红领巾瓜报 Insights | 红领巾瓜报 Weekly Roundup

Filter by topic:

Receive timely expert insights on topics you care about.

53 Results found.

What the Senate’s Budget Approval Means for the Future

On July 1, 2025, the US Senate voted 51鈥�50, to advance its version of , continuing the budget reconciliation process. Like the bill that the House passed in May, the Senate language calls for making significant changes to the Medicare, Medicaid, Affordable Care Act (ACA) Marketplace programs, as well as health savings accounts (HSAs) and publicly funded programs such as the Supplemental Nutrition Assistance Program.

Relative to the House bill, however, the Senate differs substantially in approach and scope. Thus, the bill has been sent back to the House for consideration. Speaker of the House Mike Johnson (R-LA) intends to accelerate voting with the goal of clearing the legislation in the House by July 4, 2025.

Key Differences Between House and Senate Bills

Notable differences between the House and Senate packages pertain to the following:

Medicaid Provider Payments: The Senate version includes more restrictive changes to federal Medicaid provider taxes and state-directed payment policies. These changes are expected to affect hospitals that rely on Medicaid supplemental payments. The Senate bill also would create a $50 billion Rural Health Transformation Program to mitigate financial strain on healthcare providers in rural communities. The provision includes several stipulations regarding distributions, allocations, eligibility standards, and permissible uses of the funds, which will likely prompt considerable ongoing engagement from stakeholders if signed into law, particularly among hospitals and clinics that will face substantial headwinds under other components of the legislation.
ACA Marketplaces: Like the House bill, the Senate version includes provisions to recapture full ACA subsidy amounts, restrict subsidy eligibility for certain immigrant populations, and require verification of ACA subsidy eligibility. The Senate bill neither appropriates funding for cost sharing reduction subsidies nor includes provisions regarding the Marketplace Integrity and Affordability rule, which the Centers for Medicare & Medicaid Services (CMS) finalized on June 20, 2025. In addition, the Senate bill offers several smaller flexibilities intended to increase usage of HSAs but does not include the full suite of HSA changes included in the House bill. The Senate language also does not call for expanding individual coverage health reimbursement arrangements (ICHRAs).
More Limited Medicare Package: Although the Senate language restores the ORPHAN Cures Act and adds a modest one-year payment increase under the Medicare Physician Fee Schedule (PFS), the bill omits a number of significant Medicare policies included in the House version, including a much broader PFS investment tied to the Medicare Economic Index, as well as multiple pharmacy benefit manager (PBM) reforms under Medicare Part D. The Senate legislation also excludes two Medicaid PBM provisions that the House had included.

Estimates from the Congressional Budget Office

The Congressional Budget Office (CBO) has provided several of the cost and coverage impacts of the healthcare and tax provisions in multiple versions of the reconciliation legislation. CBO has provided cost estimates for the , as well as the Senate but has yet to release information on the final Senate version. Of note, CBO estimated the following:

The Medicaid, Medicare, and ACA related provisions in the Senate substitute amendment would reduce healthcare spending by approximately $1.15 trillion over the next 10 years.
The House bill would, by 2034, add 10.9 million people to the number of uninsured individuals in the United States.

What to Watch

Stakeholders should plan for the financial, policy, and operational impacts of the many provisions that could be enacted, including:

New administrative requirements for enrollment that will place additional obligations on individuals seeking coverage and which will require more state resources to implement and manage. Community engagement and work requirements are scheduled to take effect December 31, 2026.
Downward Medicaid financial pressures due to fewer federal funds, which will stress state budgets and states鈥� ability to maintain existing programs. This situation could lead some states to scale back eligibility for Medicaid, limitenrollment for optional programs, or some combination of these. Additionally, states could be expected to address increases in uncompensated care among their providers.
A pause on implementation of previously finalized regulations that streamlined the Medicaid enrollment process for individuals.

The combination of the House and Senate reconciliation bills and the recently finalized Marketplace Program Integrity and Affordability rule indicate an uncertain future for cost sharing subsides and enhanced premium tax credits in Marketplace programs. Healthcare stakeholders should prepare for the impact of the expiration of the enhanced premium tax credits would have on benefit packages, enrollee risk profiles, uncompensated care, and other key issues affecting access, cost, and outcomes.

Connect with Us

To learn more about the these policy changes and the impact on your organization,聽contact our featured experts below.

CSR Funding, Budget Debates, and the Future of Marketplace Affordability

Read Blog

In May 2025, the US House of Representatives passed a budget bill that includes funding for cost-sharing reduction (CSR) payments, marking a potential end to the 鈥渟ilver loading鈥� practice that has shaped pricing in the Affordable Care Act (ACA) Marketplace pricing since 2017. The US Senate is now considering this legislation as part of a broader budget reconciliation package that includes major Medicaid reforms, such as new work requirements and changes to eligibility and financing rules.

This evolving policy landscape has significant implications for states, payers, providers, and consumers. Wakely, an 红领巾瓜报 Company, recently published , which outlines how reinstating CSR payments could reshape ACA marketplace plan pricing, enrollment patterns, and federal subsidy flows. It also highlights the operational and financial risks stakeholders must prepare for in 2026.

Broad Loading and Silver Loading

Because CSR loading increases premium costs on silver plans that determine subsidies, they also increase federal payments for premium tax credit (PTC) subsidies. Guidance from the US Department of Health and Human Services on silver plan pricing has evolved over time. Three types of CSR loading are occurring in ACA markets, specifically:

Broad loading: Increasing premiums for all metal level qualified health plans (QHPs) in the individual market to collect enough revenue to offset the CSR costs of the silver plan variants enrollees
Two means of silver loading:
- Increasing premiums for only silver QHPs in the individual market to collect enough revenue to offset the CSR costs of the silver plan variant enrollees
- Raising premiums, functionally, for only on-exchange silver QHPs

As discussed in the Wakely paper, the impact of silver loading is that the federal government is likely paying out more in additional PTC subsidies than would be paid if CSR payments were fully funded. On Friday, May 2, 2025, the Centers for Medicare & Medicaid Services (CMS) released guidance related to silver loading and CSR payments for 2026 rate filings. This action was urgently needed, especially for states with May filing deadlines.

What鈥檚 at Stake

If Congress does appropriate funding for CSR payments, some issuers will be reimbursed for the difference in cost sharing between standard and CSR-enhanced silver plans. Issuers that cover nonemergency pregnancy termination services, would be ineligible for CSR payments; however, as the Wakely paper indicates, these payments would not cover the additional utilization driven by richer benefits. For example, it is anticipated that a member in a 94 percent actuarial value CSR plan will use more services (i.e., four primary care visits versus three in a standard plan), but reimbursement would only reflect the cost-sharing difference鈥攏ot the increased volume of care.

States like Georgia and New Mexico, which mandate silver loading, could see significant shifts in premium relativities and enrollment behavior. Wakely鈥檚 modeling suggests that changes in CSR policy鈥攅specially if paired with the expiration of enhanced premium subsidies at the end of 2025鈥攃ould lead to higher net premiums, reduced enrollment, and a deterioration in risk pool morbidity.

What to Watch

The Senate鈥檚 deliberations will determine whether CSR funding is restored and could have significant implications on whether enhanced premium subsidies are extended beyond 2025. These decisions will directly affect the following:

2026 rate filings and benefit designs
Marketplace affordability and enrollment stability
State reinsurance funding and 1332 waiver dynamics
Consumer costs and plan switching behavior

Wakely鈥檚 analysis also cautions that if CSR funding is restored without accounting for induced utilization, issuers may still need to price for higher service use鈥攑otentially leading to premium volatility. In addition, if broad loading is mandated instead of silver loading, it could raise premiums across all metal tiers and reduce the value of premium tax credits for many enrollees.

Key Considerations for Stakeholders

States聽should assess how CSR policy changes affect reinsurance programs, waiver funding, and Medicaid redeterminations.
Payers聽must prepare for multiple pricing scenarios and evaluate how changes in subsidy structures influence enrollment and risk adjustment, 1332 reinsurance programs, and overall market risk.
Providers聽should anticipate shifts in patient mix and utilization (i.e., more uncompensated care with more uninsured patients).
Advocates聽need to monitor how policy changes affect access and affordability for low-income and underserved populations.

These developments also create more opportunities for movement between Medicaid, Marketplace, and uninsured populations, underscoring renewed opportunity for integrated eligibility systems and coordinated outreach.

Connect with Us

红领巾瓜报 (红领巾瓜报), experts are actively advising stakeholders on how to navigate these complex changes. Whether you鈥檙e a state policymaker, health plan executive, provider leader, or advocate, we can help you assess the impact and plan strategically.

These issues will also be explored in depth at the聽红领巾瓜报 Conference in October 2025. To discuss how these developments will affect your organization, contact our featured expert below.

Evolving Medicaid Work Requirement Policies: Essential State Actions to Prepare

Read Blog

On May 22, 2025, the US House of Representatives advanced a comprehensive legislative package that includes expansive changes to healthcare spending and tax policies. The , will be subject to further revision in the Senate 鈥� and potentially again in the House 鈥� before it can be sent to the president for his signature. If enacted, the legislation would have significant implications for the Medicaid program, including a nationwide work and community engagement requirement. The House-passed bill establishes a deadline of December 31, 2026, for implementation, but individual states could move earlier.

As state legislatures pass work requirement bills, governors consider executive actions, and Congress contemplates revisions to the Medicaid work mandate, vetting key implementation issues may significantly affect the direction of related policies. Even before implementation, states must test operations, enable systems, and establish connections to beneficiaries to reduce potential implementation missteps, inappropriate disenrollments, and litigation risks.

If the goal of Medicaid work requirement policies is to stimulate connections between health benefits and employment/workforce, building state and federal capacities to support these approaches is critical to effectuating that change. In the remainder of this article, 红领巾瓜报 (红领巾瓜报), experts focus on the operational dynamics that need to be discussed, tested, and built as states begin introducing work and community engagement initiatives.

Federal Policies and Early State Actions on Work Requirements

The House bill would require all states to implement work and community engagement requirements for adults without dependents for at least 80 hours per month.[1] Employment, work programs, education, or community service (or a combination of those activities) would satisfy the requirement.

The work requirements in the House-passed legislation would apply only to individuals between the ages of 19 and 64 without dependents, and the following groups are exempted:

Women who are pregnant or entitled to postpartum medical assistance
Members of Tribes
Individuals who are medically frail (i.e., people who are blind, disabled, with chronic substance use disorder, has serious or complex medical conditions, or others as approved by the Secretary of the US Department of Health and Human Services)
Parents of dependent children or family caregivers to individuals with disabilities
Veterans
People who are participating in a drug or alcoholic treatment and rehabilitation program
Individuals who are incarcerated or have been released from incarceration in the past 90 days

In addition, individuals who already meet work requirements through other programs, such as Temporary Assistance for Needy Families (TANF) or the Supplemental Nutrition Assistance Program (SNAP), would be exempt. However, the House-passed version would make the eligibility verification and work requirements for SNAP more stringent and shift program costs to these states, which would affect cross-functional eligibility. The legislation also includes temporary hardship waivers for natural disasters and areas with an unemployment rate greater than 8 percent (150 percent of the national average).

Though the federal budget package has received a great deal of attention, at least 14 states already have moved forward (see Table 1) in advance of the current federal debate by passing laws and submitting work requirement demonstration requests to the Centers for Medicare & Medicaid Services (CMS).

Table 1. A Review of 2025 States鈥� Approaches to Work Requirements in Medicaid

Status	State	Population Criteria	Requirements	Exemptions/ Notes	Public Comment
Work Requirement Request Submitted	Arizona	Ages 19鈭�55	80 hours/month	Multiple exemptions; 5-year lifetime limit	Closed
Work Requirement Request Submitted	Arkansas	Ages 19鈭�64; covered by a qualified health plan (QHP)	Data matching to assess whether on track/not on track	No exemptions	Closed
Work Requirement Amendment Request Submitted	Georgia	Ages 19鈭�64; 0-100% FPL	80 hours/month	Already has approval but is requesting reporting be changed from monthly to annually and adding more qualifying activities	Federal comment period open through June 1, 2025
Work Requirement Request Submitted	Ohio	Ages 19鈭�54; expansion adults	Unspecified hours	Limited list of exemptions	Closed
Legislation Passed	Idaho	Ages 19鈭�64	20 hours/week required	Limited list of exemptions	鈥�
Legislation Passed	Indiana	Ages 19鈭�64; expansion adults	20 hours/week required	Limited list of exemptions	鈥�
Legislation Passed	Montana	Ages 19鈭�55	80 hours/month required	Multiple exemptions	鈥�
Ballot Initiative Passed	South Dakota	Expansion adults	鈥�	2024 ballot initiative asking voters for approval for state to impose work requirements for expansion adults passed	鈥�
Legislation Pending	North Carolina	鈥�	鈥�	Pursue requirements that are CMS approvable	鈥�
Work Requirement Request Draft	Iowa	Ages 19鈭�64; expansion adults	100 hours/month required	Limited list of exemptions Separate bill would end expansion if work requirements are withdrawn/ prohibited (80 hr./mo.)	Closed
Work Requirement Request Draft	Kentucky	Ages 19鈭�60; no dependents; enrolled more than 12 months	Connected to employment resources	Multiple exemptions	State comment period open through June 12, 2025
Work Requirement Request Draft	South Carolina	Ages 19鈭�64; 67%鈭�100% FPL	Specified activities (work specific is 80 hours/month)	Limiting participation to 11,400 individuals based upon available state funding	State comment period open through May 31, 2025
Work Requirement Request Draft	Utah	Expansion adults ages 19鈭�59	Register for work, complete an employment training assessment and assigned job training, and apply to jobs with at least 48 employers within 3 months of enrollment	Several exemptions, largely aligned with federal SNAP exemptions	State comment period open through May 22, 2025
Anticipated Waiver Request	Alabama	Non-expansion population	鈥�	Potential to resubmit previous work requirement demonstration request	鈥�

Key Questions to Guide State Policy Decisions

Considerable research and findings from previous Medicaid work requirement initiatives can help prepare policymakers to implement a potential new phase of Medicaid work requirement policies. Some previous findings include the high cost of administration relative to potential savings, the importance of systems that support foundational items like logging an enrollee鈥檚 compliance activities and exemptions, as well as developing an efficient appeals process. The Medicaid and CHIP Payment and Access Commission (MACPAC), General Accounting Office, National Institutes for Health, and multiple researchers have published assessments regarding previous experiences that could prove useful in policy making.

红领巾瓜报 experts have experience identifying key issues and considerations, analyzing options, and implementing critical issues and for state leaders and stakeholders who will be responsible for implementing work requirements. Several of these issues are described below and in more detail in the 红领巾瓜报 blog, Building State Capacities for Medicaid Work and Community Engagement Requirements.

Exemptions, particularly medical frailty definitions and assessments. The federal government and states will need to identify individuals classified as 鈥渕edically frail鈥� and make them exempt from the mandates. Medically frail individuals include those with chronic, serious, or complex medical conditions. Various methods can be employed to identify these people.
Developing and streamlining systems and processes to promote continued coverage for eligible individuals. The Medicaid unwinding from the COVID public health emergency taught policymakers lessons about the complexities of Medicaid systems, patient engagement, and reliable methods of member outreach. State Workforce Commissions and Departments of Labor are clear partners, as they manage integrated eligibility systems and data-sharing agreements across programs like SNAP and TANF, which also serve many Medicaid participants. These and other partnerships will need further exploration.
Clinical and utilization data that promote eligibility assessment. Many, but not all, individuals with chronic diseases may be exempt from the requirements. Knowing the health status and chronic conditions of the populations affected and the conditions that qualify people for exemption are variables as implementation questions, like the definition of medically frail, are addressed.
Anticipated need for effective Medicaid managed care engagement in work requirements/community engagement initiatives. Approximately of Medicaid expansion enrollees are members of comprehensive managed care organizations (MCOs). States will need to review the scope of existing vendor contracts as well as determine the need for new services, roles, third-party reporting, oversight, and potential exemptions for emergencies. Work requirements can disrupt MCO risk pool stability and care coordination. MCOs have a financial incentive to drive down inappropriate disenrollments and are uniquely positioned to support state responsibilities, including maintenance of up-to-date contact information.
Measuring impact and adapting policies as needed. Dynamic metrics that provide actionable information to federal and state policy makers will support effective oversight and monitoring.

Connect with Us

红领巾瓜报 helps stakeholders鈥攊ncluding state agencies and their partners鈥攎anage the challenges of implementing new Medicaid or CHIP initiatives, with a focus on ensuring efficient integration and improvements in outcomes. Our teams are adept at developing materials for and supporting stakeholder engagement from design to implementation, which is a critical aspect for work and community engagement initiatives and other potential new eligibility and renewal requirements.

For support tracking federal and state level developments and enhancing your organization鈥檚 strategy and preparations for new Medicaid requirements, contact our featured experts below.

[1]聽U.S. Congress. House. Introduced May 20, 2025.

CMS Seeks Input on the Future of Digital Health: What the Health Technology Ecosystem RFI Means for Stakeholders

Read Blog

This week, in our In Focus section, health IT experts at Leavitt Partners, an 红领巾瓜报 Company, review the recently released Request for Information (RFI) from the Centers for Medicare & Medicaid Services (CMS) and the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health (ASTP/ONC), titled (CMS-0042-NC). The RFI, published May 16, 2025, signals a renewed federal focus on advancing digital health tools, improving data interoperability, and supporting patient-centered innovation.

Notably, this RFI aligns with the vision laid out in Leavitt Partners鈥� policy blueprint, developed in collaboration with a broad coalition of healthcare stakeholders. The paper outlines a future in which patients and providers benefit from seamless digital experiences, real-time data exchange, and reduced administrative burden. The RFI reflects many of the same priorities鈥攕uch as expanding FHIR庐 Application Programming Interfaces (APIs), improving provider directories, and promoting digital identity solutions鈥攖hat were highlighted in the paper as essential to modernizing the healthcare system.

Why This RFI Matters

The RFI invites public input on how CMS and ASTP/ONC can strengthen the digital health ecosystem for Medicare beneficiaries. It builds on years of federal investment in interoperability. The agencies are now seeking feedback on how to reduce barriers to data access, promote innovation in digital health products, and align technology with value-based care goals.

This is a pivotal opportunity for stakeholders to shape the future of digital health policy鈥攅specially as CMS continues to explore how APIs, digital identity, and patient-facing tools can improve care delivery and outcomes.

Key Themes in the RFI

The RFI is broad in scope, but several themes stand out, including:

Addressing Patient and Caregiver Needs: The RFI asks patients which digital tools would be most helpful to them and their caregivers in managing their health needs, navigating care, and accessing all relevant health information in one place. It asks what features are most needed, what is missing from current apps, and how CMS can support adoption, especially for Medicare beneficiaries with limited digital experience. CMS is exploring how to make more data鈥攂eyond claims and clinical data鈥攁vailable through APIs. It also explores the role that CMS should play in reviewing and measuring the real-world impact of these tools on outcomes and costs. They also are considering how to promote the use of secure, standardized digital identity credentials (e.g., Login.gov, ID.me) to streamline patient access. Feedback also is sought on how TEFCA, FHIR APIs, and health information exchanges (HIEs) can better support seamless data exchange.
Provider Adoption of Digital Health Tools: CMS is exploring how to help providers, especially those in rural areas, adopt digital health tools by addressing barriers like workflow integration, data access, and interoperability. CMS is also looking to improve administrative functions like scheduling and intake through third-party apps. In addition, CMS is seeking to understand which FHIR APIs and capabilities are already being supported or utilized in provider systems. They are also interested in understanding how providers might accept standardized digital identity credentials from patients and any challenges that might inhibit its adoption. ASTP/ONC is also seeking information on revisions to the information blocking requirements.
Engaging Payers: The RFI invites payers to share how they can support interoperability and digital innovation, including through the use of APIs, digital identity credentials, and real-time access to clinical quality data. CMS is also interested in how payers can reduce provider burden, support value-based care (VBC), and contribute to a more connected digital health infrastructure. Feedback is requested on TEFCA participation, payer-to-payer data exchange, and the potential for a nationwide provider directory.
Advancing VBC Organizations: The RFI emphasizes the role of digital health in supporting alternative payment models (APMs) and accountable care organizations. CMS is seeking feedback on which digital capabilities are most essential for success in VBC鈥攕uch as care coordination, quality measurement, and patient engagement鈥攁nd how certification criteria and data standards can better align with these needs. The agencies are also exploring how to reduce complexity for APM participants while maintaining flexibility and data access.
Enabling Technology Vendors, Data Providers, and Networks: The RFI requests feedback from developers, data aggregators, and HIEs on how to unlock innovation through better access to CMS data, improved API standards, and streamlined certification processes. The RFI asks which technical and policy changes would enable more effective digital health products, recommendations to improve interoperability across networks, and means of supporting the viability of data exchange infrastructure.

Implications for Stakeholders

This RFI is more than a technical exercise; it is a strategic signal. The Trump Administration is maintaining momentum behind VBC and digital transformation. Stakeholders should consider:

Submitting comments聽to CMS by the June 16, 2025, deadline.
Assessing internal readiness聽to adopt or develop digital tools that align with CMS鈥檚 vision.
Engaging in policy discussions聽regarding digital identity, data standards, and patient access.
Monitoring related RFIs, including the exploring the potential use of HL7 FHIR standards to support the submission of study data derived from real-world data sources鈥攕uch as electronic health records, claims, and registries鈥攆or regulatory purposes.

Next Steps

红领巾瓜报, Inc. (红领巾瓜报), encourages healthcare organizations to review the RFI and consider how their experiences, innovations, and challenges can inform CMS鈥檚 next steps. This is a rare opportunity to influence the infrastructure that will shape digital healthcare for years to come.

For support in drafting comments or understanding how this RFI intersects with your organization鈥檚 strategy, contact our Leavitt Partners health IT experts below.

CMS Announces New Innovation Agenda: Here鈥檚 What You Need to Know

Read Blog

On May 13, 2025, the Centers for Medicare & Medicaid Services (CMS) published its new for the CMS Innovation Center. The strategy builds on the lessons of the first 15 years of the Innovation Center, while presenting a significant pivot in policy direction, which emphasizes evidence-based prevention, consumer engagement, and tech-enabled care, while prioritizing financial performance over broad participation.

The provides high-level direction on the Trump Administration鈥檚 vision for the next phase of value-based payment reform under the leadership of CMS Administrator Dr. Mehmet Oz and Innovation Center Director Abe Sutton. They intend to 鈥渄ouble down on our commitment to value-based care and take the learnings from the[se] previous investments to build a health system that empowers people to drive and achieve their health goals and Make America Healthy Again.鈥� Notably, the strategy also aligns with goals central to the Trump Administration鈥檚 .

This new direction affirms the administration鈥檚 commitment to continue advancing value-based care and opens additional opportunities for organizations seeking to enhance the delivery of services that drive positive outcomes. 红领巾瓜报 (红领巾瓜报), experts will be tracking the implementation of the Innovation Center鈥檚 new strategy, including expected forthcoming models, movement toward greater levels of downside risk, and changes to existing models to align with the administration鈥檚 priorities. In this article, our experts review the strategy and provide insights on key takeaways for stakeholders.

New Strategy Overview

CMS leaders view the Innovation Center agenda as a framework for accelerating healthy behaviors, leveraging the agency鈥檚 authority to test new approaches designed to incentivize and engage stakeholders. According to CMS officials, the Innovation Center 鈥渨ill work expeditiously toward the future of health鈥攂uilding a system in which people are empowered to achieve their health goals and providers are incentivized to compete to deliver high-quality, efficient care and improve the health outcomes of their patients.鈥�

The strategy has three interrelated, foundational pillars:

Promoting evidence-based prevention
Empowering people to achieve their health goals
Driving choice and competition.

Table 1 provides more detail on each pillar.

In addition to the new agenda, CMS released a seeking industry input on strategies that can better leverage data and technology to empower consumers. The focus of the RFI aligns with the Innovation Center鈥檚 strategic pillars to use tools, information, and processes that better connect people to their health data and allow them to make informed health decisions alongside their providers.

Table 1. CMMI鈥檚 Interrelated Strategic Pillars

Takeaways and Considerations

Critical to CMS鈥檚 approach is the belief that empowering individuals to make their health decisions鈥攖hrough incentives, better data access, and more flexible options鈥攃an lead to better health outcomes and lower overall costs. This shift reflects an evolution in healthcare policy that places greater emphasis on personal accountability and private sector collaboration鈥攁 key theme that is emerging across the administration鈥檚 policy initiatives.

Consumer Engagement. One of the most notable aspects of the new Innovation Center strategy is the promotion of consumer engagement; it places more focus on direct consumer engagement through education and incentives compared with earlier initiatives. This is one area in which the Innovation Center plans to collaborate with the private sector to develop consumer-facing tools (e.g., mobile apps, nudges toward healthy behaviors, etc.).

The focus on consumer engagement also presents opportunities for organizations to enhance their customer experience. By understanding the needs and preferences of their patients, organizations can tailor their services and care models to better meet those demands. This personalized approach not only improves patient satisfaction, but also drives continuity of care, ultimately contributing to long-term improvements in health.

Data and Technology. The new strategy also emphasizes the importance of data, indicating intentions to better equip organizations that participate in the model with data that can inform decisions and optimize their processes. CMS officials are examining policies and collaborations that will empower private sector organizations, including model participants, researchers, and technology vendors, to develop innovative data-driven solutions to drive efficiencies and improved health.

To that end, the May 16, 2025, Request for Information (RFI) from CMS and the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health (ASTP/ONC), (CMS-0042-NC), focuses on Medicare beneficiaries’ use of technology to improve health outcomes. The RFI, which 红领巾瓜报 experts analyze here [insert bookmark or link to the other In Focus article] underscores the administration鈥檚 intentions of taking 鈥渂old steps to modernize the nation鈥檚 digital health ecosystem.鈥�

Medicare Advantage. The Innovation Center鈥檚 new strategy indicates that stakeholders should expect more models that address Medicare Advantage (MA). The agency stated that 鈥渇eatures of a model could include testing changes to payment for MA plans, such as testing the impact of inferred risk scores, regional benchmarks, or changes to quality measures that better align with promoting health.鈥� Additionally, the strategy references a forthcoming specialty-focused longitudinal care model within MA and Medicaid, signaling intentions to drive multi-payer alignment.

Saving Federal Tax Dollars. Another major aspect of the strategy is 鈥減rotecting federal taxpayers.鈥� This goal reflects a continued emphasis on total cost of care accountability and indicates a more aggressive shift to downside risk. The Innovation Center says it will 鈥渞equire all models to have downside financial risk and require providers to assume some of the financial risk..鈥� Additional provisions of protecting tax dollars include reducing role of state governments in rate setting, simplifying model benchmark methodology, and ensuring 鈥減roper and nondiscriminatory provision of funds for health care services.鈥�

What to Watch

For healthcare organizations, the Innovation Center鈥檚 agenda signals a need to prioritize consumer-centric models. Hospitals, providers, and insurers should anticipate the following:

Increased focus on preventive care initiatives to align with new model designs
More robust data-sharing and technology requirements, meaning investments in patient-focused digital tools will become essential
New opportunities in MA, given potential payment model innovations affecting plan structures and risk-adjusted reimbursement

Healthcare stakeholders should monitor possible developments related to the strategy.

While details on specific strategies have yet to emerge, the Innovation Center it plans to provide more information on new models, as well as changes to existing models, in the coming months.
The Innovation Center has not provided a goal akin to the previous administration鈥檚 effort to have 100 percent of Medicare beneficiaries in accountable care relationships by 2030. It is still unknown whether these goals are forthcoming or if this will remain vague.
Stakeholders are still awaiting clarity on changes to existing models, including key models set to conclude at the end of 2026 (i.e., ACO REACH and Kidney Care Choices).
Strategy language indicates that the agency may develop payment innovation in prescription drugs, medical devices, and technology.

Connect With Us

The 红领巾瓜报 Annual Conference, , October 14-16, 2025, in New Orleans, LA, will feature discussions on how the new strategy is reshaping the healthcare system and care delivery for patients, particularly the opportunities to revisit provider contracts with MA plans and to integrate technology to advance the prevention of chronic conditions and achieve population health goals.

For more information about the opportunities and considerations the Innovation Center agenda presents for your organization, contact 红领巾瓜报鈥檚 featured experts below.

President Issues Executive Order Calling for Most Favored Nation Drug Pricing

Read Blog

On May 12, 2025, the President signed an Executive Order (EO), .鈥� The EO calls for or, in some cases, presumes a range of manufacturer, administrative and regulatory actions to reduce drug prices, but ultimate outcome remains unclear.

红领巾瓜报 experts, including Leavitt Partners, an 红领巾瓜报 company, are closely following executive agency and stakeholder responses to the EO. In this article, our experts summarize the EO and identify key considerations for healthcare stakeholders.

Policy Overview

Since his first administration, President Trump has consistently criticized disparities in brand-name prescription drug prices between the United States and other developed countries. In 2018, the previous Trump Administration issued a to institute an International Pricing Index (IPI) model targeting Medicare payments for a subset of clinician-administered drugs. The IPI model would have set a Medicare payment amount for select Part B drugs at a lower amount to align with international prices and allow for negotiation of prices, while still providing a drug add-on payment to providers consistent with historical drug costs. In November 2020, the administration issued an interim final rule (IFR) instituting an escalated version of this concept, entitled the . Both the IPI proposal and the MFN final rule, the latter of which was enjoined by the courts on largely procedural grounds and later rescinded by the Biden administration, would have been implemented under the Center for Medicare and Medicaid Innovation鈥檚 (CMMI) demonstration authority.

On May 12, 2025, the President signed an EO, , which reaffirms the Administration鈥檚 concerns regarding what it perceives to be American funding of pharmaceutical research and development 鈥渨hile foreign health systems get a free ride.鈥� In an effort to address the Administration鈥檚 concerns, the EO notes that the Administration 鈥渨ill take immediate steps to end global freeloading鈥� and that 鈥渟hould drug manufacturers fail to offer American consumers the most-favored-nation lowest price, my Administration will take additional aggressive action.鈥�

The EO outlines efforts to implement this policy, including:

Trade Efforts.聽The US Department of Commerce and United States Trade Representative (USTR) are directed to ensure that foreign countries are not engaged in actions with the effect of forcing Americans to 鈥減ay for a disproportionate amount鈥� of R&D costs.
Direct-to-Consumer (DTC) Sales at MFN Price.聽The US Department of Health and Human Services (HHS) is directed to facilitate DTC sales programs for manufacturers to offer MFN prices.
MFN Targets.聽The HHS Secretary is directed to provide MFN targets to manufacturers within 30 days with the expectation that manufacturers will 鈥渂ring prices for American patients in line with comparably developed nations.鈥�
If 鈥渟ignificant progress鈥� toward MFN pricing is not made, HHS will be directed to propose a rulemaking plan to impose it.
The order suggests that the HHS Secretary certify, on a case-by-case basis, that reimportation will pose no additional risk to public health and will result in savings, as well as to create standard mechanisms for importation. It is unclear how this direction aligns with the current statutory framework, which is focused on Canada.
Federal Trade Commission/Department of Justice Action.聽The EO calls for efforts 鈥渃onsistent with law鈥� to undertake enforcement action against anticompetitive practices identified in the prior drug pricing EO, including use of the Sherman Antitrust Act.

Key Considerations

At this stage, the scope and practical effects of the EO remain uncertain, as the administration has not yet provided details regarding the regulatory and subregulatory actions envisioned under the document. With respect to trade policy, for instance, the EO does not outline explicitly what particular tools it expects USTR or the Commerce Department to leverage in combating 鈥渇oreign freeloading.鈥�

Similarly, the EO does not elaborate on the steps that the administration plans to take in 鈥渇acilitat[ing]鈥� voluntary MFN target pricing under DTC purchasing arrangements. Such efforts could theoretically bring waivers or other regulatory flexibilities to bear, or else they could take a more hands-off approach, simply encouraging drugmakers to take action on their own.

Without further clarifications around how the administration might define or assess 鈥渟ignificant progress鈥� towards MFN pricing targets on the part of manufacturers, nor the form, manner, or timeline that 鈥渁ggressive action鈥� in the absence of such progress might take, the EO serves principally as an illustration of the President鈥檚 posture, perspective, and priorities with respect to prescription drug affordability and access.

Even in the absence of immediate pricing or payment interventions, the EO could provide a preview of future executive actions aligned with the document鈥檚 focus. Such actions could include CMMI models building on the IPI or MFN initiatives from the first term, explicit trade negotiation priorities, regulatory measures related to DTC purchasing arrangements, FDA reimportation program flexibilities, or any number of other drug-related policies.

Our experts will continue to monitor these activities as they progress.

Connect With Us

For details regarding the EO and potential impact on the healthcare sector, contact our featured experts below at聽[email protected]

House Committees Consider Policies to Meet Budget Reconciliation Instructions

Read Blog

This week, key committees in the House of Representatives released recommendations for legislative language that meets their federal savings and spending targets required in the fiscal year (FY) 2025 budget resolution. On May 11, 2025, the House Energy and Commerce Committee released legislation鈥攁nd subsequently a substitute amendment鈥攖hat contains several substantive Medicaid proposals designed to address eligibility and enrollment; financing; fraud waste, and abuse; and to institute mandatory work and community engagement requirements and cost sharing. The Committee completed its markup on May 14, 2025, voting to approve the provisions in the substitute amendment.

The release of text and committee markups are key steps in Congress鈥檚 budget reconciliation process; however, proposals may change during Senate proceedings.

红领巾瓜报 (红领巾瓜报), and Leavitt Partners, an 红领巾瓜报 company, are tracking these developments and analyzing the extensive health and health-related legislative text, including the Medicaid, Medicare, and Affordable Care Act (ACA) Marketplace proposals. Below, we review the status of congressional efforts and key policies.

Background

The budget reconciliation process is a powerful tool for enacting significant fiscal policy changes, as it allows for expedited consideration and passage of budget-related legislation. It has been used in the past to enact major tax reforms, healthcare legislation, and other important budgetary measures.

In 2025, Congress has been actively working to develop its budget bills through a series of steps. The House adopted a budget resolution on February 25, 2025, which sets the framework for federal spending, revenue, and the debt limit for fiscal year 2025 and outlines budgetary levels for the following years through 2034. The Senate passed an amended version of the budget resolution on April 5, 2025. The Senate鈥檚 amendments included reconciliation instructions that require $4 billion in gross deficit reductions and allow a $5.8 trillion net deficit increase. On April 10, 2025, the House agreed to the Senate鈥檚 amendments with a vote of 216鈭�214. This agreement set the stage for the development of a reconciliation bill.

House Energy and Commerce Markup

On May 14, 2025, the House Committee on Energy and Commerce completed its second day of legislative language to comply with the Concurrent Resolution on the Budget for Fiscal Year 2025, voting to advance the proposals out of committee. The committee鈥檚 proposal excluded certain significant structural reforms that had generated concern among some members and stakeholders, such as broad reductions in the federal matching rate (enhanced federal matching assistance percentage (FMAP)) for Medicaid expansion populations, per-capita caps on federal Medicaid cost growth, or reductions in the safe harbor threshold for state Medicaid provider taxes. The proposal does, however, contain more than a dozen provisions that would reduce federal health care spending by $715 billion with the funding reductions mostly focused on Medicaid, which the Congressional Budget Office projects will reduce the federal share of Medicaid spending, including:

Adding mandatory work and community engagement requirements for individuals ages 19鈭�64 without dependents, subject to exceptions for pregnant women, people who are medically frail, people with disabilities, people in compliance with other government program work requirements, people living in areas experiencing a temporary hardship, and other individuals
Adding cost sharing for beneficiaries in the expansion population who earn more than 100 percent of the Federal Poverty Level, not to exceed $35 per item or service
Pausing implementation of several final rules published during the Biden Administration, including: the final rule published September 21, 2023, 鈥淪treamlining Medicaid; Medicare Savings Program Eligibility Determination and Enrollment鈥�; the April 2, 2024 rule, 鈥淪treamlining the Medicaid, Children鈥檚 Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes鈥�; and the May 10, 2024, final rule, 鈥淢inimum Staffing Standards for Long Term Care Facilities and Medicaid Institutional Payment Transparency Reporting鈥�
Adding provider screening requirements
Increasing frequency of eligibility redeterminations for certain individuals and adding enrollee address verification policies
Reducing expansion FMAP for certain states that provide Medicaid coverage to undocumented individuals and families, regardless of the source of funding
Preventing certain spread pricing arrangements in Medicaid between states and pharmacy benefit managers
Restricting funding for certain essential community providers that furnish family planning services, reproductive health, and related healthcare services
Ending a temporary increased FMAP to new states adopting Medicaid expansion, revising policies governing the use of Medicaid provider taxes, and payment limits for state directed payments

Committee Markups

Various other House committees have begun holding markups for the reconciliation package. The Committee on Ways and Means conducted its markup on May 13, 2025, to discuss its of the reconciliation bill, which involves $4.5 trillion in deficit increases. The initial Ways and Means proposal did not include many significant healthcare proposals, but on May 12, 2025, the committee released a substitute amendment that includes several changes that would affect private insurance coverage and Medicare. Key provisions include:

Changes to Medicare and ACA premium tax credit (PTC) eligibility requirements related to immigration status
Improvements to ACA PTC eligibility verification checks
Changes to Health Savings Account flexibilities
Codification and renaming of individual coverage health reimbursement accounts, which serve as a defined contribution that employees can use to purchase insurance in the individual market

Other committees, such as the Education and Workforce, Judiciary, Armed Services, and Homeland Security Committees, also have conducted markups and approved their respective portions of the reconciliation bill.

Connect With Us

These steps are part of the ongoing process to finalize the budget and reconciliation legislation for FY 2025. Our federal policy experts with Leavitt Partners and across 红领巾瓜报 are monitoring the legislative policies and ongoing negotiations in Congress and with the administration. They work with healthcare organizations and industry to plan for the range of scenarios and policies Congress is debating.

For more information about the impact of these policies, contact our featured federal policy experts聽below.

HHS Begins Reorganization: Actions Focus on Efficiency, Establishment of Administration for a Healthy America

Read Blog

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

红领巾瓜报, 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.

Spotlight on Development of President Trump鈥檚 Children鈥檚 Health Strategy

Read Blog

This week, our In Focus section highlights President Trump鈥檚 Make America Healthy Again (MAHA) , which is designed to address the challenges driving chronic diseases in the United States. Our article delves into the key components of the order, presents a data snapshot about the state of children鈥檚 health, and discusses implications for stakeholders seeking to prepare for and inform the transitions impacting the future of children鈥檚 health.

Presidents can use executive orders to communicate their priorities and set a framework and timelines for federal agency actions. Historically, these orders have provided strong signals for the initiatives and policy direction that federal departments and agencies will pursue. 红领巾瓜报 (红领巾瓜报), experts are monitoring the MAHA directive and several other executive orders, alongside other Trump Administration actions.

Executive Order: Making Children Healthy

On February 13, 2025, President Trump signed an executive order establishing the Make America Healthy Again Commission, chaired by US Department of Health & Human Services (HHS) Secretary Robert F. Kennedy, Jr. The commission, which builds on the Secretary鈥檚 prior work, is charged with combating 鈥渃ritical health challenges facing citizens, including the rising rates of mental health disorders, obesity, diabetes, and other chronic diseases.鈥�

Initially, the commission will focus on studying and addressing childhood chronic diseases. The order directs the commission to release within 30 days an assessment that summarizes what is known about the childhood chronic disease crisis, identifies gaps in knowledge, and includes international comparisons. This report will serve as the foundation for developing a strategy to improve the health of children, which is due within 180 days of the order.

Data Snapshot: Childhood Chronic Conditions

Evaluating existing data and identifying gaps in data for children are critical initial steps toward developing a comprehensive and evidence-driven federal policy agenda. At present, 90 percent of the $4.5 trillion in annual US healthcare expenditures are used to provide services to people with chronic and mental health conditions. Many of the risk factors for developing these conditions begin in childhood and some are preventable. For example:

鈥痑蹿蹿别肠迟蝉听, putting them at risk of chronic diseases such as type 2 diabetes, heart disease, and some cancers. More than one in three young adults ages 17鈭�24 are too heavy to join the US military.鈥疶he youth obesity rate from 2017鈭�2020 was聽, a 42 percent increase from the rate in 1999鈭�2000.聽Lifestyle choices, combined with social and environmental factors like access to healthy foods and neighborhood walkability and safety can significantly reduce the risk of developing obesity.聽
In 2022, diabetes and the complications associated with it accounted for $413 billion in total medical costs and lost wages in the United States. While few children have type 2 diabetes, nearly one in five adolescents (12鈭�18 years old) have prediabetes and may develop diabetes in adulthood. Like obesity, both personal choices and adverse social and environmental factors can increase the lifetime risk of developing diabetes.聽
础辫辫谤辞虫颈尘补迟别濒测听聽in the United States have asthma, which is incurable but can be managed. Asthma is one of the main causes for missed school days among children. Many US schools have poor indoor air quality, which can expose children to allergens, irritants, and triggers such as mold, dust, and pests. Conditions in children鈥檚 homes also can exacerbate asthma.

How Federal Programs Impact Children鈥檚 Health

Numerous federal programs directly and indirectly affect children鈥檚 health. Examples include:

Nationally, more than 38 percent of children have Medicaid coverage, with rates exceeding 50 percent in some states and territories (e.g., Louisiana, New Mexico, Puerto Rico). Medicaid鈥檚 requirement to cover Early Periodic Screening, Diagnostic and Treatment (EPSDT) has long been the vehicle for addressing the chronic healthcare needs of children on Medicaid. For example, for children with asthma, in addition to covering medications to prevent and treat exacerbations, some states will reimburse providers for conducting home health assessments to identify and remediate triggers in the home. In addition, federal funding through both Medicaid and US Department of Education supports school nurses and school-based health centers, which can be critical resources in addressing the chronic healthcare needs of students, such as the administration of Insulin or providing inhalers to children experiencing asthma.聽
To receive funding through the National School Lunch and School Breakfast programs, schools must provide meals aligned with the 鈥溾€� established by US Department of Agriculture, which specifies the amount of food among various groups and an age-based maximum for calories, saturated fat, and sodium. Under current guidelines, by 2027, school meals also will be expected to comply with limits on added sugars.聽
Participants in the Special Supplemental Nutrition Assistance Program for Women, Infants, and Children (WIC), which provides participants with certain foods to meet their nutritional needs, have a聽聽for preterm birth, low birthweight infants, and infant mortality.聽

Federal programs affect children鈥檚 home and school environment in other ways, and the health implications of those funding choices may not be explicitly recognized or prioritized. For example:

Housing assistance programs in some cases prevent families from experiencing homelessness but may place them in living situations where exposure to environmental hazards such as mold, pests, or pollution and neighborhood factors like crime and lack of walkability may adversely affect their health.聽
Some federal agriculture programs are specifically designed to make nutritious foods available (e.g., Gus Schumacher Nutrition Incentive Program, or聽), while others聽聽without specifically bringing a health lens to those programs.

Implications for Stakeholders

The President has directed that the strategy address 鈥渁ppropriately restructuring the Federal Government鈥檚 response to the childhood chronic disease crisis, including by ending Federal practices that exacerbate the health crisis or unsuccessfully attempt to address it, and by adding powerful new solutions that will end childhood chronic disease.鈥� Though we do not know what the Make our Children Healthy Again Assessment and Strategy will recommend, we anticipate it will present both opportunities and risks for organizations focused on children鈥檚 health. As the commission begins its work, organizations can take the following actions:

Consider policy opportunities: Review your organization鈥檚 strategic plan as well as your operational and policy priorities and consider how they may fit into this framework. This could be the time to suggest changes to federal grants you receive or federal regulations or requirements that negatively affect your ability to keep children healthy.聽
Prepare for potential funding disruptions: It is possible that programs you rely on will have changes in scope or funding levels. Review your offerings for children with chronic conditions and identify substitutes or complements to your main priorities. Consider partners you might work with to keep work going that may not have the same level of federal support in the future.聽
Be prepared to share the real-world impacts of policy changes: Begin gathering data, stories, and compelling information to share about chronic conditions affecting children that can be used in future public comment opportunities, shared with the media, and discussed with your federal, state, and local representatives. Think about how to talk about these issues in a clear and compelling way that will resonate with each of those audiences.聽
Find partners and allies: As you consider the policy opportunities and risks, think about other organizations that share your interests and how you can work with them in complementary ways. It can be compelling to policymakers when stakeholders who might not naturally be aligned on other issues can unite around a specific policy area.聽

Connect with Us

Healthcare stakeholders with a commitment to healthy children and healthy adults have an opportunity to support the specific policies and funding opportunities that may emerge from the MAHA order. To learn more about these policy changes, the impact on your organization,鈥痑nd actions your organization can take, contact our one of our featured experts below.聽

Executive Actions and Congressional Budget Reconciliation: Trump Administration’s 2025 Healthcare Overhaul

Read Blog

This week, our In Focus section highlights how the new Administration and Congress are poised to significantly change healthcare policies, ranging from health equity and Affordable Care Act (ACA) Marketplace subsidies to Medicaid services and prescription drug costs. Stakeholders seeking to influence these potential changes should plan to engage quickly. Today鈥檚 section covers important developments that occurred through 2 pm January 29, and healthcare stakeholders will need to remain attune to future developments impacting federal healthcare programs.

Executive Action

Over the first week of his second term, President Donald J. Trump has issued several executive orders (EOs) and presidential directives affecting healthcare stakeholders. Presidents have increasingly used EOs at the beginning of their administration to rescind policies of their predecessors and direct the federal departments and agencies to exercise their authorities in line with the president鈥檚 directives.

Though some EOs require no further action, many are just the beginning of the policymaking process, with agencies tasked with implementing the directives. This timeline can provide stakeholders with opportunities to work with to policymakers to inform how they shape the rules for compliance with these directives.

Initial EOs issued so far by President Trump include policies that:

, including:
- Executive Order 13985 of January 20, 2021, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government聽
- Executive Order 13988 of January 20, 2021, Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation聽
- Executive Order 13990 of January 20, 2021, Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis聽
- Executive Order 14009 of January 28, 2021, Strengthening Medicaid and the Affordable Care Act聽
- Executive Order 14070 of April 5, 2022, Continuing to Strengthen Americans鈥� Access to Affordable, Quality Health Coverage聽
- Executive Order 14075 of June 15, 2022, Advancing Equality for Lesbian, Gay, Bisexual, Transgender, Queer, and Intersex Individuals聽
- Executive Order 14087, of October 19, 2022, Lowering Prescription Drug Costs for Americans聽

聽the Office of Management and Budget (OMB), the Attorney General, and Office of Personnel Management (OPM) to 鈥渃oordinate the termination of all discriminatory programs,鈥� including diversity, equity, and inclusion (DEI) programs, policies, and activities in the federal government.聽
聽鈥渋llegal private-sector diversity, equity, and inclusion (DEI) preferences, mandates, policies, programs, and activities.鈥澛�
聽federal rulemaking until department heads appointed or designated by the president can review and approve the rules and withdraw rules that have been sent to but not yet published in the聽Federal Register聽so they can be reviewed.聽
聽and implement the Department of Government Efficiency (DOGE) as a temporary organization within the Executive Office of the President that reports to the White House Chief of Staff. Executive agencies are directed to establish DOGE teams of at least four employees. DOGE is intended to modernize Federal technology and software to maximize governmental efficiency and productivity.聽
聽OMB, OPM, and DOGE to submit a plan within 90 days to reduce the size of the federal government鈥檚 workforce through efficiency improvements and attrition.聽

Developments on the Federal Funding Pause

Notably, the White House OMB issued a memo () on January 27, 2025, to all agencies with instructions to temporarily pause and provide a comprehensive analysis of all activities related to obligation or disbursement of federal financial assistance programs that EOs may affect. On January 29, 2025, the administration retracted the directive for a temporary pause on federal payments, though reiterated it will continue to review federal funding.

Though it is customary for a new administration to pause communications, regulatory activity, and new funding opportunities as incoming political appointees are confirmed and policy agendas are solidified, the breadth of the federal funding pause exceeds prior orders. The first lawsuit was on January 28, and a federal judge for the US District Court for the District of Columbia quickly issued a temporary stay on the federal funding pause until at least February 3, 2025, while she considers arguments in the case.

The now-rescinded January 27 memo was scheduled to take effect at 5:00 pm ET on January 28, 2025, to give the Trump Administration 鈥渢ime to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President鈥檚 priorities.鈥� According to the memo, the pause did not apply to Medicare or Social Security payments. In a subsequent , OMB further clarified that 鈥渕andatory programs like Medicaid and SNAP [the Supplemental Nutrition Assistance Program] will continue without pause.鈥�

What to Watch: Executive Actions and Budget Reconciliation

The Trump Administration has indicated that federal programs and funding should be aligned with his administration鈥檚 priorities. Healthcare stakeholders should be prepared for additional scrutiny of future funding awards.

Meanwhile, congressional Republicans are preparing to quickly leverage the budget reconciliation process to pass legislation related to several priority areas, including taxes, immigration, and domestic energy production (see Spotlight on Congress: Budget Reconciliation Update). Budget reconciliation provides a rare opportunity to pass significant healthcare legislative changes on a party-line basis. House Republicans have begun to develop their menu of healthcare options, which range from changes to the ACA premium tax credit structure, expanding Health Savings Accounts, and changes in Medicaid financing and eligibility.

In a January 2025 ,鈥痚xperts from Leavitt Partners, an 红领巾瓜报 company, , ,&苍产蝉辫;补苍诲鈥€痙iscussed the potential health policy priorities of the Trump Administration, the implications of reconciliation for healthcare stakeholders, and the challenges and opportunities presented while navigating this expedited process.

Navigating Change

红领巾瓜报 experts are working with federally funded entities to quickly analyze their federal awards and plan for the next phase of federal agency actions and oversight. 红领巾瓜报 companies also help healthcare stakeholders seeking to inform, shape, prepare for, and implement federal policy changes. Organizations seeking to influence the outcome of these policy debates and to thrive in a dynamic legislative and regulatory environment must have the most up-to-date information, informed by partners that understand the processes and the underlying policies under consideration.

红领巾瓜报 experts provide additional complementary services, including analyses to predict how the Congressional Budget Office will score the costs or savings of specific policies. Especially in the reconciliation environment, the budgetary impact of particular policies can significantly influence their likelihood of passage.

Connect with Us

To learn more about the these policy changes and the impact on your organization,聽聽our January 2025 policy webinar and contact one of our featured experts below.

Spotlight on Congress: Budget Reconciliation Update

Read Blog

With full Republican control, expect Congressional Republicans and the Trump Administration to quickly leverage the budget reconciliation process to pass legislation in several priority areas, including taxes, immigration, and domestic energy production. While expiring tax provisions may be the driving force of this year鈥檚 reconciliation efforts, Republicans are also likely to include other priorities, potentially including raising the debt ceiling, which will increase the need for reductions in mandatory health programs or changes to health care revenue to be used as offsets.

Budget reconciliation provides a rare opportunity to pass significant health care legislative changes on a party-line basis. However, while budget reconciliation has certain procedural advantages, it is also fraught with complex rules and procedures that can make it very difficult to pass large pieces of policy legislation intact.

Experts from Leavitt Partners, an 红领巾瓜报 company, recently held a webinar reviewing the budget reconciliation process, opportunities and legislative strategies to navigate this process, and potential policies that could be considered. Access the . Contact experts Elizabeth Wroe, Josh Trent, and Sara Singleton if you鈥檙e interested in learning more about the specialized services our team can offer your organization to navigate the Congressional budget reconciliation process and its outcomes.

CMS Stays the Course with Proposed Payment Updates for Medicare Advantage and Part D Services in 2026

Read Blog

Trump Administration will Issue Final Policies

This week, our In Focus section examines the Centers for Medicare & Medicaid Services (CMS) calendar year (CY) , published January 10, 2025. That same day, CMS also released draft . This regulatory guidance includes CY 2026 payment updates as well as additional technical and methodological changes to MA and Part D for the coming plan year.

The release of the CY 2026 Advance Notice鈥攁long with the complementary CMS policy and technical proposed rule released in November 2024鈥攔epresent the last major Medicare regulations of the Biden Administration, and these annual payment and policy updates will be finalized under the incoming Trump Administration. As a result, the proposed MA and Part D payment policies could be modified before finalization in April 2025.

Comments on the Advance Notice are due by February 10, 2025, leaving a tight timeline for MA plans and other stakeholders to provide formal feedback and written comments to CMS. Following are brief summaries of the major proposals in the Advance Notice and key considerations for stakeholders as they analyze the proposals.

Payment Impact on Medicare Advantage Organizations

In the Advance Notice, CMS projects that federal payments to MA plans will increase by 4.33 percent from 2025 to 2026鈥攚hich represents a $21 billion increase in expected payments to MA plans next year. CMS estimates that federal payments to MA plans in 2026 will total $590.9 billion.

The proposed increase in payments accounts for several factors, including growth rates in underlying costs, changes to MA Star Ratings, continued implementation of the new risk adjustment model, and MA risk score trends. The estimated growth rate considers demographic changes in MA enrollment, including projected increases in the number of enrollees.

The Advance Notice estimates represent the average increase in payments to MA plans and actual payments will vary from plan to plan. Below, Table 1 provides estimates of the impact of proposed policy changes on net MA plan payments.

MA Risk Adjustment Changes

CMS intends to complete the three-year phase-in of the MA risk adjustment model that was first published in the CY 2024 Rate Announcement. Specifically, CMS proposes to calculate 100 percent of the risk scores using the new MA risk adjustment model, referred to as the 2024 hierarchical condition categories (CMS-HCC) framework. CMS maintains that the changes to the methodology for calculating risk have improved the predictive accuracy of the model while ensuring risk-adjusted payments to MA plans are accurate.

In addition, CMS has been working to calibrate the risk adjustment model based on MA encounter data, and CMS proposes to begin phasing in an encounter-based MA risk adjustment model as soon as CY 2027.

CMS also proposes to apply the statutory minimum MA coding pattern difference adjustment factor of 5.90 percent for CY 2026.

Technical Adjustment to Cost Calculations Related to Medical Education Costs

Similar to changes in the MA risk adjustment model, CMS plans to complete the three-year phase-in of technical adjustments to the per capita cost calculations related to indirect and direct medical education costs associated with services delivered to MA beneficiaries. This technical adjustment鈥攆inalized in the CY 2024 Rate Announcement鈥攈as reduced growth rates for MA plans because of the removal of MA-related medical education costs from the benchmarks.

MA Star Ratings

CMS reiterates its continued focus on moving toward a 鈥淯niversal Foundation鈥� of measures with the goal of creating metrics that center on clinical care, patient outcomes, and improved patient experiences and are aligned across CMS programs. In addition, CMS is soliciting initial feedback on both substantive measure specification updates as well as comments on new measure concepts. CMS also is seeking stakeholder feedback on modifications to the Health Equity Index, including adding social risk factors and geography (urban or rural) to the reward factor. Any specific changes to MA Star Ratings measures, including modifications to the Health Equity Index, would occur through the formal rulemaking process.

Medicare Part D Provisions

The CY 2026 Advance Notice and the include several payment and benefit updates as required in the Inflation Reduction Act (IRA) of 2022. The CY 2026 updates include:

The CY 2026 annual out-of-pocket cost threshold for Part D covered drugs is $2,100, which is the original out-of-pocket cap of $2,000 adjusted for the annual percentage increase in average expenditures for Part D covered drugs
Establishment of the selected drug subsidy program
Changes to the liability of enrollees, plan sponsors, drug manufacturers, and CMS in the standard Part D benefit design, specifically to account for the start of the Medicare Drug Price Negotiation Program in 2026
Guidance on the successor regulation exception to the IRA鈥檚 formulary inclusion requirement for selected drugs under the Medicare Drug Price Negotiation Program

Other previously implemented IRA reforms will continue in CY 2026, including no cost sharing for Medicare beneficiaries for Part D covered drugs in the catastrophic phase, which begins after the annual out-of-pocket threshold of $2,100 is reached; a $35 monthly cap on enrollee cost sharing for insulin; no cost sharing for adult vaccines recommended by the Centers for Disease Control and Prevention鈥檚 (CDC鈥檚) Advisory Commission on Immunization Practices and covered under Part D; and the requirement for Part D plans to offer the Medicare Prescription Payment Plan to beneficiaries.

What to Expect

The CY 2026 Advance Notice includes important technical, programmatic changes and payment updates for MA and Part D plans, which will be finalized when CMS publishes the final CY 2026 Rate Announcement on or before April 7, 2025. MA plans and other stakeholders have a rigid timeframe to provide formal input and written comments to CMS before the February 10 deadline.

Like the policy and technical changes included in the MA proposed rule, the CMS Advance Notice payment updates will be finalized under the incoming Trump Administration. MA plans and other stakeholder can anticipate that the new leadership at the US Department of Health and Human Services and CMS will closely examine and take a fresh look at the proposed payment and policy changes. Though the current CMS leadership maintains that payment updates included in the Advance Notice are sufficient to support stability in MA premiums and benefits, proposed payment policies can be modified or delayed as the new leadership takes shape.

For example, officials in the Trump Administration could seek to delay the phase in of the risk adjustment changes as well as the technical adjustment regarding medical education costs, which CMS estimates would result in an additional $10.4 billion in payments to MA plans.

Connect With Us

Medicare experts at 红领巾瓜报, will continue to assess and analyze the policy and political landscape, which will determine the final policies included in the CY 2026 Rate Announcement. 红领巾瓜报 experts have the depth of knowledge, experience, and subject matter expertise to assist organizations that engage in the rulemaking process and to support implementation of final policies, including policy development, tailored analysis, and modeling capabilities.

For details about the CY 2026 MA Advance Notice and its impact on MA and Part D plans, providers, and beneficiaries, contact our featured experts below.

Featured Solutions:

Featured 红领巾瓜报 insights:

More insights from our companies:

Receive timely expert insights on topics you care about.

53 Results found.

What the Senate’s Budget Approval Means for the Future

CSR Funding, Budget Debates, and the Future of Marketplace Affordability

Evolving Medicaid Work Requirement Policies: Essential State Actions to Prepare

CMS Seeks Input on the Future of Digital Health: What the Health Technology Ecosystem RFI Means for Stakeholders

CMS Announces New Innovation Agenda: Here鈥檚 What You Need to Know

President Issues Executive Order Calling for Most Favored Nation Drug Pricing

House Committees Consider Policies to Meet Budget Reconciliation Instructions

HHS Begins Reorganization: Actions Focus on Efficiency, Establishment of Administration for a Healthy America

Spotlight on Development of President Trump鈥檚 Children鈥檚 Health Strategy

Executive Actions and Congressional Budget Reconciliation: Trump Administration’s 2025 Healthcare Overhaul

Spotlight on Congress: Budget Reconciliation Update

CMS Stays the Course with Proposed Payment Updates for Medicare Advantage and Part D Services in 2026

Trump Administration will Issue Final Policies

Featured Solutions:

Featured 红领巾瓜报 insights:

More insights from our companies:

Insights

红领巾瓜报 Insights: Your source for healthcare news, ideas and analysis.

Receive timely expert insights on topics you care about.

53 Results found.

Trump Administration will Issue Final Policies