Weekly Spotlight: 340B at an Inflection Point
The 340B Drug Pricing Program, which allows safety-net hospitals and other covered entities to purchase outpatient drugs at steep discounts in exchange for serving low-income patients, is under simultaneous pressure from manufacturers, Congress, and the courts — and this week may mark a turning point.
Eli Lilly followed through on its June ultimatum, cutting 340B discounts to hospitals that refused to submit claims data through its third-party vendor. Four major hospital associations — the American Hospital Association, the Catholic Health Association, America’s Essential Hospitals, and the Children’s Hospital Association — responded by calling on federal regulators to intervene, arguing Lilly’s data demands have no legal basis under the 340B statute.
The legislative response came Thursday from Senate HELP Committee Chairman Bill Cassidy (R-LA), who released a long-anticipated discussion draft to overhaul the program. The bill proposes a rebate model to replace upfront discounts, new limits on contract pharmacy arrangements, and a mechanism allowing drug manufacturers and hospitals to negotiate rebate policy directly. The draft is circulating for stakeholder comment, not yet legislation.
Separately, litigation over the 340B program’s “patient” definition is advancing in ways that could affect which drug purchases qualify for the discount. Also this week, HRSA published a Federal Register correction to its June 15 notice on the 340B Rebate Model Pilot Program, signaling the agency is advancing the rebate pilot even as Cassidy’s draft proposes a broader legislative framework.
Sources: STAT News | Fierce Healthcare | Inside Health Policy | Becker’s Hospital Review | Becker’s Hospital Review | HFMA
Tags: #DRUG #HOSPITAL #PROVIDER
Centers for Medicare & Medicaid Services
Medicare Advantage: $342M Overbilling Repayment and Star Rating Recalculation
Two Medicare Advantage enforcement and ratings developments this week. Elevance Health transferred $342,209,085 to CMS via wire on May 27 to resolve overbilling allegations — what appears to be the first time CMS has successfully compelled an MA plan to repay alleged overpayments at this scale. The payment followed a February enforcement action threatening to freeze Elevance’s MA enrollment. Court filings in a parallel DOJ False Claims Act case revealed the transfer; an Elevance executive confirmed it was a “remittance of the total overpayment amount.” Elevance faces additional compliance milestones through July. Separately, CMS conducted another round of MA star rating recalculations following its loss in the Clover Health lawsuit challenging the 2026 quality bonus payment methodology. The recalculation carries adjustments in both directions, reflecting the volatility that has characterized star ratings in recent years.
- Medicare Advantage Company Pays $342M to Government in Midst of Billing Probe (KFF Health News)
- CMS Recalculates Star Ratings — Again (MedCity News)
Tags: #PAYER #PATIENT
Medicare’s AI Prior Authorization Pilot Draws Investigative Scrutiny and Democratic Pushback
KFF Health News published an investigation finding that Medicare’s AI-driven prior authorization pilot — the Wasteful and Inappropriate Service Reduction (WISeR) model — has generated errors and delays for patients and physicians since its January 2026 launch. Patients and doctors report incorrect coverage denials and a system that moves too fast without adequate accuracy safeguards. Separately, 31 House Democrats sent a letter to CMS Administrator Mehmet Oz on June 22 requesting detailed performance data on the pilot, including denial rates, appeal outcomes, and patient demographics.
Sources: KFF Health News | Becker’s Hospital Review
Tags: #PAYER #PATIENT #PROVIDER
Medicare Spending and Enrollment: Two Reports This Week
The 2026 Medicare Trustees Report projects the Hospital Insurance Trust Fund will be depleted in 2033, unchanged from last year. A KFF analysis finds Medicare spending growth is accelerating, driven by rising enrollment, Medicare Advantage expansion, and GLP-1 drug costs. A separate MedPAC analysis documents the complexity beneficiaries face when choosing between traditional Medicare and Medicare Advantage — citing limited decision support and significant consequences from errors including selection of plans that don’t cover preferred providers or medications — and raises the issue in the context of ongoing enrollment simplification discussions.
- Medicare Funding Projections Sharpen Concerns Over Access and Payment Rates (HFMA | KFF Research)
- MedPAC Offers a Look at Enrollment Hiccups for Medicare Beneficiaries (Fierce Healthcare)
Tags: #PAYER #PROVIDER #PATIENT
Coverage Erosion: ACA Enrollment Drop, Marketplace Financial Strain, and Withheld Grants
Three converging coverage pressures this week. Approximately 4 million Americans dropped ACA marketplace plans in 2026 after enhanced premium subsidies enacted under the Inflation Reduction Act expired at year-end 2025; MedPage Today finds approximately 3 million fewer enrollees compared to the same point in 2025, concentrated among lower-income households. ACA marketplace plans collectively lost $5.5 billion in 2025 before subsidies expired — a financial strain already pushing some insurers to exit markets or raise premiums, with downstream pressure on provider reimbursement rates. Meanwhile, hundreds of millions of dollars in health-related grants approved by Congress remain unreleased as the fiscal year nears its end, with health advocacy groups challenging the delays in court.
- Millions Dropped ObamaCare Plans After Subsidies Ended (The Hill | MedPage Today)
- ACA Plan Financial Struggles Could Hit Providers (HFMA)
- Trump Officials Still Delaying Funds (KFF Health News)
Tags: #PAYER #PATIENT #PROVIDER
U.S. Health Spending Hit $5.7 Trillion in 2025; CMS Projects $9 Trillion by 2034
CMS actuaries released two related reports. The 2025 National Health Expenditure data shows spending reached $5.7 trillion, driven primarily by utilization increases rather than price growth, with GLP-1 drug costs a significant contributor. A ten-year projection forecasts spending will reach $9 trillion by 2034, representing approximately 20.6% of GDP.
Sources: Healthcare Dive | Fierce Healthcare
Tags: #ALL
Food and Drug Administration
Two FDA AI Clearances: Structural Heart Screening and the First AI Agent
Two FDA AI clearances this week with different implications. EchoNext, from Pathway Labs, screens patients for structural heart disease — including aortic stenosis — using a standard 12-lead electrocardiogram rather than an echocardiogram, positioning AI-assisted EKG screening as a potential first-line detection method with implications for earlier intervention and downstream imaging referral rates. STAT News and The New York Times covered a patient case where the tool identified a serious heart problem initially misdiagnosed as asthma. Separately, UpDoc secured what Inside Health Policy reports is the first FDA clearance for an AI “agent” — a system capable of taking sequences of actions rather than producing static outputs. The distinction between AI tool and AI agent carries regulatory and liability implications and may signal how FDA intends to approach increasingly autonomous clinical AI systems.
- FDA-Cleared AI Tool EchoNext to Detect Structural Heart Disease via EKG (STAT News | The New York Times)
- First FDA-Cleared AI Agent Could Offer FDA, State Regulatory Clues (Inside Health Policy)
Tags: #DEVICE #PROVIDER
Lobbyists Eye MDUFA Reauthorization as Vehicle for AI and Digital Health Policy
Digital health and medical device lobbyists are exploring whether the upcoming Medical Device User Fee Act (MDUFA) reauthorization can serve as a legislative vehicle for AI and digital health policy priorities, Inside Health Policy reports. MDUFA reauthorization historically attracts policy riders on FDA oversight, approval processes, and user fee structures. Industry groups are working to identify which AI governance and software-as-a-medical-device provisions are ripe for inclusion before negotiations begin in earnest.
Source: Inside Health Policy
Tags: #DEVICE
Department of Health and Human Services
HHS Launches Operation TrailBlazer to Speed Phase 1 Clinical Trials by 6 to 12 Months
HHS directed six agencies — FDA, NIH, CMS, CDC, BARDA, and ARPA-H — to reduce regulatory barriers in early-stage clinical research, with a goal of cutting the Phase 1 timeline by six to twelve months. The centerpiece is an FDA pilot called the Expedited Investigational New Drug program, which would allow qualifying drugs to enter first-in-human trials faster by streamlining the IND application process. HHS framed the initiative as a competitive response to China’s biopharma sector. FDA simultaneously opened a public docket on the expedited IND pilot and published four draft guidances covering clinical evidence standards, master protocols, quantitative systems pharmacology tools, and the pilot program itself.
Sources: Fierce Biotech | Inside Health Policy | STAT News
Tags: #DRUG #DEVICE
ACIP Charter Rewritten to Protect Kennedy’s Appointees; Sanders Releases Internal CDC Emails
HHS published a revised Advisory Committee on Immunization Practices (ACIP) charter on June 25 that broadens membership criteria and shifts the committee’s mandate toward examining alternatives to vaccines and studying “gaps in vaccine safety research.” Public health attorneys told STAT News and KFF Health News the charter is designed to insulate Kennedy’s hand-picked committee members from a March federal court ruling that found them unqualified — effectively retrofitting the rules around people who failed them. The charter also loosens the relationship between ACIP recommendations and the Vaccines for Children program, which provides free vaccines to approximately 40 million low-income children.
The same week, Sen. Bernie Sanders (I-VT) released internal HHS and CDC emails showing Kennedy pressuring agency staff to change vaccine guidance and advance anti-vaccine policy. The New York Times separately published internal CDC emails documenting the pressure on career staff during Kennedy’s first months in office.
Sources: STAT News | KFF Health News | Inside Health Policy | The Hill | The New York Times
Tags: #ALL
RFK Jr.: On the Road, Tightening CDC’s Science Pipeline, and a New Deputy
Three HHS politics and personnel items. The White House is sending Kennedy on a campaign-style road schedule ahead of November’s midterms, positioning him as a MAHA messenger in competitive districts. A STAT News investigation reports a proposed new CDC science office would route research findings through a political review layer before publication, tightening HHS leadership’s control over agency scientific outputs. And Trump has nominated Chris Klomp, a health tech entrepreneur who previously negotiated drug price reductions, as HHS deputy secretary.
- White House Puts RFK Jr. on the Road Ahead of Crucial Midterms (The Hill)
- Proposed CDC Science Office Could Tighten Political Control at Agency (STAT News)
- Trump Nominates New Top Deputy to RFK Jr. (POLITICO)
Tags: #ALL
JAMA Publishes COVID Vaccine Effectiveness Study That CDC Leadership Had Blocked
JAMA Network Open published a peer-reviewed COVID-19 vaccine effectiveness study that the acting CDC director had previously blocked from a CDC-affiliated journal. The study found meaningful protection from COVID vaccination against serious illness. Its publication in JAMA provides the findings a peer-reviewed home independent of federal agency control.
Sources: Inside Health Policy | MedPage Today | The Hill
Tags: #ALL
Public Health Groups Prepare to Sue If OMB Finalizes Political Grantmaking Rule
Public health organizations warn they will file suit to block a proposed Trump administration rule requiring federal public health grantees to align with administration policy priorities. Inside Health Policy reports the coalition views the rule as an unconstitutional condition on federal grants that would chill scientific independence.
Source: Inside Health Policy
Tags: #ALL
NIH to Use Real-World Data and Expanded Site Networks to Strengthen Clinical Research
NIH announced steps to modernize its clinical research enterprise by incorporating real-world data, AI tools, and expanded trial site networks. Inside Health Policy reports the initiative is designed to improve the speed and generalizability of NIH-funded research, complement FDA’s Operation TrailBlazer announcement, and address underrepresentation of diverse populations by expanding participating sites.
Source: Inside Health Policy
Tags: #DRUG #DEVICE
HHS Seeks Public Input on Anti-Kickback Safe Harbors
HHS published a request for information in the Federal Register seeking public comment on whether changes are needed to anti-kickback statute safe harbor regulations governing financial relationships between health care entities. The RFI is broad in scope and may signal interest in updating safe harbors for value-based care arrangements, digital health, and provider coordination models. Comments are open for 60 days.
Source: Federal Register
Tags: #PROVIDER #HOSPITAL
HHS Clinical Roadmap Signals Possible HTI-6 API Requirement for EHRs
HHS released a clinical roadmap suggesting ONC may require electronic health record systems to adopt new API provisions under a forthcoming HTI-6 rulemaking. Inside Health Policy reports the roadmap is not yet a proposed rule but indicates the direction of ONC’s interoperability agenda, including requirements that could affect how EHRs connect to third-party applications and payers.
Source: Inside Health Policy
Tags: #PROVIDER #HOSPITAL
HRSA Awards $8.6M Patient Safety Contract as OPTN Modernization Advances
HRSA awarded the Organ Procurement and Transplantation Network (OPTN) Patient Safety and Compliance task order to General Dynamics Information Technology (GDIT) in partnership with Arbor Research, valued at $8.6 million for up to one year. The award is part of HRSA’s multi-vendor modernization initiative breaking up what had been a single-contractor system managed entirely by UNOS. Patient safety activities were prioritized for separation from the UNOS contract following congressional scrutiny over accountability gaps; the GDIT award marks that transition.
Source: HRSA / OPTN
Tags: #PROVIDER #PATIENT #HOSPITAL
Heard on the Hill
House Doctors Caucuses Finalize MACRA Reform Bill, Working Through Payfors
The bipartisan House GOP and Democratic Doctors Caucuses held a joint meeting June 25 to finalize details of their Medicare Access and CHIP Reauthorization Act (MACRA) reform legislation, Rep. Kim Schrier (D-WA) told Inside Health Policy. The bill addresses physician payment instability under MACRA’s Merit-based Incentive Payment System and Alternative Payment Model tracks. Financing mechanisms remain under discussion.
Source: Inside Health Policy
Tags: #PROVIDER
Senate Democrats Propose $5,000 Out-of-Pocket Cap for Traditional Medicare
Senate Minority Leader Charles Schumer and 14 co-sponsors plan to introduce legislation establishing a $5,000 annual out-of-pocket cap for traditional Medicare beneficiaries — a benefit Medicare Advantage enrollees already receive but fee-for-service beneficiaries do not. Sen. Ron Wyden is a lead sponsor. The proposal is unlikely to advance in the current Senate but is designed to draw a contrast with Republican Medicare policy heading into November.
Sources: KFF Health News | Inside Health Policy | MedCity News
Tags: #PAYER #PATIENT
Medicaid Oversight and Health Care Fraud: A Busy Week on Both Fronts
The DOJ announced charges against 455 defendants for $6.5 billion in alleged health care fraud — spanning telemedicine schemes, durable medical equipment fraud, and pharmacy billing violations — one of the largest single enforcement announcements in the department’s history. The announcement landed the same week the House Energy & Commerce Oversight and Investigations Subcommittee held a hearing with state Medicaid directors from California, Minnesota, and New York. Republican members pressed directors on program integrity; Democrats argued the administration’s enforcement has selectively targeted Democratic-led states. State directors defended their programs, citing fraud rates consistent with or below national averages.
- DOJ Charges 455 Defendants With Fraud As Conservatives Push Medicaid Financing Reform (Inside Health Policy | The Hill)
- E&C Subcommittee Grills State Medicaid Directors on Fraud; Democrats Allege Partisan Targeting (Inside Health Policy)
Tags: #ALL
Committee Action: Prior Auth, Transparency, Overdose, and PBM Data Bills Advance
Two committees moved health care legislation this week. The House Energy & Commerce health subcommittee advanced a bipartisan package including prior authorization reform, price transparency measures, and illicit drug scheduling bills targeting xylazine and nitazenes. The House Education & the Workforce Committee advanced the Health Data Access, Transparency and Affordability Act, which would require pharmacy benefit managers to provide employer-sponsored health plan sponsors with expanded data on network performance, drug pricing, and rebate arrangements. Both packages now advance toward the House floor.
- E&C Health Subcommittee Advances Prior Auth, Transparency, Overdose Bills (Inside Health Policy)
- House E&W Advances Employer PBM Data Transparency Bill (Inside Health Policy)
Tags: #PAYER #PROVIDER #DRUG
Notable Notes
TAVR: New Clinical Evidence, Quality Concerns, and Edwards Aortic Regurgitation Data
A cluster of transcatheter aortic valve replacement (TAVR) and structural heart stories this week spans clinical outcomes, off-label device performance, patient safety at rural centers, and updated EARLY TAVR trial data. A meta-analysis of sex-specific outcomes finds TAVR offers early advantages for women, with five-year results converging across sexes. A study presented at New York Valves 2026 links TAVR using the Edwards Lifesciences valve to encouraging outcomes in patients with severe aortic regurgitation, an indication not currently covered under the standard TAVR National Coverage Determination. A video interview with Robert Hawkins, MD, covers risk assessment for patients who may need surgical aortic valve replacement (SAVR) after a prior TAVR. Updated EARLY TAVR trial findings presented by Philippe Genereux, MD, reinforce continued benefit of treating asymptomatic severe aortic stenosis. Cardiovascular Business also reports cardiologists and patient family members raising quality-of-care concerns following a failed TAVR procedure at a rural hospital, surfacing questions about outcomes at low-volume centers. In device adjacencies, high-intensity ultrasound technology for patients ineligible for SAVR or TAVR made its European debut.
- Sex-specific outcomes after TAVR and SAVR: Key takeaways from a new meta-analysis (Cardiovascular Business)
- TAVR with Edwards Lifesciences Valve for Severe AR Linked to ‘Encouraging’ Data (Cardiovascular Business)
- How to Evaluate Risk When TAVR Patients Require Surgery Later in Life (Cardiovascular Business)
- EARLY TAVR Update: New Data Highlight Continued Benefits of Treating Asymptomatic Aortic Stenosis (Cardiovascular Business)
- TAVR Concerns: Cardiologists, Patient Family Members Question Quality of Care at Rural Hospital (Cardiovascular Business)
- High-Intensity Ultrasound Technology for Calcified Valve Leaflets Debuts in Europe (Cardiovascular Business)
Tags: #DEVICE #PROVIDER
Transcatheter Mitral Repair: Real-World Outcomes and a New LVOT Protection Technique
Two transcatheter mitral repair items. A MedPage Today analysis from New York Valves 2026 asks whether the bar for transcatheter edge-to-edge repair is too low in real-world practice, with data suggesting operators are accepting residual mitral regurgitation grades not validated in pivotal trials. Separately, Cardiovascular Business reports on the BATMAN technique for anterior leaflet modification, which may protect patients from left ventricular outflow tract obstruction — a serious complication of transcatheter mitral valve replacement.
- Is the Bar Too Low for Transcatheter Mitral Repair in Real-World Practice? (MedPage Today)
- BATMAN to the Rescue: TMVR Technique Helps Cardiologists Reduce Risk of LVOT Obstruction (Cardiovascular Business)
Tags: #DEVICE #PROVIDER
Abandoned Heart Failure Trial Raises Questions About FDA’s Breakthrough Device Designation
A STAT News investigation examines an abandoned heart failure device trial — LivaNova’s VITARIA vagus nerve stimulator — that had received FDA’s Breakthrough Device designation. The trial’s failure to reach patients despite expedited status illustrates a persistent gap between designation and actual device availability, raising questions about whether breakthrough designation is being applied to technologies not yet ready for the rigorous evidence-building the pathway presumes.
Source: STAT News
Tags: #DEVICE
MAHA: Insurers Adopt the Language; Americans Can’t Agree on the Definition
Two POLITICO pieces capture MAHA’s unusual political position. A poll finds the Make America Healthy Again label encompasses people with sharply opposing views on vaccines, food safety, and health care costs, making it functionally incoherent as a policy platform even while retaining cultural resonance. Separately, health insurers are quietly adopting MAHA language in marketing and coverage communications, positioning themselves as aligned with Kennedy’s wellness priorities despite being a frequent target of his criticism.
Tags: #ALL
State-Level Hospital Pricing and Insurer Accountability Push Expands
Three state legislative items on hospital pricing and insurer accountability. Indiana’s Republican governor is advancing a hospital price cap law limiting what hospitals charge employer-sponsored health plans. Michigan Speaker Matt Hall introduced bills creating a hospital cost review board and capping price increases at 10%. A Pennsylvania bill would create criminal liability for insurer CEOs whose coverage denials result in patient harm.
- Indiana Takes On Powerful Hospitals by Capping Prices Charged to Employers (KFF Health News)
- Michigan Bill Would Cut Hospital Prices by 10% and Faces Hospital Opposition (Becker’s Hospital Review)
- Pennsylvania Bill Would Create Criminal Liability for Insurer CEOs Over Coverage Denials (Becker’s Hospital Review)
Tags: #HOSPITAL #PAYER #PROVIDER
CBO Warns No Surprises Act Arbitration May Be Raising Costs, Not Lowering Them
The Congressional Budget Office published a report calling for new research on the No Surprises Act after emerging evidence suggests the law “might not have the effects that CBO anticipated.” When CBO scored the law in 2021, it projected the independent dispute resolution (IDR) process would reduce premiums by roughly 1%. Instead, providers are winning more than 80% of IDR cases and being awarded payments far above expected levels, with 3.4 million disputes filed through mid-2025 — far exceeding the roughly 22,000 per year originally projected. Administrative costs alone reached nearly $900 million in fees through 2024. CBO warns that if providers can systematically secure large payments through IDR, they have an incentive to remain out of network or demand higher in-network rates — a dynamic that could increase premiums over time rather than reduce them. The office also flagged that large organizations dominate arbitration activity, potentially disadvantaging smaller providers and encouraging consolidation.
Source: Congressional Budget Office
Tags: #PAYER #PROVIDER #PATIENT
DOJ Memo Targets Olmstead Integration Mandate for People With Disabilities
A new DOJ memo signals the department’s intent to scale back enforcement of the Olmstead integration mandate, which requires states to provide community-based services to people with disabilities as an alternative to institutionalization. STAT News reports the memo narrows the circumstances under which DOJ will bring Olmstead enforcement actions — a move disability rights advocates call a significant rollback of the landmark 1999 Supreme Court ruling.
Source: STAT News
Tags: #PATIENT
Prior Authorization Failure: A Patient Who Couldn’t Get a Drug Insurers Had Promised to Cover
KFF Health News’s Bill of the Month follows Margaret Hvatum, a Medicare Advantage enrollee hospitalized after her insurer denied coverage for a medication she depends on to boost her immune function — despite prior coverage commitments. The case illustrates the gap between insurer coverage communications and actual prior authorization outcomes, arriving as Congress debates prior authorization reform legislation this week.
Source: KFF Health News
Tags: #PAYER #PATIENT