The Regulator
246 billion dollars: that is what the Centers for Medicare and Medicaid Services’ own actuaries say a new Medicaid rule will cut from federal spending over the next decade, and the rule’s public comment clock started running yesterday. CMS published the proposed rule “Medicaid Program; Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes” (CMS-2452-P) in the Federal Register on July 23, 2026, implementing Section 71115 of this year’s federal tax and spending law, which CMS calls the Working Families Tax Cut legislation. The rule tightens the “indirect hold harmless” threshold, the mechanism states use to tax hospitals, nursing homes and other providers and draw down extra federal Medicaid matching dollars; in states that expanded Medicaid, the new lower thresholds take effect October 1, 2027, then step down another 0.5 percentage points a year starting in 2028 until they bottom out at 3.5 percent in 2032, and the rule bars states from imposing new or increased provider taxes that were not already enacted and in effect as of July 4, 2025. Comments are due September 21, 2026. Confidence: High on the rule’s provisions and the deadline, since the Federal Register notice and CMS’s own fact sheet confirm them; Low on whether the 246 billion dollar estimate survives to a final rule, since the comment period has just opened. Sources: Medicaid Program; Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes, Federal Register, Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes Proposed Rule (CMS-2452-P), Centers for Medicare and Medicaid Services.
A Senate committee chairman said yesterday he already has the votes to confirm Robert F. Kennedy Jr.’s pick to run the Centers for Disease Control and Prevention, even though the committee postponed the vote itself. The Senate Health, Education, Labor and Pensions Committee was scheduled to vote July 23, 2026 on Dr. Erica Schwartz’s nomination to lead the CDC, the vote this issue previewed on July 23, but Chairman Bill Cassidy postponed it after Senator Lisa Murkowski, one of the panel’s Republicans, was absent for a family emergency, leaving Cassidy without a guaranteed majority in a committee Republicans control by a single seat. Cassidy said he decided to back Schwartz after the CDC took what he called a “good faith action” changing website language on vaccines and autism, and said he already has the votes to advance her; the committee’s next executive session, and the nomination’s next opportunity for a vote, is July 30, 2026. Confidence: High on the postponement and the July 30 date, since the committee’s own scheduling notice and multiple outlets confirm them; Medium on Cassidy’s vote-count claim, since it has not been tested. Sources: Updated: Senate HELP Committee To Consider Nomination for CDC Director, Senate HELP Committee, Senate committee postpones vote on whether to advance CDC director nominee, UPI.
A federal appeals court ruled this week that drugmakers cannot switch hospitals’ discount drug program from upfront discounts to after-the-fact rebates without the government’s sign-off. The U.S. Court of Appeals for the District of Columbia Circuit ruled July 21, 2026 in Novartis Pharmaceuticals Corp. v. Kennedy that Section 340B of the Public Health Service Act requires the Department of Health and Human Services Secretary to approve any rebate mechanism before drug manufacturers, including Eli Lilly, Bristol Myers Squibb, Sanofi and Novartis, can replace the point-of-sale discounts hospitals and clinics get under the federal 340B drug discount program with a rebate model that would make providers pay full price upfront and wait to be reimbursed. The court wrote that “the statute places the Secretary, not the manufacturers, in the driver’s seat of this important program,” backing the Health Resources and Services Administration’s authority to preapprove or block manufacturers’ rebate plans. Confidence: High on the ruling and its holding, since the court’s own opinion and hospital-association reporting both confirm it; Low on whether manufacturers appeal further, since none has stated intent as of this writing. Sources: Court ruling, Novartis Pharmaceuticals Corp. v. Kennedy, U.S. Court of Appeals for the D.C. Circuit, Court rules that companies may not impose 340B rebate model without HHS approval, American Hospital Association.
23.7 billion dollars: that is how much Medicare Advantage plans were improperly paid last year, and the government’s own auditor says a backlog in fraud audits is part of why. The Government Accountability Office reported July 21, 2026 that Medicare Advantage, the privately run alternative to traditional Medicare that now covers over half of Medicare’s enrollees, had a 6.1 percent improper payment rate in fiscal year 2025, totaling 23.7 billion dollars in payment errors, a rate the report says “has not decreased” in recent years. The report, GAO-26-107946, found the Centers for Medicare and Medicaid Services’ backlog of risk-adjustment data validation audits, the process meant to verify insurers’ diagnosis coding actually supports the extra payments they collect for sicker patients, is delaying the agency’s ability to recover improper payments once found; GAO recommended CMS set a detailed plan to speed up those audits and run a comprehensive fraud risk assessment of the entire program. Confidence: High on the dollar figures and recommendations, since GAO’s own report confirms them directly. Source: Program Integrity: Actions Needed to Reduce Improper Payment and Fraud Risks in VA Community Care and Medicare Advantage, GAO-26-107946, U.S. Government Accountability Office.
40.9 percent: that is the biggest premium increase an insurer has asked Pennsylvania regulators to approve for next year’s Affordable Care Act marketplace plans. The Pennsylvania Insurance Department posted insurers’ initial 2027 rate requests this week, showing individual-market increases ranging from 10.46 percent from Geisinger Health Plan to 40.90 percent from Ambetter Health of Pennsylvania, with 16 carriers filing in the individual market and 16 in the small-group market, where requests range from 3.74 percent to 33.57 percent from UnitedHealthcare Insurance Company; the statewide average request is 17.1 percent for individual plans and 11.5 percent for small-group plans. The department is taking public comment on the requests before it approves final rates this fall, and Pennsylvanians can submit feedback directly to the agency at ra-rateform@pa.gov. Confidence: High on the filed rate ranges and the comment process, since the state’s own posted filings confirm them; Low on what the final approved rates will be, since Pennsylvania has not yet reviewed or ruled on the requests. Sources: ACA Health Rate Filings, Pennsylvania Insurance Department, Pennsylvania ACA health insurers propose 2027 double-digit premium rate increases, WHYY.
547 million dollars: that is the size of the genetic-testing fraud scheme prosecutors say a fugitive indicted seven years ago was finally arrested for this week. The Department of Health and Human Services’ Office of Inspector General announced July 21, 2026 that Khalid Satary, 54, was arrested in connection with what the agency calls one of the largest health care fraud schemes ever charged by the Department of Justice, a scheme prosecutors say defrauded Medicare of more than 547 million dollars through medically unnecessary genetic testing; Satary was originally charged by indictment in 2019 in the U.S. District Court for the Eastern District of Louisiana. Confidence: dropped, since the Department of Justice’s own press release on the arrest could not be independently reviewed for this issue and this account rests on HHS’s Office of Inspector General’s enforcement posting; High on the original indictment’s existence and district, since court records corroborate it. Source: Notorious Fugitive Arrested in Connection with $547 Million Medicare Fraud Scheme, HHS Office of Inspector General.