HMA consultants are participating on four panel sessions at NatCon25 in Philadelphia, May 5-7. In this blog, HMA Principal Suzanne Daub offers a peek at her session topic and explains how improvisation is being used in behavioral health.
In the fast-paced, high-stakes world of behavioral health, case and care managers are often the steady bridge between crisis and stability, support and recovery. Yet the complexity of their roles鈥攏avigating systems, engaging clients with diverse needs, adapting to change in real-time鈥攔equires more than clinical knowledge. It calls for presence, empathy, adaptability, and clear communication. These are exactly the skills honed through applied improvisation.
Several years ago, I attended a national healthcare conference and found myself in a session on applied improvisation for medical professionals. I expected a few communication tips. What I experienced instead was a transformative, embodied approach to learning that blended empathy, collaboration, and spontaneity in a way that felt deeply relevant to behavioral health. I knew immediately: this belongs in our field.
That session sparked my own journey. I began formal improv training, developed a personal improv practice that I鈥檝e now sustained for over five years, and eventually became a certified trainer in applied improvisation for healthcare professionals. Since then, I鈥檝e been focused on bridging this work into behavioral health鈥攅specially to support case and care managers, who often work at the emotional and logistical front lines of client care.
What Is applied improv? Applied improvisation takes the tools and principles of theatrical improv鈥攍ike active listening, collaboration, spontaneity, and 鈥測es, and鈥� thinking鈥攁nd uses them in professional, non-performance contexts to strengthen human interaction. It鈥檚 grounded in neuroscience, play theory, and experiential learning.
In medical training, applied improv is used to support communication, teamwork, leadership, and emotional resilience. It helps providers stay grounded in the face of uncertainty, build trust with patients and teams, and respond rather than react. Academic medical centers, residency programs, and interprofessional training teams are increasingly turning to improv to improve quality of care and reduce burnout.
Applied improv is still emerging in behavioral health, but momentum is growing. Innovative programs are using improv to support:
Engagement in developmental disability services where play-based, nonverbal, and responsive communication is vital.
Reducing isolation among older adults and dementia caregivers through shared storytelling, and connection-building.
Substance use disorder recovery by helping individuals rediscover joy, flexibility, and authentic connection in group work.
Supervision and team development where role-play and real-time scenarios help staff practice challenging conversations and build peer support.
For case and care managers in behavioral health, applied improv can help:
Enhance engagement, improve presence, listening, and rapport-building with clients across cultures and abilities.
Build comfort with unpredictability and navigating uncertainty 鈥攅ssential when managing client crises or changing systems.
Foster collaboration and trust in interdisciplinary teams.
Bring joy, presence, and creative reset鈥攖ools we all need to stay grounded, prevent burnout and foster resilience.
If you’re attending NatCon25, I invite you to join our interactive workshop: 鈥淚mprov in Behavioral Health: Strengthening Empathy, Collaboration and Adaptability,鈥� where you鈥檒l gain hands-on tools, and leave with a new lens on what it means to connect. There are two sessions available, Monday, May 5, 4:30 PM 鈥� 5:30 PM ET or Tuesday, May 6, 11:15 AM 鈥� 12:15 PM ET, both located in room 204C.
Don鈥檛 miss these other HMA presentations at NatCon25:
Monday, May 5, 10:15 AM 鈥� 11:15 AM ET session A3 in room 103B Harnessing Your Superpowers in Times of Disaster Breakout Presenter: Monica Johnson, MA, LPC 鈥� 黑料网
Monday, May 5 10:15 AM 鈥� 11:15 AM ET session A13 in room 115BC Building Sustainable Pathways for Behavioral Health Careers Breakout Presenter: Allie Franklin, MSSW, LICSW 鈥� 黑料网
This week, in our In Focus section, 黑料网鈥� Medicare experts review the changes to the Center for Medicare and Medicaid Innovation鈥檚 (CMMI) proposed in the Fiscal Year (FY) 2026 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Proposed Rule (). The IPPS proposed rule, released April 11, 2025, maintains the model with no changes to the timeline, participants, accountable care organization overlap policies, or required episodes.
While most changes are technical in nature, involve minor methodological tweaks, or seek to align with the Trump Administration鈥檚 policy priorities, stakeholders should continue to assess their readiness and prepare to implement the TEAM model. This is a critical time for healthcare stakeholders to stay on top of this specific proposed rule, the TEAM model, and other federal and state-level developments that are affecting the healthcare system.
This article reviews key aspects of the IPPS proposed rule policies related to TEAM with strategic steps for stakeholders as they continue to prepare for the model鈥檚 implementation.
Background on TEAM
is a value-based care initiative that requires participating hospitals to manage costs for a range of surgical procedures, including both inpatient and outpatient services. The program involves bundled payments covering all aspects of care from the surgical procedure itself to most post-acute care occurring within a 30-day window following discharge from the hospital. Payments will be calculated based on regional benchmarks, and hospitals will assume financial responsibility for the quality and cost of care provided.
TEAM is scheduled to begin in 2026 with 741 hospitals required to enter into value-based arrangements. The program will affect how hospitals manage five types of surgical episodes in both the inpatient and outpatient hospital setting by shifting more risk to the hospitals themselves. This risk includes not only the cost of the surgery but also post-acute care, including readmissions, complications, and downstream provider services. The goal is to incentivize hospitals to improve care coordination, reduce costs, and enhance patient outcomes.
Proposed Changes to the Model
According to the proposed changes, CMS is moving forward with the five-year mandatory model largely as planned, with minor updates focusing on technical details rather than a significant overhaul. Some of the proposed changes were expected based on the administration鈥檚 policy priorities, including removal of:
The Decarbonization and Resilience Initiative
Health equity plans
Health-related social needs data reporting
Other technical changes address flexibility for newly opened hospitals within TEAM鈥檚 required the impact of the possible of the Medicare Dependent Hospital (MDH) program, and modified episode attribution to be based on discharge date, rather than start date. CMS is also still seeking comment on how to finalize the low-volume threshold policy, where hospitals under a certain number of procedures would only have Track 1 (upside only) applied.
Overall, CMS expects that its proposed changes to TEAM 鈥渟hould not result in dramatic shifts to the Medicare savings estimate鈥� of $481 million in savings to CMS across the model鈥檚 five performance years.
Stakeholder Considerations for the Future
Keeping this model largely intact and maintaining the mandatory nature signals that the Trump Administration intends to continue with value-based arrangements and is looking for ways to achieve program savings. A mandatory model will generally achieve a higher level of savings than a voluntary one.
As they prepare for implementation, stakeholders will need to take action, including:
Thoroughly reviewing the proposed changes to the TEAM model to understand the changes and their implications to model of care policies and operations, financing, and collaborations with clinicians and care teams outside of the facility. Consider submitting comments to CMS on the proposed changes. Review the聽聽in TEAM.
Contextualizing their work to implement this model alongside other pending federal and state policy changes. Stakeholders will benefit from staying on top of developments in this dynamic policy landscape since many pending proposals have financial and structural implications for healthcare providers.
Preparing for the mandatory model by developing strategies to manage the financial risk associated with the bundled payments and improving care coordination. This may include modeling hospital payment policies and assessing the implications of the proposed changes.
Assessing the system and technology changes and collaborations that will be required to effectively manage risk in the model.
Connect With Us
黑料网鈥� (HMA鈥檚) Medicare Practice Group monitors federal regulatory and legislative developments in the inpatient setting and assesses the impact on hospitals, life science companies, and other stakeholders. Our experts interpret and model hospital payment policies and assist clients in developing CMS comment letters and long-term strategic plans. Our team replicates CMS payment methodologies and model alternative policies using the most current Medicare fee-for-service and Medicare Advantage claims data. We also support clients with Diagnosis Related Group (DRG) reassignment requests, new technology add-on payments (NTAP) applications, and analyses of Innovation Center alternative payment models.
For more information about the proposed policies, contact our featured experts聽below.
April is always a busy month for Medicare. It is the month when (MA) policies get finalized and the bid season moves into the final stretch. It is also the starting month for annual rule making for the next cycle of Medicare payment rules. These provide important signals about the Center for Medicare & Medicaid Services (CMS) plans for modernizing Medicare鈥檚 quality programs and commitment to value-based care.
This month, we鈥檝e highlighted the work that do to support organizations鈥� Medicare projects. We鈥檝e discussed our experts’ ability to support organizations with the transition to digital quality measures. Our experts were on top of policies that made it into final MA rate notices and policy rules. We also flagged what wasn鈥檛 included and what this may mean for the future of Medicare policy. We examined the notable policy proposals in Medicare payment rules for inpatient hospitals and how these are a 鈥渃anary in the coal mine鈥� for other upcoming rules, especially related to making quality reporting and measurement more efficient and actionable. And we asked whether Medicare is ready for the next era of innovation?
We are at the start of a new season of priority setting for CMS. Early signals of what will be important to policy officials include alignment with the Make America Healthy Again (MAHA) initiative, digital health, transparency, and addressing fraud.
Impact of Recent Policy Changes
Recent policy changes have impacted the Medicare landscape in various ways. Changes announced in recent Medicare Advantage and Part D rate notices and policy include updates to payment models, quality reporting requirements, and measures to enhance transparency and accountability. The focus on digital health and the integration of digital tools into clinical models are reshaping how care is delivered and measured. Additionally, the emergent emphasis on chronic disease and program integrity is driving organizations to take a fresh look at their data, models of care, and strategies for collaborating with partners to improve patient care. Staying informed and adapting to these policy changes is crucial for organizations to remain competitive and deliver high-quality care to Medicare beneficiaries.
The Future of Medicare
Medicare will continue to play a vital role in providing healthcare to the in the program, as it is poised for significant transformation through the integration of digital tools, increased focus on quality care, and the need for cost efficiency in both Medicare Advantage and in Fee-for-Service Medicare. Organizations that stay ahead of these changes and align with policy priorities will be well-positioned to drive meaningful improvements and ensure the sustainability of the program.
As we look ahead, the commitment to innovation, transparency, and quality will be key to shaping the future of Medicare. HMA is helping clients navigate this dynamic landscape in , integrated care programs for dual eligibles, Medicare Advantage Stars and Medicare value-based care programs, PACE, and rural-focused health by providing actuarial support, long term strategic plans for data and quality initiatives, modeling of payment policies, and analyses of alternative payment models.
Multi-sector consensus-based alliances, rooted in collaboration, are a critical tool for cutting through the divisive partisanship of our national discourse, providing a pathway to sustainable progress. Through the Leavitt Center for Alliances, an initiative of 黑料网, we have helped diverse stakeholders鈥攑ublic and private, government and industry, nonprofit and corporate鈥攕olve dozens of the most entrenched challenges in health care.
Consensus-based alliances can solve complex challenges faster and more creatively than any one organization alone. With the recent publication of several case studies on website, the tools for collaboration are now more accessible than ever. The site offers a window into the Center鈥檚 proven alliance framework and showcases a range of successful collaborations that exemplify how shared purpose, a commitment to consensus, and structured governance can drive real-world impact.
The case studies bring this to life, illustrating the diversity of issues that alliances can address when built on trust, structure, and shared purpose:
Empowering a Community Against Gang Violence聽鈥� A multi-sector coalition came together to reduce gang violence, demonstrating how community-based alliances can rebuild safety and trust.聽
The Long-Term Power of Alliances: Supply Chain Collaboration for Patient Safety 鈥撀�Leaders from across the health care supply chain collaborated to improve patient safety through aligned practices and shared goals.聽
Creating Value in Business: Alliance Building at the One Intermountain Breast Care Center 鈥�聽A regional alliance centered around a breast care center demonstrated how aligned incentives and coordinated care can improve outcomes and reduce waste.聽
Unifying the Smart Home:听How Matter Brought the Industry Together 鈥撀�Competitors in the tech industry joined forces to create a universal smart home standard, proving that alliances can drive industry-wide innovation.聽
Bringing Government and the Private Sector Together to Modernize Health Care Data Exchange 鈥撀�Public and private stakeholders worked together to enhance interoperability and improve access to health data.聽
In our own ranging from behavioral health integration to payment reform and data interoperability, we see firsthand how alliances are helping translate federal policy shifts into systems change. These examples reveal what鈥檚 possible when stakeholders move beyond silos and toward collective action
Hospitals that use specially designated new technologies in the inpatient setting may receive additional reimbursement through a program offered by the Centers for Medicare & Medicaid Services (CMS) known as the new technology add-on payment (NTAP) program. CMS offers a separate NTAP payment in addition to the regular Medicare Severity-Diagnosis Related Group (MS-DRG) payment, for use of specially designated new technologies that qualify. This payment is meant to remove some of the disincentives faced by hospitals under the bundled inpatient payment system, when the costs of new technologies are not incorporated into the payment rates until two to three years after market entry. At a recent webinar, HMA Principal Clare Mamerow discussed the NTAP program, what manufacturers must do to apply for and receive NTAP designation for their new technologies, and some of the changes coming in 2025. This blog shares some of the key issues raised.
While NTAP designation can offer manufacturers of new technologies a significant advantage, the NTAP application process can be intense, arcane, and difficult to navigate without proper guidance. Most products applying for NTAP need to meet three criteria: newness, cost, and substantial clinical improvement. Certain other products 鈥� breakthrough devices and certain antibiotic and antimicrobial drugs 鈥� are deemed to have already met the newness and substantial clinical improvement criteria and therefore, only need to show that the cost criterion is met. This alternative application pathway is significantly streamlined and makes gaining NTAP designation much easier for these special products because the majority of products that fail to meet the three criteria miss substantial clinical improvement.
The newness criterion has two facets. First, the product must be newly on the market (received FDA approval recently, but prior to May 1, 2026) and must not be 鈥渟ubstantially similar鈥� to other available products. CMS looks to whether the product has a different mechanism of action or whether the product treats a new or different disease or patient population in making a substantially similar determination.
The cost criterion involves an analysis of Medicare claims data, where claims from two years ago are identified as cases where the new product could have been used had it been available and then repriced to account for the cost of the new technology. The average charges on those claims are compared to a DRG specific thresholds that CMS calculates. If the claim charges exceed the threshold, the cost criterion is met.
Finally, the substantial clinical improvement criterion requires that applicants show that patient outcomes are better with treatment with the new technology. Outcomes such as reduced mortality, reduced complications, and reduced health care utilization are all examples of clinical improvement. CMS takes a totality of the circumstances view of substantial clinical improvement, so applicants are encouraged to provide as much data as possible to support their application.
While NTAP can provide supplemental payments in some circumstances, it鈥檚 important to understand the program鈥檚 limits. The NTAP payment that hospitals receive is calculated on a claim-by-claim basis, with the payment at the lesser of 65% of the cost of the product, or 65% of the cost above the regular DRG payment. This means that hospitals are only made aware of the payment amount after the claim has been submitted, and that the hospital can never be made whole for the use of the new technology. In addition, the payment can be any amount less than 65% of the cost of the product鈥攊t鈥檚 even possible that the hospital will receive no payment if the cost of the case isn鈥檛 high enough to trigger the payment. Certain antibiotics and gene therapies that treat sickle cell disease receive a high payment, up to 75% of the cost of the product. Additionally, the payments are only applicable to Medicare fee-for-service claims in IPPS hospitals. Medicare Advantage, Medicaid, and commercial hospital claims are not eligible for payments. Finally, NTAP eligibility only extends for 2-3 years after market entry.
Although the NTAP application deadline for FY 2027 has not yet been announced, manufacturers of new technologies with an interest in NTAP should begin preparing their applications soon.
HMA experts in Medicare and Life Sciences can partner with your organization navigate the challenges in the NTAP program. If you are interested in learning more, contact us.
This week, our second In Focus article addresses the transition to end the Medicare Advantage Value-Based Insurance Design (VBID) model, which launched in 2017 and subsequently has been expanded with bipartisan support. This model was designed to promote flexible benefit design, reduce cost barriers, and enhance care for targeted populations, especially dual eligibles and individuals with chronic conditions. In December 2024, however, the that the model would be terminated by the end of 2025, citing unmitigable costs to the Medicare Trust Funds, totaling more than $4.5 billion across 2021 and 2022 alone鈥�.
Despite its popularity and effectiveness in improving medication adherence and addressing social determinants of health, CMS concluded that the cost trajectory was unsustainable within the parameters of the Innovation Center鈥檚 mandate.
The end of the VBID model is not the end of innovation in Medicare Advantage (MA); rather, it is a strategic inflection point. Plans that approach this transition with a proactive, data-driven lens will be best positioned to maintain competitive advantage, compliance, and member trust. This article reviews critical steps VBID plans should be taking and how Medicare Advantage Organizations (MAOs) and their partners can best prepare for future opportunities.
Pain Points and Key Strategic Decisions for MAOs
As plans prepare for a post-VBID world, they face a series of complex trade-offs鈥攅specially those with Dual Eligible Special Needs Plans (D-SNPs) that had $0 drug cost sharing under VBID. With the end of CMS鈥檚 drug cost offset in the initial coverage phase, MAOs will need to determine whether and how to absorb those costs through alternative mechanisms. In addition, plans will need to make important decisions regarding their other VBID benefits, namely, whether to discontinue or transition them to the special supplemental benefits for the chronically ill (SSBCI) program. MAOs should consider the following key strategic decisions:
Offer an Enhanced Alternative (EA) or Basic Alternative (BA) Part D Plan:聽To replicate $0 cost sharing, MAOs would need to use EA or BA plan designs with $0 deductibles and $0 copays across all tiers鈥攁n expensive move and potentially untenable investment for many.
Tier-Specific Buy-Downs (T1/T2):聽Some plans may consider buying down T1 and T2 copays to $0, a much less costly approach. Others may consider moving key T2 drugs to T1, while keeping T1 copays at $0 to protect access and using non-zero dollar T2 copays to limit costs.
Competitive Alignment Considerations:聽MAOs offering broader cost-sharing reductions (e.g., $0 copays on both T1 and T2 drugs) may experience undesirable shifts in enrollment patterns depending on how competitors structure their formularies and benefit designs. MAOs should consider competitive parity and attempt to maintain a balanced benefit structure that aligns with market norms.
Transferring VBID Benefits to SSBCI:聽Some benefits鈥攍ike non-health-related transportation, healthy foods, and general supports for living鈥攃ould migrate to the SSBCI program. But SSBCI has strict eligibility, documentation, and operational requirements, calling for nuanced workflows and cross-departmental coordination.
Action Plan: What MAOs Should Be Doing Now
To navigate this transition successfully, teams of experts at Wakely, a 黑料网, Inc. (HMA) Company, are already working with VBID stakeholders to evaluate multiple transition scenarios. Our experts recommend that MAOs take the following actions:
What to Watch: Future Innovation in Medicare Advantage
Though VBID is ending, the innovation landscape is far from static. With the new Trump Administration and the return of Abe Sutton鈥攁 VBID expansion advocate鈥攁ppointed as Director of the CMS Innovation Center, our experts are closely monitoring the potential for a revised version of VBID or similar models. Stakeholder advocacy could influence how CMS prioritizes the next wave of innovation. Plans should consider engaging in dialogue now to shape what happens next.
Connect with Us
Wakely is embedded in MA strategy and policy. Wakely and HMA teams are working with clients to evaluate multiple transition scenarios, helping them optimize value, protect Star Ratings, and preserve member satisfaction during this pivotal shift, while also supporting targeted policy engagement efforts to ensure their perspectives are reflected in future CMS and Innovation Center decision making.
Our joint capabilities bring together:
Actuarial modeling expertise聽to quantify cost and risk impacts of design alternatives
Regulatory insight聽to ensure compliance with CMS requirements
Operational support聽to help you implement SSBCI programs efficiently
Market strategy consulting聽to align your plan offerings with local competition and enrollment goals
Policy advocacy聽to help clients engage in the conversation around what comes next after VBID
To connect on additional questions contact our featured experts聽below.
This week, our In Focus section reviews the policy changes that the Centers for Medicare & Medicaid Services (CMS) proposes to make in the Fiscal Year (FY) 2026 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Acute Care Hospital (LTCH) Proposed Rule (). The IPPS proposed rule, released April 11, 2025, includes several important policy changes that will alter hospital margins and change administrative procedures, beginning as soon as October 1, 2025.
Key Provisions of the FY 2026 Hospital IPPS and LTCH Proposed Rule
For FY 2026, CMS proposes to modify several hospital inpatient payment policies. We highlight and interpret six of these proposed policies that may be among the most impactful for Medicare beneficiaries, hospitals and health systems, payers, and manufacturers, as follows:
Annual inpatient market basket update
Labor share reduction
Medicare Advantage (MA) data integration in measuring hospital readmissions
New Technology Add-on Payment (NTAP) program growth
Transforming Episode Accountability Model (TEAM) modifications
Uncompensated care payment increase for disproportionate share hospitals (DSHs)
Annual Inpatient Market Basket Update
Proposed Rule: CMS鈥檚 FY 2026 Medicare IPPS Proposed Rule will increase payments to acute care hospitals overall by 2.4 percent from FY 2025, amounting to an estimated $4 billion increase in reimbursement. This update is based on a hospital market basket increase of 3.2 percent and a 0.8 percent reduction for total factor productivity.
HMA Analysis: CMS鈥檚 2.4 percent increase results from the estimated rate of increase in the cost of a standard basket of hospital goods鈥攖he hospital market basket. For beneficiaries, this payment increase will lead to a slightly higher standard Medicare inpatient deductible and an increase in out-of-pocket costs. For hospitals and health systems, payers, and manufacturers, the proposed payment increase (2.4 percent) is consistent with economy-wide inflation over the past year (2.4 percent) and below the amount that MA plans will receive for 2026 (5 percent).[1], [2]Although the published payment update for FY 2026 is 2.4 percent, other policy changes result in the average change in inpatient payments totaling slightly more than 3 percent. We anticipate the proposed 2.4 percent increase will increase somewhat by the time CMS finalizes these rates later in the year.
Labor Share Reduction
Proposed Rule: CMS proposes to modify the hospital labor share used to reimburse hospitals for inpatient services. Using 2023 hospital cost report data CMS proposed a national labor鈥憆elated share of 66.0 percent, a decrease from the labor share of 67.6 percent.
HMA Analysis: Every five years, CMS recalculates the hospital market basket and the hospital labor share using updated cost data from the hospital cost reports. For FY 2026, CMS conducted its routine rebasing calculation using 2023 cost report data, replacing the 2018 cost data currently used. As a result, CMS calculated that the cost of labor accounts for a slightly smaller share of total hospital costs in 2023 than in 2018. The labor share is used within the IPPS to identify the proportion of payments that are affected by the hospital wage index in an effort to adjust payments for geographic variation in labor costs. The consequence of a lower hospital labor share is that a slightly smaller share of hospital inpatient payments will be adjusted by the hospital wage index. The subtle impact of this change is that hospitals with higher wage index values may experience reductions in payment. Further, this downward revision of the labor share signals that hospital wages, salaries, and employee benefits account for a smaller share of total costs in the post-pandemic environment. This change may come to a surprise to some, as hospital labor costs have been a subject of concern since the COVID-19 public health emergency.
Medicare Advantage Data Integration in Measuring Hospital Readmissions
Proposed Rule: CMS proposed to make several modifications to the Hospital Readmissions Reduction Program (HRRP), including:
Refining all six readmission measures to add MA patient data
Removing the COVID-19 patient denominator exclusion from measures
Reducing the applicable period from three years to two
Modifying the DRG payment ratios in the payment adjustment formula to include MA beneficiaries
Clarifying that CMS has the discretion to grant an extension to hospitals under the extraordinary circumstances exception (ECE)
CMS also proposed to include MA data in other measures included in the Hospital Value-Based Purchasing (VBP) program and the Inpatient Quality Reporting (IQR) program.
HMA Analysis: The inclusion of MA data in the HRRP may have significant payment implications for many hospitals because it will alter their readmission rates in unanticipated ways, particularly if hospitals鈥� MA patients differ substantially from traditional Medicare beneficiaries. Importantly, the inclusion of MA data in the HRRP measures, and also within the VBP program and the IQR program, signals that CMS is moving toward broader integration of MA data into Medicare fee-for-service reimbursement systems.
New Technology Add-on Payment Program Growth
Proposed Rule: CMS proposed to continue NTAP status for 26 products because they continue to meet the newness criteria required under this program. In addition, within the proposed rule CMS discusses new NTAP applications for 43 additional products. Among these applications, 29 were submitted under the alternative pathways for breakthrough devices and qualified infectious disease products (QIDP).
HMA Analysis: The overall number of products with NTAPs is on par with other recent years, but the number of NTAP applications has blossomed in FY 2026 as the result of the alternative breakthrough application pathway. This alternative pathway allows breakthrough devices and certain antibiotic and antimicrobial drugs to apply for NTAP using an abbreviated application process.
Transforming Episode Accountability Model Modifications
Proposed Rule: CMS proposed several modifications to the forthcoming CMS Innovation Center TEAM framework. Among the various methodological modifications proposed to this mandatory payment model beginning January 1, 2026, CMS proposed to take the following actions:
Limit the deferment period for certain hospitals
Replace the Area Deprivation Index (ADI) with the Community Deprivation Index (CDI)
Use a 180-day lookback period and Hierarchical Condition Categories (HCC) for risk adjustment
Remove health equity and health-related social needs data reporting
Expand use of the Skilled Nursing Facility (SNF) three-day rule waiver
HMA Analysis: The critical aspect of CMS鈥檚 TEAM provision is that the agency proposes to follow through with this Innovation Center model while cancelling other Innovation Center payment models in recent months. It also is noteworthy that the agency has proposed to remove the health equity data reporting requirements for TEAM in line with actions taken with many other CMS programs. Another proposal of note is the plan to expand the use of the waiver to circumvent the SNF three-day inpatient stay rule, which will allow hospitals to discharge patients more quickly to SNFs.
Uncompensated Care Payment Increase for Disproportionate Share Hospitals
Proposed Rule: CMS proposes to increase uncompensated care payments to DSHs by $1.5 billion in FY 2026.
HMA Analysis: CMS鈥檚 proposal will increase uncompensated care payments to hospitals by 26 percent. This increase is driven by CMS鈥檚 assumption that the rate of uninsured people will increase to 8.7 percent of the population in 2026 from 7.7 percent in 2025.
Stakeholder comments on the IPPS proposed rule are due no later than June 10, 2025.
Connect With Us
The 黑料网, Inc. (HMA), Medicare Practice Group monitors federal regulatory and legislative developments in the inpatient setting and assesses the impact on hospitals, life science companies, and other stakeholders. Our experts interpret and model hospital payment policies and assist clients in developing CMS comment letters and long-term strategic plans. Our team replicates CMS payment methodologies and model alternative policies using the most current Medicare fee-for-service and Medicare Advantage (100%) claims data. We also support clients with DRG reassignment requests, NTAP applications, and analyses of Innovation Center alternative payment models.
For more information about the proposed policies, please contact our expert below.
[1] U.S. Bureau of Labor Statistics. Table 1. Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, by Expenditure Category. Modified April 10, 2025. Available at: .
[2] Centers for Medicare & Medicaid Services. 2026 Medicare Advantage and Part D Rate Announcement. April 7, 2025. Available at: .
Digital quality measures (dQM) are quickly emerging as a cornerstone of healthcare operations, propelled by federal efforts to enhance efficiency, interoperability, transparency, and real-time data sharing. New bipartisan proposals like the Healthcare Efficiency Through Flexibility Act (H.R. 483) highlight just how quickly the legislative landscape can change.
Healthcare organizations face mounting pressure to do more with less. As legislation continues to evolve at both federal and state levels, digital innovation remains a critical, key strategy for driving efficiency and reducing administrative burden.
National mandates, emerging legislative proposals, and regulations continue to set the 鈥渞ules of the road鈥� for healthcare, including digital quality transformation. New bills can significantly reshape reporting requirements, data standards, and reimbursement models, often on accelerated timelines. Organizations that proactively adapt to these shifting mandates will be better positioned to improve patient outcomes, streamline operations, and remain leaders in this evolving market.
Foundational Legislation
21st Century Cures Act (2016): Enacted by the U.S. Congress, this laid the groundwork for modernizing the healthcare data ecosystem using application programming interfaces (APIs). Healthcare related provisions focused on interoperability & usability of electronic health data by preventing information blocking (unreasonable interference with access/ exchange of electronic health information); required certified electronic health records (EHRs) to utilize Fast Healthcare Interoperability Resources (FHIR)-based APIs to promote patient access to their health data.
The Centers for Medicare & Medicaid Services (CMS) Interoperability & Patient Access Final Rule(CMS-9115-F) (2020): Required CMS-regulated payers (Medicare Advantage, Medicaid, Children鈥檚 Health Insurance Program (CHIP), Qualified Health Plan (QHP), and Federally-facilitated Exchanges (FFEs) beginning on or after January 1, 2022, to offer FHIR-based APIs for Patient Access and Provider Directories.
Mandated Payer to Payer Data Exchange for patients to take their data with them if they change payers.
Promoted data exchange by requiring hospital participation in sending patient event notifications through an ADT (Admissions, Discharge and Transfer) feed.
Publicly reporting providers who do not list their digital contact information in the National Plan and Provider Enumeration System (NPPES).
Further curtailed information blocking by publicly reporting eligible clinicians and hospitals who may be blocking information.
Subsequent federal communication in December 2021 formalized CMS鈥檚 decision not to enforce certain provisions of this rule to give payers additional time to comply.
Health Data, Technology, and Interoperability (HTI-1): Certification Program Updates, Algorithm Transparency, and Information Sharing-Final Rule (2024): This rule, which was issued by the Office of the National Coordinator (ASTP/ONC)[1] introduces significant changes to software supporting care. It implements the Cures Act鈥檚 EHR Reporting Program, requiring transparent reporting on certified health IT metrics. It also updated information blocking regulations to make data easier to share. In addition, it established a new standard data model for all 鈥渃ertified鈥� Health IT products: the United States Core Data for Interoperability (USCDI) version 3, starting January 1, 2026. In addition, the voluntary certification program (which has been adopted by 96% of all EHRs) has updated its standards, criteria, and requirements, including standardized FHIR APIs, electronic case reporting using Health Level Seven International Clinical Document Architecture (HL7 CDA) and FHIR-based specifications, revised decision support intervention criteria, and new functionality for patient Electronic Health Information (EHI) restriction requests.
CMS Interoperability & Prior Authorization Final Rule (CMS-0057-F) (2024): Builds on previous CMS efforts and the 2020 CMS Interoperability & Patient Access Final Rule to improve access to and exchange of health records among patients, providers, and payers. It also focuses on simplifying and modernizing prior authorization processes while expanding data-sharing requirements to reduce administrative burdens. Impacted payers must begin implementing certain measures by January 1, 2026, while most API-related requirements are extended until January 1, 2027, based on stakeholder feedback provided to CMS.
Beyond federal legislation, other influential entities like CMS, National Committee for Quality Assurance (NCQA), and ASTP/ONC, are adopting new frameworks that accelerate the shift to digital quality measurement.
Rapidly Evolving National Healthcare Frameworks & Healthcare Quality Landscape Changes
CMS National Quality Strategy/Meaningful Measures 2.0 and CMS Digital Quality Measurement Strategic Roadmap (Published in 2022)
These frameworks map out a future in which interoperability and digital measures play a pivotal role in improving care quality and outcomes.
NCQA鈥檚 Shift to Digital Healthcare Effectiveness Data and Information Set (HEDIS)庐 Measures: NCQA has taken a significant step in its quality measurement strategy for health plans. Specifically, HEDIS measures are moving to fully digital by 2030, signaling an industry-wide move toward automated data capture and reporting (published in 2024). In addition, they have also launched their Digital Content Services (DCS) product which allows organizations to submit their quality measures digitally for the 2024 measure year.
Digital Quality Implementers Community: In 2024, a collaborative consensus-based effort was initiated to develop, advance, and standardize tools and platforms that make digital quality measurement possible using open standards instead of proprietary tools. This group is actively working to advance a quality enablement layer including tools, guidance, and standards changes. Leavitt Partners, an HMA company, facilitates this community.
Signals from the Trump Administration Related to Digital Quality
There is ongoing speculation about how the Trump Administration and Congress will approach digital healthcare transformation鈥攑articularly in areas like digital quality measurement. Yet multiple indicators suggest they will stay on this course, and perhaps even accelerate the adoption of digital quality measures.
One key signal is that Ryan Howells, a Principal with Leavitt Partners, an HMA Company, is reportedly one of two finalists under consideration for the position of Assistant Secretary for Technology Policy (ASTP). Known as a champion for digital healthcare data, Howells leads the CARIN Alliance, a national group focused on improving health data access. The ASTP/ONC has significant influence in shaping federal regulations for electronic health records and broader data, technology, and artificial intelligence strategies within the Department of Health and Human Services (HHS).
Additionally, recent bipartisan legislation introduced in January 2025 further underscores a commitment to pursuing digital quality transformation as a linchpin for success in a 鈥渄igital-first鈥� environment, one that prioritizes efficiency and enhanced patient outcomes.
H.R. 483: Healthcare Efficiency Through Flexibility Act
Proposes delaying electronic clinical quality measures (eCQM) adoption until 2030, citing the need to reduce provider burden and pilot more advanced, interoperable reporting tools, including digital quality measurement.
Meanwhile, the national shift toward dQM continues to gain momentum. With eCQM mandates set to begin in reporting year 2025 for Medicare Shared Savings Program Accountable Care Organizations (MSSP ACOs), many organizations view these requirements as redundant and burdensome, given the industry鈥檚 rapid move toward fully digital quality. Unlike eCQMs, dQMs leverage more robust structure and standardization, especially through FHIR-based APIs, to enable broader, more timely, and more efficient data capture. The result is a faster path toward high-impact quality measurement and improvement in our increasingly digital healthcare environment.
Major Implications for Healthcare Organizations
Compliance Deadlines: Evolving Administration rules can quickly shift timelines, significantly impacting prior authorizations, data exchange, and quality measurement.
Financial & Legal Risks: Non-compliance may lead to financial penalties, legal actions, or even program exclusion.
[1] ONC was renamed to the 鈥淎ssistant Secretary for Technology Policy/Office of the National Coordinator (ASTP/ONC) in 2024, but in the current administration, may be folded back into CMS.
Our second In Focus section reviews the most recent Medicaid enrollment trends in capitated risk-based managed care programs in 29 states.[1] 黑料网 Information Services (HMAIS) collected and analyzed monthly Medicaid enrollment data from the fourth quarter (Q4) of 2024.
The data offer a timely overview of trends in Medicaid managed care enrollment and valuable insights into state-level and managed care organization (MCO)-specific enrollment patterns. This information allows state governments, their partners, and other organizations interested in Medicaid to track enrollment shifts. Understanding the underlying drivers of enrollment shifts is critical for shaping future Medicaid policies and adjusting program strategies amid a dynamic healthcare landscape.
Overview of the Data
The 29 states included in our review have released monthly Medicaid managed care enrollment data via a public website or in response to a public records request from 黑料网 (HMA). This report reflects the most recent data posted or obtained. HMA has made the following observations related to the enrollment data (see Table 1):
As of December 2024, across the 29 states tracked in this report, Medicaid managed care enrollment was 61.7 million, down by 3.6 million (-5.5%) year-over-year.
Though most states experienced declines in enrollment, six states saw enrollment increases as of December 2024鈥攄ouble the number of states from the previous year.
Figure 1. Year-Over-Year Medicaid Managed Care Enrollment Percent Change in Select States, 2020鈭�24
Among the 22 expansion states included in this report, net Medicaid managed care enrollment has decreased by 2.1 million (-4%) to 49.5 million members at the end of Q4 2024, compared with the same period in 2023.[2]
Among the seven states included in this report that had not expanded Medicaid as of December 2024, net Medicaid managed care enrollment decreased by 1.5 million, or 1 percent, to 12.3 million members at the end of Q4 2024 compared with to the same period in 2023.
Table 1. Monthly MCO Enrollment by State鈥擮ctober through December 2024
Note: In Table 1 above, 鈥�+/- m/m鈥� refers to the enrollment change from the previous month. 鈥�% y/y鈥� refers to the percentage change in enrollment from the same month in the previous year.
It is important to note the limitations of the data presented. First, not all states report the data at the same time during the month. Some of these figures reflect beginning of the month totals, whereas others reflect an end of the month snapshot. Second, in some cases the data are comprehensive in that they cover all state-sponsored health programs that offer managed care options; in other cases, the data reflect only a subset of the broader managed Medicaid population. This limitation complicates comparison of the data described above with figures reported by publicly traded Medicaid MCOs. Hence, the data in Table 1 should be viewed as a sampling of enrollment trends across these states rather than as a comprehensive comparison, which cannot be established based solely on publicly available monthly enrollment data.
HMAIS also compiles a more detailed quarterly Medicaid managed care enrollment report representing nearly 300 health plans in 41 states. The report provides by plan enrollment plus corporate ownership, program inclusion, and for-profit vs. not-for-profit status, with breakout tabs for publicly traded plans. Table 2 shows a sampling of plans and their national market share of Medicaid managed care beneficiaries based on a total of 66.3 million enrollees. These data too should be viewed as a broader representation of enrollment trends rather than as a comprehensive comparison.
Table 2. National Medicaid Managed Care Market Share by Number of Beneficiaries for Sample of Publicly Traded Plans, 2024
What to Watch
Enrollment in Medicaid MCOs has experienced significant fluctuations recently, influenced both by policy changes and economic factors. Since April 2023, Medicaid enrollment has been on a downward trajectory as states complete eligibility redeterminations after the end of the COVID-19 public health emergency. This trend, coupled with financial and political challenges, necessitates strategic planning for stakeholders to navigate the evolving Medicaid landscape effectively.鈥�
Potential changes that may affect enrollment and require scenario and readiness planning include:
Federal requirement, or a new state option, to implement Medicaid work requirements for at least some categories of enrollees
Changes to the federal financial match policy, which may cause some states to make different decisions about their Affordable Care Act expansion program for adults
Modifications in requirements and expectations for more efficient eligibility processes to improve the accuracy of determinations and assignment to eligibility categories
Connect with Us
HMA is home to experts who know the Medicaid managed care landscape at the federal and state levels. The HMAIS subscription provides point-in-time and longitudinal Medicaid enrollment data, health plan financials, and additional actionable information about eligibility expansions, demonstration and waiver initiatives, as well as population- and service-specific information. HMAIS also includes a comprehensive public documents library containing Medicaid requests for proposals and responses, model contracts, scoring sheets, and protests.
For detail about the HMAIS enrollment report and subscription service, contact聽our experts below.
[1] Arizona, California, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin.
CMS approves average increase of 5.06 percent for MA plans while deferring major policy changes in MA and Part D programs
The Centers for Medicare & Medicaid Services (CMS) released the聽聽on April 7, 2025, finalizing payment updates for calendar year (CY) 2026. This announcement came shortly after the release of the聽on April 4, 2025.聽Together, these updates mark the conclusion of CMS鈥檚 annual rulemaking cycle for Medicare Advantage, ahead of the June 2, 2025, deadline for 2026 MA plan bids.
Notably, because of the timing of the draft notices and proposed rule, Trump Administration officials ultimately had more input into policies omitted from the rate notice and final policy rule than on policies that were finalized. For example, the final rule is exclusive of proposals to expand coverage for anti-obesity medications, guardrails for artificial intelligence (AI), and new requirements related to utilization management and prior authorization procedures.
In his confirmation , CMS Administrator Mehmet Oz, MD, cited Medicare Advantage prior authorization practices and health risk assessments that lead to upcoding as areas that deserve further consideration and scrutiny, raising the potential for future regulatory shifts and even legislative reform. With the possibility of Medicare, including MA, facing cuts as part of broader budget negotiations in Congress, the rate notice and policy rule offer program stability counterbalancing the political and fiscal pressures that may emerge this year.
CMS has sought to stabilize MA and Part D programs into 2026, and stakeholders can benefit from understanding the impact in markets for 2026 and the signals of potential regulatory changes to come. For more in-depth analysis and insights on the rate notice, look for our policy and actuarial experts鈥� brief due out next week.
The remainder of this In Focus article reviews CMS鈥檚 decisions on major payment and policy proposals in the Rate Announcement and Final Rule and examines key considerations for healthcare stakeholders.
Payment Impact on Medicare Advantage Organizations
In the CY 2026 Rate Announcement, CMS projects that federal payments to MA plans will increase by 5.06 percent from 2025 to 2026, which represents a $25 billion increase in expected payments to MA plans next year. According to CMS, this represents an increase of 2.83 percentage points compared with the CY 2026 Advance Notice that is largely attributable to an increase in the effective growth rate. The increase in the effective growth rate鈥攊ncreasing to 9.04 percent in the Rate Announcement from 5.93 percent in the Advance Notice鈥攊s primarily the result of the inclusion of additional data on Medicare fee-for-service (FFS) expenditures, including payment data through the fourth quarter of 2024.
The Rate Announcement estimates represent the average increase in payments to MA plans and actual payments will vary from plan to plan. Below, Table 1 provides CMS estimates of the impact of finalized payment changes on net MA plan payments.
MA Risk Adjustment Changes
As expected, CMS finalized the last year of the three-year phase-in of the MA risk adjustment model, which requires calculating 100 percent of the risk scores using only the 2024 CMS-HCC (Hierarchical Condition Category) model in 2026. CMS also addressed stakeholder concerns with the planned transition toward a risk adjustment model based on MA encounter data, as previewed in the CMS CY 2026 Advance Notice. CMS pledged to engage stakeholders in this model development process while continuing to evaluate the feasibility, transparency, and timing of a future transition to an encounter-based risk adjustment model.
CMS also finalized the MA coding pattern adjustment factor of 5.9 percent for CY 2026, which is the statutory minimum adjustment factor to account for differences in coding patterns between MA plans and providers under Medicare FFS Parts A and B.
Part D Risk Adjustment
For CY 2026, CMS finalized the revised 2026 RxHCC model with adjustments for maximum fair price drugs. Importantly, CMS also finalized using separate FFS normalization factors for MA-Prescription Drug (MA-PD) plans and Prescription Drug Plans (PDPs), making 2026 the second year CMS will vary normalization for these two markets. The calculation of the factors for CY 2026 is different, however, and will have substantially greater impact than the method used previously. It also will reduce Part D risk scores significantly for MA-PD plans while increasing scores for PDPs.
MA Star Ratings
CMS continues to solicit feedback from stakeholders on ways to simplify and refocus MA Star Ratings measures to focus more on clinical care, outcomes, and patient experience of care measures. Also included in the CY 2026 Rate Announcement are non-substantive measure specification updates and a list of measures included in the Part C and Part D improvement measures and categorical adjustment index for the 2026 Star Ratings.
Separately, in the policy and technical changes rule, CMS finalized new regulatory requirements designed to enhance MA beneficiary protections in an inpatient setting, provisions related to allowable special supplemental benefits for the chronically ill (SSBCI), and the care experience for dually eligible beneficiaries enrolled in MA special needs plans.
Enhancing MA Beneficiary Appeal Rights and Notification Requirements
CMS is finalizing provisions that limit the ability of MA plans to reopen and modify a previously approved inpatient hospital decision on the basis of information gathered after the approval. Under the final rule, MA plans will be able to reopen an approved hospital admission only due to error or fraud. In addition, CMS finalized several provisions to enhance beneficiary appeal rights and new reporting and notice requirements, including:
Ensuring that MA appeals rules apply to adverse plan decisions, regardless of whether the decision was made before, during, or after the receipt of such services
Codifying existing guidance that requires plans to give a provider notice of a coverage decision
Ensuring enrollees have a right to appeal MA plan coverage denials that affect their ongoing source of treatment
Non-Allowable Special Supplemental Benefits for the Chronically Ill
The final rule establishes guardrails for SSBCI benefits by codifying a list of non-allowable examples (e.g., unhealthy food, alcohol, tobacco, life insurance). CMS did not finalize proposals that were designed to improve administration of supplemental benefits and enhance transparency of the availability of such benefits.
Improving Care Experience for Dual Eligibles
CMS finalized new requirements for dual eligible special needs plans (D-SNPS) that are applicable integrated plans (AIPs) as follows:
D-SNPs will be required to have integrated member ID cards for their Medicare and Medicaid plans
D-SNPs will be required to conduct an integrated health risk assessment for Medicare and Medicaid, rather than separate ones for each program.
These provisions affecting certain D-SNPS plans will be effective for the 2027 plan year.
Provisions Pertaining to the Medicare Part D Inflation Reduction Act
CMS is finalizing proposals to codify existing requirements related to key provisions of the Inflation Reduction Act, including no cost sharing for adult vaccines and capping monthly copayments for insulin at $35. In addition, CMS is codifying existing guidance related to the implementation of the Medicare Prescription Payment Plan, which is also part of the Inflation Reduction Act.
Key Proposals CMS Has Yet to Finalize
As noted earlier, CMS finalized a streamlined rule that excluded several regulatory changes identified in the November 2024 proposed rule. In addition to provisions related to coverage of anti-obesity medications, guardrails for AI, and mandatory analysis of the health equity impact of MA plans utilization management practices, the following proposals were not finalized. CMS notes that these proposals might be finalized in future rulemaking.
Expanding Medicare Part D Medication Therapy Management (MTM) eligibility criteria
Ensuring equitable access to behavioral health services by applying MA cost-sharing limits
Enhancing the Medicare Plan Finder to include information on plan provider directories
Promoting informed choice by enhancing CMS review of MA marketing and communication materials
Enhancing rules on MA plans鈥� use of internal coverage criteria
Key Considerations
The policies finalized in the CY 2026 Rate Announcement are projected to increase average Part C payments to MA plans by 5.06 percent in CY 2026鈥攁 significant uptick from the payment updates originally proposed in the CY 2026 Advance Notice. Nonetheless, the final rate increase will have varying effects across MA plans, with some experiencing larger or smaller impacts in CY 2026. MA plans should assess these outcomes as they prepare their bid submissions for 2026.
According to the CY 2026 Rate Announcement, CMS expects that the 5.06 percent increase will provide continued stability for the MA program and its beneficiaries while ensuring accurate and appropriate payments to Medicare Advantage organizations.
In the CY 2026 MA and Part D Final Rule, CMS adopted a significantly scaled-back final rule, which omitted some of the more far-reaching proposals for MA and Part D that were originally proposed in November 2024. CMS, however, could potentially revisit and finalize some of these proposals in future rulemaking. Moreover, new regulatory requirements that enhance enrollee protections in inpatient care settings and improving the care experience for dual eligibles signal CMS鈥檚 continued interest in improving program oversight and enhancing consumer protections for MA beneficiaries.
Connect With Us
MA stakeholders need to undertake scenario planning and be prepared to adapt to a rapidly evolving federal policy environment. From modeling and impact assessments of specific policy changes to strategy development and implementation, HMA is home to experts with diverse skill sets. Our team can help stakeholders assess and prepare for potential changes to prior authorization, looking holistically at their organization鈥檚 operations, patient care models, and reimbursement strategies. Our team also provides detailed modeling and assessments to ensure health plans are prepared for changes in risk adjustment and coding policies, supplemental benefits, and other key issues affecting capitation payment, bids, and care delivery models.
For details about the finalized payment and policy rules contact our featured experts below.
With ongoing debates about Medicaid funding, healthcare costs, and the need for mental health integration, state policymakers are looking to shape the health policy landscape that will impact millions of residents. The recent legislative session brought these issues to the forefront, with lawmakers discussing the future of Medicaid expansion, the affordability of prescription drugs, and how to address the state鈥檚 provider shortages.
For healthcare providers, patients, and industry stakeholders, these discussions are more than just policy debates鈥攖hey shape access to care, financial stability, and long-term health outcomes. If Utah wants to maintain its reputation for high-quality, low-cost healthcare, it must navigate these challenges strategically.
Legislative Leaders Take the Stage
At the annual Utah State of Reform Health Policy Conference held in late March, a panel of Utah鈥檚 top healthcare policymakers鈥攎oderated by Francis Gibson, president of the Utah Hospital Association鈥攃ame together for a dynamic discussion on these pressing issues.
Panelists:
Sen. J. Stuart Adams: President, Health & Human Services Committee, Utah State Senate
Rep. Steve Eliason: Member, Health & Human Services Committee, Utah State House of Representatives
Sen. Luz Escamilla: Minority Leader, Health & Human Services Committee, Utah State Senate
Sen. Jen Plumb: Minority Assistant Whip, Health & Human Services Committee, Utah State Senate
Major Healthcare Issues Addressed
Medicaid & State Budget Considerations
With federal Medicaid funding facing potential impact, Utah lawmakers discussed strategies to prepare for possible financial shortfalls. While Utah has a year to plan for any changes made to the Federal Medical Assistance Percentage (FMAP) that would trigger updates to Utah鈥檚 Medicaid program (particularly for the expansion population), the impact could be significant, particularly for vulnerable populations. President Adams emphasized that the goal would be to maintain coverage as much as possible, and the state would have time to look at adjustments and consider using state reserves in the short term to mitigate disruptions.
Drug Pricing & the 340B Program
Lawmakers discussed the passage of , which set some parameters for how pharmaceutical manufacturers provide discounts to covered entities through the 340B program. Pharmaceutical manufacturers argue that the 340B program has expanded beyond its original intent, claiming that it allows hospitals and healthcare entities to profit from drug discounts without necessarily passing savings on to patients. They contend that increased transparency and tighter regulations are needed to prevent unintended financial benefits for large health systems while ensuring that the program continues to serve its intended purpose of aiding vulnerable populations.
Lawmakers emphasized that ensuring the savings from 340B pricing actually reach the intended patients and healthcare facilities is crucial. The state must now focus on assessing the impact of the bill, monitoring how savings are allocated, and ensuring that these resources directly benefit underserved communities. The program鈥檚 long-term success will depend on transparent oversight and continued evaluation to confirm that cost reductions lead to improved patient care and access to essential medications.
Protecting Healthcare Providers from Malpractice Burdens
Sen. Adams then talked about House Bill 503, which aimed to attract more healthcare providers to Utah by mitigating excessive malpractice insurance costs. Sen. Plumb鈥攈erself a practicing physician鈥攑osited that mounting malpractice costs discourage independent physicians, which is especially a problem in rural areas. Many small clinics and independent providers struggle to keep up with the rising costs of malpractice insurance, leading to increased financial strain and, in some cases, forcing them out of practice. This, in turn, limits healthcare access, especially in underserved areas where provider shortages are already a pressing issue.
The legislation aimed to ensure that malpractice claims do not impose an undue burden on healthcare providers while still maintaining patient protections. By stabilizing liability costs and creating a more predictable legal environment, these Utah legislators hope to retain and attract medical professionals, ultimately strengthening its healthcare workforce and ensuring broader access to care across the state.
Mental Health & Early Intervention
The legislative panelists were united regarding the urgency of improving mental healthcare, particularly for children. Expanding early intervention programs, integrating mental health screenings in schools, and increasing access to care were all identified as priorities. Utah has seen a growing demand for mental health services, with rising rates of anxiety, depression, and suicide among both youth and adults. However, access to timely and effective treatment remains a challenge, with long wait times and a shortage of mental health professionals exacerbating the crisis.
The discussion underscored that addressing mental health proactively could reduce long-term healthcare costs and improve overall public health outcomes. Legislators highlighted the importance of integrating mental health with primary care, increasing funding for community-based mental health initiatives, and enhancing telehealth services to bridge gaps in access. Additionally, ensuring insurance coverage for mental health services on par with physical health care was recognized as a necessary step to improve treatment equity and effectiveness.
What Wasn鈥檛 Said
One bill that sparked intense debate but was not discussed by the panel was Utah鈥檚 recent ban on fluoridation in public water systems. The legislation, which earned a visit to Utah from Robert F. Kennedy Jr., has drawn national attention. Supporters of the ban argue that fluoridation poses potential health risks, while major medical organizations maintain that it is a safe and effective way to prevent cavities. Critics of the bill worry that removing fluoride could lead to worse dental health outcomes, particularly for children in low-income communities.聽
This decision comes at a time when an estimated 120,000 adult Utahns enrolled in Medicaid will now have access to expanded dental services. These services may include check-ups, X-rays, cleanings, fillings, root canals, extractions, dentures, emergency exams for severe pain, and crowns, according to state health officials. With broader dental coverage now available for low-income residents, the fluoride ban raises questions about how the state plans to balance preventive care with access to treatment. Similar legislation is emerging in other states, signaling a potential nationwide shift in water fluoridation policies.
What This Means for Utah鈥檚 Healthcare Future
These legislative discussions make it clear that healthcare in Utah is at a pivotal moment. Healthcare stakeholders must stay engaged, advocating for policies that support sustainable, high-quality care. Utah has long been a leader in healthcare innovation鈥攏ow is the time to reinforce that leadership by making smart, forward-thinking policy decisions.
Now more than ever, healthcare providers, policymakers, and industry leaders must collaborate to ensure a stable and effective healthcare system in Utah. For organizations looking to navigate these evolving policies, engage with legislators, or explore strategic solutions, the Utah HMA office鈥攊ncluding consultants from the local Leavitt Partners team鈥攊s here to help. Let鈥檚 work together to create a healthcare system that serves all Utahns鈥攂oth now and in the future.
On March 27, 2025, the US Department of Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr. significant changes in the department with respect to staffing and organizational restructuring. This reorganization is consistent with President Trump鈥檚 February 11, 2025, Executive Order (EO) 14210, 鈥�.鈥�
HHS is moving rapidly to implement its plans. On April 1, 2025, HHS initiated actions to reduce the federal workforce across the agencies and remake the department. In addition, the Senate is expected to vote on a budget resolution this week, which could have significant impacts on federal healthcare spending, including for the Medicaid and Medicare programs.
In the coming weeks and months, HHS intends to make additional announcements about how the department will be restructured. It will be critical that healthcare organizations and stakeholders track these developments closely. Organizations seeking to participate in the development of new federal policies and initiatives must know which offices within HHS will maintain authority over key policy areas. Further, to adapt to changes in funding and policies, it is vital that healthcare leaders remain informed.
Because many changes have already begun, the remainder of this article explains what is known to date about the HHS restructuring and other developments and actions relevant to providers, life sciences firms, insurers, safety net clinics, state and local agencies, and other interested stakeholders. This information can help stakeholders consider how best to proceed.
The Reorganization Plan
EO 14210 required agencies to develop reorganization plans and submit them to the Director of the Office of Management and Budget within 30 days and to 鈥減romptly undertake preparations to initiate large-scale reductions in force.鈥� The broader HHS reorganization plan seeks to implement a new departmental focus on 鈥渆nding America鈥檚 epidemic of chronic illness by focusing on safe, wholesome food, clean water, and the elimination of environmental toxins.鈥�
The reorganization calls for the following:
Consolidating the 28 HHS divisions into 15
Reducing the HHS regional offices from 10 to five
Centralizing the human resources, information technology, procurement, external affairs, and policy functions of the department
Reducing the full-time staff at HHS by 10,000
When combined with other efforts, including early retirement and pre-reduction in force (RIF), HHS鈥檚 staffing levels of 82,000 full-time will be reduced to 62,000. The announcement listed specific workforce reduction plans for the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), the National Institutes of Health, and the Centers for Medicare & Medicaid Services (CMS).
Following the March 27 announcement, additional details regarding the restructuring have continued to emerge, including:
The Biomedical Advanced Research and Development Authority (BARDA) reportedly will be combined with Advanced Research Projects Agency for Health (ARPA-H) under a new Office of Healthy Futures.
The Administration for Strategic Preparedness and Response (ASPR) will be reorganized as a part of CDC.
Programs currently under the Administration for Community Living (ACL) are slated to be reassigned to other agencies; for example, programs that support older adults and people with disabilities will move to the Administration for Children and Families (ACF), Assistant Secretary for Planning and Evaluation (ASPE), and CMS.
HHS Plans for New Agencies that Mirror Policy Priorities
The reorganization includes the establishment of a new Administration for a Healthy America (AHA), which will combine the following offices and agencies:
Office of the Assistant Secretary for Health, which includes the Office of the Surgeon General, the Office of Women鈥檚 Health, and several programs focused on health promotion, chronic disease prevention, and vaccines
Health Resources and Services Administration (HRSA)
Substance Abuse and Mental Health Services Administration (SAMHSA)
Agency for Toxic Substances and Disease Registry (ATSDR)
National Institute for Occupational Safety and Health (NIOSH)
According to HHS, the changes are intended to 鈥渋mprove coordination of health resources for low-income Americans and will focus on areas including, Primary Care, Maternal and Child Health, Mental Health, Environmental Health, HIV/AIDS, and Workforce development.鈥� The department also noted that transfer of SAMHSA to the new AHA will 鈥渂reak down artificial divisions between similar programs鈥� and improve operational efficiency.
HHS also intends to establish a new Assistant Secretary for Enforcement position, which will be responsible for leading efforts to address waste, fraud, and abuse at the Departmental Appeals Board, Office of Medicare Hearings and Appeal, and the Office for Civil Rights.
HHS will merge the ASPE and Agency for Healthcare Research and Quality (AHRQ) to establish a new Office of Strategy. The new office will support research 鈥渢hat informs the Secretary鈥檚 policies and evaluates the effectiveness of federal health programs.鈥� This office will also include some of the 鈥渃ritical programs that support older adults and people with disabilities鈥� that are currently within the Administration for Community Living.
Developments on Workforce Reduction Plans
On April 1, 2025, HHS began issuing formal termination notices to a significant number of federal employees across several agencies, including the FDA, SAMHSA, and CDC. The workforce actions reportedly include a full dissolution of some offices, for example, SAMHSA鈥檚 Office of the Director for Centers for Mental Health Services, Office of Behavioral Health Equity, The Policy Lab, among others, and CMS鈥檚 Medicare Medicaid Coordination Office.
What鈥檚 Next
In the coming weeks HHS will put in place a structure for the new AHA and other planned new entities. Many questions remain about the impact on specific agencies and authorities as well as reassignment of responsibilities for programs and functions that were carried about by affected federal employees and offices.
Congressional committees are seeking additional information about the HHS restructuring. The US Senate Committee on Health, Education, Labor, and Pensions (HELP) that Secretary Kennedy testify at a hearing on April 10, 2025, to discuss the proposed reorganization plan. Providers, health centers, life sciences firms, insurers, health systems, state and local agencies and other healthcare stakeholders and partners should take steps to work through challenges and avail themselves of opportunities to strengthen healthcare systems and improve health. Examples include:
Identify the HHS agencies and offices that are now responsible for policies and procedures that impact your business.
Establish a plan for tracking developments鈥攊ncluding litigation鈥攁nd processes to brief key organizational leaders and act on information, when needed. Healthcare providers, insurers, community groups, and state and local governments will benefit from information as it becomes available regarding changes to agencies and their portfolios and decision makers for policies governing Medicare, Medicaid, child-specific programs, aging and disability programs, mental health and substance use programs, among many others.
Immediately assess current federal discretionary funding and reimbursement policies that may be at risk for your organization, your key partners, and collaborators. Consider potential impact of the policy changes that Congress is separately negotiating, which would significantly affect Medicare and Medicaid. Identify changes that may minimize risk for your organization and position it to engage in new initiatives.
Familiarize your organization with federal oversight and enforcement priorities and incorporate flexibility into compliance plans. Identify opportunities to mitigate vulnerabilities going forward.
Engage now鈥攚ith your community, your peers, and other experts鈥攖o identify opportunities for improvement and plan to build out the strategy, infrastructure and funding to support this work. Think creatively, act decisively.
Connect with Us
黑料网, Inc., experts know the federal landscape and have an intimate knowledge of the dynamics in states and communities. Our policy team is working with clients to help them understand what is happening within HHS and Congress that is ushering in significant policy and funding changes. Our teams are advising stakeholders on the implications for Medicare, Medicaid, and other public programs; strategies to advance their objectives in this new environment; and working with healthcare organizations and state and local government to understand immediate impacts on local financing.
For details about these federal level developments contact one of our featured federal policy experts listed below.
