Weekly Spotlight
After Tuesday: What the Next Congress Could Do With This Year’s Health Stories
Tuesday’s election will decide what happens next to the health stories this digest has followed all year: Medicaid work requirements, marketplace premiums, drug prices, and oversight of the Department of Health and Human Services (HHS). Republicans hold both chambers going in, 218-214 in the House and 53-47 in the Senate as of mid-September (Holland & Knight).
The lame duck comes first: The current Congress returns with two deadlines. Government funding runs out Dec. 11. On Dec. 31, the temporary 2.5% increase in physician fee schedule payments expires, along with mandatory Community Health Center Fund money that supplies about 70% of federal grant funding for health centers (Holland & Knight). Medicare telehealth flexibilities are already extended through 2027. Holland & Knight lists pharmacy benefit manager reform and site-neutral payment among possible additions to a year-end package, and WilmerHale adds hospital price transparency. WilmerHale sees less pressure to finish in December if Republicans keep both chambers. A Democratic House would make December Republicans’ last weeks of unified control. A Democratic sweep would give Republicans the strongest incentive to act before Jan. 3 and Democrats more reason to postpone broader bargains.
Medicaid and the marketplaces: Work requirements under the 2025 reconciliation law begin Jan. 1. Brookings analysts expect a Democratic House to start with reversing the law’s Medicaid and marketplace cuts and restoring the enhanced premium tax credits. With a Republican Senate, Holland & Knight sees outright repeal as difficult and points instead to targeted delays, appropriations limits, or regulatory flexibility. If Republicans keep both chambers, Holland & Knight expects implementation to proceed with less congressional check and Republicans to explore health savings accounts, Individual Coverage Health Reimbursement Arrangements, and other alternatives.
Drug prices: House Democrats are preparing a probe of TrumpRx and the most-favored-nation drug pricing deals if they win the House (Inside Health Policy). Holland & Knight notes that Republican control could give the administration room to seek codification of parts of the most-favored-nation approach. Pharmacy benefit manager practices draw bipartisan scrutiny, and the 340B program stays in view under either outcome.
Oversight and the gavels: A Democratic House would gain subpoena power. Holland & Knight lists HHS Secretary Robert F. Kennedy Jr.’s vaccine policy, Medicare Advantage payment and prior authorization, and the drug pricing deals among likely targets. The Senate Health, Education, Labor, and Pensions (HELP) Committee will have a new chair in January (Inside Health Policy). Chair Bill Cassidy (R-La.) lost his May primary, and Fierce Healthcare names Sens. Rand Paul, Susan Collins, and Roger Marshall as options for chair or ranking member. Brookings analysts expect major health changes to be unlikely in a divided government while President Trump remains in office.
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From Savage Health Policy
The 2027 Payment Rules Are Due. Get a Read the Day They Drop.
The Centers for Medicare and Medicaid Services (CMS) usually releases the final physician fee schedule and hospital outpatient payment rules around Nov. 1, and the 2027 rules could arrive any day. The physician rule settles the proposed 1.68% conversion factor cut for most clinicians and the proposal to end traditional Medicare payment for remote monitoring delivered through outside vendors. The outpatient rule settles CMS’s proposals on 340B payments, site-neutral payment, and the phase-out of the inpatient-only list.
Order a rule read on demand. When the final rules publish, I read them end to end against your codes, issues, and products. You get what changed from the proposal and what it does to you, organized by page, while your team is still working through the preamble.
The Rule Summary is free and arrives the week each final rule publishes. For a read built around your issues, start at the Comment Intelligence page or email me at csavage@shpconsulting.llc.
Centers for Medicare and Medicaid Services (CMS)
Medicaid Work Requirements: A Court Strikes the Frailty Definition Two Months Out
A federal judge struck down CMS’s definition of medical frailty, the standard that exempts some enrollees from Medicaid work requirements. The ruling is a win for more than two dozen states that sued. The ruling also gives states six more months before the frailty change is enforced, and CMS could still appeal. The requirements take effect Jan. 1, 2027. Many states will not be ready. CMS gave states a worksheet to report implementation problems. Manatt Health says many of the proposed mitigations will not keep eligible people covered. A nonpublic CMS document reviewed by WP Intelligence lists backup plans for states that need more time. The American Medical Association (AMA) and eight other physician groups filed an amicus brief challenging CMS’s exemption rules.
- Judge strikes down CMS ‘medical frailty’ policy for Medicaid work requirements
- Medicaid work requirements go live in two months. Many states won’t be ready.
- Stakeholders: CMS’ New Medicaid Work Req Mitigation Plan Falls Short
- CMS Has Offered Backup Plans For States Struggling To Meet Medicaid Deadline, Document Shows
- AMA joins legal challenge to Medicaid work rule ahead of 2027
- Beyond Compliance: Turning Medicaid Requirements into Stronger State Programs
- Work Requirements Put New Pressure On Medicaid Member Retention
Tags: #PAYER #PATIENT #PROVIDER
Marketplaces: Another Year of Steep Premium Increases
Affordable Care Act marketplace premiums will rise an average 13% for 2027, on top of an earlier steep increase. The Washington Post maps the increases state by state. CMS’s proposed eligibility verification rule could cut marketplace enrollment by 332,500 people a year, according to CMS. KFF explains the financial help available to people who buy their own coverage.
- Obamacare Policies Hit Again With Steep Premium Increases for 2027
- ACA Premiums Are Going Up Again. See What It Means For You.
- CMS proposes tying ACA subsidy access to eligibility verification (Becker’s Payer Issues)
- Explaining Health Care Reform: Questions About Health Insurance Subsidies
Tags: #PAYER #PATIENT
Prior Authorization: WISeR Results, Vendor Problems, and a Jan. 1 Deadline
A JAMA research letter finds that in the first six months of Medicare’s WISeR prior authorization model, use of targeted services fell in participating states relative to the rest of the country. The drop reached nearly 20% for some services. CMS documents obtained by the Electronic Frontier Foundation show technical failures, poor communication, and delays at WISeR vendors, which the documents link to patient harm. Payers face a Jan. 1, 2027, deadline to adopt prior authorization application programming interfaces. Epic describes where readiness still falls short.
- Medicare’s AI-enabled prior authorization pilot linked to nearly 20% drop in some services
- FOIA Reveals Corrective Action Plans, RFIs For WISeR Vendors
- Prior authorization in the real world: Takeaways from Epic ahead of looming API deadline
Tags: #PAYER #PROVIDER #PATIENT
Ambulatory Specialty Model: Calls to Delay or Scrap
Hospital and physician groups urged the CMS Innovation Center to delay the Jan. 1 launch of the mandatory Ambulatory Specialty Model, citing unresolved technical problems and limited guidance. The Center for Healthcare Quality and Payment Reform called for scrapping the model. The center’s Oct. 27 report warns that the model could cost thousands of Medicare beneficiaries with low back pain and heart failure access to specialty care and leave some small rural communities without specialists.
- Provider Groups Urge CMMI To Delay ASM; CHQPR Calls For Scrapping Model
- CMS specialty model could harm rural patients: Report
Tags: #PROVIDER #HOSPITAL
Valve Replacement Without Surgical Backup: New Data and a Society’s Position
A new study and two editorials examine whether the falling rate of emergency surgical bailout during transcatheter aortic valve replacement (TAVR) justifies rethinking coverage policies that require surgical backup. Opinions are mixed. The Society for Cardiovascular Angiography and Interventions (SCAI) surveyed its members on possible changes to TAVR policies, and the results shaped its official position.
- Is surgical backup still necessary during TAVR? Opinions are mixed as bailout risk decreases
- SCAI’s position on TAVR changes evolved after member survey
Tags: #PROVIDER #HOSPITAL #DEVICE
Organ Procurement: CMS Finalizes Tougher Oversight
CMS finalized a rule Oct. 30 that clarifies when the agency can decertify poorly performing organ procurement organizations and lets top performers compete for more than one donation service area. The rule takes effect 60 days after its Nov. 3 Federal Register publication.
Tags: #HOSPITAL #PATIENT
Dialysis: A 2.7% Increase for 2027
CMS’s final 2027 end-stage renal disease payment rule, released Oct. 28, gives freestanding and hospital-based dialysis facilities a 2.7% increase, higher than expected.
Tags: #PROVIDER
Also in CMS
The CMS Innovation Center will expand the Cell and Gene Therapy Access Model beyond sickle cell disease and invite manufacturers of other therapies to negotiate outcomes-based agreements for state Medicaid programs (CMS). CMS posted a decision memo on autologous stem cell transplant for multiple myeloma (CMS). More than 4 million Medicare beneficiaries will have their stand-alone Part D or Medicare Advantage drug plan terminated Dec. 31 (KFF). An HHS advisory committee meets Nov. 9 to vote on recommendations on Medicare Advantage oversight, site-neutral payment, and Medicaid nutrition services (Inside Health Policy). As hospitals buy physician practices, routine office care is increasingly billed at hospital outpatient rates, sometimes 10 times the physician-office price (The Washington Post). Insurers and employers asked CMS to pause recertifying No Surprises Act arbiters until it adopts tougher standards (Healthcare Dive). Women’s health groups asked CMS to delay unbundling maternal health codes, set for Jan. 1 (Inside Health Policy). The AMA defended its Current Procedural Terminology (CPT) coding process and the AMA/Specialty Society Relative Value Scale Update Committee, known as the RUC, and offered CMS a voting seat on the CPT Editorial Panel (Inside Health Policy). HCA Healthcare expects flat 2027 earnings as Medicaid supplemental payments fall by up to $650 million (Becker’s Hospital Review).
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Food and Drug Administration (FDA)
Peptides: An Interim Compounding Pathway Over FDA Scientists’ Objections
HHS issued an interim policy Oct. 28 that lets state-licensed pharmacies compound six unapproved peptides while FDA writes a rule on adding them permanently to the 503A bulks list. MedPage Today reports that FDA scientists opposed the move and had little input.
- FDA Opens Interim Peptide Compounding Pathway As Safety, Oversight Questions Loom
- RFK Jr. Eases Access to Unproven Peptides Despite Opposition From FDA Scientists
Tags: #DRUG #PROVIDER
Clinical AI: Who Regulates, Who Pays, and Who Is Liable
Sen. Bill Cassidy (R-La.) released a discussion draft of the PATIENT AI Act. The draft would settle whether FDA or the Office of the National Coordinator for Health IT (ONC) oversees health AI tools. The bill would also create a federal payment pathway for AI-based services. FDA and CMS officials are working to head off conflict with states that want to test AI in clinical settings. The AMA says liability for harm from clinical AI should be split among developers, deployers, and physicians according to their roles. ONC’s final deregulatory rule repealed the AI “model card” requirement over objections that it would shift the burden of vetting AI onto providers. A CMS health IT official said the agency is building conversational primary care AI for consumer apps. Top House Democrats on three committees asked five AI firms to report safety incidents to Congress within 48 hours.
- Senator’s draft bill would create healthcare AI payment pathway
- FDA, CMS scramble to avoid regulatory logjam as more states look to test AI in clinical settings
- AMA: Health AI Liability Should Be Split Among Developers, Deployers, Clinicians
- Health Data, Technology, and Interoperability: ONC Deregulatory Actions To Unleash Prosperity
- Gleason: CMS Aspires For Everyone To Have ‘Primary Care AI In Their Pocket’
- Trio of key House Democrats query major AI firms on security and safety incidents, seek ongoing reports
Tags: #DEVICE #PROVIDER #PAYER
Gene Therapy: One Application for Many Variants
FDA released draft guidance Oct. 27 on personalized cell and gene therapies for rare diseases. The guidance sets out how to submit one biologics license application for products customized to individual patients and how much they may differ and still count as one product.
Inside Health Policy BioPharma Dive
Tags: #DRUG #PATIENT
Also in FDA
FDA leaders gave few details Oct. 28 on how the new Rare Disease Framework Initiative will work and asked for feedback (Inside Health Policy). FDA established the Neuroscience Advancement and Innovation Nexus to coordinate development of products for neurological conditions (FDA). FDA issued draft guidance on submitting investigational device exemption applications through eSTAR (RAPS).
Tags: #DRUG #DEVICE
Department of Health and Human Services (HHS)
Pharmacy Benefit Managers: The Labor Department Finalizes Its Disclosure Rule
The Labor Department finalized a rule requiring pharmacy benefit managers (PBMs) to disclose fees and compensation to self-funded employer health plans starting in 2027. Employers praised the rule, and PBMs criticized it. The House Oversight Committee is investigating whether PBMs stepped up audits of independent pharmacies in retaliation for their support of a bill barring PBMs from steering patients to affiliated pharmacies.
- Labor Department finalizes sweeping PBM disclosure rule
- Drug Middlemen Will Soon Have To Share Details On How They Are Paid
- White House Clears DOL’s Long-Awaited PBM Transparency Rule
- House Lawmakers Investigate PBMs’ Stepped-Up Auditing Of Pharmacies Backing Reform Bill
Tags: #PAYER #DRUG #PROVIDER
Two Leadership Exits at Federal Health Agencies
Centers for Disease Control and Prevention (CDC) Deputy Director Jennifer Shuford, a former Texas health official appointed to help steady the agency, resigned after four months. The head of the Advanced Research Projects Agency for Health was placed on administrative leave amid an apparent ethics investigation.
The New York Times Inside Health Policy
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Also in HHS
HHS is seeking nominations for the CDC’s Advisory Committee on Immunization Practices, which has not met for months since a court stayed Secretary Kennedy’s appointments (Inside Health Policy). The administration moved $46 million in HIV prevention grants from community-based organizations to state health departments (WUSF). Supplement trade groups oppose a National Institutes of Health plan to move the Office of Dietary Supplements under the Office of Nutrition Research (Inside Health Policy).
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Heard on the Hill
ACA Coverage Terminations: Senators Press Insurers
Thirteen Senate Democrats, led by Sens. Ron Wyden and Bernie Sanders, asked the 10 largest marketplace insurers about their role in the administration’s termination of coverage, over alleged fraud, for about 760,000 enrollees in September.
- Senators Probe 10 Insurers Over Role In Terminating ACA Coverage For 760,000 People
- Sanders, Wyden press insurers on Trump ACA coverage terminations
- Senators Investigate Insurers’ Role in Removing Thousands from ACA Coverage
Tags: #PAYER #PATIENT
TrumpRx: A Request for a Federal Review
House Energy and Commerce ranking member Frank Pallone Jr. (D-N.J.) asked the Government Accountability Office to review whether the White House’s TrumpRx deals with drugmakers save consumers money.
STAT (subscription) Inside Health Policy
Tags: #DRUG #PAYER
On the Hill
A bipartisan clinical trial bill could become the policy-rider roadmap for the next prescription drug user fee reauthorization (Inside Health Policy). Labcorp and Quest urged Congress to pass the RESULTS Act, which would reform lab payment rate-setting, in the lame-duck session (MedTech Dive).
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Notable Notes
Uninsured Rates Climb
A Commonwealth Fund survey puts the uninsured rate among working-age adults at 11.2% in 2026, up from 8.9% in 2024, and finds that nearly half of working-age adults are underinsured or uninsured. Census data released Oct. 29 show the child uninsured rate at its highest level in a decade, with an increase among young children, according to Georgetown’s Center for Children and Families.
- Uninsured Rate Rises To 11% Ahead Of Medicaid Work Requirements
- Nearly half of American adults are underinsured or uninsured, survey finds
- New Census Data Show Child Uninsured Rate Remains at Highest Level in Decade, Increases for Young Children
Tags: #PATIENT #PAYER
340B: Lilly’s Data Demands and a Suit Against CVS
Eli Lilly’s requirement that 340B hospitals submit claims-level data to receive statutory discounts drew a cease-and-desist letter from the Missouri attorney general and another lawsuit from Massachusetts hospitals. The University of Kentucky and Ashland Hospital Corporation sued CVS Health Oct. 27, alleging that CVS and its affiliates diverted more than $41 million in 340B savings.
- Eli Lilly’s 340B data policy draws new opposition from Missouri AG, Massachusetts hospitals
- University of Kentucky sues CVS over alleged $41M 340B scheme
Tags: #HOSPITAL #DRUG
Valve Disease Deaths Rise Among Older Adults
Death rates from valvular heart disease among U.S. adults 65 and older rose nearly 5% from 2018 to 2023, from 104 to more than 109 per 100,000, after nearly two decades of decline.
Tags: #PATIENT #PROVIDER
Also Notable
A STAT investigation finds that Epic selectively withholds access to patient data from rival developers (STAT). C. Joseph Ross Daval and Aaron S. Kesselheim argue that Congress should repair federal expert advisory committees (STAT). Former Rep. Michael Burgess, M.D., argues that Congress should reassert its role for Medicare patients and physicians (Roll Call). A Colombian study maps high-notification clusters of congenital heart disease (BMC International Journal of Health Geographics).
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