Health Care Matters | August 8
Medicare, Medicaid Plan to Experiment with Covering Weight Loss Drugs
The Washington Post and Axios report the Trump administration is planning a five-year experiment that would allow Medicare prescription drug plans and state Medicaid programs to voluntarily cover popular weight-loss drugs like Ozempic, Wegovy, Mounjaro, and Zepbound for obesity treatment. The test will be piloted through CMMI and could begin as early as April 2026 for Medicaid and January 2027 for Medicare plans. This represents a significant shift from the administration's April decision to reject Biden-era proposals for broader coverage, offering instead an optional pathway for states and insurers to provide access to these expensive medications that typically cost $5,000-$7,000 annually per patient. Read here and here.
Why It Matters
This announcement signals the Trump administration's approach to balancing fiscal concerns related to GLP-1 coverage with growing pressure to address America's obesity crisis affecting roughly 100 million people. While the voluntary nature may limit initial participation, especially given that only 13 states currently cover GLP-1s for obesity through Medicaid and insurers heavily lobbied against broader coverage due to costs, a successful pilot program could pave the way for nationwide expansion. The timing is strategic, coinciding with upcoming Medicare price negotiations for these drugs and the administration's broader health care agenda. However, with mixed messaging from key officials (CMS Administrator Oz called the drugs "a big help" while HHS Secretary RFK Jr. has raised cost concerns and emphasizes they shouldn't replace diet and exercise), we expect a rollout with heavy emphasis on combining medication with lifestyle programs, potentially setting the stage for either expanded coverage or reinforced resistance based on cost-effectiveness data from participating states and plans.
CMS Inches Toward Establishing National Provider Directory
As we shared last week and as part of CMS's Digital Health Tech Ecosystem initiative, CMS is moving to establish a national provider directory to address the widespread problem of inaccurate health insurance company provider lists that plague patients nationwide. HHS Secretary Robert F. Kennedy Jr. and CMS Administrator Dr. Oz discussed the initiative with health IT executives in June, describing their goal as a "dynamic, interoperable directory" that would standardize provider information across the health care system. While the insurance industry has expressed support for a "robust public-private partnership" approach, and major insurers like Centene, Cigna, and CVS Health have met with CMS to discuss the concept, significant details remain unclear about implementation, funding, and governance of such a system. Read here.
Why It Matters
The success of a national directory will hinge on execution, and the health care industry remains skeptical after previous government technology initiatives like electronic health records failed to deliver promised benefits despite massive investments. While provider directory inaccuracies are a real problem that have spawned "ghost network" lawsuits and forced patients to rely on Google searches over official insurer lists, this feels like more bureaucratic theater without addressing root causes. The fundamental challenge is that maintaining accurate, real-time directory information is complex and expensive, with networks constantly changing as contracts are negotiated, renewed, or terminated. A national system could simply nationalize these same data quality problems while creating new layers of red tape and potentially eliminating competitive advantages that some insurers have built through better directory management. Without clear governance structures, funding mechanisms, and accountability measures, this risks following the pattern of other ambitious government IT initiatives that have struggled to meet their original objectives.
Look for the Helpers: llinois Initiative Trains Residents as Crisis Responders
The Trauma & Resilience Initiative demonstrates how community-based mental health support can transform lives, having trained over 500 residents in Champaign-Urbana, Illinois to provide neighbor-to-neighbor counseling for gun violence survivors and trauma victims. Through innovative 24/7 crisis support, peer mentoring, and wraparound services, Simms created an alternative to traditional policing that helped reduce gun deaths in Champaign by 68% between 2021 and 2024. Despite facing closure due to expired federal funding, Simms continues offering training to volunteers and support groups, ensuring her trauma-informed care model continues to serve and strengthen the community. Read here.
What We Are Reading
Changes In Clinicians’ Participation Across Medicare Value-Based Payment Models, 2017–22
A new Health Affairs study found that the share of Medicare clinicians exempt from the Quality Payment Program (QPP) increased from 27.5% to 38.1% between 2017-2022, suggesting CMS may face increasing difficulty improving population-level outcomes through accountable care as fewer clinicians leverage APM participation as a tool for QPP participation. Read more here.
Caregiving in the US – 2025 Report
AARP and the National Alliance for Caregiving released the Caregiving in the US 2025 report which reveals that 63 million American adults (nearly one in four) now provide ongoing care to adults or children with medical conditions or disabilities, representing a dramatic 45% increase since 2015, with caregivers facing increasing intensity, longer duration of care, and significant financial, physical, and emotional challenges while receiving limited formal training and support. Read more here.
Coming Soon
Rural Health Fund Applications Open in September
States can apply starting in early September for their share of the $50 billion Rural Health Transformation Program, designed to help rural hospitals navigate federal funding cuts through workforce development, system optimization, and telehealth technology expansion. Learn more about how this funding could impact rural health care delivery in our recent blog post here.
What We Are Attending
Guiding an Improved Dementia Experience Model: What’s Next for CMS’s GUIDE Model
Manatt Health is hosting an interactive panel discussion on Tuesday, August 12 from 2:00-3:00 PM ET featuring CMS officials and GUIDE Model participants to explore implementation successes, lessons learned, and future opportunities for CMS's dementia care alternative payment model one year after its launch. To learn more and register, click here.
Pop Health Podcast
PFS 2026 & ASM: What ACOs and Specialists Need to Know
In this episode, Melissa Cohen is joined by Coral Health Advisors’ Alison Falb and Joy Chen to break down key updates for ACOs in the CY 2026 Medicare Physician Fee Schedule Proposed Rule and explore the new mandatory Ambulatory Specialty Model.