Health Care Matters | July 18
Regulatory Roundup: A Week of Major Medicare Updates
This week brought a trifecta of significant regulatory announcements with CMS releasing the proposed 2026 Medicare Physician Fee Schedule (PFS), the Outpatient Prospective Payment System (OPPS) rule, and made a major announcement regarding the Center for Medicare and Medicaid Innovation's new Care Transformation Track (CGT). Our team is working through the dense technical details of these proposals, and we'll have a comprehensive blog post breaking down the PFS implications coming soon.
Key PFS Highlights Worth Watching:
Mandatory Ambulatory Specialty Model (ASM): Starting January 1, 2027, specialists treating heart failure or low back pain in Original Medicare will be required to participate in this 5-year model across selected regions, focusing on preventive care and upstream chronic disease management to reduce avoidable hospitalizations and unnecessary procedures.
MSSP Risk Acceleration: CMS proposes limiting inexperienced ACOs to just 5 performance years (down from 7) in one-sided risk models, while requiring faster progression to two-sided risk by their second agreement period – pushing organizations toward greater financial accountability.
Temporary Conversion Factor Relief: The proposed +2.5% one-year increase to conversion factors reflects Congressional action through OBBBA, providing short-term relief while long-standing structural issues with physician payment rates remain unresolved without permanent legislative fixes.
Drug Pricing and ASP Reporting Updates: CMS proposes clarifying definitions and reporting requirements for price concessions and bona fide service fees in Average Sales Price reporting, while confirming that units sold at Maximum Fair Price must be included in ASP calculations and updating policies for Medicare Part B and Part D Inflation Rebate Programs.
FDA Offers to Trade Faster Drug Reviews for Lower US Prices
The FDA is implementing a new Priority Voucher program that would dramatically accelerate drug reviews from the standard 10-12 months to just 1-2 months for pharmaceutical companies that commit to "equalizing" their drug prices between the U.S. and other developed countries. FDA Commissioner Marty Makary announced this pricing initiative as part of the Trump administration's broader effort to lower drug costs, stating the agency wants to "incentivize good behavior in the marketplace." The program operates as a one-year pilot where companies must use awarded vouchers within two years, with the FDA establishing a committee to evaluate which products and companies qualify for this expedited review process. Read more here and here.
Why It Matters
The FDA's new Commissioner's National Priority Voucher program represents a shift toward using incentives rather than regulation to influence drug manufacturers. Designed to fast-track access to critical medications, the program includes a telling provision: manufacturers may need to "equalize" U.S. drug prices with international markets to qualify. The details remain murky regarding how this criterion would work, what pricing standards would apply, or whether it will even be implemented, but its mere inclusion signals policymakers' growing willingness to use creative pressure tactics on drug pricing outside of traditional regulatory frameworks. The timing raises additional questions. The FDA grapples with workforce reductions and internal restructuring while promising to quickly evaluate these complex voucher applications, raising concerns about the agency's capacity to maintain rigorous standards for both manufacturers and patients awaiting breakthrough therapies.
Look for the Helpers: New AI Program Boosts End-of-Life Care Conversations Fivefold
A team of researchers at Washington University in St. Louis and BJC HealthCare developed an AI-powered system that helps clinicians identify patients who would benefit from end-of-life care discussions, training over 300 health care providers and increasing goals-of-care conversations fivefold across their hospital network. Their compassionate innovation combines artificial intelligence with enhanced clinical training to ensure patients receive the comfort-focused care they prefer in their final days, while also reducing unnecessary medical interventions. The program demonstrates how technology can be thoughtfully paired with human expertise to improve one of health care's most challenging aspects, helping patients and families navigate end-of-life decisions with dignity and support. Read here.
What We Are Reading
Medicare Skin Substitute Spending Increases 50-Fold to $10B
L&M Policy Research analyzed Medicare spending on skin substitutes from 2019-2024, revealing explosive growth from $200M to $10B (50-fold increase) with average per-patient costs rising from $10K to $150K, driven by higher-priced products and expanded use in home and nursing home settings. Read here.
Medigap Regulations Provide Protections For Beneficiaries, Especially After Health Shocks, But May Raise Premiums
This Health Affairs study found that state regulations requiring guaranteed issue and community rating for Medigap insurance plans increased disenrollment from Medicare Advantage by beneficiaries with serious health diagnoses (2.75% vs 1.42% in unregulated states), suggesting these consumer protections help sick patients access traditional Medicare but may raise premiums for healthier beneficiaries. Read here.
The Case For Integrated ACOs For Dual-Eligible Beneficiaries
This Health Affairs article argues that CMS should expand Medicare ACOs to include Medicaid risk for dual-eligible beneficiaries, as only 6.2% of dual eligibles are currently enrolled in highly integrated plans while 35% of traditional Medicare dual eligibles are now served by ACOs, creating an opportunity to better coordinate care across both programs. Read here.
Unpaid Caregivers Are Essential and Should Be Compensated
NEJM Catalyst’s commentary, “Unpaid Caregivers Are Essential and Should Be Compensated,” highlights the critical but uncompensated labor of family caregivers and calls for policies that formally recognize, support, and financially reimburse their indispensable contributions. Read here.
Job opportunities
CMMI Hiring Update: Temporary Pathway to Federal Opportunities
The Centers for Medicare & Medicaid Innovation (CMMI) is launching a major hiring initiative through an unconventional approach.
Key Details:
Hiring Structure: Primarily temporary positions (up to 4 years) with limited permanent roles initially
Pay Scale: Most positions at GS-12/13 levels (check OPM for salary details)
Location: Full-time, in-person work required at CMS regional offices or DC-Baltimore area facilities
Permanent Roles: Will continue posting through USAJobs
This temporary-to-permanent pathway allows CMMI to quickly fill vacancies while offering candidates federal experience with potential long-term opportunities. Given high interest, expect longer response times and ensure applications clearly demonstrate relevant health care innovation and federal contracting qualifications.
Pop Health Podcast
Unpacking CMS Reforms to ACO REACH for 2026
CMS rolled out major updates to the ACO REACH Model for Performance Year 2026, with new policies affecting benchmarks, risk scores, and quality incentives, we break down what’s changing with Coral’s own Maria Alexander and Joy Chen along with guest expert Noah Champagne from Milliman.