Healthcare Finance and Business Strategy News
News Briefs: White House healthcare plan would have major implications for the industry
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President Donald Trump announced a healthcare framework aimed at boosting transparency, consumer choice and affordability, although numerous details still need to be decided before Congress can act on the proposals.
The plan’s Jan. 15 release came as Senate talks to renew the expired ACA subsidies stalled amid disputes over abortion coverage and concerns about cost. Without an extension, major premium increases are in place for 2026, with KFF estimating that average out-of-pocket premiums would rise by 114% and the Congressional Budget Office projecting 2.2 million more uninsured.
Trump’s plan ties drug prices to lower international rates, expands over-the-counter drug access and reforms the business practices of pharmacy benefit managers.
It also promotes health savings accounts and consumer-directed funding to offset deductibles and, apparently, premiums, potentially encouraging the purchase of cheaper ACA plans or off-marketplace coverage. Analysts warned such a scenario could destabilize the ACA risk pools. The framework also would fund ACA cost-sharing reductions.
Regarding transparency, providers would be required to prominently post their prices and fees “in their place of business,” while insurers would need to disclose information on claim-denial rates and prior authorization wait times.
After court halts 340B rebate model, HHS pauses appeal
A federal court stopped implementation of a 340B Drug Pricing Program rebate model that had drawn fierce opposition from providers.
The preliminary injunction issued Dec. 29 at the U.S. District Court for Maine required HHS’s Health Resources and Services Administration to halt the rebate model before it took effect Jan. 1. Hospital plaintiffs had gone to court seeking the injunction.
After the ruling, HHS filed to take the case to the U.S. Court of Appeals for the First Circuit, where it sought an emergency stay of the injunction. Several days after the court denied the stay, the Department of Justice issued correspondence saying the government was no longer seeking an expedited appeal of the lower court’s ruling.
The Jan. 12 letter indicated that HHS instead is reconsidering the model and is working with the plaintiffs on a path forward.
The pilot would require providers to pay the wholesale acquisition cost (WAC) for 10 commonly used Medicare Part D drugs before filing claims to obtain a rebate of the difference between the WAC and the 340B price.
CMS distributes $10 billion for states to use to improve rural health
CMS awarded states $10 billion in rural health funding for 2026, implementing a widely anticipated provision of the legislation known as the One Big Beautiful Bill Act (OBBBA).
The Rural Health Transformation Program (RHTP) funding is intended to help rural healthcare providers succeed amid the projected cutbacks in federal Medicaid funding over the next decade under the OBBBA. RHTP funding amounts to $50 billion over five years through 2030.
Each $10 billion annual disbursement includes $5 billion to be doled out equally to all 50 states and up to $5 billion in discretionary funding based on state proposals. Allocations for 2026 ranged from $147 million (New Jersey) to $281 million (Texas), CMS said in an announcement Dec. 29.
In apportioning the discretionary funding:
- 50% was based on characteristics such as the size of the state’s rural population, amount of uncompensated care provided and rural geographical footprint.
- 30% was based on the rural healthcare improvement plans described in state applications.
- 20% hinged on pledges to implement state policies favored by the Trump administration, among them repealing Certificate of Need laws.
FY26 appropriations bill includes new administrative mandate for hospitals
Hospitals soon could face new administrative requirements around billing for services provided at off-campus outpatient departments (OPDs), based on text in an appropriations bill agreed to in bipartisan negotiations.
The primary purpose of the bicameral bill was to fund the Departments of Labor, HHS and Education for the remainder of FY26. Without passage, funding for those departments was set to expire Jan. 30.
As part of a push by policymakers to curb site-based payment differentials, hospitals would have to ensure each off-campus OPD has a unique National Provider Identifier distinct from the main hospital. Noncompliance would render the OPD ineligible for Medicare payment starting in 2028.
The bill also has changes to the formula for determining uncompensated care as used to calculate Medicaid disproportionate share hospital payments, and it extends Medicare waivers for telehealth (through FY27) and the acute-care hospital-at-home program (through FY30).
Physician specialties with the biggest Medicare payment impacts in 2026
Regulatory changes to the Medicare Physician Fee Schedule in the new year will have disparate impacts on different specialties. Here are the specialties for which the payment update is projected to have the highest impact. (Note that for many specialties, the update can vary significantly depending on whether the physician is facility-based.)
| Physician specialties | Impact of changes on Medicare payment |
|---|---|
| Allergy and immunology | 7% |
| Vascular surgery | 5% |
| Clinical social worker, rheumatology | 4% |
| Critical care, gastroenterology, plastic surgery | -4% |
| Neurosurgery | -5% |
| Infectious disease | -6% |
Healthcare use and service intensity fueled spending growth in 2024
Increasing use of hospital care, physician and clinical services, and retail prescription drugs led a continued surge in U.S. healthcare spending in 2024, according to a report by CMS researchers published Jan. 14 in Health Affairs, drawing on various data sources.
National health expenditures (NHE) reached $5.3 trillion, a 7.2% increase year-over-year and comparable with the 7.4% jump recorded in 2023. Except for the pandemic year of 2020, the increases seen in the two most recent years of data are the biggest since 2003.
On a per capita basis, NHE increased by 6.5% in 2023 and 6.1% in 2024. Aside from 2020, the increase had not hit 6% since 2005 and had not even reached 5% since 2007. Of the 2024 per capita increase, 3.6 percentage points stemmed from the use and intensity of healthcare goods and services.
CMS would bar hospitals from Medicare and Medicaid for providing gender-affirming care to minors
Hospitals would face significant financial consequences for providing gender-affirming care as treatment for minors who have gender dysphoria, according to a proposed rule.
Any hospital offering care such as puberty blockers, hormone therapy and surgery to minors would be locked out of Medicare and Medicaid, the agency said Dec. 18.
On Dec. 23, Democratic attorneys general representing 19 states and Washington, D.C., filed litigation intended to halt the proposed rule, specifically HHS’s accompanying declaration that the services at issue are unsafe and unproven treatments for gender dysphoria in minors.
