Health Care Matters | July 17
CMS Proposes Broad Changes to Physician Payment and Accountable Care
CMS’s proposed CY 2027 Medicare Physician Fee Schedule includes several changes to the Medicare Shared Savings Program’s financial methodology. The agency would limit the Accountable Care Prospective Trend (ACPT) so it cannot fall more than 1 percentage point below or rise more than 1.5 percentage points above national expenditure growth. CMS proposes applying those guardrails retrospectively to ACOs with agreement periods beginning in 2024 through 2026, which would delay Performance Year 2025 financial reconciliation until November 2026. The rule also proposes a new benchmark adjustment for ACOs that bring clinicians and beneficiaries into accountable care, a higher prior savings adjustment, and changes to regional and risk-adjustment policies. Other proposals include increasing the BASIC Track Level E shared savings rate from 50% to 60%, allowing certain ACOs to reduce or eliminate Part B cost sharing, and exploring prospective primary care capitation in MSSP. Read here.
Why It Matters
Taken together, the proposals use quality reporting, fee schedule payments, and ACO financial incentives to make accountable care a more distinct and potentially more attractive path within Medicare. The higher Level E sharing rate and new evaluation and management (E/M) modifier would provide more immediate financial value for ACO participation, while the MIPS transition would narrow the alternatives available to clinicians outside the APM Performance Pathway. At the same time, lower overall conversion factors could make it harder for some practices to invest in the infrastructure needed to succeed under these arrangements. The proposal strengthens Medicare’s accountable care incentives without resolving the broader instability surrounding physician payment.
Higher Prior Authorization Use Linked to Medicare Advantage Disenrollment
A new Health Affairs study examined differences in prior authorization use across Medicare Advantage contracts and how those differences related to beneficiary enrollment decisions in 2021. Prior authorization rates varied widely across geographic areas, and Black, Hispanic, Asian, and dual-eligible beneficiaries were disproportionately enrolled in contracts with higher rates. Beneficiaries in contracts with the highest prior authorization rates were 4.7 percentage points, or 44%, more likely to leave their contract than those in contracts with the lowest rates, either switching to another Medicare Advantage plan or returning to traditional Medicare. Read here.
Why It Matters
Prior authorization is often evaluated through measures such as denials, processing times, and administrative burden, but this study suggests its effects may also appear in beneficiaries’ decisions to leave a plan. The findings do not establish that prior authorization caused disenrollment, yet the correlation raises questions about whether enrollment and retention data could provide another signal of how utilization management policies shape the beneficiary experience. The unequal exposure among racial and ethnic minority and dual-eligible beneficiaries also adds an equity dimension to current efforts to streamline prior authorization, particularly if reforms reduce administrative friction without addressing variation in how extensively plans use it.
Look for the Helpers: North Carolina Communities Show What Support Beyond the Clinic Can Mean
North Carolina’s Healthy Opportunities Pilots connected Medicaid beneficiaries with food, housing, transportation, and other services through local community organizations. A new collection of stories from participants, care managers, and service providers shows how that support helped people manage health conditions, regain stability, and feel less alone while navigating difficult circumstances. It is a reminder that meaningful improvements in health often begin with people who understand their communities and are ready to respond to what residents need. Read here.
New Resource
Coral Health Advisors’ Rural Health Transformation Program Tracker
Coral Health Advisors has launched a new tracker to help organizations monitor RHTP activity across states. The tracker brings together state updates, procurement opportunities, webinars, deadlines, and other key developments in one easy-to-navigate dashboard, with filters and preferences that allow users to focus on the states and topics most relevant to their work.
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Learn more about the RHTP tracker in this product demo.
If you have any questions or would like to learn more about subscription options, please don't hesitate to reach out at info@coralhealthadvisors.com
What We Are Reading
Facing Funding Losses, States Call Out Big Businesses With Employees on Medicaid
KFF Health News examines efforts in several states to publicly identify or financially penalize large employers whose workers rely on Medicaid, as states prepare for federal funding reductions and new work requirements. Read here.
The LEAD Model and the Remaining Structural Limits to Fee-for-Service Value-Based Care
A Health Affairs Forefront article explores how the LEAD Model expands ACOs’ financial responsibility and introduces new payment and beneficiary engagement tools without giving them the operational authority available to Medicare Advantage plans. Read here.
Feds Push Back HIPAA Security Rule Overhaul to July 2027
Fierce Healthcare reports that HHS has delayed final action on proposed HIPAA Security Rule changes that would establish more prescriptive cybersecurity requirements for health care organizations, plans, and business associates. Read here.
Minimizing H.R.1-Related Medicaid Coverage Disruptions for High-Risk Patients
A Health Affairs Scholar study examines how linked state and community data could help identify people eligible for exemptions and reduce coverage losses under new Medicaid work requirements. Read here.
“Check Symptoms & Get Care”: Mount Sinai’s AI Triage Solution
An NEJM Catalyst case study explores how Mount Sinai uses an AI-supported symptom checker to guide patients to appropriate care and connect them with available services. Read here.
Payment for Clinical AI
A Peterson Health Technology Institute report examines why existing fee-for-service, performance-based, and capitated payment models may not adequately support clinical artificial intelligence, particularly as AI takes on more autonomous roles in care delivery. Read here.
Pop Health Podcast
What the LEAD Model Means for Specialty Care and ACOs
Specialty care has long been one of the harder pieces of accountable care to operationalize. In this episode, Coral’s Joy Chen speaks with Theresa Dreyer, CEO of the Health Care Transformation Task Force, about what CMS’s Long-term Enhanced ACO Design, or LEAD, Model could mean for ACOs and specialty groups. They discuss why specialty engagement has been challenging across payer lines, how LEAD creates more formal pathways for ACO-specialist arrangements, what different types of specialty groups may need to consider, and what it will take for these models to move from payment design to practical changes in care delivery.