THIS WEEK’S DOSE
- Congress lacks consensus on addressing healthcare affordability. Bipartisan talks on the soon-to-expire enhanced advanced premium tax credits (APTCs) are ongoing, and the Senate Health, Education, Labor, and Pensions Committee held a hearing on healthcare affordability, but no bipartisan agreement has been reached. Senate Democrats are poised to offer a clean three-year enhanced APTC extension bill next week.
- House Ways and Means Oversight Subcommittee examines organ procurement organizations. Committee members and witnesses agreed on the need for greater accountability and reform within organ procurement organizations (OPOs).
- Senate Aging Committee holds hearing on aging in place and community support. The hearing highlighted successful programs under the Older Americans Act and explored how strong community networks can support older adults during the holiday season, when isolation peaks.
- Senate Finance Committee leaders introduce bipartisan pharmacy benefit manager reform legislation. The bill is cosponsored by most members of the Finance Committee and is a reintroduction of legislation that passed through the committee by a unanimous vote in the last Congress.
- CMS releases MA and Part D proposed rule. The rule proposes several policy and technical changes to the Medicare Advantage (MA) and Part D programs for 2027 and beyond, including removing the Excellent Health Care for All reward and removing 12 measures from the star ratings.
- CMS announces negotiated prices for 15 drugs selected for Medicare Part D. The selected drugs for 2027 will join the 10 Part D-covered drugs already selected for negotiation beginning January 1, 2026.
- CMS repeals minimum staffing requirements for long-term care facilities. The interim final rule repeals the Biden-era regulation that initially established the nursing home minimum staffing standards.
- CMS Innovation Center announces new digital health model. The Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) model aims to increase access to new technology-supported care options for chronic conditions, including diabetes and heart disease.
- HHS unveils AI strategy. The US Department of Health and Human Services (HHS) released its strategy for integrating artificial intelligence (AI) into HHS department workflows, internal operations, and research.
CONGRESS
Congress lacks consensus on addressing healthcare affordability. With the December 31, 2025, expiration date of the enhanced APTCs quickly approaching, discussions – both partisan and bipartisan – continued on Capitol Hill this week, although agreement on a path forward remains elusive. As part of the agreement to reopen the government last month, Senate Majority Leader Thune (R-SD) promised Democrats an APTC floor vote in December. This vote is expected to occur on December 11. On December 4, Senate Minority Leader Schumer (D-NY) announced that Democrats will offer a bill on the Senate floor at that time to provide a clean three-year extension of enhanced APTCs. That bill is unlikely to garner much, if any, Republican support. It is still unknown whether Senate Republicans plan to offer an alternative bill.
Partisan differences on APTCs were on display during this week’s Senate Health, Education, Labor, and Pensions (HELP) Committee hearing on healthcare affordability, with Democrats pressing for a straightforward extension of the enhanced APTCs and Republicans split on whether to extend the credits with revisions or focus on other measures to bring down health insurance costs, such as health savings accounts, price transparency efforts, and reforms to promote competition. Some Senate Republicans agreed that, in the short term, APTCs should be extended to avoid immediate harm to families while broader reforms are debated.
House Ways and Means Oversight Subcommittee examines organ procurement organizations. During the hearing, committee members agreed on the need for systemic reform, including stronger oversight, penalties for violations, and improved data transparency within organ procurement organizations (OPOs). Witnesses emphasized the urgent need for accountability within OPOs to prevent harm to patients and families. Republican committee members focused their questions on accountability and transparency within OPOs, highlighting allegations of fraud, misuse of federal funds, and unethical practices. Democrats on the committee stressed the importance of maintaining health insurance coverage for transplant patients, warning that cuts to Medicaid and failure to extend the enhanced APTCs would leave millions uninsured and jeopardize access to organ transplants.
Senate Aging Committee holds hearing on aging in place and community support. During the hearing, members on both sides of the aisle expressed support for reauthorizing the Older Americans Act and encouraging aging in place by shifting resources from institutions to home- and community-based services. Witnesses spoke to the importance of Older Americans Act programs in supporting older adults, individuals with disabilities, and their caregivers. Republican committee members expressed support for other solutions to aid caregivers and reduce senior loneliness, such as a multigenerational home caregiver tax credit and partnerships with community-based organizations. Democrats on the committee voiced concern about Medicaid cuts and recent administration actions, such as reductions in force in the Administration for Community Living and US Department of Education, and rulemaking related to travel accessibility and the direct care workforce.
Senate Finance Committee leaders introduce bipartisan pharmacy benefit manager reform legislation. Chair Crapo (R-ID) and Ranking Member Wyden (D-OR) introduced the Pharmacy Benefit Manager (PBM) Price Transparency and Accountability Act in an effort to increase transparency in federal prescription drug programs and lower drug prices for patients. The legislation would delink PBMs’ compensation from their negotiated rebates and increase PBM reporting requirements to Medicare Part D plan sponsors and HHS. It would also require retail community pharmacies to participate in the National Average Drug Acquisition Cost survey to ensure accurate Medicaid payments to pharmacies, and would mandate that PBMs pass Medicaid payments directly to pharmacies in order to ensure transparency in drug costs.
ADMINISTRATION
CMS releases MA and Part D proposed rule. The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule with policy and technical changes to the MA and Part D programs for 2027 and beyond. Key takeaways include:
- Significant star ratings changes. CMS proposes to remove 12 measures from the star ratings beginning with the 2027 measurement year and remove the EHO4all reward (also known as the Health Equity Index) from the 2027 star ratings. CMS would continue applying the existing reward factor, which was scheduled to end with the 2027 ratings.
- Codifying Inflation Reduction Act of 2022 (IRA) provisions. As required by the IRA, CMS proposes to eliminate the coverage gap phase and the annual out-of-pocket threshold, remove cost sharing for enrollees in the catastrophic phase, and implement the manufacturer discount program. While these IRA provisions are already in effect, CMS implemented them using temporary authority and now proposes to codify the provisions in regulation.
- Changes to marketing and communications. CMS proposes to reduce restrictions on beneficiary outreach and third-party marketing organizations. CMS notes that if finalized for the 2027 contract year, these changes would take effect on October 1, 2026, when marketing for the 2027 plan year begins.
- Special enrollment periods (SEPs). CMS proposes to modify the SEP that allows an enrollee to change plans when a provider they see leaves the network. CMS proposes to eliminate the requirement that the network change be deemed “significant” to trigger the SEP. CMS also proposes to codify existing policy that certain SEPs require prior CMS approval.
- Improvements for special needs plans (SNPs). CMS’s proposals focus on passive enrollment, continuity of care, contract modifications, and model of care off-cycle submissions.
- Requests for information (RFIs). The rule includes several RFIs on topics such as risk adjustment, stars and quality bonus payments, well-being and nutrition, chronic condition SNPs, marketing oversight and agent and broker regulations, and reducing data collection and reporting burdens.
Comments on the proposed rule are due by January 26, 2026. Read CMS’s fact sheet on the proposed rule here. You can also read our Regs & Eggs blog post on this topic.
CMS announces negotiated prices for 15 drugs selected for Medicare Part D. In a press release, CMS announced the agreed-upon maximum fair prices for 15 drugs selected for the 2027 Medicare Drug Price Negotiation Program. CMS estimated that about 5.3 million people with Medicare Part D coverage used these drugs in 2024 to treat a variety of conditions, such as cancer, type 2 diabetes, and asthma, and that these drugs accounted for about $42.5 billion in total gross covered prescription drug costs under Medicare Part D in 2024, or about 15%. Had these negotiated prices been in effect in 2024, net savings to the Medicare program would have approximately $12 billion, according to CMS.
The 15 Part D-covered drugs selected for 2027 will join the 10 Part D-covered drugs previously selected for negotiation, with those prices going into effect January 1, 2026. A fact sheet detailing the negotiated prices for the 15 selected drugs can be found here.
CMS repeals minimum staffing requirements for long-term care facilities. CMS issued an interim final rule effectively repealing the Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting final rule. Released by the Biden administration in 2024, the repealed rule established minimum staffing standards for long-term facilities. These standards would have required a registered nurse (RN) to be onsite 24 hours, seven days per week, and would have required each facility to provide a minimum of 0.55 RN, 2.45 nurse aide (NA), and 3.48 total nurse staffing hours per resident day, for a specified time period. The 2024 rule has been challenged in court, and the One Big Beautiful Bill Act prohibited CMS from implementing, administering, or enforcing the minimum staffing standards until September 30, 2034. Thus, the standards have never been enforced.
CMS will reinstate prior regulatory requirements, including the minimum statutory RN staffing requirement for long-term care facilities to use the services of an RN for at least eight consecutive hours a day, seven days a week, and to designate an RN to serve as the director of nursing on a full-time basis except when waived. CMS is accepting comments, but the changes are effective 60 days after the rule is published in the Federal Register (both the comment due date and the rule’s effective date are estimated to be February 1, 2026).
CMS Innovation Center announces new digital health model. The ACCESS model is a 10-year voluntary model designed to expand access to new technology-supported care options that help Medicare fee-for-service beneficiaries improve their health and prevent and manage chronic disease. Examples of technology-supported care that would be covered by this model include medication management, therapy and counseling, and the use or monitoring of US Food and Drug Administration (FDA)-authorized devices or software.
The ACCESS model will test outcome-aligned payments for care organizations enrolled in Medicare Part B and will include four clinical tracks focused on common chronic conditions:
- Early cardio-kidney-metabolic conditions: Hypertension, dyslipidemia (abnormal or elevated lipids, including cholesterol), obesity or overweight with marker of central obesity, and prediabetes.
- Cardio-kidney-metabolic conditions: Diabetes, chronic kidney disease, or atherosclerotic cardiovascular disease.
- Musculoskeletal conditions: Chronic musculoskeletal pain.
- Behavioral health conditions: Depression or anxiety.
During a December 4, 2025, live stream event, CMS officials announced that applications are expected to open in January 2026 and close in April 2026, with rolling admissions. The model is scheduled to begin in July 2026 and will run for 10 years. During the same event, FDA and CMS officials announced the TEMPO (Technology-Enabled Meaningful Patient Outcomes for digital health devices) pilot project, an FDA initiative that will help health device manufacturers offer their device inside of the ACCESS model with exemption from the FDA market access process. Applications for the TEMPO pilot are expected to open in early 2026.
FAQs on the ACCESS model can be found here.
HHS unveils AI strategy. HHS announced its AI action plan focused on integrating AI via a “OneHHS” approach in which all HHS divisions will use a collaborative department-wide AI infrastructure. The strategy focuses on five pillars:
- Ensure governance and risk management for public trust.
- Design infrastructure and platforms for user needs.
- Promote workforce development and burden reduction for efficiency.
- Foster health research and reproducibility through gold standard science.
- Enable care and public health delivery modernization for better outcomes.
QUICK HITS
- CMS releases home health final rule. The calendar year (CY) 2026 final rule decreases payments to home health agencies by an estimated 1.3%, or $220 million, compared to CY 2025, significantly below the estimated 6.4% aggregate reduction in the proposed rule. The rule also finalized changes to the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program. A fact sheet on the final rule can be found here, and a fact sheet on the competitive bidding updates can be found here.
- GAO releases report on fraud risks in APTCs. The US Government Accountability Office (GAO) report asserts that tens of thousands of Social Security numbers (SSNs) were used to obtain more than one year’s worth of subsidized coverage in a single plan year, with CMS permitting multiple enrollments per SSN to account for potential identity theft or data entry issues. The report identifies vulnerabilities related to unauthorized agent or broker changes and notes that CMS’s outdated fraud-risk assessments limit its ability to effectively manage APTC fraud risks. Read the full report here.
- Administration announces pharmaceutical trade agreement with UK. The Office of the United States Trade Representative, the US Department of Commerce, and HHS announced a pharmaceutical trade agreement between the US and the United Kingdom, in which the UK will increase net prices it pays for new drugs by 25%. In return, the US will exempt UK pharmaceutical products from Section 232 tariffs, avoid Section 301 actions on UK drug pricing, and support access to advanced medicines for UK patients.
- MedPAC hosts December public meeting. The Medicare Payment Advisory Commission (MedPAC) agenda included sessions on fee-for-service payment policies, payment adequacy for skilled nursing facility services, hospital inpatient and outpatient services, and outpatient dialysis services, as well as sessions addressing several mandated reports on topics such as the Medicare ground ambulance data collection system and the home health prospective payment system.
NEXT WEEK’S DIAGNOSIS
The House and Senate are both scheduled to be in session next week, with votes on the expiring APTCs expected in the Senate. At the committee level, the House Committee on Oversight and Government Reform will hold a hearing on how technology can lower the cost of healthcare, and the Senate HELP Committee will hold a hearing to examine the US organ procurement and transplantation network. The Senate Committee on Homeland Security and Governmental Affairs Subcommittee on Investigations will also hold a hearing on healthcare. The House Judiciary Committee will continue the APTC discussion with a hearing on the topic.
