Weekly Spotlight
The Appropriations Law Rule: Flat PBM Fees, Graded Directories, and $0 Generics
CMS released a proposed rule on Oct. 16 implementing sections of the Consolidated Appropriations Act of 2026, with new guardrails for pharmacy benefit managers (PBMs) and Medicare Advantage plans. Comments are due Dec. 15 (Becker’s Hospital Review).
PBMs. Starting Jan. 1, 2028, PBMs and their affiliates could accept only flat-dollar, itemized service fees for Part D drugs, not fees tied to drug prices or rebates. Manufacturer rebates and discounts remain allowed if they are fully passed through to the plan sponsor. PBMs would return impermissible payments to the plan sponsor, which would pass them to CMS, and allow sponsors to audit them at least once a year (Becker’s Hospital Review). Standalone prescription drug plans would get more PBM transparency (Inside Health Policy).
Provider directories. Beginning in contract year 2028, Medicare Advantage organizations would estimate a letter grade for directory accuracy from a sample of providers, and CMS would post the scores publicly in 2029. Plans would verify directory data at least every 90 days. An enrollee who books a provider listed as in network would pay no more than in-network cost-sharing, even if the listing proves wrong. The rule also adds plan-provider ownership transparency requirements (Inside Health Policy, Modern Healthcare).
Low-income enrollees. In plan year 2028, full-benefit dual-eligible enrollees at or below 100% of the federal poverty level would pay $0 for generic drugs, down from $1.60 in 2026 (Becker’s Hospital Review).
Tags: #PAYER #DRUG #PROVIDER #PATIENT
From Savage Health Policy
A Rule Just Dropped. Do You Know What It Does to You?
CMS released another proposed rule on Friday, and the Spotlight above covers it. Most organizations learn what a rule does to them late. The news comes from a consultant’s summary a week on, or from the one member who read the right section. By then a third of the comment period is gone.
I start with the rule. Within days of publication, I read it against your codes, your issues, and your products, so your leadership knows what it does to you while there is still time to respond.
Then the record. When the comment period closes, I code every letter against the rule’s own proposals. You see who made your argument, who undercut it, and which question the agency asked that no one answered. Then comes the letter, in your voice. When the final rule lands, a scorecard shows what the agency adopted and whose language it tracked.
Software changed the economics of the reading. Judgment still decides what to say. The Rule Summary is free, and a read of one issue or one sector is $5,000. Start at the Comment Intelligence page or email me at csavage@shpconsulting.llc.
Centers for Medicare and Medicaid Services (CMS)
Marketplace Coverage: A Tighter Subsidy Rule, 189,000 Subsidies Ended and an 18% Enrollment Drop
The Internal Revenue Service (IRS) proposed a rule Oct. 14 that would redefine “qualified health plan” and “coverage month,” toughen eligibility verification for Affordable Care Act premium tax credits and narrow access for noncitizens, implementing the 2025 tax law. CMS ended subsidies for about 189,000 enrollees it found deceased or also enrolled in Medicare, Medicaid, or the Children’s Health Insurance Program, and CMS said it is building a national system to prevent duplicate Medicaid enrollment across states. CMS has reinstated a small number of the 760,000 people removed from Marketplace rolls last month over alleged fraud. KFF finds individual-market enrollment fell 18%, from 25.2 million in June 2025 to 20.5 million in June 2026. Agents and brokers asked a federal court to block the moratorium on new HealthCare.gov agents and brokers ahead of 2027 open enrollment, while state regulators seek an exceptions process.
- Modern Healthcare: IRS Proposed Rule Tightens ACA Subsidies Access
- Trump Administration Again Takes Aim At ACA Subsidies — Restricting Access, Removing Enrollees
- CMS Ends 189,000 ACA Subsidies, Announces Upcoming National Medicaid Enrollment System
- HHS eliminates health insurance subsidies for 189K ‘duplicate’ enrollees as part of ongoing audit
- After Booting 760K People From ACA Plans, Trump Administration Has Added Some Back
- KFF: Individual health insurance enrollment fell 18 percent in June
- Agents/Brokers Sue To Block Healthcare.gov Moratorium; State Regulators Seek Exceptions Process
Tags: #PAYER #PATIENT
CMS Can Now Exclude Providers From Federal Health Programs
Secretary Robert F. Kennedy Jr. delegated to the CMS administrator the authority to exclude individual providers and entities from Medicare, Medicaid, and other federal health programs, a power previously held solely by the HHS Office of Inspector General. The delegation took effect immediately through a Federal Register notice.
Modern Healthcare Becker’s Hospital Review
Tags: #PROVIDER #HOSPITAL #PAYER
RAPID: Physicians Join Device Makers in Seeking a Broader Pathway, and Payment Codes
The American Medical Association (AMA) joined medical device groups in comments urging CMS to open its proposed RAPID expedited coverage pathway to in vitro diagnostics and more 510(k) devices. The AMA also told CMS it wants to work with the agency on payment codes for breakthrough devices that move through the pathway.
Inside Health Policy Inside Health Policy
Tags: #DEVICE #PROVIDER #PAYER
Medicaid: Rural Grants, Work Requirements, and a Ballot Setback
States are launching projects under the five-year, $50 billion Rural Health Transformation Program nearly a year in, and Georgetown’s Center for Children and Families argues the grants are being offset by Medicaid cuts, including new paperwork requirements. KFF finds Medicaid’s expansion pathway covered more than one in four Social Security Disability Insurance applicants and beneficiaries waiting for Medicare (120,300 of 415,300 in 2023), coverage that new work requirements could make harder to keep. In Florida, a new state law derailed the campaign to put Medicaid expansion on the 2026 ballot, and organizers now target 2028.
- CMS Rural Health Transformation Grants: How States Are Spending
- Federal Government is Propping up Rural Health with Grants, Knocking it Down with Medicaid Cuts
- What Could Medicaid Work Requirements Mean for People with Disabilities Waiting for Medicare Coverage?
- Medicaid Expansion: The Ballot Initiative That Was Forced To Change Course
Tags: #HOSPITAL #PATIENT #PAYER
No Surprises Act: Arbitration Profits and a Supreme Court Petition
A STAT investigation traces how the nonprofit iMPROve Health, after losing more than $2 million in 2022, won a lucrative contract in the law’s federal arbitration process. The administration is using a Fifth Circuit No Surprises Act decision to ask the Supreme Court whether lower courts may universally vacate agency rules under the Administrative Procedure Act.
- How No Surprises Act Arbitration Became A Health Care Cash Cow
- Administration Asks SCOTUS To Rein In Courts’ Ability To Vacate Rules Using APA
Tags: #PAYER #PROVIDER #PATIENT
Also in CMS
Fifty-two health care organizations urged CMS to revise spending benchmarks in the forthcoming Long-term Enhanced ACO Design (LEAD) Model, warning the method could discourage accountable care organizations from voluntarily aligning beneficiaries (Inside Health Policy). Some Part D premiums will rise $50 or more a month in 2027, at least $600 a year for enrollees who keep their plans (NBC News). CMS’s new Emergency Care Access and Timeliness measure brings emergency department boarding and wait times into federal quality reporting (Becker’s Hospital Review). KFF tracks green card processing backlogs for refugees and asylees and what the delays mean for coverage eligibility under the 2025 reconciliation law (KFF).
Tags: #ALL
Food and Drug Administration (FDA)
Generative AI Devices: Comments Close on FDA’s Discussion Paper
Comments on FDA’s discussion paper on regulating generative AI-enabled medical devices were due Oct. 19. In JACC, Harlan Krumholz wrote on the agency’s request for help.
- FDA-2026-N-7874: Regulation of Generative AI-Enabled Medical Devices
- Regulatory Considerations for Generative AI: The FDA Asks for Help (JACC)
Tags: #DEVICE
Rare Disease Reviews and the Next PDUFA
FDA announced a new framework for reviewing rare disease drugs as part of its ongoing “reset.” A rare disease advocacy group urged FDA to align the draft commitment letter for the next Prescription Drug User Fee Act (PDUFA) reauthorization with that framework, and Paragon Health and a former FDA commissioner back bipartisan drug development reforms with PDUFA as the vehicle.
- FDA ‘reset’ continues with new plan for reviewing rare disease drugs
- Rare Disease Group To FDA: Align PDUFA With Drug Development Framework
- Paragon Health, Former FDA Commissioner Push Bipartisan Drug Development Reforms
Tags: #DRUG
FDA Under Scrutiny: Former Commissioners and Advisory Panel Ties
Former FDA commissioners Rob Califf, Scott Gottlieb, and Ned Sharpless criticized the officials who oversaw the staffing exodus under the Department of Government Efficiency (DOGE), saying the agency lost institutional knowledge that will take years to restore, while arguing FDA can rebound. A STAT analysis found patient or consumer representatives tied to pharma-funded advocacy groups sat on nearly 40% of FDA advisory committee meetings over 20 years, and FDA’s conflict-of-interest rules for these members are not as well developed as those for scientific members.
- Former Commissioners Believe FDA Can Rebound From DOGE ‘Disaster’
- Former FDA commissioners Califf, Gottlieb, Sharpless lay into current HHS leadership
- Patient, Consumer Reps On FDA Advisory Panels Tied To Pharma-Funded Groups
- Many Patient, Consumer Reps On FDA Advisory Panels Have Conflicts Of Interest, Analysis Finds
Tags: #DRUG #DEVICE
Valve Delivery Systems: An FDA Early Alert and a JenaValve Catheter Recall
FDA issued an early alert Oct. 15 on four lots of Edwards’ Commander M delivery systems used with the SAPIEN M3 transcatheter mitral valve. Edwards has received three reports of the balloon bursting during inflation, with one serious injury and one death as of Oct. 5, and told customers to remove the affected units. FDA warns of embolism risk and that the device may not be retrievable through the sheath, which could force surgery in patients who are poor surgical candidates. Separately, JenaValve issued a Class II recall of certain delivery catheters for its Trilogy transcatheter heart valve system, used in transcatheter aortic valve replacement (TAVR), over a risk of deployment problems.
FDA MedTech Dive Cardiovascular Business Cardiovascular Business
Tags: #DEVICE #PROVIDER #PATIENT
Also in FDA
AdvaMed urged the U.S. Copyright Office not to renew the exemption that allows third parties to bypass software locks for medical device diagnosis, maintenance, and repair (AdvaMed filing).
Tags: #DEVICE
Department of Health and Human Services (HHS)
340B: A Bill to Delay the Rebate Pilot, Drugmakers in Court, and an ASPE Case for Cuts
Four House members introduced bipartisan legislation to pause the Health Resources and Services Administration’s 340B rebate model pilot for two years. AbbVie, Bristol Myers Squibb, Boehringer Ingelheim, and PhRMA moved to intervene in the hospital industry’s lawsuit to block the pilot. A report from the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) backs major cuts to hospital 340B payment rates, arguing lower payments would better reflect acquisition costs.
- New bill would delay 340B rebate pilot for 2 years: 6 notes
- Drugmakers, PhRMA seek to join hospitals’ 340B rebate lawsuit
- ASPE Report: 340B Payment Cuts Needed To Align Hospital Incentives
Tags: #HOSPITAL #DRUG
Kennedy and Vaccines: An NIH Board Rebuke
The National Institutes of Health (NIH) Clinical Center board voted unanimously to back its chairman’s statement accusing Secretary Kennedy of undermining trust in science and politicizing the hospital over its new vaccine injury clinic. In Concord, N.H., Kennedy renewed doubts about hepatitis B vaccine safety but would not comment on a state anti-vaccine bill his agency inspired.
- N.I.H. Hospital Board Rebukes Kennedy Over New Vaccine Injury Clinic
- In Concord, RFK Jr. Renews Attack On Hep B Vaccine That Inspired State Anti-Vaccine Bill
Tags: #ALL
Also in HHS
GAO found NIH implemented 14 of 15 federal research security requirements it reviewed and recommends stronger management of foreign interference risk (GAO). MIT enrolled nearly 500 fewer graduate students this fall, a 20% drop from 2024 that its president tied to a $100 million cut in federal research awards (STAT).
Tags: #ALL
Heard on the Hill
On the Hill
Senate Finance Committee ranking member Ron Wyden and colleagues issued an Oct. 16 request for information asking long-term care stakeholders about a universal Medicare-style benefit and nursing home staffing and wages (Inside Health Policy). The Stop Corporate Takeovers of Physicians Act of 2026 would bar insurers and private equity from owning or controlling medical practices. Its core provision exempts hospitals, but other restrictions could still reach them (HFMA). The Ways and Means Committee collected stakeholder support for health bills including the Alzheimer’s Screening and Prevention Act, a medically tailored meals pilot, the Apples to Apples Comparison Act and the Empowering Moms Act (Ways and Means Committee).
Tags: #ALL
Notable Notes
TAVR Evidence: Five-Year Valves, Bicuspid Anatomy, Surgical Bailout, and Coronary Stenting
Five-year results of the PORTICO IDE trial in high- and extreme-risk patients found the self-expanding intra-annular Portico valve had similar survival, stroke, and valve function to commercially available valves, though new pacemaker implantation was higher (36.6% vs. 20.3%). Contemporary balloon-expandable TAVR showed no significant long-term differences between bicuspid and tricuspid anatomy. A CMS database analysis finds surgical bailout during TAVR is becoming less common but carries high short-term mortality. A new analysis following the PRO-TAVI trial suggests some patients may still benefit from percutaneous coronary intervention before TAVR. ClinicalTrials.gov lists a completed Medical University of Vienna study, with Edwards as a collaborator, of a guide sheath technique to prevent dock drop during SAPIEN M3 mitral replacement.
- Five-Year Follow-Up of Transcatheter Aortic Valve Replacement With Self-Expanding Intra-Annular Versus Commercially Available Valves
- Long-Term Outcomes of Contemporary Balloon-Expandable TAVR in Bicuspid Aortic Valve: A Propensity-Matched Comparison to Tricuspid
- Surgical Bailout During TAVR: A Contemporary Analysis of the Centers for Medicare and Medicaid Services Database
- ** PCI before TAVR may still be safest strategy for some heart patients
- Double Transseptal Guide Sheath to Prevent Dock Drop During SAPIEN M3 Transcatheter Mitral Valve Replacement
Tags: #DEVICE #PROVIDER
Insurers and AI: Gold Cards, Shared Provider Data, and Rising Costs
Centene will launch a gold card program next month that lets more than 160,000 providers use a simplified prior authorization process for select outpatient services. UnitedHealth, Cigna, Aetna, Centene, Elevance, and Humana are founding members of a Provider Data Collective announced by DataSpring, formerly CAQH. A Peterson Health Technology Institute report found administrative AI for documentation, coding, billing, and prior authorization entrenches inefficiency and fuels inflationary billing, and the AMA released a governance framework for agentic AI in clinical settings. GAO finds private insurance market concentration was generally higher in 2024 than in 2011.
- Centene To Launch Gold Card Program For Prior Authorizations
- UnitedHealth, Cigna, Aetna Unite On Shared Provider Data Standard
- AI tools drive up healthcare costs: Report
- AMA Urges Providers To Utilize Evidence-Based Framework To Govern AI Tools
- AMA releases governance framework for agentic AI in healthcare
- Private Health Insurance: Market Concentration in 2024 Was Generally Higher Than in 2011
Tags: #PAYER #PROVIDER
Also Notable
The Mussallem CHD Alliance, formed by the Mussallem Foundation in September 2025, launched P3-CHD with Boston Children’s Hospital, Stanford Medicine, and Children’s Hospital of Philadelphia to standardize patient-specific 3D heart models for congenital heart surgery planning. The partners plan to offer the capability to hospitals without in-house expertise and to seek FDA clearance for a software platform (Medical Design & Outsourcing).
Tags: #DEVICE #PROVIDER