Weekly Spotlight: The 2027 Medicare Payment Rule Lands
The dominant story of the week is regulatory. On July 14 CMS released its CY2027 Physician Fee Schedule proposed rule, and it reaches well beyond the headline pay cut. Physicians face a 1.7% cut to the conversion factor (1.2% for advanced APM participants) as the one-year statutory increase for 2026 expires, alongside a revamp of primary-care and evaluation-and-management payment. The rule would rework the Medicare Shared Savings Program with new benchmarking and higher shared-savings rates to expand ACO participation while phasing out the traditional Medicare ACO track, and would sunset the Merit-Based Incentive Payment System in 2029 in favor of specialty MIPS Value Pathways. CMS framed the package as “transformational” and a shift “from sick care to health care”; physician groups called it meaningful but insufficient to reverse years of Medicare pay erosion without congressional action.
The rule’s surprise is buried in the fee schedule: a proposal to bar Medicare payment for remote patient monitoring delivered by third-party vendors, limiting billing to clinical staff employed by the billing practice. Digital-health stakeholders called the move “cataclysmic” and “seminal,” warning it could quash much of the RPM sector — and it lands in direct tension with a bipartisan House Ways and Means bill the committee advanced the same week to set a Medicare payment floor for remote monitoring. The details of the vendor ban are likely to draw heavy comment.
Providers moved fast on the pay question: a day after the proposed cut, the bipartisan GOP and Democratic Doctors Caucuses introduced the Patients First Act, a Medicare payment overhaul that would tie physician reimbursement to the Medicare Economic Index and bolster independent practices, drawing praise from provider groups and a detailed markup of the proposal. The takeaway for readers: with Congress constrained before the August recess, the near-term action is at CMS and in the comment file — the public comment window on the proposed rule is now open — while the legislative pay fixes remain aspirational.
Centers for Medicare and Medicaid Services (CMS)
Medicaid Work-Requirement Fight Moves to Court as Rules Take Shape
The implementation of H.R. 1’s new Medicaid work-reporting requirements erupted into litigation and provider unease this week. Twenty-five states plus the District of Columbia sued CMS, alleging its guidance to states diverged from the statute roughly a month before June’s interim final rule; the Trump administration countered in a court filing that Congress delegated to CMS the authority to define who counts as “medically frail” and thus exempt. Doctors, meanwhile, say final rules requiring enrollees to repeatedly document that they are too sick to work put clinicians in an untenable position, and some states are moving to publicly name large employers whose workers rely on Medicaid as they brace for federal funding losses.
Source(s):
Inside Health Policy
Inside Health Policy
KFF Health News
KFF Health News
Tags: #PAYER #PATIENT #PROVIDER
Federal Judge Blocks Parts of the 2027 ACA Exchange Rule
A federal judge in Maryland granted a preliminary injunction July 16 blocking HHS from implementing eight provisions of its final 2027 Affordable Care Act exchange rule, which would have made sweeping changes to marketplace enrollment and eligibility. The case was brought by Democracy Forward on behalf of several cities and stakeholder groups, temporarily halting some of the administration’s most consequential exchange changes.
Source(s):
Modern Healthcare
Inside Health Policy
Tags: #PAYER #PATIENT
More Insurers Sue CMS Over Medicare Advantage Star Ratings
SCAN Health Plan and Alignment Healthcare sued CMS after it declined to recalculate industry-wide Medicare Advantage star ratings using the same methodology it had applied for Clover Health, widening the growing litigation over the ratings that drive billions in quality bonus payments. One plan executive called the system “undeniably broken.”
Source(s):
Healthcare Dive
Tags: #PAYER
CMS Signals a Rethink of How Medicare Pays for — and Codes — Clinical Software
Two developments this week point to a broader CMS effort to modernize the economics of medical software and coding: the agency signaled it wants to build a standardized Medicare payment structure for clinical software and AI tools that accounts for their impact on patient outcomes, and it opened feedback on ending its reliance on the AMA’s proprietary CPT-4 coding system as Republican lawmakers scrutinize the decades-long arrangement.
- CMS signals intent to revamp how it pays for clinical software and AI
- CMS seeks public feedback on the AMA’s “monopoly” over CPT-4 licenses
Tags: #PROVIDER #DEVICE #PAYER
Food and Drug Administration (FDA)
MDUFA VI Reauthorization Clears Key Steps
The Medical Device User Fee Amendments (MDUFA VI) reauthorization advanced on multiple fronts: the draft commitment agreement cleared OMB, the FDA announced a public meeting to review it, and the draft would expand and potentially make permanent the Total Product Life Cycle Advisory Program (TAP), a priority for device makers. AdvaMed welcomed the milestones, with CEO Scott Whitaker calling the progress “an important step toward preserving the seamless access to proven medtech patients deserve.”
Source(s):
AdvaMed
Inside Health Policy
Tags: #DEVICE
FDA Leadership Turns the Page After Makary and Prasad
The FDA’s senior ranks are resetting after a turbulent stretch. Acting Commissioner Kyle Diamantas laid out agency priorities in his first public outline since the departure of former commissioner Marty Makary — emphasizing rare-disease treatments and AI — and told lawmakers that a Q&A document and journal announcements from Makary’s tenure were not FDA policy. At the biologics center (CBER), new acting director Karim Mikhail is working to restore staff morale and revisit contested product decisions left by predecessor Vinay Prasad.
- Diamantas says FDA will refocus on rare-disease drugs, AI use in policy refresher
- Diamantas confirms Makary publications are not FDA policy
- Under a new leader, the FDA’s biologics center moves to steady itself
Tags: #DRUG #DEVICE
FDA Moves to Streamline U.S. Drug-Manufacturing Registration
The FDA proposed a streamlined registration pathway for “hub-and-spoke” manufacturing facilities and moved to clarify registration requirements for foreign plants, especially makers of active pharmaceutical ingredients — part of its broader push to bolster domestic drug manufacturing and reduce reliance on overseas supply.
Source(s):
Fierce Pharma
Tags: #DRUG
Department of Health and Human Services (HHS)
Senate Grills Trump’s CDC and ASPR Nominees Over Vaccines
The Senate HELP Committee held confirmation hearings July 15 for CDC director nominee Dr. Erica Schwartz and ASPR nominee Sean Kaufman, and vaccines dominated. Schwartz — seen as a mainstream, vaccine-supportive pick for an agency being reshaped by HHS Secretary Robert F. Kennedy Jr. — told lawmakers, “I will never betray the science,” but was vague on how she would resist political pressure. Kaufman drew a heated rebuke from Chair Bill Cassidy over a misleading hepatitis B vaccine social-media post, with the physician-senator demanding, “Why would you repeat those damn lies?” Analysts suggested Schwartz may face an easier confirmation path than earlier nominees.
Source(s):
STAT
The New York Times
Fierce Healthcare
Becker’s Hospital Review
STAT
The Hill
Tags: #PATIENT #PROVIDER
Scrutiny Mounts Over RFK Jr.’s Reshaping of Vaccine Policy
Pressure built this week on Secretary Kennedy’s overhaul of federal immunization policy. Democratic senators questioned financial conflicts on an HHS health advisory panel that includes Trump donors and motivational speaker Tony Robbins, nine pharmacy groups warned that the CDC’s revised ACIP charter could delay vaccine access, and a detailed report examined Kennedy’s broader push to dismantle decades of U.S. vaccine policy.
- Inside RFK Jr.’s push to dismantle decades of U.S. vaccine policy
- Top Democrats question RFK Jr.’s health care advisory panel
- 9 pharmacy groups warn revised ACIP charter could delay vaccine access
Tags: #PATIENT #PROVIDER #DRUG
340B Purchases Hit $100 Billion as the Oversight Fight Sharpens
Purchases under the 340B drug discount program reached $100 billion in 2025, up 22.8% year over year per HRSA data, intensifying the long-running fight over the program’s scope and oversight. Hospitals pushed back on HRSA’s claim that its yet-to-be-proposed 340B rebate pilot would impose minimal burden, demanding the agency raise its cost estimate, while reform advocates and hospital and manufacturer interests traded blame over the program’s future.
Source(s):
STAT
Inside Health Policy
HealthExec
Tags: #DRUG #HOSPITAL
HHS Research Agency Ends Funding for Dozens of Health Studies
The Trump administration terminated dozens of health research grants this week, telling grantees it is shifting priorities toward issues such as the “overmedication of children” and autism, according to a prominent research organization. The cuts add to broader concern about the direction of federally funded health research under current HHS leadership.
Source(s):
Roll Call
Tags: #PROVIDER #PATIENT
Heard on the Hill
Largest Medicare Advantage Insurers Pressed on AI Denials
Sens. Richard Blumenthal (D-Conn.) and Josh Hawley (R-Mo.) are demanding internal records from the largest Medicare Advantage insurers — including UnitedHealth, Humana, and CVS — on their use of AI to deny or delay care, a bipartisan escalation of congressional scrutiny of algorithmic coverage denials and MA prior-authorization practices.
Source(s):
STAT
Tags: #PAYER #PATIENT #PROVIDER
Senate Rejects Resolution to Block CMS’s WISeR AI Prior-Auth Pilot
The Senate on July 16 rejected, 46-50 along party lines, a Democratic Congressional Review Act resolution that would have blocked CMS from further implementing its Wasteful and Inappropriate Service Reduction (WISeR) model, which uses AI to approve or deny care in original Medicare. AARP had urged seniors to press their senators against the pilot; prior authorization remains rare in traditional Medicare but common in Medicare Advantage.
Source(s):
STAT
Inside Health Policy
Tags: #PAYER #PROVIDER #PATIENT
Committees Advance Prior-Auth, MA, and Transparency Bills
Health-committee activity picked up ahead of the August recess, with a slate of Medicare Advantage, prior-authorization, and price-transparency measures moving toward the floor. The Ways and Means Committee unanimously advanced a package addressing MA oversight, prior-auth streamlining, price transparency, and rural pay, and the full Energy and Commerce Committee was set to mark up its own MA and transparency bills Monday, July 20.
- Ways & Means advances Medicare, MA bills addressing prior auth, transparency
- E&C to mark up MA, prior auth, price transparency bills
Tags: #PAYER #PROVIDER
Notable Notes
Structural Heart, in Brief
A busy week for transcatheter-valve and structural-heart policy and safety news relevant to Edwards Lifesciences and its peers, spanning a coverage fight, a Class I recall of a congenital-heart device, and a landmark antitrust settlement.
- Three medical societies weigh in as CMS nears a final decision on its June TAVR National Coverage Determination proposal
- Medtronic recalls 102 lots of its Harmony transcatheter pulmonary valve delivery catheter — used in congenital heart disease — after tips could detach and cause serious injury or death
- Edwards Lifesciences will pay $10 million to settle FTC charges it structured its JC Medical (J-Valve) acquisition to stay under the $119.5M Hart-Scott-Rodino reporting threshold — the largest-ever penalty for failing to make an HSR filing (see also the FTC announcement of the $12M total settlement)
- A Michigan surgeon performs what is described as the world’s first single-port robotic mitral valve repair
Tags: #DEVICE #PROVIDER
720 Rural Hospitals at Risk — and Private Insurers Are the Biggest Reason
Private insurance underpayment — not Medicare or Medicaid — is the biggest reason about 720 rural hospitals, roughly a third of all rural facilities, are at risk of closing, according to a Center for Healthcare Quality and Payment Reform analysis. As these hospitals shutter service lines and operating rooms, “surgical care deserts” are expanding across rural America.
Source(s):
Becker’s Hospital Review
Becker’s Hospital Review
Tags: #HOSPITAL #PAYER
A Year On, Insurers Hedge on Their Prior-Authorization Pledge
One year after dozens of health insurers signed a six-part pledge promising to reduce barriers to doctor-recommended care, some now say they will not implement all the promised initiatives. Patients, advocates, and clinicians say little has changed at the point of care.
Source(s):
KFF Health News
Tags: #PAYER #PATIENT #PROVIDER
No Surprises Act Enforcement Fight Continues
The battle over the No Surprises Act’s arbitration system intensified on two fronts: a federal judge dismissed a third lawsuit against billing intermediary HaloMD, continuing a string of legal wins narrowing challenges to the law, while UnitedHealthcare joined insurers calling for an overhaul, arguing the independent dispute resolution process “is not working, certainly not as Congress intended it.”
- Judge tosses another No Surprises lawsuit against HaloMD
- UnitedHealthcare: No Surprises arbitration system “needs to be reformed”
Tags: #PAYER #PROVIDER
Access to Specialized Cardiac Care Tied to Adult CHD Survival
A Global Burden of Disease analysis (1990-2021) found that adults with congenital heart disease living in states with better access to specialized cardiac care had higher survival — direct evidence that access to ACHD-specialized care affects outcomes, and a data point squarely relevant to CHD coverage and workforce policy.
Source(s):
American Heart Association
Tags: #PATIENT #PROVIDER