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The Keckley Report

CMS Medicare Advantage Final Rules: Why 2025 will be Significantly Different for Plans, Enrollees and Providers

By April 8, 2024No Comments

Last Monday, CMS announced the base payment rate it will pay Medicare Advantage plans in 2025: plans will see an average 3.7%, or $16 billion, increase in payments once risk scores are factored in but a cut to base payments of 0.16% since 2025 risk scores were expected to be 3.86%. That’s the math.

It came as a surprise to insurers and investors who had imagined CMS would modify its November proposed rule to increase payments as has been the precedent in prior years. Per Bloomberg:

Only once in the past 10 years have final rates not improved from regulators’ initial proposals…The tougher stance in the face of lobbying signals another hurdle for insurers that already face faster-than-expected increases in medical costs. Humana Inc., which is the most exposed to Medicare among large insurance companies, fell 9.2% in premarket trading. UnitedHealth Group Inc., the largest US health insurer, dropped 4.3%, while CVS Health Corp. declined 5.2%. Stocks including Elevance Health Inc. and Centene Corp. retreated in post-market trading after the announcement.

Then on Wednesday, CMS released a 1327-page final rule with sweeping directives about how Medicare Advantage plans should operate starting next year: “This final rule will revise the Medicare Advantage (Part C), Medicare Prescription Drug Benefit (Part D), Medicare cost plan, and Programs of All-Inclusive Care for the Elderly (PACE) regulations to implement changes related to Star Ratings, marketing and communications, agent/broker compensation, health equity, dual eligible special needs plans (D-SNPs), utilization management, network adequacy, and other programmatic areas. This final rule also codifies existing sub-regulatory guidance in the Part C and Part D programs.”

When first proposed in November, insurers pushed back. In response, most of the 3463 comment letters received by CMS said they needed more time to modify their plans. CMS replied: “We appreciate the commenter’s concern regarding the plans having enough time to understand the impact of finalized regulations. We will take their recommendation into consideration for future rulemaking.” P20). Accordingly, all MA plans must get approvals from CMS reflecting these changes on or before June 3, 2024.

Arguably, CMS took this hardline approach because bona fide studies by MedPAC, USC Shaeffer and others found widespread risk-score upcoding by Medicare Advantage plans that resulted in 6%-20% annual overpayments by Medicare. Recent high-profile missteps by two of the biggest and most profitable MA players no doubt reinforced CMS’ get tougher posture: UnitedHealth Group’s Change Healthcare cybersecurity breech and Cigna’s $172 million Fraud and Abuse penalty for inflating its MA risk coding.

So, the transition from Medicare Advantage circa 2024 to Medicare Advantage 2025 will be its most significant since Medicare Choice was included in the Balanced Budget Act of 1997. In 2024, Medicare Advantage experienced enrollment growth and profitability to which its players were accustomed despite a late-year spike in utilization:

  • 33.8 million Medicare enrollees (or 51% of total Medicare enrollment) get their coverage from Medicare Advantage plans—up 6.4% from 2023.
  • The average Medicare beneficiary has access to 43 Medicare Advantage plans in 2024, the same as in 2023, but more than double the number of plans offered in 2018. The majority of options do not require an extra payment above what Medicare pays private issuers on their behalf and the majority offer supplemental benefits including dental, eyecare, wellness et al.
  • And Medicare Advantage insurers entered the year on solid financial footing: the biggest issuers posted strong profits in 2023 i.e. UnitedHealth Group: $22.4 billion, CVS (Aetna) Health: $8.3 billion, Elevance Health: $6 billion, Cigna Group: $5.2 billion, Centene: $2.7 billion, Humana: $2.5 billion
  • In 4Q 2023, pent-up demand for services by Medicare Advantage enrollees pushed utilization of doctors, hospitals and other providers up 8.1% above prior year levels including 4Q 2023 increases for outpatient surgery 14.4%, outpatient visits excluding ER and surgery 8.7%, physician visits 6.0%, inpatient adult care 5.3%, Part B drugs 5% and ER visits 4%.

But 2025 will be different. The 4Q spike in utilization and impact of the new rules will have profound impact on Medicare Advantage: the biggest players like United and Humana will adapt and be OK, but others downstream will be disrupted or impaired:

  • Smaller MA plan sponsors and their lobbyists: AHIP, ACHP, BCBSA, Better Medicare Alliance and the army of lobbyists deployed to defeat these rules took a hit. Members pay dues for results. These rules were disappointing (though it could have been worse).
  • MA brokers, agents and marketing organizations: The limits on compensation, constraints on MA marketing tactics and enrollee protections around transparency may reduce revenues for many third-party marketing organizations that sell their services to the plans. A shakeout is likely.
  • Supplemental services providers: lower payments by CMS will force some to reduce/eliminate supplemental benefits that are valued less by enrollees. Dental and prescription drug benefits appear safe but others (i.e. fitness programs) might be cut by some.
  • Hospitals and physicians: Cuts by CMS to MA plans will trickle-down as reimbursement cuts to direct providers of care. Hardest hit will be smaller and rural providers in communities with large MA enrollment.
  • MA enrollees: Though the rule adds behavioral health benefits, data privacy protections and equity considerations in utilization management decisions by the plans, the likely impact of the rate cut is fewer plan options for enrollees and higher premiums. Margin compression for MA plans will hurt bigger plans who will adapt but incapacitate smaller plans unable to survive.
  • The Presidential campaigns: MA sponsors must submit their proposed 2025 plans to CMS on or before June 3, 2024—in the midst of Campaign 2024. And open enrollment will begin in October as MA plans launch marketing for their newly-revised offerings. No doubt, the Campaigns will opine to Medicare security in their closing rhetoric recognizing MA covers more than half its enrollees.

My take:

These rules are a big deal. CMS appears poised to challenge the industry’s formidable strengths and force changes.

Together, these rules will disrupt day to day operations in every MA plan, intensify friction with providers over network design, coverage and reimbursement negotiations and confuse enrollees who might have to pay more or change plans.

Medicare Advantage remains a work-in-process.  Stay tuned.



CMS Final Rule Medicare Program; Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Program for Contract Year 2024–Remaining Provisions and Contract Year 2025 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All[1]Inclusive Care for the Elderly (PACE) 2024-07105.pdf (

Contract Year 2025 Medicare Advantage and Part D Final Rule (CMS-4205-F) | CMS

Health Insurance Stocks Fall on Final Medicare Advantage Rates (UNH, CVS, CNC) – Bloomberg

Medicare Advantage Enrolls Lower-Spending People, Leading to Large Overpayments – USC Schaeffer

Newsroom | Northwestern Mutual – Planning & Progress Study 2024

:Becker’s, Large health system vs. payer profits in 2023, March 2024


  • Quotables
  • Economy
  • Hospitals
  • Insurers
  • Physicians
  • Population Health
  • Regulators



Re: Accountability for Change Healthcare cybersecurity: breach “The recent cybersecurity discourse, particularly in the wake of the Change Healthcare cyberattack, has unveiled a stark disconnect between the expectations placed on healthcare providers and the reality of our cybersecurity challenges.

Legislators have been quick to point fingers, with suggestions to hold healthcare CEOs and organizations directly accountable for breaches. This rhetoric grossly oversimplifies and misrepresents the issue at hand. And it blames the victims, rather than the international terrorists that attack them.

What’s more, actual healthcare providers—hospitals and clinics—are being lumped together with insurers, device manufacturers and pharmaceutical companies in political conversation. That is unrealistic and dangerous.

The other entities do not provide direct patient care, nor do they face the same operational realities as health care providers. Their profit margins often allow for more substantial investments in cybersecurity defenses—a choice not afforded to many healthcare providers, particularly not-for-profit, safety net, and rural hospitals operating on razor-thin margins.”

Chris Van Gorder is president and CEO of Scripps Health located in San Diego, CA Contributed Content: 4 Ways Forward in The Aftermath of the Change Healthcare Attack | HealthLeaders Media

Re: primary care shortage: “The loss of a trusted doctor is never easy, and it’s an experience that is increasingly common.

The stress of the pandemic drove a lot of health care workers to retire or quit. Now, a nationwide shortage of doctors and others who provide primary care is making it hard to find replacements. And as patients are shuffled from one provider to the next, it’s eroding their trust in the health system.”

More Patients Are Losing Their Doctors — And Trust in the Primary Care System – KFF Health News

Re: CMS’ bundled payment programs: “Policy makers are actively contemplating the future of bundled payments. As they appropriately consider questions such as mandatory participation, coordination with population-based models, and practice transformation in specialty care, it is important that they keep physician groups engaged. In a future model, engagement could take the form of direct participation of physician groups but could also include alternatives such as flexible gainsharing models. Regardless, prioritizing alignment with physician group incentives and strengths is paramount.”

Future Bundled Payment Models Need To Engage Physician Group Practices | Health Affairs

Re: voter views on drug prices: “Americans agree on few things, but lowering the price they pay for medication is the most popular policy position in American politics, tied with support for Social Security. Nine in ten say this should be an important or top priority for Congress. In his State of the Union address Joe Biden spent a full three minutes on the topic…

Americans spend twice as much on prescription medication per person as comparable countries… This spending is heavily skewed by branded drugs with no competitors, so-called non-generic drugs. These make up 10% of prescription drugs but 80% of spending. Adjusted for inflation, spending on prescription drugs has increased from $101 per person in 1960 to $1,147 in 2021. Unsurprisingly, that scale of increase has an effect on care: nearly one in three Americans say they sometimes skip taking medication as prescribed because of the price tag.”

Joe Biden’s assault on the $900 child-eczema cream (

Re: Walmart Healthcare: “We’re on a journey to transform health care, connecting more people to the right care at the right time — at a cost that makes sense,”

Walmart CEO Doug McMillon How the world’s largest company jumped into healthcare (

Re: GLP-1 obesity drug forecast: “With close to half of the world’s population expected to be obese or overweight by 2030, according to the World Obesity Federation, demand for these drugs is surging—Bloomberg, a data provider, estimates that these medications will hit $80bn in yearly sales by then. The market is projected to grow by 26% per year in the next 5 years, compared with 16% per year for oncology drugs and 4% per year for immunology medicines, the two other biggest areas.”

Could weight-loss drugs eat the world? (

Re: Hospitals and concierge medicine: “Nonprofit hospitals created largely to serve the poor are adding concierge physician practices, charging patients annual membership fees of $2,000 or more for easier access to their doctors.

It’s a trend that began decades ago with physician practices. Thousands of doctors have shifted to the concierge model, in which they can increase their income while decreasing their patient load…

Using Medicare claims data, the researchers found that concierge medicine enrollment corresponded with a 30%-50% increase in total health care spending by patients.”

Hospitals Cash In on a Private Equity-Backed Trend: Concierge Physician Care – KFF Health News

Re: Medicaid expansion in states: “Kansas is one of just 10 states that have not expanded Medicaid under the Affordable Care Act, which allowed adults with incomes up to 138% of the federal poverty level, or about $43,000 a year for a family of four, to qualify for the program. All of Kansas’s neighbors have adopted the expansion, three of them — Missouri, Nebraska and Oklahoma — through ballot initiatives in recent years.

There have also been signs of movement in Republican-controlled states in the South. In recent months, Republican leaders in Alabama, Georgia and Mississippi have expressed new openness to expanding Medicaid…

There have also been setbacks. The same day that lawmakers in Topeka stopped Ms. Kelly’s bill from advancing to the floor, a similar measure in Georgia died in a Senate committee. Mr. Masterson, the Kansas Senate president, argued that the resistance in his state and elsewhere showed that momentum was heading the opposite way.”

For Red State Holdouts Like Kansas, Is Expanding Medicaid Within Reach? – The New York Times (

Re: for-profit healthcare legislation proposed: “Last week, Sen. Ed Markey (D-Mass.) released draft legislation called the “Health Over Wealth Act,” aimed at both private equity and other for-profit health services providers under licensing overseen by HHS. Both types of owners would be required to disclose a laundry list of financial and operational data, including around debt, political spending, wages, and the use of areas like hallways and waiting rooms for patient care be required to create an escrow account to cover essential health services costs for five years in the event of a facility closure. HHS also could prohibit any deal, even from licensees, while it conducts a study into the impact of private equity on health care. HHS also could block any sale-leaseback transaction that it believes “would lead to a long-term weakened financial status of the health care entity or place the public health at risk.”

Sen. Markey offers bill to block private equity deals in health care (

Re: McKinsey on price transparency: “US healthcare prices vary widely; on average, prices for the same healthcare services differ by 30 to 40% within a given US metropolitan statistical area. This means substantial economic value is at stake in commercial rate negotiations between care delivery organizations and payers. Given that annual spending for commercial healthcare claims is roughly $1.1 trillion, every increase or decrease of 1 percent in commercial reimbursement rates leads to an increase or decrease of about $11 billion in national healthcare claims spend”

The implications of US healthcare price transparency | McKinsey

Re: economic value of weight loss drugs: “Our analysis shows that reducing obesity rates would also decrease the incidence of many related conditions, such as heart disease and diabetes, that each independently raise medical spending and reduce quality of life. All told, in the first 10 years alone, Medicare coverage of weight-loss therapies would save the program $175 billion to $245 billion, depending on whether private insurance also covers the treatments. Over 60% of these savings would accrue to Medicare Part A by reducing hospital inpatient care demands and the demand for skilled nursing care. Given these findings, policymakers should consider the societal benefits of lifting the moratorium on Medicare coverage for weight-loss drugs and enable Medicare to work with manufacturers to create reimbursement solutions that provide broad access to new treatments.”

Benefits of Medicare Coverage for Weight Loss Drugs – USC Schaeffer

Re: AI and CDC public health surveillance: “One item in particular, Microsoft and OpenAI announced that they are planning to build a $100B supercomputer called Stargate to power artificial intelligence. And while Stargate is not necessarily being built for healthcare-related AI, we also noticed that the CDC announced that it will apply AI to identify public health threats more quickly. This begs the question: what could the CDC do with a supercomputer like Stargate? The discoveries and possibilities are as endless as they are in the Phenomenon movie.”

Julie Barnes, Maverick Health Policy Only What Matters on Health Information Policy (

Re: protecting against cyberattacks in healthcare: “As the scope and frequency of these attacks increase, healthcare providers and payers will incur large losses. But society will ultimately foot the bill in the form of higher healthcare costs for everyone. The federal government needs to update regulations and offer the healthcare industry financial incentives to adopt the new generation of highly secure and reliable autonomous digital infrastructure.”

It’s Time to Hand Cybersecurity Over to the Computers – WSJ

Re: physician shortages: “Despite years of efforts to improve efficiency and access, wait times to see a doctor have only gotten worse, amid a shortage of physicians in almost every specialty. One survey found the average time to secure a new-patient appointment is approaching one month in 15 of the largest cities in the U.S., and another survey found more than a third of Medicare patients are waiting more than a month to see a doctor.

At least half of patients report experiencing “operational friction”—long hold times on the phone to reach a scheduler, difficulty getting a timely appointment and trouble accessing follow-up information…

One of the biggest reasons for the frustrating waits is a shortage of doctors…Federal data show the U.S. is short 12,945 primary-care practitioners, indicating that less than half of primary-care needs are being met…

Seeing a Doctor Doesn’t Have to Be So Frustrating – WSJ

Re: Steward, Cerberus finances: “We do clearly know this: Cerberus worked hand-in-glove with Dr. Ralph de la Torre and Steward executives to create complicated financial schemes that put health providers in impossible positions and actively undermined the public’s access to high quality health care. We need clear answers from the company to find out who at Cerberus received these huge profits — and claw them back from the private equity executives responsible for this mess.”

Sens. Warren, Markey April 2, 2024 Massachusetts lawmakers say Cerberus got $800M profit from Steward exit (



BLS Employment Situation Summary: Highlights of Bureau of Labor Statistics’ Jobs Report for March, 2024:

  • Total nonfarm payroll employment rose by 303,000 in March, and the unemployment rate changed little at 3.8%. Job gains occurred in health care, government, and construction.
  • Both the unemployment rate, at 3.8%, and the number of unemployed people, at 6.4 million, changed little in March. The unemployment rate has been in a narrow range of 3.7 % to 3.9% since August 2023.
  • Health care added 72,000 jobs in March, above the average monthly gain of 60,000 over the prior 12 months. In March, job growth continued in ambulatory health care services (+28,000), hospitals (+27,000), and nursing and residential care facilities (+18,000).
  • In March, employment in government increased by 71,000, higher than the average monthly gain of 54,000 over the prior 12 months. Over the month, employment increased in local government (+49,000) and federal government (+9,000).

Employment Situation Summary – 2024 Q01 Results (



AHA Study: Covid impact on rural hospitals:  The American Hospital Association contracted with VCU academics to assess the impact on Covid-19 on rural hospitals. The researchers used available.  financial data for 2,246 rural hospitals for 2017-2022. Key Findings:

  • 48% of rural hospitals consistently experienced negative operating margins from patient services prior to and during the COVID-19 pandemic.
  • 12% of rural hospitals consistently experienced positive operating margins prior to and during the COVID-19 pandemic.
  • The COVID-19 provider relief funds benefited all rural hospitals especially rural hospitals with negative total margins.
  • 83% of hospitals in the positive margin group were system members compared to 60% and 37% of the mixed and negative margin groups respectively.
  • “In 2021, COVID-19 provider relief funds masked long-standing financial challenges experienced by many rural hospitals..”

Assessing-the-Impact-of-COVID-19-on-Rural-Hospitals-report.pdf (

AMN Healthcare survey of hospital nursing executives: In response to question, “What are the top 3 challenges you face in your role?” (The top 5 responses):

  • Recruitment & retention: 43%
  • Staff burnout: 32%
  • Labor shortages: 32%
  • Financial constraints: 25%
  • Labor costs: 22%

AMN Healthcare: Survey of Hospital Nurse Leaders, February 2024



Delays in Care, Medicare Advantage vs Traditional Medicare: “Thinking about the past two years, have you experienced any of the following when trying to access needed health care?”

Delay in care

Medicare Advantage Traditional Medicare
Waited more than 1 month to see a doctor 36% 34%
Care was delayed because it needed approval 22% 13%
Difficulty getting to the doctor because of transportation or distance 10% 7%

Note: Commonwealth Fund survey was conducted between 11/6/23 and 1/4/24, using nationally representative sample of 3,280 Medicare beneficiaries age 18 and older.

Commonwealth Fund: What Do Medicare Beneficiaries Value About Their Coverage?, February 2024

CMS’ Medicare Advantage Marketing Final Rule (effective June 3, 2024): CMS issued its final 2025 Medicare Advantage and Part D rule April 4, setting new standards around marketing, broker payments, and prior authorization. Highlights:

  • Agent/broker payments: CMS set a fixed amount that agents and brokers can be compensated by MA plans, regardless of the plan a beneficiary enrolls in. The agency increased the final fixed amount by $100, compared to the proposed $31.
  • Requirements for Third Party Marketing Organizations (TPMO): Prohibits personal beneficiary data collected by a third-party marketing organization for marketing or enrollment purposes sharing without prior written consent is given by the enrollee; prohibits insurers from using volume-based bonuses for TPMO steerage to certain plans;
  • Benefits/coverage: adds behavioral health network adequacy requirements; requires specifics about supplemental benefits accessible to diagnosis-specific populations; requires expedited review for termination of skilled nursing or outpatient rehab facility, and for home health services;
  • Member services: requires bi-annual notification about supplemental benefits status; Part D sponsors will have more flexibility around formulary substitutions of biosimilars with interchangeable generic products.
  • Governance: requires that MA plan have an expert in health equity on utilization management committee
  • Dual eligibles: reduces the number of plans able to enroll beneficiaries dually eligible for Medicare and Medicaid outside of the open enrollment period (reduces aggressive marketing of D-SNP plans)
  • CMS appeals process: limits in how much information MA plans can request from CMS when appealing risk adjustment data validation audits.

2024-07105.pdf (

EBRI Study: Health savings accounts in 2022: Key findings in the Employee Benefit Research Institute (EBRI new research include:

  • Relatively low balances: Since the establishment of EBRI’s HSA Database, average account balances have generally trended upward and 2022 was no exception. End-of-year balances increased in 2022 to $4,607, but average balances are still modest.
  • Contributions below the maximum: Relative to 2022, average HSA contributions increased. Average employee contributions rose to $1,962, while the average employer contribution decreased slightly to $762.
  • High incidence of withdrawals: Over one-half of accountholders withdrew funds. The average distribution rose to $1,868, continuing to rise from the COVID-era lows observed in 2020.
  • Low use of investments: Few accountholders took advantage of the ability to invest HSA funds, as only 13% of accountholders invested in assets other than cash.

Trends In Health Savings Account Balances, Contributions, Distributions, And Investments, 2011–2022 « (



Study: in-person visit requirement prior to telemental health treatment: Researchers examined how often patients had an in-person visit before their first telemental health visit between 2019 and 2022 (when in-person requirements were not in place). Findings:

  • Across 2019-2022 visits, 44.2% of patients had any prior in-person visit with the same clinician. Of all 2019-2022 visits, 26.8%, 34.5%, and 39.4% of patients had an in-person visit with the same clinician in the prior 3, 6, and 12 months, respectively. These rates varied over time.
  • In 2022, 18.4%, 28.2%, and 22.3% of patients with index visits had an in-person visit with the same clinician, any clinician in the same practice, or a clinician from the same specialty in the same practice in the prior 6 months, respectively.

“These findings suggest that Medicare’s in-person visit requirement will require substantial changes in current practice. Future work should assess quality benefits of requiring in-person care. Medicare could consider increasing flexibility for in-person visit requirements to minimize disruptions in care.”

In-Person Visits Before Initiation of Telemedicine for Mental Illness | Health Policy | JAMA Health Forum | JAMA Network

Re: Concierge primary care in NFP hospitals: “Nonprofit hospitals created largely to serve the poor are adding concierge physician practices, charging patients annual membership fees of $2,000 or more for easier access to their doctors.

It’s a trend that began decades ago with physician practices. Thousands of doctors have shifted to the concierge model, in which they can increase their income while decreasing their patient load.

Critics of concierge medicine say the practice exacerbates primary care shortages, ensuring access only for the affluent, while driving up healthcare costs. But for tax-exempt hospitals, the financial benefits can be twofold. Concierge fees provide new revenue directly and serve as a tool to help recruit and retain physicians. Those doctors then provide lucrative referrals of their well-heeled patients to the hospitals that employ them…Some concierge physicians say their more attentive care means healthier patients. A study published last year by researchers at the University of California (UC), Berkeley and the University of Pennsylvania in Philadelphia found no impact on mortality rates . What the study did find: higher costs.

Using Medicare claims data, the researchers found that concierge medicine enrollment corresponded with a 30-50% increase in total healthcare spending by patients.”

Hospitals Cash In on a Private Equity-Backed Trend: Concierge Physician Care | MedPage Today

Study: Political participation by physicians: Researchers compared rates of political participation between self-identified physicians and nonphysicians in 2017, 2019 and 2021. Findings:

“Physicians’ political participation varied depending on the activity but generally exceeded that of nonphysicians. In the unadjusted analysis, physicians were more likely than nonphysicians to read, watch, or listen to political news (83.8% vs 73.6%); discuss politics with friends and family (81.9% vs 61.4%) or neighbors (29.5% vs 22.7%); buy or boycott products based on political values (28.6% vs 16.7%); donate to political organizations, parties, or campaigns (21.9% vs 9.6%); vote in local elections (63.9% vs 54.1%); and contact elected officials to express an opinion (19.3% vs 11.5%).”

Reported Political Participation by Physicians vs Nonphysicians | Health Disparities | JAMA | JAMA Network


Population Health

Study: Perinatal mood, anxiety disorders: “Nationwide, perinatal mood and anxiety disorder (PMAD) diagnoses among privately insured people increased by 93.3% from 2008 to 2020, growing faster in 2015–20 than in 2008–14. Most states and demographic subgroups experienced increases, suggesting worsening morbidity in maternal mental health nationwide. PMAD-associated suicidality and psychotherapy rates also increased nationwide from 2008 to 2020. Relative to 2008–14, psychotherapy rates continued to rise in 2015–20, whereas suicidality rates declined.

Unique among high-income countries, the US faces a growing maternal health crisis, with negative impacts on birthing people and infants. Stark disparities in maternal morbidity and mortality, including mental health conditions, stem from social, structural, and policy features of US society.2 In this study, we found that the prevalence of privately insured birthing people with diagnosed perinatal mood and anxiety disorder (PMAD) rose substantially between 2008 and 2020, with sharper increases after the 2014 implementation of the Affordable Care Act (ACA).”

Perinatal Mood And Anxiety Disorders Rose Among Privately Insured People, 2008–20 | Health Affairs


Regulator Reports/Rules/Notices:

White House Plan to address drug shortages: Last Tuesday, the White released details about its plan to address drug shortages: Two new NGOs would be created:

  • The government’s Manufacturing Resiliency Assessment Program would create metrics and a process to assess drugmakers’ practices to monitor for shortages and improve manufacturing performance.
  • The separate Hospital Resilient Supply Program would create bonuses and penalties for hospitals based on their drug purchasing practices.

White House offers new plan to address drug shortages – STAT (

CMS Final Rules issued last week (in addition to Medicare Advantage rules):

  • Network adequacy standards for Affordable Care Act plans:
  • Dental Coverage: Effective January 1, 2027, every state can update its essential health benefit benchmark plans to include cleanings, diagnostic x-rays, fillings and root canals.
  • Travel Time: The rule clarifies how long a consumer must travel to see different types of providers in state marketplaces on the federal platform.

Office of Civil Rights: “The Department is aware of media reports as well as medical and scientific literature highlighting instances where, as part of medical students’ courses of study and training, patients have been subjected to sensitive and intimate examinations – including pelvic, breast, prostate, or rectal examinations – while under anesthesia without proper informed consent being obtained prior to the examination.  It is critically important that hospitals set clear guidelines to ensure providers and trainees performing these examinations first obtain and document informed consent from patients before performing sensitive examinations in all circumstances.  Informed consent includes the right to refuse consent for sensitive examinations conducted for teaching purposes and the right to refuse to consent to any previously unagreed examinations to treatment while under anesthesia.”

Letter to the nation’s teaching hospitals and medical schools |

IRS Releases Two New Compliance Strategies “The Tax-Exempt and Government Entities (TE/GE) division of the Internal Revenue Service priorities: 1. Tax-Exempt Hospitals: “The focus of this strategy is on compliance with the Patient Protection and Affordable Care Act (PPACA). We will verify whether tax exempt hospitals are complying with their statutory obligations under Internal Revenue Code Section 501(c)(3), including the community benefit standard, and Section 501(r). “