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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 Point32Health Reports Q1 Profit Turnaround Point32Health reported an adjusted net income of $248 million in Q1 2926, a reversal from a $21 million adjusted net income in Q1 2025. Point32Health is the Harvard Pilgrim Health Care and Tufts Health Plan parent. #healthplans #margins https://www.beckerspayer.com/financial/point32health-posts-86m-operating-income-in-q1/ — Marc S. Ryan

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,

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

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

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 Cassidy Loses Primary Health, Education, Labor and Pensions (HELP) Committee Chair and Sen. Bill Cassidy, R-LA, lost his primary battle by coming in third, which means he is out as a senator next year. President Trump endorsed a conservative congresswoman in the primary given Cassidy’s contentious relationship with the White House. This will mean a new Senate healthcare head is in the cards for 2027 whether or not the GOP keeps control. #congress #midterms #healthcare https://www.fiercehealthcare.com/regulatory/senate-help-chair-bill-cassidys-primary-loss-casts-congressional-health-policy

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: (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 Plans, Providers Want A Targeted Fraud Approach In response to a request for information on stemming fraud in government programs, providers and payers are each urging some caution. Providers say the Centers for Medicare and Medicaid Services (CMS) should move cautiously to implement its anti-fraud strategy rather than apply a uniform approach across the board. They want reforms focused on high-risk activities so as not to further

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

Plans Launch New Ad Campaign On NSA Disputes A new health plan ad campaign takes aim at the No Surprises Act (NSA) law and its arbitration component. It says that the dispute processes “create a ‘fox guarding the hen house’ dynamic.” Data show that providers are far more likely to win (87% of the time) and earn significantly higher payouts than payments before the law. It is driving overall healthcare costs up. Further, it is subject to abuse, with five organizations accounting for 63% of disputes in the first half of 2024: Team Health, SCP Health, Radiology Partners, AGS Health and HaloMD. Plans have sued but it will take the courage of Congress to fix his problem. #nosurprisesact #transparency https://www.fiercehealthcare.com/payers/new-payer-backed-ad-campaign-pushes-no-surprises-act-idr-reform Administration Attacks Fraud The Centers for Medicare and Medicaid Services (CMS) announced two fraud initiatives. First, CMS and the Department of Health and Human Services (HHS) issued an ultimatum to

Makary Resigns At FDA Food and Drug Administration (FDA) Marty Makary, M.D, is out at the agency, having resigned under pressure from Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr. The move was approved by the White House. The last straw appeared to be Makary’s reluctance to approve fruit-flavored e-cigarettes given the potential for abuse by minors. Critics argued that Makary lacked government experience and did not lead the agency well. Others say he rightfully pushed back on certain administration initiatives he deemed wrong-headed. I won’t get into the saga, only to say that Makary was dealt a poor hand, with layoffs and huge cutbacks at a time of great political volatility for the agency. Such appointments don’t always work out for the principled person. I am a supporter of Makary, who I have been connected with for over five years now. (He endorsed my book when it

United Moving To Transparency For Its PBM UnitedHealth Group Inc. said it will change its profit structure at pharmacy benefits manager (PBM) Optum Rx. The company handled about 1.7 billion prescriptions last year. Optum Rx plans to shift to a more transparent fee structure that gives clients clarity into payments the PBM gets from drug makers. CVS Health Corp’s Caremark earlier said it would change how it pays pharmacies to make it simpler and more transparent. Cigna’s Express Scripts late last year said it will phase out rebate payments in many private health plans. (Article may require a subscription.) #pbms #drugpricing https://www.modernhealthcare.com/insurance/mh-unitedhealth-optum-rx-pbm-model Kaiser Q1 Profit Down Kaiser Permanente’s Q1 operating performance took a step back in 2026 compared to Q1 2025, although investments and other sources of income offset the bad news. Non-profit Kaiser booked over $2 billion in profit. The integrated delivery system and health plan reported operating income