific and CMS Recalculation.

This is getting interesting. To keep it all straight, I have created a tracker of possible measure scenarios from SY 2026 to SY 2029. I assume little chance of statutory and regulatory cure for SY 2026 through SY 2028 and eventually CMS or congressional fixes that keep in place the CMS restructure in SY 2029. It also assumes that new measures and removals hitting in SY 2027 through SY 2029 would be deemed regulatory sufficient, which is an open question. Scan goes in depth on how the Clover judge was right to say anything outside the actual regulation (e.g., Technical Notes and Announcements) do not pass regulatory muster. You can email me for the tracker via the website page under Contact.

My most recent blog explaining what is happening – written before the Scan suit but still on target: https://www.healthcarelabyrinth.com/more-clover-lawsuit-fallout-the-balkanization-of-star-ratings/

#cms #medicareadvantage #stars #quality

The Scan lawsuit: https://litigationtracker.law.georgetown.edu/wp-content/uploads/2026/07/SCAN-Health-Plan-v.-HHS_2026.07.08_COMPLAINT.pdf

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Wearables Growing But Not Integrated

The use of wearables for disease monitoring has increased dramatically. About 86% of U.S. physicians report they sometimes review data from their patients’ wearables, including heart physiology, oxygen and breathing, and sleep. But only 6% of doctors say such data is integrated into clinical workflows and that clearly limits growth and  potential. The Trump administration has in part sought to leverage technology and overcome this deficiency by announcing the ACCESS reform pilot, which contracts with technology entities to partner with physicians to monitor chronic disease states.

#chronicdiseases #technology #medicare #access

https://www.healthcaredive.com/news/physician-wearable-data-use-hindered-workflow-reimbursement-challenges-american-medical-association/824640/

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Study Says Median Exchange Hike Will Be 14% Thus Far

A Peterson-KFF Health System Tracker analysis finds that preliminary rate filings in the Exchanges will mean a median premium rate hike of 14% in 2027. This follows a final median hike of 20% in 2026 after plan switches. This would amount to a one-third increase over two years. While most of the hike will be covered by premium subsidy increases, the hikes will hurt those with little or no subsidy.

Peterson-KFF looked at 77 insurers across 16 states and the District of Columbia. The healthcare duo calculated the enrollment-weighted average rate change across its offerings in a state. Most plans are requesting increases of between 10% and 20% for the coming year, though 20 payers have requested an increase of more than 20%.

Plans say factors such as high medical costs, the expiration of enhanced exchange subsidies, and tighter enrollment processes are driving the premium hikes.

Additional articles: https://thehill.com/policy/healthcare/5958559-obamacare-premiums-rise-again/ and https://www.beckerspayer.com/payer/aca/aca-premiums-could-jump-14-in-2027-7-things-to-know/ and https://www.fiercehealthcare.com/payers/aca-plans-set-another-year-premium-spikes-preliminary-filings-show and https://www.healthcaredive.com/news/affordable-care-act-premium-increase-2027-kff-peterson-center-healthcare/824695/ and https://www.modernhealthcare.com/insurance/mh-aca-marketplace-plans-premium-2027-kff/ and https://www.kff.org/affordable-care-act/in-preliminary-rate-filings-aca-marketplace-insurers-largely-propose-double-digit-premium-increase-for-2027-following-a-steep-climb-this-year/

#exchanges #affordability #coverage #healthcare

https://www.healthsystemtracker.org/brief/how-much-and-why-aca-marketplace-premiums-are-going-up-in-2027/

— Marc S. Ryan

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Pharmacy Group Alleges Price Fixing

A community pharmacy group has filed suit against Prime Therapeutics, alleging that the company colluded with fellow pharmacy benefits manager (PBM) Express Scripts to fix prices and engage in anti-competitive behavior. The suit alleges Prime accessed Express Scripts’ network to slash prices.

Additional article:https://www.modernhealthcare.com/insurance/mh-prime-therapeutics-lawsuit-express-scripts-pbm/

(Some articles may require a subscription.)

#pbms #drugpricing #antitrust #pharmacies

https://www.fiercehealthcare.com/payers/independent-pharmacies-hit-prime-therapeutics-antitrust-suit-over-alleged-price-fixing

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ACA Exchange Risk Adjustment Settlements Total $11.7 Billion

Health insurers will shuttle $11.17 billion between them due to the 2025 ACA Exchange risk-adjustment settlements. The settlements recognize differences in risk in the program in a given year. UnitedHealthcare will pay $335 million while Centene will receive $751 million, Elevance Health $312 million, Aetna $216 million, and Oscar Health $189 million.

(Article may require a subscription.)

#exchanges #riskadjustment

https://www.modernhealthcare.com/insurance/mh-aca-exchange-risk-adjustment-payments-2025/

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Paragon Proposes Reforms

The influential Paragon Health Institute released a new report calling for federal funding cuts or tax reforms impacting all health plan lines of business and coverage areas. People pay attention to what Paragon says given its influence and impact on government regulations since 2025 as well as in the One Big Beautiful Bill Act (OBBBA).

In summary, Paragon wants to see the following changes:

  • Cuts to the federal matching rate in Medicaid, especially equalizing matching rates for historic and expansion populations and lowering the floor to 40%
  • Further cuts to Medicaid provider taxes, state directed payments, and intergovernmental transfers
  • State and Medicaid managed care penalties for fraud or improper billing patterns
  • Site neutral payments in Medicare
  • Better target various hospital subsidies
  • Redesign the 340B program
  • Reversing the 2022 Part D redesign, which destabilized the standalone Part D (PDP) program and to some degree Medicare Advantage (MA)
  • MA risk adjustment, benchmark, and quality bonus changes to reduce payments
  • Reform Medigap
  • Minimum premium payments in the Exchanges
  • End automatic re-enrollment into Exchange coverage
  • Broker and agent reform in the Exchanges
  • Fund cost-sharing reduction subsidies in the Exchanges to save dollars
  • Reform Exchange premium tax credits
  • Relax medical loss ratio requirements
  • Cap the tax exclusion for employer-sponsored health insurance

#medicare #medicaid #exchanges #employercoverage #healthcarereform #healthcare #coverage

https://paragoninstitute.org/medicare/restoring-fiscal-sustainability-to-federal-health-programs-reforming-the-incentives-that-drive-health-care-spending/

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MA Star Bonus To Exceed $13B

Healthcare policy group KFF reports that federal spending on Medicare Advantage (MA) quality bonuses will reach at least $13.4 billion in 2026, compared with $12.7 billion in 2025. This is more than four times higher than in 2015. More than two-thirds of Medicare Advantage enrollees (68%) are in plans that qualify for the quality bonus in 2026, down from 75% in 2025. This is the lowest since 2018. The increase ties to more enrollment not better ratings.

In another briefer, KFF updates on MA coding intensity.

Additional article: https://www.kff.org/medicare/decoding-medicare-advantage-coding-intensity/

#medicareadvantage #radv #riskadjustment #stars #quality #cms

https://www.kff.org/medicare/medicare-will-spend-more-than-13-billion-on-the-medicare-advantage-quality-bonus-program-in-2026/

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House Wants To Rein In Private Equity

A bipartisan House bill would require extensive reporting on private equity firms’ healthcare holdings and ownership structures. The reporting is aimed at identifying financial arrangements that may impact the financial health of the healthcare entity as well as impacts on healthcare delivery. The bill is similar to state laws on transparency in private equity. Other states have gone deeper and ruled out certain financial arrangements by private equity for acquired healthcare entities.

(Article may require a subscription.)

#healthcare #congress #privateequity

https://www.modernhealthcare.com/politics-regulation/mh-private-equity-healthcare-congress-transparency

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