CMS Slaps Its Own A.I. Contractor in Controversial WISeR Program

By Joey Rettino – Last week, the Centers for Medicare and Medicaid Services (CMS) reprimanded one of the six participants in the Wasteful and Inappropriate Service Reduction (WISeR) model just six months after the pilot launched. WISeR is a pilot program that expanded the use of prior authorization in Traditional Medicare in six states and handed the reins over to AI companies to make those decisions about whether or not a patient receives coverage for care. Read Full Article...

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1. CMS Orders Corrective Action for AI Contractor: CMS directed Virtix Health, which administers the WISeR model in Washington state, to submit a Corrective Action Plan after finding it failed to meet required turnaround times for Medicare prior authorization reviews. The reprimand marks the agency’s first formal acknowledgment of operational problems within the pilot. Reporting from local and national outlets documented patients experiencing prolonged delays and inappropriate denials under the system. Some patients waited months for necessary treatments, and at least one case required more than two months to overturn a denial.

2. Systemic Problems Across All Pilot States: The issues in Washington are not isolated, according to the article, which states that all six companies participating in WISeR have fallen short of CMS standards. Providers in multiple states reported weeks-long delays in securing approvals or reversing denials, and in Ohio the prior authorization portal was reportedly nonfunctional for months after launch. The pilot operates in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. These operational challenges have raised broader concerns about the model’s efficiency and transparency goals.

3. Growing Bipartisan Push to End the Program: Opposition to WISeR is increasing in Congress, with more than 60 House members urging CMS to wind down the model by the end of 2026. Several senators and representatives have introduced resolutions under the Congressional Review Act to repeal the program, following a Government Accountability Office determination that it qualifies for such review. The House Appropriations Committee also unanimously adopted an amendment that would block funding for WISeR, reflecting bipartisan skepticism. Although its ultimate legislative fate is uncertain, these actions signal mounting political pressure on the initiative.

CMS proposes 340B cuts

By Nicole DeFeudis – A proposed rule would cut the rates by which Medicare pays hospitals for 340B drugs by more than a third, reviving a similar policy introduced by the first Trump administration. CMS said on Thursday that Medicare payments to some hospitals have “substantially exceeded” what those hospitals spend to acquire the drugs under the 340B drug discount program. The agency proposed aligning those costs by reducing Medicare reimbursement rates to 340B hospitals, equal to the drug’s average sales price minus 33.4%. Currently, hospitals are reimbursed a drug’s average sales price plus 6%. Read Full Article... ^{_{(Subscription required)}}

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1. CMS Proposes $4.55 Billion Reduction in 340B Drug Reimbursement: CMS has proposed reducing Medicare reimbursement for drugs purchased through the 340B Drug Pricing Program, estimating the policy would save Original Medicare $4.55 billion in 2027, the first year of implementation. Because Medicare outpatient payments must remain budget neutral, CMS would redistribute those savings by increasing payments for non-drug outpatient hospital services by an equivalent $4.55 billion. The agency said the proposal is based on newly collected hospital acquisition cost data that identified significant differences between 340B and non-340B drug purchasing costs.

2. Hospital Groups Oppose the Proposal and Warn of Funding Reductions: Hospital organizations, including 340B Health, argue the proposed reimbursement cuts would reduce resources that hospitals use to provide care in underserved communities. Industry leaders have urged CMS to withdraw the proposal in its entirety, contending the policy would weaken financial support for safety-net providers and negatively affect patient services. The proposal continues a longstanding debate over balancing Medicare savings with funding for hospitals participating in the 340B program.

3. Proposal May Face Additional Legal Challenges: The proposal follows the 2022 Supreme Court ruling that invalidated CMS's 2018 reimbursement reduction to Average Sales Price (ASP) minus 22.5%, finding the agency could not single out 340B hospitals without first surveying acquisition costs. CMS says it addressed that requirement by conducting a survey between January 1 and April 7, 2026, which found significant disparities between the acquisition costs of 340B drugs and those purchased outside the program. Despite the new survey, legal experts expect hospitals to challenge the survey's methodology and results, making additional litigation likely.

‘AI communication gap’ leaves negative impression on customers

By Rayne Morgan – Some insurers should reconsider how they use artificial intelligence for customer service, as a new Trustpilot report found that an "AI communication gap" could negatively affect consumer reviews. In a recently released report, Danish reviews website Trustpilot found customer ratings of American insurance companies tanked when a complaint was not addressed or escalated along a human chain — especially during times of crisis. Compounding the issue, consumer reviews mentioning AI, particularly with being looped in a system and unable to contact a human, were significantly more negative than reviews that did not mention AI. Read Full Article...

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1. Ignored complaints carry measurable reputational costs: Trustpilot’s Insurance Insights Report 2026 found that when customers felt their complaints were ignored, company ratings dropped by an average of 1.6 stars out of five. That decline can significantly alter how prospective customers perceive a brand when comparing options online. The data suggests the issue is not the existence of complaints, but the failure to acknowledge and escalate them properly. Insurers that overlook this dynamic risk avoidable damage to their public ratings.

2. AI-related reviews trend sharply more negative: An analysis of reviews from January 2021 through December 2025 showed that posts mentioning AI averaged 2.47 stars, compared with a 4.35-star average for reviews that did not reference AI. Common frustrations included being stuck in automated loops and being unable to reach a live representative. This indicates that AI tools, when perceived as barriers rather than aids, can materially affect customer satisfaction. The findings highlight the importance of designing AI systems that complement, rather than replace, human support.

3. Crisis response amplifies the need for human escalation: The report found that companies lacking clear human escalation paths during events such as the January 2025 California wildfires faced heightened risks of long-term reputational harm. Trustpilot’s U.S.-focused study drew on more than 145,000 consumer reviews, underscoring the scale of the feedback analyzed. Executives emphasized maintaining transparency when AI is involved in decisions and ensuring customers can easily reach a person. Insurers that balance efficiency with empathy may differentiate themselves in a competitive market.

Where Obamacare enrollment is plummeting

By David Nather – Ohio, Oklahoma, Arizona, South Carolina and Minnesota have sustained some of the deepest losses in Obamacare coverage since beefed-up federal subsidies expired this year, according to state-by-state federal data. Read Full Article...

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1. Steep state-level declines following subsidy expiration: Several states experienced especially sharp enrollment drops after enhanced federal subsidies ended. Ohio and Oklahoma each saw enrollment fall by nearly one-third over the past year, while Arizona, South Carolina and Minnesota also posted significant decreases. Other states, including Indiana, Michigan, Mississippi and Louisiana, recorded declines exceeding a quarter of their prior enrollment levels. The losses span both Republican- and Democratic-leaning states.

2. National enrollment down by millions amid competing explanations: Nationwide, Affordable Care Act marketplace enrollment declined by roughly 3 million people year over year, representing about a 13% decrease. A federal report attributed much of the reduction to improper or fraudulent sign-ups involving so-called “phantom enrollees.” However, some health policy experts argue that many consumers simply failed to pay their initial premiums once enhanced subsidies expired. The differing explanations could shape how policymakers interpret the data.

3. Political implications ahead of midterm elections: The enhanced subsidies enacted during the pandemic disproportionately benefited red states, particularly those that did not expand Medicaid. With those subsidies now expired and enrollment falling, the issue may become a flashpoint in upcoming midterm campaigns. Democrats are expected to highlight the coverage losses, while it remains unclear how prominently Republican candidates will address the subsidy expiration. The debate could influence broader discussions about the future of ACA support and affordability.

Eye doctors ask states to protect them from vision plan price pressure

By Allison Bell – Optometrists say they need protection against big, remorseless vision benefit plans to save patients' access to fast, flexible, high-quality vision care services. The vision plans say optometrists are trying to limit price competition in ways that will push up the cost of vision benefit plans and hurt consumers' ability to pay for eyeglasses and contact lenses. The National Council of Insurance Legislators is preparing to bring both sides together July 17 in Boston, at an in-person meeting of NCOIL's Health Insurance & Long Term Care Issues Committee. Read Full Article... ^{_{(Subscription required)}}

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1. Debate Over a Proposed Model Law: A draft model act introduced at NCOIL would establish standards for how vision benefit plans reimburse providers and structure their networks. Supporters say the proposal is designed to ensure transparent and fair business practices, particularly around payments and supplier relationships. Critics argue that some provisions could effectively require plans to accept all providers at their requested rates. The dispute centers on whether the model protects patient access or restricts competitive pricing.

2. Concerns About Price Floors and Consumer Costs: Representatives of vision care plans contend that the draft includes language that could function as a de facto price floor for services and materials. They argue this would reduce price competition among providers and potentially increase premiums and out-of-pocket costs for consumers. Plan representatives also say limits on steering patients to lower-cost providers would make it harder for consumers to compare options. Optometrists counter that current contracting practices leave them with little negotiating leverage.

3. Broader Implications for Health Care Competition Policy: The upcoming NCOIL committee discussion in Boston is expected to serve as a preview of larger debates over health care market rules. Lawmakers at both the state and federal levels are weighing proposals that would impose new requirements on insurers and provider systems. Similar conflicts between benefit plans and providers, including disputes over patient steering, are already unfolding in states such as Texas. The outcome of the vision care model debate could influence how policymakers approach competition and cost-containment measures across other health sectors.

Caregiving responsibilities could be costing Gen Z their careers

By Paola Peralta – The role of primary caregiver is a tough responsibility for any employee, but for young talent, it's also pushing them out of the workforce before they've really started their careers. Ninety percent of caregivers are showing burnout symptoms, according to a recent survey of 1,000 U.S. adults from health tech company LogicMark. And while caregiver fatigue has been affecting employees of all ages, the data revealed that Gen Z, the youngest caregivers in the workforce, are being hit the hardest — 62% said caregiving cuts into their job performance, compared to 44% of millennials and 45% of Gen X, and 50% said caregiving has damaged their personal relationships. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Gen Z Takes on a Growing Share of Caregiving Responsibilities: Caregiving is no longer primarily a Millennial or Gen X issue, with Gen Z increasingly taking on responsibility as more older adults choose to age independently at home following the pandemic. Many younger workers are balancing caregiving while simultaneously launching their careers, repaying student debt, starting families, and navigating ongoing economic uncertainty. This shift is bringing greater attention to the unique challenges facing Gen Z employees and their evolving workplace needs.

2. Caregiving Is Influencing Career Decisions and Employer Talent Strategies: Caregiving responsibilities are leading some Gen Z employees to forgo career advancement opportunities in favor of jobs closer to home, lower-paying positions, or roles that offer remote work flexibility. These tradeoffs can contribute to increased burnout, disengagement, and retention challenges, while employers risk losing highly qualified talent if caregiving support remains limited. Organizations may need to rethink benefits and workplace flexibility to better attract and retain younger employees.

3. Employers Are Expanding Benefits to Better Support Family Caregivers: Beyond traditional paid leave and PTO, employers are increasingly considering benefits such as consultations with aging-care specialists, counseling for caregivers and their parents, personalized benefits guidance, and technology-enabled services including 24/7 monitoring, emergency response, and family alerts. These resources are designed to reduce non-emergency caregiving interruptions, distribute responsibilities across broader support networks, and improve employee productivity and morale. Without more sustainable caregiving support, organizations risk increased workforce attrition as more Gen Z employees believe caregiving is limiting their long-term career growth.

Healthcare Dealmakers—Ascension closes $3.9B Amsurg purchase, Hims & Hers' $1.2B international play and more

By Dave Muoio – Healthcare mergers and acquisitions are in no short supply as providers, health tech companies, payers and other industry players look to expand their businesses and gain a competitive edge. Here’s a roundup of new deals that were revealed, closed, rumored or called off during the month of June. Read Full Article...

HVBA Article Summary

1. Large-Scale Provider Consolidation Continues: Several hospital and health system operators completed or advanced sizable transactions during June. Ascension finalized its $3.9 billion acquisition of AmSurg, becoming the nation’s third-largest ambulatory surgery center platform with more than 300 sites after agreeing to divest seven centers to satisfy federal regulators. Other notable moves included Select Medical’s $3.9 billion take-private transaction and West Virginia University Health System’s planned $800 million investment tied to its proposed acquisition of Independence Health System. These deals reflect ongoing consolidation among providers seeking scale, geographic reach and operational leverage.

2. Strategic Portfolio Shifts and Divestitures: Multiple organizations used June to reshape their portfolios through asset sales and divestitures. Humana said it would sell its minority stake in Gentiva at an approximately $900 million valuation, while Health Catalyst agreed to divest Vitalware for $147 million in cash to focus on higher-priority business areas. HCA Healthcare also struck agreements to sell 31 home health and hospice agencies and separately acquire 17 urgent care clinics, signaling a recalibration of service lines. Together, these moves highlight how companies are balancing growth initiatives with efforts to streamline operations and strengthen balance sheets.

3. Tech and Pharmacy Benefit Players Pursue Scale and Differentiation: Digital health and pharmacy benefit management companies were active in pursuing expansion and competitive positioning. Hims & Hers completed its $1.2 billion acquisition of Australia-based Eucalyptus to expand into markets such as Australia and Japan while deepening its footprint in the U.K., Germany and Canada. Meanwhile, LucyRx and Abarca announced plans to merge into a new entity serving more than 9 million members, positioning themselves as an independent alternative in the PBM market. A steady stream of additional health IT acquisitions—spanning AI, revenue cycle management and patient engagement—underscores continued investment in technology-enabled healthcare services.