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Federal Judge Strikes Risk Adjustment Audit Rule A federal court has vacated the 2023 Medicare Advantage (MA) Risk Adjustment Rule finalized during the Biden years. The court nullified the entire rule not just portions of it. I will write more on this in a blog in coming days. Humana challenged the rule in September 2023 on several grounds:  The court found that the Centers for Medicare and Medicaid Services (CMS) did not follow the procedural requirements of the Administrative Procedures Act. There were inadequate notice requirements. CMS did not justify its decisions via the comment period, either. Because of the potential harm to plans, the court vacated the rule entirely. The harm really would have been pronounced via retroactive application. Books are closed for prior periods for MA plans. Plans never even had a chance to reserve dollars for potential recoupments as the new rule was published years later. Indeed,

Regional Plans Not Faring Well Despite some studies suggesting regional plans are doing better than national payers during this financial downturn, HealthScape Advisors says regional nonprofit insurance companies are falling behind their larger competitors. It says that in 2024, 71% of regional nonprofit insurers ended the year with an operating loss. By comparison, 53% posted operating losses in 2023, and just 22% did in 2020. In other news, Humana will not pay agents and brokers for enrolling new members in many of its wider-network Medicare Advantage (MA) products for 2026. There will be 288 plans across 46 states and the District of Columbia impacted, about 80% of which are Preferred Provider Organizations (PPOs). Further, a bipartisan group of lawmakers has introduced legislation requiring MA plans to promptly pay out providers’ claims, with up to a $25,000 fine and interest accrual. Plans would have a 14-day deadline to pay electronically submitted,

C-SNPs Could Impact Dual Integration While Medicare Advantage (MA) Dual Eligible Special Needs Plans (D-SNP) membership is growing rapidly, a new Health Affairs Forefront blog calls out that growth in Chronic Care SNPs (C-SNP) could actually create barriers to greater integration of Medicare and Medicaid. The authors note the huge growth in C-SNP enrollment over the past few years. C-SNP product offerings have grown from 303 in 2024 to 372 in 2025. The total number of Medicare beneficiaries enrolled in C-SNPs has increased from 629,560 to 1,069,660 in that timeframe. In 2016, there were only 137 C-SNPs with 315,200 beneficiaries. The authors note that in 2025 there are now 125,638 full-benefit dual eligible individuals and 86,815 partial dual eligibles in C-SNPs. About 28% of the full-benefit dual eligible beneficiaries were previously enrolled in a plan that offered some form of integration in the prior year. The authors propose a few

Report Says MA Had $5.7B Underwriting Loss in 2024 Credit rating agency AM Best says that Medicare Advantage (MA) plans had a collective underwriting loss of $5.7B in 2024. From 2019 to 2022, MA made up 40% of underwriting gains and dropped to 20% in 2023. The agency said the losses came from the v28 risk adjustment model (being phased in from 2024 to 2026), lower Star ratings bonus revenue, and high utilization, inflation, and medical costs. About 3 out of 4 insurers with an MA concentration had a loss last year. #medicareadvantage #margins https://www.beckerspayer.com/payer/medicare-advantage/ma-struggles-cited-in-2024-5-7b-underwriting-loss-report ACA Rebates Announced Insurers are announcing the rebates they will pay back to enrollees and employers because medical loss ratios did not meet the minimum requirement of 80% or 85% as dictated by the Affordable Care Act (ACA). UnitedHealthcare announced it needs to pay out $359 million in rebates for 2024. Centene will pay out

PwC Highlights AI-Driven Change In Healthcare A blockbuster report from management consultant PwC predicts that $1 trillion of national healthcare spending could go to digital-first, personalized medical care. PwC also says healthcare is in the process of a monumental shift to artificial-intelligence-driven, consumer-centric healthcare services, which could mean simplified care models emerge that lower costs and increase quality. PwC notes that healthcare spending is expected to grow to $8.6 trillion by 2035, hitting 20% of gross domestic product. And this means health plan and provider executives must rethink care delivery. In terms of payers, PwC notes that medical cost trends are nearing double digits and that payers will be expected to deliver far more with far less. It says AI and other technologies can help build capabilities to deliver medical value and actively manage population risk within the plan and with provider partners. It says payers will increasingly serve as

Government Funding Bill Fails A government shutdown is coming closer to reality. A stop gap funding measure through November 21 passed the House on a vote of 217-212 but failed to achieve 60 votes in the Senate. Almost all Democrats and two Republicans voted together and the bill failed in the upper chamber by a vote of 44-48. Democratic Sen. John Fetterman, PA, voted with most Republicans in favor, while GOP Sens. Lisa Murkowski, AK, and Dr. Rand Paul, KY, voted with Democrats. The House is expected to be out until two days before funding expires but may now have to come back early. The measure included many critical healthcare funding and policy extensions. Additional articles: https://www.modernhealthcare.com/politics-regulation/telehealth-medicaid-dsh-stopgap-funding-bill/ and https://thehill.com/homenews/senate/5512606-government-shutdown-senate-funding-bill/ (Some articles may require a subscription.) #governmentshutdown #congress #ffy2026 #healthcare https://www.fiercehealthcare.com/regulatory/republicans-unveil-7-week-stopgap-hospital-funding-telehealth-extensions-no-aca-premiums Studies Project Impact On Hospitals From One Big Beautiful Bill Two new studies outline the financial fallout expected for hospitals

Provider Directory Rule For Medicare Advantage Medicare Advantage (MA) insurers will be required to submit provider directories to the Centers for Medicare and Medicaid Services (CMS) next year under a final rule issued Thursday. The provider information will be added to the Medicare Plan Finder. CMS will issue an operational guide to outline how to prepare and submit the directory. MA plans will have to submit their network lists by Jan. 1 and then once a year. Updates must be made every 30 days to reflect changes in provider participation. Insurers will not have to attest that they meet network adequacy standards. (Article may require a subscription.) #medicareadvantage #providers #cms https://www.modernhealthcare.com/politics-regulation/mh-medicare-advantage-plans-provider-directories-2026 CBO Again Projects Coverage Losses The Congressional Budget Office (CBO) issued a new assessment of the Exchange premium subsidy enhancements extension. It found making the enhancements permanent would cost $350 billion over ten years (added to the deficit) and boost