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February 14, 2025

Major Staff Cutbacks In Healthcare At Federal Government The Trump administration has directed agencies to begin laying off probationary employees. The Department of Health and Human Services (HHS) and related agencies are firing up to 5,200 probationary employees as of today. About 1,300 are employed by the Centers for Disease Control and Prevention (CDC) and a sizeable number are with the National Institutes of Health (NIH). There are over 2 million federal employees. Additional article: https://www.modernhealthcare.com/labor/cdc-layoffs-cuts-trump (Some articles may require a subscription.) #hhs #nih #cdc #staffing #layoffs #trump #doge https://www.fiercehealthcare.com/regulatory/mass-layoffs-hhs-cdc-cuts-1300-probationary-workers-reports-say Trump Administration Cuts Exchange Navigator Funding Similar to what happened in its first term, the Trump administration axed Exchange Navigator funding by 90% to just $10 million. The navigator program received $98 million in the 2024 plan year but only enrolled 92,000 consumers, accounting for just 0.6% of selections through federally facilitated exchanges (FFEs) in the open enrollment period. Trump’s

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February 13, 2025

RFK, Jr. Confirmed As Health Chief; Will Chair MAHA Commission President Donald Trump’s nominee as secretary of Health and Human Services (HHS), Robert F. Kenndy, Jr., was confirmed by the Senate today on a 52-48 vote, with Mitch McConnell being the only GOP senator to not vote yes. All Democrats opposed Kennedy. Trump also signed a new executive order to establish a Make America Healthy Again (MAHA) Commission. Kennedy will chair the task force, focused on investigating the “root causes of America’s escalating health crisis.” The commission first will address childhood chronic diseases. In other news, HHS assistant secretaries were also named by Trump. One of them is an anti-trust lawyer with deep background in healthcare mergers.  This could be a clue that the Biden administration’s healthcare anti-trust agenda may not totally go away. Additional articles: https://www.fiercehealthcare.com/regulatory/trump-creates-maha-commission-chronic-disease-chaired-rfk and https://insidehealthpolicy.com/daily-news/newly-confirmed-hhs-sec-rfk-jr-lead-maha-commission and https://www.modernhealthcare.com/politics-policy/rfk-jr-full-senate-vote-hhs and https://www.healthcaredive.com/news/rfk-jr-confirmed-hhs-secretary-robert-f-kennedy-jr/740054/ and https://insidehealthpolicy.com/daily-news/trump-nominates-two-hhs-asst-secretaries-general-counsel (Some articles may require a

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Medicare Advantage In The Gunsight

Despite Republicans liking Medicare Advantage, major funding and structural changes could occur Some of you have written me asking why I am so convinced that the Trump administration and a GOP Congress will continue to target Medicare Advantage (MA) for savings. It is true that Donald Trump likes private healthcare and MA as a program. His healthcare nominees, including incoming Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr., and Dr. Mehmet Oz, who is slated to be the Centers for Medicare and Medicaid Services (CMS) administrator, favor the program. Trump and the GOP Congress could even opt for future Medicare beneficiaries to default to MA versus the traditional fee-for-service (FFS) program. They could offer some short-term relief in terms of MA rates and pull back on the misguided Inflation Reduction Act’s (IRA) Part D out-of-pocket cap and cost-sharing changes. But many of the folks with influence over Trump

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February 12, 2025

Healthcare Segments’ Top Priorities A good article in Fierce Healthcare on the priorities of the various healthcare segments for 2025. Here are the highlights and there will be some battles between the parties. Hospitals – extending Exchange premium subsidy enhancements, further health plan prior authorization (PA) and utilization management limits, fighting coverage reductions, and maintaining the 340b program substantially as is. Plans – relief on Medicare Advantage (MA), and PBM reform (most health plans support except those with sister company PBMs). Providers – a Medicare rate fix, reducing administrative burden, and workforce reform. Also on the agenda is extending telehealth flexibilities and the hospital-at-home program. #healthcare #healthplans #hospitals #providers #medicare #exchanges #medicaid https://www.fiercehealthcare.com/regulatory/healthcare-lobbying-2025-here-are-top-policy-issues-hospitals-payers-docs-and-tech Budget Reconciliation Progress But Showdown Looming The House announced it is moving forward with a one reconciliation bill approach and will mark up a budget resolution quickly. The resolution will allow the deficit to rise $4.5 billion

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February 11, 2025

Humana Continues Digging Out Of Its Financial Troubles Medicare Advantage (MA)-dominant Humana told investors today that it was prioritizing efficiency as it continues to dig out from financial woes due to the MA rate and regulatory landscape. Due to uncertainty, including on rates, it is not yet able to give guidance going into 2026 but affirmed its guidance for the current year. Humana is also suing the Centers for Medicare and Medicaid Services (CMS) over its 2025 Star ratings, accusing the agency of gross regulatory violations and incompetence in administering the quality bonus program. Humana posted a $693 million loss in Q4, an increase from a Q3 loss of $541 million. The company also halved its profits for the full year 2024 compared to 2023, posting $1.2 billion. Humana earned $2.5 billion in profit for 2023. Humana expects to lose up to 550,000 MA members this year. It lost 445,000

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February 10, 2025

Trump May Impose Tariffs On Drugs, But Calls Pricing Unfair And Wants Change In an exclusive Super Bowl interview on Fox News, President Donald Trump seemingly endorsed tariffs on drugs but said in the end drug costs would come down. Many are worried that tariffs on drugs and other medical devices will further drive up healthcare costs. But Trump seemed to signal he intends to try to end the fundamental unfairness of drug prices in America compared with other developed countries. Trump used the example of Ozempic costing $88 a month in the U.K., while it is $1,200 a month in America. Trump’s rough prices are entirely accurate and represents what he said was roughly ten times more in America. Trump said the U.S. has been too nice on the issue. In a recent blog, I predicted that the populist Trump would come around on the issue of drug pricing

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If VBID Is To Go, Ensure Flexibilities Remain For Plans

VBID should stay until CMS truly assesses what may be lost The Centers for Medicare and Medicaid Services (CMS) announced in December that it was sunsetting the Value Based Insurance Design (VBID) within the Medicare Advantage (MA) program as of the end of CY 2025. The move took many plans by surprise as it comes just 20 months after CMS said it was extending VBID until 2030. Sixty-two insurers covering more than 7 million beneficiaries are participating in VBID in 2025. These include big, medium, and small plans. CMS says it is sunsetting the program for a few reasons: I have often said that CMS has far too many reform pilots in the Medicare space, that they have not shown savings, and they are administratively expensive. I have called for the termination of most of them and the creation of a small subset of pilots with uniform rules to ensure administrative

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February 7, 2025

As DOGE Works, Evidence Of FWA Emerges Even as Democrats excoriate Elon Musk and the Department of Government Efficiency (DOGE) commission for its far-reach and tactics, more word is coming out about the depth of improper payments made through Medicare and Medicaid. While the estimate is down since the COVID pandemic, a new report says there was $88.5 billion in improper payments in 2024, more than 5% of outlays last year. A Centers for Medicare and Medicaid Services (CMS) fact sheet says improper payments from federal programs can include payment errors or fraudulent payments but most often involve insufficient or missing documentation in reporting by states, providers, or contractors. My view: fraud, waste, and abuse (FWA) is much higher. Latest estimates suggest FWA is more like 25% of all healthcare costs, up from a traditional 10% norm used before.  That would mean FWA accounts for over $1 trillion in the entire

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February 6, 2025

Molina Reports Mixed Financial News Medicaid-dominant insurer Molina Healthcare had its net income grow 8.1% to $1.2 billion in 2024 as revenue spiked 19.3% to $40.7 billion. For the fourth quarter, net income rose 16.2% to $251 million as revenue increased 16% to $10.5 billion. But like other insurers, Molina struggled with medical expenses and had an 89.1% medical loss ratio (MLR) in 2024, one percentage point higher than in 2023. Membership expanded by 10.8%. Molina expects Medicaid spending to increase by 4.5% in 2025, but thinks cost pressures will ease. Molina sees growth and financial success in 2026 and beyond with new state Medicaid awards and success on bidding in existing states. Molina Healthcare CEO Joe Zubretsky downplayed attempts by Republicans to gut or limit Medicaid in upcoming reconciliation bills. He thinks any cuts will be marginal. See my blog this week on the topic: https://www.healthcarelabyrinth.com/will-medicaid-and-the-affordable-care-act-see-huge-cuts/ . Additional articles: https://www.healthcaredive.com/news/molina-earnings-q4-2024-medicaid/739391/ and https://www.fiercehealthcare.com/payers/medicaid-cuts-washington-will-be-marginal-says-molina-healthcare-ceo (Some

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Democrats’ IRA Part D Cost-Sharing Fiasco

Part D changes will raise premiums and destabilize the program I have been all over this even before it was fashionable. After reading up on some analyses of the Part D cost-sharing changes in the Inflation Reduction Act (IRA), I declared that seniors and those with disabilities would see an October surprise in the form of increased costs going into the election as they chose 2025 Medicare Advantage (MA) or Part D benefits. The Centers for Medicare and Medicaid Services (CMS) initially scoffed at my and others’ predictions, arguing the IRA anticipated this with a premium stabilization program. The problem: it applied just to the base benefit. We know that seniors have come to rely on enhanced Part D drug benefits from MA and standalone Part D (PDP) plans. And since the out-of-pocket (OOP) changes raised plan costs for both the base and enhanced benefits, recipients would have seen major

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