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White House Wants To Reduce HHS Budget In a long-delayed budget blueprint for federal fiscal year 2027, the White House is asking Congress for a $15.8 billion discretionary budget cut for the Department of Health and Human Services, which is 12.5% lower than this year and eliminates many programs. Major reorganizations are again proposed. A major change would be the move of the growing 340B program to the Centers for Medicare and Medicaid Services (CMS). That is a fair change given the out-of-control nature of the program and the nexus to government program payments at CMS. A new agency, the Administration for a Healthy America, would be established and oversee health priorities currently managed by multiple agencies. That, too, is not a bad idea and should be considered. The administration says the cuts will eliminate “bloated, woke and inefficient programs” and refocus on core priorities. But Senate Appropriations Chair Susan

CMS Finalizes 2027 MA And Part D Rule The Centers for Medicare and Medicaid Services (CMS) finalized the 2027 Medicare Advantage (MA) and Part D rule. Next week, I will publish a detailed blog on the changes between the draft and final rules. The major Star ratings changes were adopted, including the cancellation of the Excellent Health Outcomes for All (EHO4all) reward while maintaining the Reward Factor as well as the sunset of numerous measures. All of the proposed measure terminations were adopted except the Diabetic Eye Exam measure was maintained. Depression Screening will also be added. Most changes occur in Star Year 2029. In other news, CMS announced Maximus will no longer be the Part C Independent Review Entity (IRE). C2C will take over, which also is the Part D IRE. Additional articles: https://www.beckershospitalreview.com/legal-regulatory-issues/cms-finalizes-2027-medicare-advantage-and-part-d-rule-10-notes/ and https://www.beckerspayer.com/payer/medicare-advantage/cms-awards-ma-independent-review-contract-to-new-vendor/ and https://www.cms.gov/newsroom/fact-sheets/contract-year-2027-medicare-advantage-part-d-final-rule (Some articles may require a subscription.) #medicareadvantage #stars #quality #cms https://www.modernhealthcare.com/politics-regulation/mh-cms-medicare-advantage-star-ratings-2027

Elevance Gets A Reprieve Elevance Health avoided sanctions for now, including an enrollment and marketing freeze, after the Centers for Medicare and Medicaid Services (CMS) granted the Medicare Advantage (MA) plan an extension to make up for incorrect risk adjustment data reporting. Elevance has until May 30 to remediate the issues. At the same time, a bipartisan group of senators is urging CMS to work with Congress to crack down on overpayments in MA. Further, a lawsuit alleging Elevance Health’s Carelon Behavioral Health misled beneficiaries about the scope of its provider network was allowed to move forward by a judge. Additional article: https://www.healthcaredive.com/news/elevance-sidesteps-medicare-advantage-sanctions-cms/816324/ and https://www.fiercehealthcare.com/payers/blue-cross-plan-accused-perpetrated-fraud-ghost-network-class-action-lawsuit and https://www.modernhealthcare.com/insurance/mh-carelon-behavorial-ghost-network-lawsuit-elevance/ (Some articles may require a subscription.) #medicareadvantage #riskadjustment #overpayments #elevancehealth https://www.healthcaredive.com/news/bipartisan-senators-cms-crack-down-medicare-advantage-overpayments-upcoding/816336 Hospitals DSH It Out To HHS Over 130 hospitals are suing the Department of Health and Human Services (HHS) over a 2024 rule involving changes to how payments to hospitals treating a

Gallup Finds Healthcare Affordability Tops Concern List A new Gallup Poll finds that Americans are more concerned about the availability and cost of healthcare than any other domestic issue. It is now issue number 1 in Americans’ minds. This has not happened since 2020. About 61% of the 1,000 adults surveyed said they worry a “great deal” about accessing and affording healthcare, while 23% expressed a “fair amount” of concern. About 51% of respondents said they were concerned a “great deal” about the economy and 50% said the same about inflation. The change comes as premiums surge throughout healthcare and enhanced Exchange subsidies expired. In other news, healthcare tech company Cedar surveyed 4,150 patients across the U.S. and analyzed 1.5 billion patient interactions. Nearly 40% of healthcare collections now come from uninsured patients, up 54% in the past three years. Also, states are paying contractors such as Deloitte, Accenture, and

CMS Announces Final Exchange Enrollment The Centers for Medicare and Medicaid Services (CMS) announced final Exchange enrollment nationwide as well as premium hike statistics. Total enrollment fell nationwide from 24.3 million in 2025 to 23.1 million in 2026. This is far less than anticipated, but some say rolls will slip further due to the inability to afford the surges in premiums as well as lower subsidies. Current 2026 enrollment is still 1.7 million higher than in 2024. About 15.8 million enrollees obtained coverage through the HealthCare.gov platform, while 7.4 million were enrolled through a state-based Exchange. New customers dropped 13% year over year. Enrollees with an advanced payment premium tax credit dipped from 92% to 87%, while the portion with cost-sharing reductions dropped from 51% to 37%. The latter figure may indicate that many low-income individuals dropped coverage. Average premiums increased 58% for those on subsidies because enhancements expired. This

State Hospital Price Caps Modern Healthcare has a good article on various state initiatives to regulate hospital prices. Proposals range from hard caps to looser standards. Coincidentally, I had a blog on Thursday covering many of the same states and initiatives. Check it out here: https://www.healthcarelabyrinth.com/states-attack-healthcare-costs-and-hospital-prices/ In related news, healthcare policy group KFF issued a briefer on hospital competition in the U.S. The analysis examines the competitiveness of markets for hospital care based on RAND Hospital Data and American Hospital Association (AHA) survey data.  It found that one or two health systems controlled the entire market for inpatient hospital care in nearly half (47%) of metropolitan areas in 2024. In more than four of five metropolitan areas (83%), one or two health systems controlled more than 75% of the market. Nearly all (97% of) metropolitan areas had highly concentrated markets for inpatient hospital care. KFF also says that most hospital

GOP May Run Another Reconciliation Bill Republicans may run another budget reconciliation bill to advance a number of President Donald Trump’s stalled priorities, including funding for the war, a voting bill, and to fund the Department of Homeland Security. Within the bill likely will be more healthcare cuts to meet spending rule and deficit mandates. Not all of the initiatives would pass the Byrd rule, which limits what can be in such a bill. Among the healthcare cuts that could be included are: (Article may require a subscription.) #congress #trump #reconciliation #exchange #coverage https://www.modernhealthcare.com/politics-regulation/mh-gop-budget-reconciliation-bill-medicaid-aca Medicare Physician Payments Under-Funded A good Health Affairs Forefront Blog on the historic under-funding of physicians in Medicare. This is despite numerous reimbursement strategies and alternative payment models for primary care. The authors do a great job of covering the real decline in physician pay over time. Primary care physician spending per traditional Medicare beneficiary averaged

Senate Deal On Private Coverage Insulin Costs Sens. Jeanne Shaheen, D-NH, Susan Collins, R-ME, Raphael Warnock, D-GA, and John Kennedy, R-LA, reached a deal to limit out-of-pocket costs for people with diabetes by waiving any deductibles and limiting cost sharing to the lesser of $35 or 25 percent of the list price per month. This could lead to the passage of the legislation in the upper chamber. The bill would also require pharmacy benefit managers (PBMs) to pass through 100% of insulin rebates and other compensation to insurers. A pilot program in 10 states would also be set up to identify uninsured people with diabetes and providing them with $35 monthly insulin. #drugpricing #insulin #diabetes https://thehill.com/policy/healthcare/5800233-insulin-cost-cap-legislation MA Marketing Lawsuit To Proceed A civil whistleblower lawsuit against CVS Health subsidiary Aetna, Elevance Health and Humana alleging kickbacks to online brokerages for Medicare Advantage (MA) enrollments will proceed. The Justice Department has

CVS Health To Settle PBM Lawsuit With FTC CVS Health’s Caremark has become the second of the Big 3 pharmacy benefit managers (PBMs) to reach a settlement with the Federal Trade Commission (FTC) over insulin pricing. A court document filed Monday indicates the parties have requested that the matter be withdrawn “for the purpose of considering a proposed consent agreement.” No details on the settlement were made public, but the concessions likely mirror the far-reaching elements agreed to earlier by Cigna’s Express Scripts PBM. United’s OptumRx PBM will undoubtedly have to settle too. Additional articles: https://www.fiercehealthcare.com/payers/cvs-caremark-ftc-reach-settlement-insulin-pricing-case and https://www.healthcaredive.com/news/cvs-caremark-ftc-proposed-settlement-insulin-lawsuit/815581/ (Some articles may require a subscription.) #ftc #cvshealth #pbms #insulin #drugpricing https://www.modernhealthcare.com/politics-regulation/mh-cvs-health-ftc-insulin-rebate-lawsuit/ Trump Administration Launches ASPIRE Model The Centers for Medicare and Medicaid Services (CMS) announced a new model called ASPIRE. It will promote wraparound services for high-risk Medicaid and Children’s Health Insurance Plan enrollees through a payment demonstration. CMS will provide

Two Major Medicare Advantage Developments Two major Medicare Advantage (MA) developments today. Modern Healthcare reports that MA plans are pushing the Centers for Medicare and Medicaid Services (CMS) to change the $40 per member per month total beneficiary cost threshold that has been in place since 2024. Plans say this is needed so as to allow scaling back benefits more to respond to rising costs and paltry rate hikes. The 2027 proposed hike is roughly flat due to several changes in how risk adjustment will be applied. It could increase some (say to between 2% and 3%) but the final hike will not be near the cost growth in the program (that was as much as 9% coming into the year) or the over 5% hike last year. Plans have been reducing geographic footprints, shuttering expensive Preferred Provider Organization (PPO) products, and reducing benefits the past few years. But benefit