Health Care Matters | October 3
Government Shutdown Impacts
The federal government shutdown that began Wednesday, October 1, has furloughed millions of federal workers across agencies, including food inspectors, park rangers, and approximately 40% of HHS employees. However, major health care programs including Medicare, Medicaid, the Children's Health Insurance Program, and federal health insurance exchanges will continue operating because they are funded through mandatory appropriations rather than annual discretionary spending. Notably, expanded Medicare telehealth coverage and the Acute Hospital Care at Home initiative have expired because Congress only authorized payment for these services through September 30, requiring new legislation to restore them. All hospitals participating in hospital-at-home had to discharge patients or move them to physical hospitals on Tuesday after funding lapsed, further straining already crowded inpatient facilities. While providers can still offer telehealth services to Medicare enrollees, they won't be paid unless Congress authorizes retroactive reimbursement; some health systems are cutting off seniors' telehealth access while others continue providing care but holding claims. Read more here, here, and here.
Why It Matters
For health care organizations participating in CMMI models and value-based care arrangements, the immediate operational impact should be minimal since CMMI funding flows through mandatory appropriations that aren't subject to the annual budget process. However, the expiration of telehealth and hospital-at-home programs represents a significant disruption to care delivery models that many organizations have integrated into their operations since 2020. Organizations providing these services face immediate decisions about whether to absorb unreimbursed costs while awaiting potential retroactive payment or to discontinue services to Medicare beneficiaries. The uncertainty creates operational challenges for workforce scheduling, patient transitions, and care continuity.
MA and Medicare Prescription Drug Programs Expected to Remain Stable in 2026
CMS released its 2026 Medicare Advantage landscape data showing the MA market will remain stable with over 99% of beneficiaries maintaining plan access and 97% having 10+ plan choices. Average monthly MA premiums will decrease from $16.40 to $14.00, while supplemental benefits remain unchanged. Total plans will drop slightly from 5,633 to 5,600, and projected enrollment will decline from 34.9 million (50% of beneficiaries) to 34 million (48%), though CMS expects actual enrollment will exceed these projections. The data reveals considerable growth in exclusively aligned D-SNPs across FIDE, HIDE, and coordination-only arrangements. Read here.
Why It Matters
The D-SNP expansion signals a strategic shift toward full Medicare-Medicaid integration, with states increasingly pursuing tighter coordination models rather than allowing split coverage. This creates opportunities for health plans and ACOs to develop comprehensive care management capabilities and strengthen state partnerships. The market contraction and premium decreases likely reflect consolidation as plans focus on sustainable margins under heightened CMS scrutiny, particularly after CMS's unprecedented rejection of Part D bids with excessive premium increases. For Open Enrollment, CMS is introducing new Medicare.gov features including AI-powered prescription cost estimators and enhanced provider comparisons, which could impact how beneficiaries evaluate plans and influence competitive dynamics in the MA market.
Evolent Announces Strategic Divestiture of its Value-Based Primary Care Business, Evolent Care Partners
Evolent Health is selling its primary care business, Evolent Care Partners (ECP), to Privia Health for up to $113 million. ECP includes approximately 1,000 providers serving 120,000 patients, including 80,000 in the Medicare Shared Savings Program. Privia will pay $100 million at closing with up to $13 million additional payment based on how well ECP performs in 2025. The sale expands Privia's presence from 15 states to 26 states and brings its total patient population in value-based care arrangements to approximately 1.5 million across Medicare, Medicaid, and commercial insurance programs. Read more here and here.
Why It Matters
This transaction allows both companies to streamline operations and focus on their core strengths. Privia specializes in primary care and managing patient risk across all services, making the ACO business a natural fit that expands its existing multi-payer platform. Evolent, meanwhile, can now concentrate entirely on what differentiates it in a crowded market: managing complex, high-cost specialty conditions including oncology, cardiology, and musculoskeletal care. While the market currently appears to be fragmenting into specialized platforms focused on either primary care coordination or specialty care management, controlling health care costs over the long term may ultimately require both capabilities working together in an integrated system.
Look for the Helpers: Geriatrics Training Program Survives to Serve Aging Americans
The Geriatrics Workforce Enhancement Program (G.W.E.P.), which trains about 70,000 health care providers annually to work with older adults, recently survived a funding crisis after the Trump administration initially withheld $14.3 million in allocated funds before restoring them in September. Through 42 university and hospital programs nationwide, dedicated professionals like Dr. Laura Byerly in Oregon and Dr. Sam Cotton in Kentucky are addressing the shortage of geriatric expertise by training everyone from community health workers to nursing home aides in age-friendly care. These resourceful teams demonstrate how service-driven educators create meaningful change by extending vital knowledge about elder care to diverse providers ensuring that America's growing population of older adults receives the expert, compassionate care they deserve. Read here.
What We Are Reading
How Medicaid Provider Taxes Work: An Explainer
The National Association of Medicaid Directors (NAMD) published an explainer on how Medicaid provider taxes work as a complex financing tool, why states use them, and the key changes made under the OBBBA. Read here.
CMMI Preventive Care Key Concepts
CMMI recently published a preventive care key concept that defines these services as health interventions aimed at blocking or delaying illness through screenings, vaccinations, and early intervention, aligning with the administration's focus on improving long-term health outcomes and reducing costly treatments. Read here.
Where We Were
Coral’s Annual Retreat in Baltimore
Earlier this week, our team gathered in Baltimore for Coral’s annual in-person retreat. While much of our work happens virtually, the retreat gave us the chance to step away from our daily routines and focus on what mattered most: aligning on strategy, strengthening collaboration, and deepening connections.
Over several days, we reflected on recent achievements, shared lessons learned, and set priorities for the year ahead. Just as importantly, we built relationships across the team, creating connections that now translate into more creative problem-solving and stronger support for our clients and allies.
Baltimore’s energy provided the perfect backdrop. We left with sharper focus, fresh ideas, and a renewed commitment to advancing health care transformation alongside those we serve.
Pop Health Podcast
Rural Health Transformation: How States Can Align Stakeholders for Lasting Change
The Rural Health Transformation Program represents a $50 billion investment in the future of rural health care. In this episode, we sit down with Caitlin Westerson, Senior Director for State Policy and Advocacy at United States of Care, to explore what this program means for states, providers, and communities. Together, we unpack the opportunities and challenges in applying for funding, the role of value-based care in building sustainable models, and how states can align stakeholders to create lasting change in rural health systems.