🚔 The Payment PolicyThe Trump administration is sending mixed signals on healthcare cost control, proposing stricter oversight while delivering bigger checks to industry. CMS released a sweeping proposed rule requiring insurers to respond to prescription drug prior authorization requests within strict deadlines—24 hours for urgent requests and 72 hours for standard requests—while increasing transparency through full disclosure of claims denials and appeals outcomes. The rule extends electronic prior authorization requirements across Medicare Advantage, Medicaid, CHIP, and ACA marketplace plans, with compliance deadlines beginning October 2027. Yet when it comes to payment rates, industry lobbying appears to be winning. CMS finalized significantly higher Medicare Advantage rates for 2027 than initially proposed, delivering an average rate increase of 2.48% compared to the 0.09% increase that regulators proposed earlier this year. The government will send more than $13 billion in additional payments to MA plans in 2027, versus the $700 million raise that regulators initially planned. Stocks in major MA providers jumped in aftermarket trading after the rule was released, with the relief delivered by the final rule for the industry "hard to overstate," according to analysts. The pattern continues with hospital payments. Medicare proposed a 2.4% pay increase for inpatient hospitals in 2027, sending approximately $1.4 billion more to acute care hospitals, while simultaneously floating a mandatory nationwide joint replacement bundled payment model. Hospital groups immediately pushed back, arguing the payment increase was "inadequate in the face of mounting financial challenges, including a rising uninsured rate" expected to climb to 9.1% in 2027. Meanwhile, government auditors are questioning the effectiveness of Medicare innovation efforts altogether. A new GAO audit of the Center for Medicare and Medicaid Innovation found that of 70 delivery and payment models developed and tested between 2011 and 2024, just four had been scaled for nationwide implementation. The audit outlined $11.4 billion obligated to CMMI during that 14-year window, with obligations peaking at $1.3 billion in 2015. House Budget Committee Chairman Jodey Arrington called the 5.7% success rate "failure," noting "with our national debt barreling past $39 trillion, we can't afford programs that promise savings but consistently come up short."
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