A recent UnitedHealth Group report attempted to demonstrate the appropriateness of diagnoses collected during home visits and submitted for risk adjustment purposes in Medicare Advantage. But researchers say the report does nothing to address ongoing concerns about MA insurers’ aggressive coding behavior and failed to address an important question: What happens after the home visit?

The report was prepared by FTI Consulting and focused on the Optum HouseCalls program, which sends advanced practice clinicians (e.g., nurse practitioners, physician assistants) to UnitedHealthcare members’ homes to assess their health status and ongoing care needs. Relying on the statistical sampling software used by the HHS Office of Inspector General, FTI generated a random sample of 200 home visits conducted during calendar year 2025. It found that 96.6% of the Hierarchical Condition Categories (HCCs) associated with those visits and submitted to CMS for reimbursement were supported in the medical record.

FTI pointed out that the 3.4% error rate, referring to those HCCs that were not adequately supported, was lower than the 4.94% program-wide net payment error rate reported by CMS and the 5% error rate used in HHS Risk Adjustment Data Validation (RADV) audits.

While the report provides some new information in that it compares diagnosis codes captured during a home visit with those found in medical records captured at the same home visit, “it doesn’t seem that useful,” weighs in David Meyers, Ph.D., associate professor and vice chair for the Department of Health Services, Policy, and Practice at Brown University School of Public Health. “The potential problem with the home health risk assessments is that they capture diagnoses that are not actually relevant to patient care.”

He continues, “This report does nothing to answer the question of whether these diagnoses are really needed, or if the assessments are a way to inflate risk scores.”

But that wasn’t a question the FTI report intended to answer. “Consistent with how CMS conducts RADV audits, FTI did not perform a clinical review or clinical validation audit,” a UnitedHealthcare spokesperson says. “FTI’s coding review of HouseCalls focused on whether the diagnosis codes submitted accurately reflected the conditions identified and documented by the provider.”

Report Follows Problematic OIG, Journal Findings

In prior reports looking at Medicare Advantage plans’ risk adjustment practices, UnitedHealth has been an outlier. In a July 2024 Wall Street Journal investigation linking an extra $50 billion risk-adjusted payments to MA insurers stemming from “hundreds of thousands of questionable diagnoses,” the Journal estimated that UnitedHealth received $8.7 billion in 2021 payments for additional diagnoses that were not treated. The report called out home visits as one way to gather questionable diagnoses.

In October 2024, the HHS Office of Inspector General found that diagnoses derived from health risk assessments and HRA-linked chart reviews but not appearing on any other service records led to roughly $7.5 billion in MA risk-adjustment payments for 2023. The OIG expressed concern about the lack of follow-up treatment for those diagnoses and pointed out that almost two-thirds of the $7.5 billion were related to in-home HRAs and HRA-linked chart reviews. OIG noted that UnitedHealth “stood out from its peers,” generating a disproportionate share of $3.7 billion in payments.

The FTI report is the latest in a series of independent assessments commissioned by UnitedHealth. In December 2025, UnitedHealth shared a set of third-party audits of its risk assessment, managed care and pharmacy benefits practices. Two of those were conducted by FTI; the third was prepared by Analysis Group. Together, those audits resulted in 23 process improvement recommendations. UnitedHealth said it has completed all of them.

Upon releasing the latest review, UnitedHealth CEO Stephen Hemsley said FTI’s findings “validate the integrity of the HouseCalls program, but we will continue to strive to ensure that only appropriately supported diagnoses are submitted to CMS.” He noted that through UnitedHealth’s Care Connectors team, patients who are identified as having new or worsening conditions during their home visit are linked to a Care Connector to schedule follow-up care or find additional resources. After the visit, Care Connectors “remain engaged” to ensure that members are getting the care they need, he added.

FTI’s evaluation, however, used only HouseCalls records, not records from providers’ offices or hospitals where care is usually provided, points out Paul Jacobs, Ph.D., a health economist who has previously studied coding intensity in MA.

“The question that matters for Medicare beneficiaries is: Are they receiving appropriate care for their needs?” says Jacobs, who is an associate scientist with the Department of Health Policy and Management at Johns Hopkins Bloomberg School of Public Health.

“The 2024 OIG report found that for 1.7 million enrollees, diagnoses like these appear on no other medical records and with no evidence they led to follow-up care. What, then, is a diagnosis worth if it never leads to care?”

Jacobs’ own research found that encounter-based risk scores for MA enrollees in 2021 were 7.4% higher when in-home health risk assessments and chart reviews were included.

Researcher: ‘Accuracy Isn’t the Point’

The broader problem, says Jacobs, is coding intensity, referring to the more comprehensive diagnosis capture occurring in MA versus traditional Medicare. “We know from more than a decade of research that coding intensity creates huge revenue surpluses for MA plans, and we fund those surpluses as taxpayers and by every Medicare enrollee through increased Part B premiums,” he adds.

“Some may find it comforting to know that UHC/Optum’s assessment program is following its own rules,” he continues. “However, even if UHC/Optum’s coding is clean, accuracy isn’t the point — we are paying billions in extra payments for codes that often do not translate into care.”

The Medicare Payment Advisory Commission (MedPAC) has repeatedly recommended to Congress that diagnoses found during health risk assessments should be excluded from risk adjustment in MA.

“The primary concern of MedPAC, OIG, and lawmakers is that the diagnosis codes captured during the home health risk assessments inflate risk scores for beneficiaries when these diagnoses aren’t actually relevant to that patient’s care needs,” says Meyers. “This report does nothing to address any of these concerns.”

Despite reservations about in-home assessments, CMS continues to count diagnoses from such interactions in the determination of risk-adjusted payments. In 2013 and 2014, the agency issued proposals that would have restricted the use of home-derived diagnoses, but those policies never made it into final rules.

Lauren Flynn Kelly has been writing about the business of health insurance and pharmacy benefits since the early 2000s. Up until its closure in August 2025, she served a variety of roles at AIS Health, including beat reporter on Medicare Advantage and executive editor leading a specialized team of health business journalists. When she’s not busy paddleboarding at the Jersey Shore, she is helping clients build their brand authority through the creation of blog posts, case studies, white papers and other strategic content.

While some people have characterized the current state of the 340B Drug Discount Program as a fight between pharma manufacturers and hospitals, payers and employers are increasingly impacted by the situation, maintained longtime industry expert Adam J. Fein, Ph.D., president of Drug Channels Institute (DCI), an HMP Global company, during a June 12 webinar on 340B. And a recent report found that commercial payers and Medicare payers essentially equally funded the bulk of covered entities’ 340B net profits in one state.

“I don’t think people fully appreciate” this dynamic, said Fein — who was moderating his next-to-last webinar for DCI before he and his wife, Paula, vice president of business development at DCI, leave the organization at the end of 2026 — but “payers are starting to notice what’s happening.”

Founded in 1992, the 340B program has evolved into “the most contentious, confusing and controversial program in the entire U.S. health care system,” he asserted. In 2013, there were 13,000 unique 340B contract pharmacy locations, and they had 32,000 relationships with 4,000 covered entities, the latter of which consist of certain types of hospitals and federal grantees. The marketplace has since undergone a huge expansion and now has 32,000 unique 340B contract pharmacies and 12,000 covered entities, with 240,000 contract pharmacy/covered entity relationships.

In 2024, covered entities made $81.4 billion in 340B-discounted drug price purchases. “There’s no other part of the U.S. healthcare system that’s grown as quickly as 340B,” Fein stated.

340B Status Is Unknown at Time of Adjudication

Due to “one of the weird aspects of 340B,” when an individual fills a prescription at a contract pharmacy and pays her share, and her employer or health plan pays its share, it is unknown at that time what the drug’s 340B status is.

“Days or weeks or months or maybe a year” later, a third-party administrator working for the covered entity can “essentially identify the prescriptions they would like to convert to 340B,” explained Fein. “And then conceptually, not literally, they will essentially say to the pharmacy, ‘Well, that reimbursement you got from the payer and patient, give it to us, and we’ll put a product back on your shelf as if the transaction never happened.’” After that, the 340B covered entity retains the difference between the reimbursement and the 340B amount, which “can be very high.”

“Money is fungible; money doesn’t know where it comes from,” noted Fein. “When a prescription after the fact becomes a 340B prescription, the employers and payers are the ones who are losing out.”

For example, he said, take the case of a specialty drug with a $5,000 reimbursement. The manufacturer is responsible for a 30% rebate, or $1,500, and the patient has a 25% coinsurance, or $1,250, leaving the commercial plan sponsor on the hook for the remainder of the drug’s cost: $2,250.

However, once a third-party administrator converts that drug to a 340B product, the manufacturer’s rebate — the payer’s discount — vanishes. So while the patient already paid her coinsurance at the point of sale, the payer now is responsible for the remainder of the cost, increasing its total due to $3,750.

“So the plan is now paying a lot for that, more than they expected in their benefits for that prescription, and the covered entity is now getting it,” noted Fein. “And one of the things that’s interesting about this is that if you talk to employers or health plans, they will often point the finger at hospitals as being a source of high costs. And now, on top of the normal costs they’re paying for hospital services, they’re now also paying this additional 340B tariff.”

Commercial, Medicare Plans Split Funding of Minn. 340B Net Profits

While the 340B program largely remains a black box in terms of visibility, some states such as Minnesota have begun asking for data from covered entities. According to a Drug Channels post from Bryce Platt, Pharm.D., director at DCI, hospitals in that state earned $1.34 billion in 340B net profits in 2024, almost doubling from $630 million the previous year. Hospitals in Minnesota were responsible for 93% of 340B purchases in the state. According to Platt, “340B has evolved from a safety-net subsidy into a major profit stream for hospital systems.”

Plan sponsors — commercial and Medicare plans — funded 81% of the Minnesota covered entities’ profits. “And the payer behind that, in almost half of the situation, was a commercial payer, an employer, a health plan,” said Fein. “And another 40% was Medicare.”

This situation “is actually probably widespread,” he contended, “and so what is happening is that one of the things driving benefit costs has been 340B contract pharmacy, and payers are just starting to wake up to this.”

Fein cited a report that estimated payers lost $6 billion in rebates in 2025 due to 340B contract pharmacies. That leads to another issue since studies have found that payers use most of their rebates to lower premiums as opposed to lowering patient prescription costs.

“So what’s happening now is fewer rebates, which means costs go up, and an impact on premiums,” he explained. “So this is all happening behind the scenes for a program that’s growing 22% per year. So when we talk about health care costs, this is like one of these fourth-dimensional chess things that’s occurring in the background, and people don’t fully grasp it.

“But a number of employers are starting to grasp it,” he continued. “And we’ve been seeing congressional testimony about this issue. So they’re starting to realize, ‘This could be a problem for us’ and asking for transparency into where the money is going.”

In late May, a federal court issued a critical decision in favor of one health insurance plan that could have a broader impact on the entire Medicare Advantage industry. The program element in question is the CMS Star Ratings, a 5-star system intended to reward high-performing (i.e., high quality) MA plans with quality bonus payments (QBPs) that are applied in a future year.

After the release of the 2026 Star Ratings, which were issued in October 2025 and will impact 2027 revenue, MA insurer Clover Health filed a lawsuit objecting to its final overall rating of 3.5 Stars, which is below the 4-Star or higher QBP threshold. In Clover Insurance Co. v. HHS, et al., Clover argued that CMS unlawfully considered 20 different measures when calculating the insurer’s 2026 Star Rating. The inclusion of half of those measures, it contended, was inappropriate because the measures relied on data that went beyond the statutory requirement for collection. And all 20 measures should have been subject to notice and comment procedures, it argued.

Without getting too deep into the weeds, the court agreed that CMS exceeded its statutory authority in how it built the QBP rating. (If you want to follow the complete timeline of the case, including the court’s refusal to consider the defendants’ untimely cross-motion, Georgetown Law has a comprehensive tracker.)

“In light of a recent court decision,” CMS on June 17 said it was voluntarily recalculating the 2027 Star Ratings for certain MA contracts and reopening its bid submission mechanism on June 25. Because bids for the 2027 plan year have already been submitted, CMS gave impacted plans a limited window to resubmit bids that more accurately reflect their plan revenue for 2027. Those resubmissions must be filed by June 29, with actuarial certifications completed by July 1.

MA Industry Is Experiencing Déjà Vu

This scenario feels familiar to some plans. In June 2024, CMS recalculated the 2024 Star Ratings after two insurers successfully challenged aspects of the MA Star Ratings that would have cost them millions of dollars in QBPs. Dozens of contracts now stand to benefit from the 2026 Star Ratings calculation, while far more would have had worse ratings had CMS not stated that those negatively impacted by the removal of certain measures will be “held harmless.”

In a previous interview with AIS Health, Star Ratings expert Melissa Newton Smith referred to the 2024 scenario as an “accelerated fire drill” exercise. In the following interview for Payer Perspectives, she warns that vacationing executives may need to get their heads out of the sand and think about potential next steps should these measures stay out of the program long term.

Payer Perspectives: Two years ago, CMS’s voluntary recalculation of the Star Ratings was considered unprecedented. Why is everyone making such a big deal about the Clover Health ruling when other insurers have sued CMS over the MA Star Ratings and won?

Melissa Newton Smith: What’s interesting about this ruling and what is different from the other court cases and rulings is that the claims made by Clover are structural and [challenge] the framework of the program since its inception. That is very unlike the other lawsuits, [in] which payers argued that an individual set of calls had a flaw, or in the case of Tukey [outlier deletion methodology], the computation of [cut point] guardrails had a flaw. Whereas the other cases were about a small concrete issue and a defined moment in time, Clover’s claims are quite literally about the entire structure of the Star Ratings, which makes for a very different set of potential next steps.

Payer Perspectives: I’d love to get to those next steps but before we do, let’s talk about that structure that’s being questioned. It appears that the plaintiff is asking the court to consider what Congress intended when it authorized CMS to calculate Star Ratings based on a variety of data sources.

Smith: That’s one issue. Yes, Clover’s claim is that CMS used 10 measures from data sets that were not part of CMS’s statutory authority for measuring quality in Medicare Advantage. So [the question is] whether CMS had the statutory authority to collect the data and use it for a quality and measurement program. The second claim that the court held true was that Clover claimed Star Ratings measures and everything about Star Ratings needed to be subjected to notice-and-comment rule making, because every step of the Star Rating and every aspect of the measures are the basis of payment for services. So the two pieces of Clover’s claim that the court held to be true are anchored to those two issues. As to other things in the suit, the court did not opine on those because they weren’t necessary to opine on after the court [upheld] the first two.

Payer Perspectives: What resulted from this, for now, is CMS’s June 17 memo announcing the 2026 Star Ratings recalculation, which excluded all Part D measures certain Part C measures that do not rely on HEDIS, CAHPS and HOS data. This gave impacted plans a small window to resubmit their bids for 2027 but held harmless those who would be negatively impacted by the new scores. Is there something the industry is missing about CMS’s intent there?

Smith: CMS didn’t agree with anything, and that’s where there is a lot of misinformation floating around. The memo is really clear: CMS concedes nothing. They’re voluntarily figuring out whether there are any contracts that should or could have gotten more money if their Star Rating had been calculated without those non-Part C HEDIS/CAHPS/HOS measures. They literally just did a onetime gift of a payout to those plans. They made no statement [or] indication of whether they will file an appeal, and the appeal is not due to the court until the end of July. And they did not make any indication on how they will handle the soon-to-be released 2027 Star Ratings [due out in October, after two plan preview periods in August and September]. There are just more unknowns than knowns.

Payer Perspectives: One final question: What do you think plans or their strategic partners are losing sight of during this process? Everyone’s excited about refiling and what this ruling means for future challenges to the CMS Star Ratings, but might this be creating a distraction when there are other quality issues to watch?

Smith: This is creating so many distractions. One of the things payers are losing sight of is what impact this recalculation would have if it applied to the 2027 Star Ratings this fall, either with or without a hold harmless [provision]. Once CMS recalculated the 2026 Star Ratings, they did issue a hold harmless because it is hard to go back and put the genie back in the bottle. But there’s no guarantee they will issue that with recalculated Star Ratings this fall. I think plans that saw this memo [and received lower ratings] were able to breathe a sigh of relief that they had been held harmless. It’s easy to go to the beach and enjoy summer vacation and not actively pursue what that might mean for the fall’s plan preview periods if CMS were to apply this absent held harmless.

Additionally, many plans are trapped under Star strategies and Stars work plans with material amounts of spending and effort, focused on individual measures, including some of the measures that came out of this recalculated Star Rating. They’re used to spending money on, for example, Part D medication adherence, with tactics that only address Part D medication adherence. I think plans are struggling to figure out how to adapt those narrow-purpose activities and tactics with speed, so that if the measures come out this year, their spending won’t be waste. And again, we’re talking about super-fast timelines.

In my opinion, it’s the ultimate test of buzzwords like agility or nimble. There are a lot of plans that have treated stars like a game. It’s why CMS already redesigned the program in the 2027 final rule. CMS is tired of plans playing games, chasing numerators and chasing metrics for the sake of metrics versus focusing on patients and their doctors and care delivery for the sake of actual health outcomes and care quality. This is going to really put that to the test.

Lauren Flynn Kelly has been writing about the business of health insurance and pharmacy benefits since the early 2000s. Up until its closure in August 2025, she served a variety of roles at AIS Health, including beat reporter on Medicare Advantage and executive editor leading a specialized team of health business journalists. When she’s not busy paddleboarding at the Jersey Shore, she is helping clients build their brand authority through the creation of blog posts, case studies, white papers and other strategic content.

It’s June and that means the latest release of MedPAC’s Report to the Congress: Medicare and the Health Care Delivery System. In the second of two annual reports, the nonpartisan advisory body makes a series of observations and recommendations to Congress about aspects of Medicare that are ripe for improvement. Many of them are recommendations that MedPAC has reiterated for years.

One observational area that’s relevant to Medicare Advantage is the chapter on Medicare enrollment choices, in which MedPAC only slightly throws insurers and their contracted agents under the bus.

While the report pointed to issues with CMS’s Medicare Plan Finder and the federally funded State Health Insurance Assistance Program, MedPAC this year treaded lightly on agents and brokers. The Commission still identified misaligned compensation incentives as an issue worth watching, but it didn’t suggest getting rid of agents and brokers altogether. Remember last year, when some comments at MedPAC’s March meeting caused a stir and led to a special conversation with representatives from the National Association of Benefits and Insurance Professionals?

For eligible Medicare beneficiaries, the MedPAC report mostly observed that their experience is confusing, from the sheer amount of mail and phone calls around open enrollment to the complexity of choices (e.g., fee-for-service Medicare, Medigap, Medicare Part D, Medicare Advantage). In fact, I counted 35 mentions of the words complex or complexity in the report. I also counted five acronyms related to enrollment periods: IEP, GEP, AEP, OEP and SEP.

It also noted that beneficiaries must figure out if they qualify for extra help through Medicare Savings Programs or the Low-Income Subsidy and that there’s some wonky timing with eligibility notifications.

What else can be taken away from this report?

Many people may not realize what happens after the initial enrollment period (IEP). MedPAC pointed out that people who continue working after 65 may not be technically notified of their eligibility for Parts A or B or D and unaware that they could pay penalties later. I’ve seen this firsthand with an aging parent who needed an expensive respiratory medication but realized that paying out of pocket was less expensive than playing catchup on Part D late enrollment penalties.

Extra benefits not available in FFS are attractive to beneficiaries, especially dual eligible individuals. In focus groups, duals highlighted dental, vision, transportation, wellness incentives and flex cards as “key motivators” for enrolling MA, said MedPAC. This is noteworthy given that insurers filing bids for plan year 2027 may have looked at further cuts to supplemental benefits to protect their margins next year.

Aggressive MA marketing is still viewed as part of the problem. The report addresses other reports that have called attention to misleading marketing of MA plans, often by third-party marketing organizations that get lumped in with independent agents and brokers. MedPAC distinguished between the two groups and even noted that there are agents who work independently of insurers and agents who are employed or contracted by one insurer. MedPAC observed that its annual focus groups report positive experiences working with agents, but they still had questions about how the agents were compensated. How can they be sure the agent is paid the same by each insurer they’re selling?

Other sources of information can also be misleading. MedPAC pointed out that while some improvements to CMS’s Medicare Plan Finder have been made, such as the inclusion of certain provider network details, it has limited information about supplemental benefits and prior authorization in MA. And for those considering Medigap (i.e., Medicare Supplemental coverage, which has 10 options alone!), MedPAC noted that premium information on Plan Finder may not be reliable. The report also pointed out that agents have an incentive to sell higher-premium Medigap plans than lower-premium ones.

Medigap enrollees like the status quo. Once a beneficiary chooses a Medigap option and gets comfortable with it, they’re likely stick with it. If it’s not broken, don’t fix it, right? But is that generous AARP-branded Plan F or Plan G leading to more utilization than necessary? I’ve also seen this firsthand with said parent and explained many times, that’s why it’s called “fee for service.”

These are all just observations. The Commission didn’t make any recommendations in this chapter, only to say that it is “concerned about the complexity of Medicare enrollment choices” and will keeping looking at these issues and explore potential policy options.

Lauren Flynn Kelly has been writing about the business of health insurance and pharmacy benefits since the early 2000s. Up until its closure in August 2025, she served a variety of roles at AIS Health, including beat reporter on Medicare Advantage and executive editor leading a specialized team of health business journalists. When she’s not busy paddleboarding at the Jersey Shore, she is helping clients build their brand authority through the creation of blog posts, case studies, white papers and other strategic content.

Companion reports from KFF recently depicted 2026 as another disruptive year for Medicare Advantage and Part D in terms of service area reductions, regional plan exits, higher out-of-pocket limits and reduced supplemental benefits. That was after some serious market shakeups in 2025, when insurers grappled with medical costs that began rising in 2024 and government payments that were slow to catch up.

Will this resetting of the MA market continue into 2027, or will things stabilize?

Plans submitted their bids for the 2027 plan year last week, and I caught up with a few industry experts to get a sense of where MA might be headed. The answer? It’s likely that certain trends will continue but may not be as dramatic as they were in 2026. These include strategic market exits, surgical benefit cuts, some portfolio reshuffling and tweaks to things like supplemental benefits and cost sharing amounts.

“If we rewind back to last year, I think many health plans were operating under a doom and gloom scenario of ‘funding is not adequate, our trends are off the rails and we’ve got to make some pretty dire changes,’” says Haitham Aly, a principal specializing in Medicare Part C and Part D consulting with Oliver Wyman. “We saw [companies] terminate certain plans and enroll people in new ones…benefit degradation, network curation, county trimming, and the reshaping of portfolios.”

In 2027, “I think you’re going to still see some of that to an extent,” but maybe not at the “same level of concern that we saw last year,” Aly continues.

That’s partly because plans have seen some recent improvements in medical trend, or at least in their ability to manage medical costs. Moreover, the government estimated an average revenue change of 2.48%, compared with its initial expected average impact of 0.09% for 2027.

That’s not to say that there won’t be a third wave of plans cutting their losses, he adds. (We’ve already seen regional plans Presbyterian Health Plan in New Mexico and Providence Health Plan in Washington state announce their exits for next year.) But the differences may be more subtle and may not be consistent across the industry.

Changes May Skew Toward Affordability Benefits

“I think the rate announcement was definitely helpful, but we’re still in this new normal of margin pressure amid modest increases in plan payments,” weighs in Tricia Beckmann, principal with Faegre Drinker Consulting. “It’s looking like it’s not going to be another retraction year, but it’s not like the rubber band’s going to snap back and we’re going to see a thousand flowers bloom with different benefit offerings.”

The KFF report estimated that 55% of eligible Medicare beneficiaries enrolled in MA this year. That’s still a significant portion, but KFF noted that the pace of enrollment in MA is slowing.

Of the benefits offered by MA plans that are not available in traditional Medicare, dental, vision and hearing remain core benefits included in most plans. For example, 98% of MA enrollees now have some form of dental coverage, compared with 94% in 2021, although the extent of coverage varies.

But after years of gaining popularity, most other extra benefits peaked in 2023 and have been declining. Specifically, KFF reported smaller shares of enrollees in plans that offer over-the-counter coverage (68% in 2026 versus 79% in 2025), meal benefits (65% in 2026 versus 70% in 2025), remote access technologies (43% in 2026 versus 49% in 2025) and transportation (73% in 2026 versus 46% in 2025). The picture for Special Needs Plans looks slightly different, due to the nature of those plans (e.g., in-home support services are available to 38% of SNP enrollees, compared with 10% of non-SNP enrollees), KFF observed.

Given the persistent affordability crisis in the U.S., insurers would be wise not to eliminate certain supplemental benefits. These include meal and grocery, over-the-counter coverage, and Part B “buyback” benefits. And since CMS abandoned its plan to prohibit the marketing of dollar amounts associated with extra benefits, more insurers may offer Part B premium reductions or heavily market them, suggests Beckmann.

In addition to Part B buybacks and OTC coverage, Aly predicts an ongoing emphasis on “particular types of members in certain regions,” such as through Chronic Condition Special Needs Plans (C-SNPs). Whereas plans a few years ago were focused more on general enrollment MA plans, “the future from what we’re seeing is…plans getting more tactical on how plans engage with members that need specific interventions.” And while some plans may look at restricting their OTC coverage, they may end up rethinking that during the rebate reallocation process in August if they need to enrich their benefits.

On the Part D side, Oliver Wyman’s Brooks Conway predicts continued Part D benefit erosion in the form of higher deductibles and coinsurance amounts for prescription drugs. But that’s as Part D enrollees face new maximum out-of-pocket limits and structural benefit changes due to the Inflation Reduction Act.

“There’s also just continued uncertainty around how much the Part D benefit is going to cost plans, just by nature of how quickly drug trend is moving,” says the Part D actuary.

Despite BALANCE Delay, GLP-1s Remain Top Concern

One thing that didn’t make it into bid planning but could impact future Part D planning is the BALANCE model. Introduced by CMS as Better Approaches to Lifestyle and Nutrition for Comprehensive hEalth (no really, that was its full name), the model would have allowed participating Part D plans to bypass the current exclusion of GLP-1 drugs used for weight loss and offer them at a lower negotiated price than is typically available to plans. But CMS indefinitely delayed the launch of that voluntary model and opted to fully fund coverage of three popular weight-loss drugs via the Medicare GLP-1 Bridge demonstration. (For more on why BALANCE wasn’t the ideal approach to testing obesity drug coverage in Medicare, see Kenneth Thorpe and Kristen Axelsen’s Forefront piece in Health Affairs.)

“We spent a lot of time during the bid season thinking about and talking about the BALANCE model,” laments Conway. “But, it still may have been a fruitful exercise because we are eventually going to have to cover GLP-1s for weight loss in Part D, so it made everybody do the legwork to think about that population and how [coverage] might be funded.”

But What About Clover and the Star Ratings?

Unless you’re living under a rock, you know that a federal court’s recent ruling in favor of Clover Health is like no other Star Ratings decision we’ve seen. That’s because the insurer’s lawsuit challenged CMS’s authority to make changes to the Star Ratings through technical notes; the judge agreed and set aside Clover’s 2026 Star Ratings. Prior to this, other insurers had argued over calculations involving cut points, the Tukey outlier methodology, and so on.

Questions remain about how this latest decision will impact the future of the Star Ratings and whether it will involve more than just Clover resubmitting its bid to account for the new bonus revenue. Plans, keep your actuaries and advisers close!

Lauren Flynn Kelly has been writing about the business of health insurance and pharmacy benefits since the early 2000s. Up until its closure in August 2025, she served a variety of roles at AIS Health, including beat reporter on Medicare Advantage and executive editor leading a specialized team of health business journalists. When she’s not busy paddleboarding at the Jersey Shore, she is helping clients build their brand authority through the creation of blog posts, case studies, white papers and other strategic content.

Payers continue to rank managing specialty drug costs, particularly for expanded indications and new therapies, as their top concern for these agents, according to the 2026 Trends in Specialty Drug Benefits Report from Pharmaceutical Strategies Group (PSG), an EPIC company.

Published in April, the report was co-sponsored by Genentech, a member of the Roche Group, and was fielded online in September and October 2025. Respondents consisted of benefits leaders from 228 employers, union/Taft-Hartley funds and health plans with a median of 12,000 covered lives.

Respondents cited managing overall specialty trend/specialty drug costs and managing the total cost of care as their two top specialty drug management goals. During a May 7 webinar, Morgan Lee, Ph.D., vice president of research and marketing at PSG, clarified that respondents ranked several goals, and lower-ranked goals “are simply not prioritized as strongly as” higher-ranked goals, but that “their placement doesn’t mean they’re unimportant to plans, and strategies that address those top goals can also in some cases align with achieving other goals.”

Among the challenges related to managing specialty drugs, a strategy specific to coverage of expanded indications and new specialty drugs — a new option for respondents to the most recent survey — was ranked No. 1 in mean rating. The challenges, explained Lee, align with what PSG sees among its clients and in the broader market.

“Given the complexities of the current drug landscape, none of this is really surprising,” asserted Renee Rayburg, R.Ph., vice president of specialty clinical consulting at PSG, during the webinar. While specialty drugs have represented at least half of FDA-approved novel new therapies over the last decade, in 2025, they made up 76% of those new drug approvals, she noted.

Almost Three-Quarters Have Medical Drug Formularies

While specialty drugs that are adjudicated under the pharmacy benefit have long been subjected to formularies, 72% of all respondents said they had implemented a medical drug formulary, said Lee. “Plans must also increasingly consider their strategy across both pharmacy and medical benefits,” she stated. Almost one-third of respondents said they focused on optimizing their specialty drug formulary across both benefits to a great extent, while another 37% said this was a moderate focus. And 57% of the total respondents said they had processes in place to manage the formulary across the pharmacy and medical benefits.

According to Rayburg, aligned cross-benefit optimization tactics include aligned coverage rules, consistent biosimilar preferences and unified step therapy. She noted that manufacturers have been increasingly focused on “dosage forms that allow for easier patient administration or/and a better patient experience,” which in turn has made it more challenging for payers to manage across the benefits.

Common areas for this include inflammatory conditions, asthma and oncology, said Rayburg, who noted that some inflammatory agents require an initial dose via infusion by a medical professional and then maintenance dosing through subcutaneous self-administration. “So access to integrated data can be really valuable here, as having that visibility into the plan costs in each benefit is helpful especially when making these benefit coverage decisions,” she emphasized.

Only 20% of respondents — 13% of employers and 35% of health plans — said they participated in value-based contracting. This, however, was an increase from the 8% of respondents who had such contracts when the question was last asked two years ago.

Are Specialty Pharmacies Really Special?

A new question in the most recent survey found that 63% of respondents had an exclusive specialty pharmacy network. Still, respondents differed in how they viewed specialty pharmacies and the care they provide, noted Lee. Based on the rating, “it seems that the answer to whether specialty pharmacies are truly special in today’s environment is a ‘maybe’ for the majority of plans,” she said.

Based on her experience, Rayburg said that “plans have higher expectations for the service levels, especially around the specialty drug expertise, enhanced patient care from the specialty pharmacies as well. But plans struggle with these higher expectations and suboptimal delivery of those expectations, especially with the PBM-owned specialty pharmacies, where they experience some additional challenges.”

Examples are selective inventory, particularly with specialty generics and biosimilars, and unsubstantiated overrides, with patients getting more fills annually than they need, leading to overutilization, said Rayburg. Inadequate service levels are an issue as well.

Almost all respondents reported receiving specialty drug rebates under the pharmacy benefit, but only slightly more than half total — 43% of employers and 70% of health plans — said they receive them under the medical benefit. Among those receiving medical drug rebates, most said that maximizing those rebates is at least a moderate priority.

In terms of alternatives to receiving rebates, a mean of 3.5 respondents out of five cited preferring drugs that are lower priced but do not have rebates. Respondents who said they would accept lower rebate guarantees in exchange for the ability to implement more utilization management strategies rose year over year from a median of 2.7 to 3.0.

“Plans that want to implement more restrictive UM controls may be faced with accepting lower rebates in exchange,” noted Lee based on a follow-up question. “In our experience, payers often benefit most when they’re optimizing their clinical management over focusing on maximizing their rebates.”

But moving away from dependency on rebates is “very complicated,” maintained Rayburg, as payers seek “other levers to pull” in order to manage their specialty drug spend. This, however, may not be as straightforward as it seems.

“Sometimes the decisions become less about the actual drug price per claim…, and these consequences often impact the rebate guarantees that financially are worth a lot to payers. This occurs when there is interest in making UM more stringent,” such as requiring documentation for certain diagnoses or mandating that members must first step through a lower-cost drug. Taking such steps may lower the rebate guarantee or negate it entirely, she pointed out.

“But in addition, sometimes payers are asked to loosen criteria in exchange for a higher rebate guarantee, but in our experience, doing that really has only provided short-term gain,” said Rayburg. “I think there is a lot of value in controlling utilization, and sometimes it is just worth taking the time to kind of evaluate the process and the complicatedness of it all to see financially where you have more to gain.”

Download the new report to learn more about other trends.

Major players in the health care industry are boosting their lobbying efforts in the first quarter of 2026, with heavy investment in Medicare Advantage-related policies, according to Payer Perspective’s analysis of federal lobbying disclosures.

The disclosures came after CMS announced a higher-than-expected increase in payments to private insurers in MA plans for 2027, at 2.48%, up from the 0.09% increase proposed in its January Advance Notice.

Since the release of the Advance Notice in January, MA advocacy groups have ramped up pressure on regulators, contributing to a surge in lobbying activity in Washington, D.C.

The Better Medicare Alliance, a nonprofit aligned with insurers and providers, spent $680,000 in the first quarter of 2026 — a 33% increase compared with the same period last year. In total, it reported more than $2.18 million in lobbying expenditures in 2025 and hired nine lobbyists, seven of whom previously held government roles, according to data compiled by OpenSecrets and U.S. Congress Lobbying Disclosure Act reports.

The insurer-backed group hosted an executive policy summit on March 3 featuring CMS Director of Medicare and Deputy Administrator Chris Klomp, along with CMS Deputy Administrator and Chief Policy and Regulatory Officer John Brooks.

AHIP, which represents health insurers, reported $5.32 million in lobbying spending in the first quarter of 2026, a 10% increase from the same quarter last year. It spent more than $17.23 million in 2025, up from $11.77 million in 2024. Of its 59 lobbyists, 34 previously held government positions.

Meanwhile, major health plans also boosted their lobbying expenditures amid heightened regulatory scrutiny and policy pressures from the Trump administration, which moved to let enhanced subsidies for Affordable Care Act marketplace plans expire and finalized significant cuts to Medicaid funding.

On Jan. 22, 2026, CEOs from the nation’s five major commercial health insurers — UnitedHealth Group, CVS Health, The Cigna Group, Elevance Health, Inc. and Ascendiun — testified before U.S. House committees, where lawmakers pressed them on affordability, prior authorization and market consolidation.

UnitedHealth Group, the country’s largest private and MA insurer, spent $12.54 million on lobbying in 2025, nearly doubling its 2024 total of $7.52 million. The third- and fourth-largest MA insurers — CVS Health, the parent company of Aetna, and Elevance Health — followed suit, reporting modest increases in their respective lobbying budgets in 2025.

The second-largest MA insurer, Humana Inc., slightly increased its lobbying spending in the first quarter of 2026, reporting more than $2.5 million.

The pharmaceutical sector is matching the insurance industry’s intensity. The Pharmaceutical Research and Manufacturers of America (PhRMA) reported a staggering $12.2 million in lobbying expenditures for the first quarter of 2026 — its second-highest quarterly total on record. The trade association lobbied aggressively on a wide range of issues, including the One Big Beautiful Bill Act, the 340B program and the SECURE Rx Act of 2026.

Individual pharmaceutical manufacturers also ramped up lobbying spending. Eli Lilly, Gilead Sciences, Roche Holding, Merck & Co. and Regeneron Pharmaceuticals each reported their highest quarterly lobbying expenditures on record in the first quarter of 2026.

What’s New:

• Total claims for GLP-1 medications increased by about 71% among beneficiaries enrolled in Medicare standalone Part D plans between 2021 and 2023, according to an Avalere Health analysis. Use was almost entirely limited to drugs approved for a Type 2 diabetes indication. The average number of GLP-1 claims per prescribing provider increased from 16.2 per provider in 2021 to 22.5 in 2023, driven primarily by growth in the average number of beneficiaries per provider with at least one GLP-1 claim, which rose from 4.4 in 2021 to 5.4 in 2023. GLP-1s also accounted for a growing share of these providers’ total Part D prescriptions, increasing from 3.2% in 2021 to 5.9% in 2023.

• Enrollment in Medicare Advantage Institutional Special Needs Plans (I-SNPs) continued to rise from 2023 through 2026 even as the number of plans declined, according to a Milliman white paper. Growth was stronger in rural areas, where enrollment increased by about 13% compared to 4% in urban areas over the same period. UnitedHealth Group remained the largest I-SNP sponsor, though its market share fell from 57% in 2023 to 46% in 2026. Most I-SNPs offer premiums at or below the low-income premium subsidy amount. While Medicare Advantage plans often offer supplemental benefits beyond traditional Medicare, comprehensive dental coverage in the I-SNP market declined sharply. The share of beneficiaries with access to comprehensive dental through national carriers fell from 98% in 2025 to 56% in 2026. Special supplemental benefits for the chronically ill are widely offered, particularly by regional I-SNPs, with food and produce benefits most common in 2026, followed by nonmedical transportation and services addressing social needs.

• Insurers of qualified health plans sold on HealthCare.gov denied roughly one in five in-network claims in 2024, according to a KFF analysis, with denial rates varying significantly across insurers and states. Three percent of reporting insurers had in-network denial rates of 30% or higher in 2024, down from 17% in 2023. Among insurers receiving more than 5 million claims, Oscar Health reported the highest in-network denial rate at 25%, while Elevance Health reported the lowest at 8%. The most common denial reason was “Other” (36%), followed by administrative issues (25%). Nine percent of denials were due to lack of prior authorization or referral, and only 5% were attributed to lack of medical necessity. Enrollees rarely appealed denied claims, and among those who did, insurers often upheld the original decision.

Next Up:

Medicare Drug Price Negotiation: What Can We Learn From the 2027 Prices and Their Justifications?

Health Affairs, March 30, 2026, 12 p.m. (ET)

Panelists:

• Kristi Martin, Highway 136 Consulting

• Sarah Emond, Institute for Clinical and Economic Review

• Laura Tollen, Health Affairs (Moderator)

2026 National Alliance Health Policy Summit

National Alliance of Healthcare Purchaser Coalitions, April 7, 2026, 8:30 a.m. (ET)

Modular PBA Considerations: Single Carve-Out Strategies For Payers

Pharmaceutical Strategies Group, April 8, 2026, 1 p.m. (ET)

Panelists:

• Tara Higgins, PharmD, Senior Clinical Consultant

• Krista Siano, VP, Business Transformation

• Jarrod King, PharmD, BCPS, Senior Pharmacy Benefit Clinical Consultant

PBM Industry Update 2026: Trends, Challenges, and What’s Ahead

Drug Channels Institute, April 10, 2026, 12 p.m. (ET)

Panelists:

• Adam J. Fein, Ph.D., President, Drug Channels Institute

• Bryce Platt, Director, Drug Channels Institute

The use of medicines continues to increase around the world, driven mainly by immunology and oncology drugs, but a new report from the IQVIA Institute for Human Data Science projects that biosimilars and generics likely will slow that growth somewhat over the next five years. As the largest global market, the U.S. will remain a driver of spending on those products, but several policy changes could have big impacts, according to Global Medicine Use Trends 2026.

“Today’s discussion is very timely,” asserted Murray Aitken, executive director of the institute and moderator of a Feb. 25 webinar on the report. “We have an unusually large number of moving parts that are reshaping markets for pharmaceuticals and a lot of discussion around drug pricing,” in particular most-favored nation (MFN) pricing, as well as tariffs and other policy changes.

“And all of that comes on top of…the longstanding discussions that we’ve had for many years about drug availability, accessibility, pricing and the impact that those drugs can have on patients,” he pointed out. “Much of this is a consequence, in a way, of ever-increasing novel therapeutics that become available each year out of the research-and-development pipeline.”

The report highlights five key findings, said Michael Kleinrock, lead research director at the institute and the lead researcher for the report, during the webinar. The first is that the growth outlook, which is at 5% to 8% compound annual growth rate (CAGR), is unchanged, with estimates showing that by 2030, global spending on medicines’ list/invoice prices will hit $2.6 trillion. That growth will be driven mainly by immunology and oncology products, although the report reveals that growth in those areas is expected to begin slowing toward the end of the decade, mainly due to competition from biosimilars.

More specifically, said Kleinrock, over the next five years “we’re going to be seeing some of the…growing impact of biosimilars and generics in a number of key areas, and small molecule patent expiries are pretty big. In fact, in the major developed markets, it’s the largest period of patent expiry impact we’ve seen in history in the next five years.”

Endocrinology, broadly speaking, is expected to grow due to medications in areas like diabetes, obesity and certain cardiometabolic conditions such as metabolic dysfunction-associated steatohepatitis (MASH), previously known as NASH. “Ten years ago, obesity was a billion-dollar market, and it’s expected to be $125 billion by 2030,” he noted.

The second element is that the use of medicine is increasing in most regions around the world, led by China, India, Latin America, and Middle East/North Africa. Only Sub-Saharan Africa is projected to buck this trend, although medication usage in that region is expected to decline less over the next five years than it did the previous five years.

Third, the use of medicines around the world increased by 15% over the past five years and is expected to grow by 16% by the end of the decade, explained Kleinrock. “We’ll get to about 4 trillion defined daily doses across all the medicines used.”

And spending on those drugs increased as well, rising 54% over five years, although that trend is expected to slow to only a 37% increase by 2030.

Finally, the institute is raising the outlook on the U.S. — the world’s largest market — on a net basis 1 percentage point to a 4% to 7% CAGR by the end of the decade. “That’s reflecting the growth of and the increased use of some higher-value therapies,” he explained, noting “that’s still down from 9.4% [net] CAGR in the prior five years. So it’s not an acceleration as much as it is a slight improvement of what we previously modeled, including all of those uncertainties.”

Three Dynamics Are Fueling U.S. Market

The U.S. market, contended Luke Greenwalt, vice president of thought leadership & innovation for IQVIA U.S., “is really a function of three core dynamics. The first one is innovation.” As evidence, he pointed to more than 2,000 products launching in the U.S. over the last 15 years.

“That represents trillions of dollars of research and development from our industry, and it’s truly something that everyone that participates in the industry should be proud of, whether you are directly at a manufacturer or whether you’re in the distribution or in the delivery of care,” he remarked during the webinar. “That has made tremendous gains in the health and well-being of the population here in the U.S. and globally.”

Growth is the second dynamic, said Greenwalt, who noted that for 2024 and 2025 only, “about 25 of the mega blockbuster products account for about 85% of the overall list price revenue growth.”

From 2016 to 2020, “the industry grew at a healthy pace” in the U.S., he said. The invoice CAGR in the U.S. was 4.5% during that period and rose to 11.0%, excluding COVID-19 vaccines, from 2021 to 2025. That more recent time frame had “some of the strongest growth rates that we’ve seen in the U.S. market,” driven by immunology and oncology, with the GLP-1s contributing toward the end of the period.

“That concentrated growth then has led to hyper-competition in the U.S. market and a lot of intensity in regard to how products are being contracted and discounted,” observed Greenwalt, leading to the third dynamic: pressure. That has led “to questions around policy and reforms throughout the entire U.S. health care system,” such as MFN pricing and potential models such as GLOBE, GUARD and GENEROUS. Almost 20 large manufacturers have agreed to MFN pricing agreements with the administration.

Contracting and discounts have led to a larger gross-to-net spread, he said: Net prices were 41% below list prices from 2021 to 2025, up from 37% in the previous time frame, with estimates showing that increasing to about a 46% discount below invoice price by 2030.

“All of these pressures are going to manifest themselves differently,” Greenwalt said, urging close attention to developments within the U.S. market.

The impact of the Inflation Reduction Act (IRA) is only recently beginning to be felt, with more reverberations expected, he said. For instance, limiting the annual out-of-pocket maximum for Medicare Part D beneficiaries to $2,000 starting last year has “greatly sped up the rate of utilization and specialty products in Medicare. And we saw increased spending because of that.”

And the beginning of 2026 saw maximum fair prices for the first round of Medicare-negotiated drugs take effect, resulting in many of their manufacturers lowering their list prices in response.

With respect to tariffs, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the president the power to impose them. But “other mechanisms remain, and this remains controversial,” Greenwalt observed. “So we fully expect this to begin playing out.”

PBM reform, including recent settlements with the Federal Trade Commission, also are part of the dynamic, he stated. “It’s not just pharma that has been pressured with practices and being called out in public policy; it’s also the payer systems in the U.S. as well.”

Another emerging trend in the U.S. is focused on consumers: the growing use of direct-to-patient programs such as TrumpRx.

“The rise of the GLP-1s and the use of direct-to-patient programs here…are uncovering really important questions about how consumers are coming in educated and asking for specific treatments in the physician office. This is going to play a big role over these next five years.”

Health Care Service Corp. CEO Maurice Smith out-earned the top executives of major public companies in 2024, despite HCSC’s 54% drop in net income.

Smith, who leads the non-publicly traded Blue Cross Blue Shield affiliate, earned $34.4 million in total compensation in 2024, representing a 23% year-over-year increase, according to financial records obtained by Payer Perspectives through open records requests.

Most of his compensation came from bonuses, while his salary declined by $161,302. In 2023, he received nearly $28 million.

As the parent company of five Blue Cross Blue Shield insurers — serving Illinois, Montana, New Mexico, Oklahoma and Texas — HCSC announced the acquisition of Cigna’s Medicare business in January 2024 and finalized the deal in 2025. The acquisition nearly quadrupled HCSC’s membership and positioned the company as a major player in the stand-alone Medicare Part D Prescription Drug Plan market.

Meanwhile, CEOs of the seven major national insurers — UnitedHealth Group, The Cigna Group, Molina Healthcare, Centene Corp., Elevance Health, Inc., CVS Health Corp. and Humana Inc. — earned a combined $145,996,812 in total compensation in 2024, despite at times disappointing financial performances, according to Payer Perspectives’ analysis of proxy statements filed with the Securities and Exchange Commission.

Among them, UnitedHealth Group CEO Andrew Witty topped the list with $26.3 million in total compensation, an 11.9% increase year over year. Cigna CEO David Cordani and Centene CEO Sarah London also saw double-digit percentage increases, earning $23.3 million and $20.6 million, respectively.

Patrick Geraghty, CEO of Florida Blue and its parent company, GuideWell Mutual Holding Corp., earned nearly $17.1 million in 2024, with most of his compensation categorized as “other compensation,” which is how firms in their regulatory filings categorize everything that is not part of a CEO’s salary, bonus, stock awards, option awards or non-equity incentive plan compensation. He previously out-earned all major public company CEOs in 2021.

Several states do not disclose compensation data for specific executives at health insurance companies or do not collect compensation data.

Reach out to Payer Perspectives (payerperspectives@gmail.com) for the full report.

What’s New:

• More than 56 million people were enrolled in Medicare Part D as of February 2026, with 56% in Medicare Advantage plans with drug coverage and 44% in stand-alone prescription drug plans, according to a KFF analysis. Overall PDP enrollment increased by 1.7 million from 2025 to 2026, largely driven by growth in employer-sponsored group PDPs. During the same period, enrollment in employer group MA-PD plans fell by about 1.2 million, while group PDP enrollment rose by roughly 1.2 million. This marked the first year-over-year decline in employer group MA-PD enrollment since 2010 and the largest increase in employer group PDP enrollment since 2013. Among non-group Part D plans, MA-PD enrollment grew by about 1 million, while non-group PDP enrollment increased by roughly 500,000. Humana Inc. and Centene Corp. added the most PDP enrollees during this period. Enrollment in Humana’s PDPs increased by 61%, and Centene’s PDP enrollment increased by 11%.

• U.S. health care prices vary widely across markets and providers, and those differences often do not correspond with better quality or safety outcomes, according to the Purchaser Business Group on Health’s Health Care Data Demonstration Project. The study analyzed data from five large self-insured employers across 10 regional markets and found significant variation in negotiated prices across regions, insurers, and even within the same facility. Researchers also found that higher-priced providers frequently performed worse on standardized quality measures, while lower-priced providers often demonstrated better safety and clinical outcomes. In addition, insurer or service provider market share did not consistently translate into more competitive pricing; some smaller players secured superior negotiated rates than dominant market insurers. The report also highlighted major limitations in federal price transparency efforts, noting that required pricing files vary widely in usability. In particular, hospital price transparency data proved more difficult to analyze and generally inferior to payer submissions.

• More than half of U.S. primary care physicians received some revenue from value-based payment (VBP) models, though participation remains significantly lower in rural and small practices, according to an analysis by The Commonwealth Fund. The analysis is based on data from the 2025 Commonwealth Fund International Health Policy Survey of Primary Care Physicians and found that 56% of PCPs said their practice received revenue from VBP. Among them, more than half reported that up to 49% of their practice revenue comes from such models. Meanwhile, less than half of rural practices received any revenues from VBP, significantly less than nonrural practices and 11 percentage points lower than the national average. Physicians working in small practices were also less likely to report receiving VBP revenue than those in larger practices. In contrast, physicians at community health centers reported higher participation rates in VBP models than physicians working outside these centers.

Next Up:

The Outlook for Obesity From 2026 to 2030: From Consolidation to Acceleration

IQVIA, March 18, 2026, 11 a.m. (ET)

Panelists:

• Sarah Rickwood, Vice President, Thought Leadership, IQVIA

• Luke Greenwalt, Vice President, Thought Leadership & Innovation, IQVIA U.S.

Pharmacy Benefit Manager Reform: Fact or Fiction?

Health Affairs, March 24, 2026, 2:30 p.m. (ET)

Panelists:

• Benjamin Rome, Harvard Medical School

• Laura Tollen, Health Affairs

Untangling the Complex Web of Health Care Financial Interests

Georgetown University’s Center on Health Insurance Reforms, March 27, 2026, 1 p.m. (ET)

Panelists:

• Linda Blumberg, Ph.D., Research Professor, CHIR

• Sabrina Corlette, J.D., Founder and Co-Director, CHIR

• Amy Goldstein, Visiting Fellow, Brookings, and former Washington Post reporter

• Chris Hamby, Investigative Reporter, The New York Times

• Jesse Kline, Senior Analyst, Lake Research Partners

PBM Industry Update 2026: Trends, Challenges, and What’s Ahead

Drug Channels Institute, April 10, 2026, 12 p.m. (ET)

Panelists:

• Adam J. Fein, Ph.D., President, Drug Channels Institute

• Bryce Platt, Director, Drug Channels Institute

What’s New:

• Medicare Advantage plans were offering less overall value to beneficiaries in 2026, according to a Milliman white paper. Average “value added” — a measure of supplemental benefits, cost-sharing reductions and premium impacts relative to traditional Medicare — across general enrollment MA plans fell by more than 8% from 2025 to 2026, the largest decline in MA. The total member (Part C + Part D) premium increased by about $2 per member per month from 2025 to 2026, the first increase in at least a decade. Meanwhile, Part D and Part C benefit value decreased by $4 PMPM and $17 PMPM, respectively. Supplemental benefits, particularly dental and over-the-counter benefit cards, saw notable cutbacks. Part D coverage also became leaner, with higher deductibles and the conversion of brand copayments to coinsurance. Nearly 2.7 million non-special needs plan beneficiaries were affected by plan exits or service-area reductions.

• Private health insurers’ financial performance weakened across most markets in 2024 as rising medical utilization and post-pandemic adjustments pressured margins, according to a KFF analysis. Per-enrollee gross margins declined year over year across Medicare Advantage, Medicaid managed care, individual, and employer group markets. Gross margins per enrollee for fully insured group plans fell 7% from 2023 to 2024, marking the first year-over-year decline in that market since 2021. Medicare Advantage continued to generate the highest margins, at about $1,655 per enrollee, though this represented a 17% drop from 2023 amid higher care use and payment policy changes. Medicaid managed care experienced the steepest decline, with margins falling 19% as states resumed eligibility redeterminations. Medical loss ratios also rose across several markets, reaching roughly 90% in Medicare Advantage and 91% in Medicaid managed care.

• The growing use of contract pharmacies under the federal 340B drug pricing program does not appear to improve access to HIV medications for Medicare beneficiaries treated at federally qualified health centers, according to an Avalere Health white paper. Using data from the Office of Pharmacy Affairs Information System from 2018 to 2022, the analysis found no meaningful differences in prescription use tied to contract pharmacy relationships. While the share of FQHCs using at least one contract pharmacy remained stable at about 30%, the average number of contract pharmacies per FQHC more than doubled, rising from eight to 18 during the study period, with many located more than 50 miles away. Despite this expansion, the proportion of Medicare beneficiaries receiving at least one HIV drug fill declined, and patients using contract pharmacies filled prescriptions at similar rates as those using in-house or non-contract pharmacies. The findings suggest the availability and growth in contract pharmacy relationships have not translated into increased access or utilization of HIV drugs among Medicare beneficiaries with HIV receiving care at FQHCs.

Next Up:

The Duke-Margolis Capital Impact Council: Advancing Private Investment That Improves Health Care and Health

Margolis Institute for Health Policy, March 6, 2026, 12 p.m. (ET)

The Outlook for Obesity From 2026 to 2030: From Consolidation to Acceleration

IQVIA, March 18, 2026, 11 a.m. (ET)

Panelists:

• Sarah Rickwood, Vice President, Thought Leadership, IQVIA

• Luke Greenwalt, Vice President, Thought Leadership & Innovation, IQVIA U.S.

Pharmacy Benefit Manager Reform: Fact or Fiction?

Health Affairs, March 24, 2026, 2:30 p.m. (ET)

Panelists:

• Benjamin Rome, Harvard Medical School

• Laura Tollen, Health Affairs

HaloMD, a third-party independent dispute resolution (IDR) services provider, has emerged as the top “middleman” under the No Surprises Act. Its share of initiating disputes jumped from just 1% in 2023 to 22% by the second quarter of 2025, according to Payer Perspective’s analysis of newly released CMS data.

The No Surprises Act, passed in 2021, banned the practice of billing patients for the difference between what their insurer pays and what a provider charges when patients unknowingly receive care from an out-of-network (OON) provider. The law also established a federal IDR process that OON providers and insurers can use to determine the OON rate that providers should receive if the two parties fail in their own attempts to negotiate.

In the first half of 2025, a total of 1,186,812 surprise billing disputes were initiated through the federal IDR process, 39% more than the last six months of 2024. Over 81% of those cases were filed by providers, according to an analysis of CMS data. Among resolved disputes involving emergency and non-emergency services (excluding air ambulance services), providers won the majority, with their win rate rising from 68% in the first quarter of 2023 to 88% in the second quarter of 2025.

Under the IDR process, providers submit unresolved bills to an HHS-approved arbitrator, who then selects an amount submitted by either the payer or the provider using criteria laid out by HHS. The arbitrators are obliged to consider the qualifying payment amount (QPA) — based largely on median regional in-network rates for a service in a given area — in their decisions.

Neurology and surgery providers using the IDR system won at especially higher prevailing rates. In the first half of 2025, the median payment determination among disputes involving neurology and neuromuscular procedures was more than 23 times the QPA. For surgical services, the median prevailing offer reached nearly 1,320% of the QPA.

A relatively small number of providers and their representatives initiated most surprise billing disputes, CMS data show. The top initiating parties over the past two years — Team Health, HaloMD and SCP Health — represent thousands of clinicians across multiple states. Team Health, SCP Health and the fourth-largest initiating party, Radiology Partners, are all backed by private-equity firms.

HaloMD ranked second overall in volume and has become the top initiating party since the fourth quarter of 2024. The third-party IDR services provider, with a win rate of more than 88% in the first half of 2025, is now facing at least four lawsuits alleging abuse of the IDR system and violations of the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. In May, Elevance, Inc.’s Georgia subsidiary sued the company and three Georgia providers, accusing them of falsely attesting to claim eligibility, overwhelming the IDR process and inflating payment offers. A month later, Elevance’s Ohio subsidiary, Community Insurance Company, made similar allegations against HaloMD and five providers in Ohio. In August, Blue Cross Blue Shield of Texas alleged that HaloMD and related parties submitted fraudulent claims to IDR entities.

In the first half of 2025 alone, nearly 29% of resolved disputes initiated by HaloMD involved Blue Cross Blue Shield of Texas, according to Payer Perspectives’ analysis.

About 17% of disputes submitted in the first six months of 2025 were actually ineligible for IDR, CMS says. Although the share of ineligible cases has declined from 69% in the first six months of 2022, they continued to clutter up the system. A study published in Health Affairs estimated that the IDR process has generated at least $5 billion in total costs from 2022 to 2024, with over 17% attributed to administrative costs and 38% to providers’ and payers’ internal costs.

Meanwhile, the industry continues to await a final rule from regulators that would clarify key aspects of IDR operations. Payer groups argue that some providers are using the IDR process strategically to drive higher reimbursements, while providers cite strong win rates and high reimbursement amounts as evidence that insurers are filing artificially low payment offers.

CMS recently revealed its newest list of Medicare drugs up for price negotiation. Working with limited information, one group of researchers managed to accurately predict almost all of the 15 products. However, some ambiguity exists around one of the medications included on the researchers’ list but not CMS’s.

On Jan. 27, CMS unveiled the list of drugs whose prices will be negotiated in the third cycle of the Medicare Drug Price Negotiation Program (MDPNP). The medications’ maximum fair prices (MFPs) will go into effect on Jan. 1, 2028.

The first two rounds of negotiations included Medicare Part D self-administered medications only, but drugs selected for the third round of negotiations included Medicare Part B provider-administered agents. Ten of the 15 drugs, however, are adjudicated under Part D, with the remainder covered under both D and B.

The MDPNP was established by the Inflation Reduction Act (IRA) in 2022, and last summer, the One Big Beautiful Bill Act (OBBBA) modified the orphan drug exclusion in two ways. First, the legislation allowed drugs with more than one orphan indication, as long as there are no nonorphan indications, to be excluded from negotiation.

Second, it extended the time for when a drug becomes eligible for negotiation relative to when the FDA approves it for its first nonorphan indication as opposed to its first indication only. The IRA initially mandated that a small molecule drug would be eligible for negotiation when it had been on the market for seven years after its initial FDA approval, with biologics becoming eligible after 11 years. But the OBBBA pushed back those timelines so they now begin on the date of approval of the first nonorphan indication.

CMS selected the drugs based on Medicare Parts D and B spending from November 2024 to October 2025. Because spending data for that time period was not publicly available, researchers trying to predict which drugs would be included were a little hamstrung, but one group of experts accurately predicted 13 of the 15 drugs as detailed in an article in the January issue of the Journal of Managed Care & Specialty Pharmacy (JMCP). The group used data from 2020 to 2023 to predict 2024 data, lead author Emma M. Cousin, Pharm.D., explains.

“Overall, the [CMS] selections were broadly consistent with what many researchers expected given the CMS guidance and the IRA/OBBBA,” observes Cousin, who is with the Comparative Health Outcomes, Policy, and Economics (CHOICE) Institute at the University of Washington School of Pharmacy.

The only two agents the researchers did not include in their list were Kisqali (ribociclib) and Xeljanz (tofacitinib), but Cousin tells Payer Perspectives that they ranked those agents No. 16 and No. 17, just missing the cut. She notes that the FDA granted an additional indication to Kisqali for early-stage breast cancer in September 2024, which “presumably” drove “a massive increase in utilization, which we could not capture given that we were relying on 2023 data, the most recent publicly available data at the time of analysis.”

Instead, researchers ranked Kyprolis (carfilzomib) No. 12 and Simponi (golimumab) No. 13. CMS ranked Simponi No. 17 on its list of the top 50 negotiation-eligible drugs, but that list did not include Kyprolis, which has several approvals, all of them for use in multiple myeloma.

According to Cousin, per the IRA, orphan drugs are excluded from negotiation when they are “designated…for only one rare disease or condition” and “the only approved indication (or indications) is for such disease or condition.”

The article points out that negotiation eligibility for Kyprolis — along with Botox (onabotulinumtoxinA) and Lenvima (lenvatinib mesylate), Nos. 9 and 10, respectively, on the CMS list and Nos. 9 and 11 on the researchers’ — was impacted by the modifications in the OBBBA.

“Kyprolis was a tricky product” due to some ambiguity around it, Cousin maintains. The FDA first approved the drug in 2012 as an orphan drug for multiple myeloma. “We believed its first nonorphan indication was for the treatment of multiple myeloma in combination with lenalidomide in 2015. This language was not clearly indicated in the Orphan Drug Designation and Approval website or the FDA approval letters, which provides information on FDA-approved orphan indications.”

Asked how Kyprolis compared with non-small cell lung cancer drug Tagrisso (osimertinib), which some analysts expected to be on the second-round list (released before the OBBBA changes), Cousin points out that Tagrisso “had four orphan indications under a single orphan designation, all of which are clearly identified in the Orphan Drug Designation and Approval website.”

The website indicates that Kyprolis’ orphan designation is for the “treatment of multiple myeloma.” Tagrisso’s designation is for the “treatment of epidermal growth factor receptor mutation-positive non-small cell lung cancer.”

Selection of Drugs for Third Cycle of Medicare Drug Price Negotiation Program

Source: CMS.

Note: Numbers are rounded to the nearest thousands.

What’s New:

• Copay accumulator adjustment programs (AAPs), copay maximizer programs, and alternative funding programs (AFPs) are widely and increasingly used by commercial health plans, according to a white paper from Avalere Health. Cost containment and premium reduction were the most cited motivations for implementing these programs. Among the three approaches, AAPs were most consistently associated with positive financial outcomes for plans, based on survey responses. However, most plans reported non-comprehensively tracking of medication adherence or broader health outcomes: 59%, 57%, and 55% for plans using AAPs, maximizers, and AFPs, respectively. The findings are based on a 2025 survey of 30 commercial health plans and pharmacy benefit managers.

• The impact of Medicare’s new Wasteful and Inappropriate Service Reduction (WISeR) Model is expected to be modest in its first year, according to a KFF analysis. Launched on Jan. 1, 2026, the pilot introduces prior authorization for select services in traditional Medicare across six states. WISeR services accounted for 5.3% of all Part B spending in traditional Medicare in 2024, with skin substitutes representing 83% ($10.3B) of WISeR service spending. Spending on skin substitutes was over 20 times higher in 2024 than in 2019 ($509.6M), driven by a steep rise in price per service. Nearly 1.1 million traditional Medicare beneficiaries nationwide received at least one WISeR service in 2024. About 86% of them received some type of orthopedic pain management service, while only 9.3% (98,000) received skin substitutes.

• The use of cell and gene therapies (CGTs) remains limited but is gradually increasing, according to a brief from the Employee Benefit Research Institute. In 2018, 7.9 per 100,000 enrollees in employment-based health plans received a CGT, rising to 9.2 per 100,000 by 2022. Overall, CGT users accounted for just under 0.1% of enrollees and approximately 0.5% of total spending. Employer size plays a key role in managing financial risk: larger, self-insured employers can absorb high-cost claims by distributing expenses across a large enrollee base; smaller employers often rely on stop-loss coverage to mitigate potential costs. As of 2025, the FDA has approved 48 CGTs, with an increasing number of therapies targeting conditions that are more prevalent than traditional rare diseases.

Next Up:

The FDA and Its Changing Relationship to Industry

Health Affairs, Feb. 17, 2026, 11 a.m. (ET)

Panelists:

• Genevieve Kanter, USC Sol Price School of Public Policy

• Holly Fernandez Lynch, Perelman School of Medicine at the University of Pennsylvania

• Chris Meekins, Raymond James

• Rachel Sachs, Washington University in St Louis (Moderator)

Consolidation and Integration in Health Care: What It Means for Patients, Payers, and Policy

KFF, Feb. 18, 2026, 12 p.m. (ET)

Panelists:

• Larry Levitt, Executive Vice President for Health Policy (Moderator)

• Erin Fuse Brown, Professor of Health Services, Policy, and Practice, Brown University School of Public Health

• Cory Capps, Partner, Bates White

• Elizabeth Mitchell, President and CEO, Purchaser Business Group on Health

What Excites Insiders About Health Care in 2026?

Health Affairs, Feb. 25, 2026, 1 p.m. (ET)

Panelists:

• Martin Cauz, Beechwood Consulting Group

• Renée Landers, Suffolk University Law School on the Health Equity Compact

• Mark Speicher, American Association of Colleges of Osteopathic Medicine

• Michael Gerber, Health Affairs (Moderator)

Although hereditary angioedema is a relatively rare disease, pharma manufacturers continue to pursue therapies for HAE. The FDA approved a handful of novel new therapies last year, and more treatments are in the late-stage pipeline, some of which offer improved dosing over available options.

The genetic condition, which affects one in every 20,000 to 50,000 people, causes episodes of swelling in different body parts, such as the face, throat, hands or abdomen and can be fatal. It is mainly classified into three types. About 85% of patients are Type 1, which is characterized by low levels of the C1 esterase inhibitor protein. About 15% are Type 2 with normal or high levels of the protein, but it is dysfunctional. People with the very rare Type 3 have normal levels and function of the C1esterase inhibitor but have mutations in other genes.

Medications consist of therapies to treat acute HAE attacks and prophylactic agents to prevent attacks.

Last year, the FDA approved three new agents that offered advances in the field: Andembry (garadacimab-gxii) from CSL in June, KalVista Pharmaceuticals, Inc.’s Ekterly (sebetralstat) in July and Dawnzera (donidalorsen) from Ionis Pharmaceuticals, Inc. in August.

Andembry is the first and only factor XIIa inhibitor for HAE prophylaxis and is indicated for people at least 12 years old. Dosing via subcutaneous injection is once monthly.

Also approved for prophylaxis in people at least 12, Dawnzera, a plasma prekallikrein-directed oligonucleotide, is the first and only RNA-targeted medicine for HAE. The subcutaneous injectable is administered monthly although its label indicates that bimonthly dosing “may also be considered.”

The plasma kallikrein inhibitor Ekterly is indicated for the treatment of acute HAE attacks in people at least 12 years old. The medication is a tablet, making it the first oral route of administration approved for the indication.

With these approvals, there are 12 agents for HAE, evenly split between on-demand treatment and prophylaxis. Multiple generics of Takeda’s bradykinin B2 receptor antagonist Firazyr (icatibant), which treats acute HAE attacks, are available.

During a Feb. 2 Evercore ISI Immunology Expert Discussion hosted by analyst Gavin Clark-Gartner, Jonathan Field, M.D., a New York-based allergist-immunologist, explained that about two-thirds of his patients are on prophylactic therapy to prevent HAE attacks, and they always have an on-demand agent as well “just in case.” The remaining patients are on medication for acute attacks only.

Treatments Have Evolved in ‘Circular Way’

The evolution of treatments, he explained, has occurred “in a circular way,” starting from no treatments when he began practicing to the October 2008 approval of prophylactic drug Cinryze (C1 esterase inhibitor [human]) from Shire plc (which was later acquired by Takeda).

Firazyr’s August 2011 approval was a “real watershed,” claimed Field, as people could self-administer the drug during an attack rather than having to seek out treatment at a hospital or a physician’s office.

Over the years, several other therapies were approved, with one notable prophylactic agent, Takeda’s Takhzyro (lanadelumab-flyo), getting FDA approval in August 2018. People with HAE who had been resistant to prophylaxis now had a subcutaneous injectable option as opposed to an infusion, and they could dose it only once or twice a month as opposed to the more-frequent regimens of other agents.

Then, “the Holy Grail…that changed things,” he said, was the December 2020 approval of BioCryst Pharmaceuticals, Inc.’s Orladeyo (berotralstat) as the first oral, once-daily prophylactic medication. It was appealing to people unsure of whether they needed prophylaxis: “It’s simple. Everyone takes a pill. It’s straightforward; it works.”

Might Prophylactic Use Improve Again?

People’s willingness to take a preventive agent certainly depends on the severity and frequency of attacks, said Field. However, the availability of longer-acting agents, with time between doses stretching to every three or six months, may indeed boost uptake of these medications.

He said he has patients who are on Ekterly, mainly treatment-naïve people. The efficacy is good, he noted, but the drug is new, and his “biggest battle right now is getting coverage. The company is great, the reps are good,” as is the hub. But with “any new drug, no matter what the company says, it’s going to take a year for the insurances to recognize that.”

The appeal of having “to put a pill in their pocket and carry it is a good thing,” Field contended.

That said, injectable weight-loss and migraine drugs have helped counter the stigma of having to inject an HAE therapy, whether for prophylactic or on-demand use, he observed, so resistance to this route of administration may not be as high now as it was four or five years ago.”

Still, with HAE, “the quicker you use the acute treatment, the better outcome you have,” making an oral agent more desirable.

As far as the prophylactic drugs, among Field’s patient population, a “handful” of people have been taking Cinryze “for 10, 12 years.…It still is an oldie but a goodie in a small group of patients.”

The next most-frequently used agent is Takhzyro “because of the simplicity.” Orladeyo also has some use, with about a quarter of his patients on that agent, and Field has two patients each on the newest agents.

Andembry, he said, “is a very clean drug. It’s got the best side-effect profile.” It’s also helpful for people with Type 3 HAE. While some insurers won’t cover the agent unless patients’ labs confirm HAE, other “insurers have recognized that factor XII inhibition seems to work for all types, so I think the coverage is good.” He has a Type 1 and a Type 3 patient on the agent.

Dawnzera appeals to people who mainly want less-frequent dosing, said Field, who has a Type 1 and a Type 2 patient on this medication.

Among the acute therapies, Pharming Healthcare, inc.’s Ruconest (C1esterase inhibitor [recombinant]) is not used often because it is not indicated for laryngeal use. However, the company is working on a prophylactic version of it, which “might change things.”

Will Long-Acting Drugs Pull Market Share?

With some HAE drugs in the late-stage pipeline, will those newer agents be able to pull share from existing treatments?

While it “depends on the patient,…many of them are open” to switching therapies, Field said. But if people are doing well on a therapy that is not burdensome, “I don’t think there’s a lot of desire to switch.” Another reason for hesitance is the potential that their health plan is not covering an agent, and “these are very expensive drugs,” with many exceeding half a million dollars annually for preventive care and anywhere from about $5,000 to more than $20,000 for on-demand use.

But there are “more sophisticated” patients who are “always looking for the next thing,” including potential gene therapies.

Among the agents to watch is Pharvaris NV’s deucrictibant, an oral bradykinin B2 receptor antagonist under investigation for both on-demand and prophylactic use. On Dec. 3, 2025, the company revealed positive RAPIDe-3 study data for on-demand treatment.

“We always try and find something that can be used both ways,” explained Field, who pointed out that one Orladeyo study explored a larger dose for prophylaxis and a regular dose for acute attacks. Having approval for both indications “may give [deucrictibant] an edge in efficacy” and appeal to payers, prescribers and patients alike.

When deucrictibant is compared with Ekterly, “it really comes down to two things,” he maintained: “onset of relief and completion of complete resolution.” Based on study data, the Pharvaris drug may have a very slight edge in the latter category, he said, but ultimately the medications are “about even.”

Prophylactic Phase 3 data for deucrictibant should be available later this year. So if it has an 80% to 85% overall attack reduction, how may the agent be viewed compared with Orladeyo? Those numbers, said Field, are “better than Orladeyo’s initial data, but now in the late years,” they are “on par.” But if a prescriber has a new patient who needs to improve symptoms quickly, deucrictibant may be the preferred option.

Another late-stage pipeline drug is BioCryst’s navenibart, which the company gained with its acquisition of Astria Therapeutics, Inc., which closed Jan. 23. The plasma kallikrein inhibitor is in Phase 3 studies for prophylactic use, with the potential for every-three-months and every-six-months dosing. Field said he is “extremely” excited for that dosing regimen.

“Other than gene therapy, with a cure, you have to think…this is something that is really revolutionary,” he stated. Twice-yearly treatment is “really a game changer.…Even every three months is impressive,” even though the latter regimen is similar to Dawnzera’s dosing.

As far as HAE gene therapies, NTLA-2002 (lonvoguran ziclumeran) from Intellia Therapeutics, Inc. is one agent in the late-stage pipeline. The CRISPR/Cas9 therapy is designed to inactivate the kallikrein B1 gene for long-term attack prevention.

On Sept. 18, 2025, the company said it had completed patient enrollment for its Phase 3 HAELO study and expected to report Phase 3 topline data in the first half of 2026. Intellia is “on track” to submit a biologics license application (BLA) “in the second half of 2026 for an anticipated U.S. launch in the first half of 2027,” said the company.

According to Field, certain people with HAE may be candidates for gene therapy. Someone whose disease is “severe and life-threatening, and they’re still going to fail therapies” may be interested in that option, as well as a person who “really wants to live a normal life, and they believe in the science; they’re comfortable with the potential side effects.”

It’s hard to have a clear picture of what uptake for such agents may look like, but from a clinical perspective, “if the safety works out, it’s the ‘C’ word — ‘cure’ — that we rarely use.”

What’s New:

• Medicare Advantage insurers made nearly 53 million prior authorization determinations in 2024, with 7.7% denied in full or in part, according to a KFF analysis. That denial rate is slightly higher than the 6.4% in 2023 and comparable to levels seen in 2022. Only 11.5% of denied requests were appealed, though more than 80% of appeals resulted in overturned decisions. On average, MA beneficiaries faced about 1.7 prior authorization requests per person, down modestly from 1.8 in 2023, largely because enrollment grew faster than the number of requests. Requests per enrollee varied widely across MA insurers, ranging from 0.6 at Kaiser Foundation Health Plan to 3.0 at Elevance Health and Centene plans. UnitedHealth Group denied the highest share of requests (12.8%), followed by Centene (12.3%) and CVS Health (11.9%), while Elevance had the lowest denial rate (4.2%).

• Throughout 2025, more than 1,000 brand-name drugs posted wholesale acquisition cost (WAC) increases, with median price hikes of about 4%, according to a 46brooklyn Research analysis. Major drugs such as Novo Nordisk’s Ozempic, Gilead’s Biktarvy and Sanofi’s Dupixent were among those with notable impact. Early 2026 data show continued list price activity, with roughly 872 brand-name products taking WAC increases and 18 posting decreases. However, manufacturers implemented substantial list price cuts, ranging from 42% to 75%, for six drugs subject to Medicare’s Maximum Fair Prices under the Inflation Reduction Act. The scale of these reductions more than offsets modest increases elsewhere, resulting in a net negative impact on Medicaid spending.

• About 23 million people have selected 2026 individual market coverage through HealthCare.gov and state-based exchanges since the start of the Marketplace open enrollment period on Nov. 1, 2025, according to CMS. That total includes approximately 3.4 million new enrollees and 19.6 million returning consumers. Of those, 15.8 million selected plans through HealthCare.gov, while 7.2 million enrolled via state-based exchanges. However, this snapshot may not fully reflect paid enrollment, according to an analysis from Georgetown University’s Center on Health Insurance Reforms. Early data from state-based marketplaces show rising cancellations and a shift toward plans with higher out-of-pocket costs. Middle-income consumers, in particular, have experienced steep 2026 premium hikes following the expiration of enhanced premium subsidies.

Next Up:

Employers Beware: Hidden Risks of 340B Shared Savings Models

National Alliance of Healthcare Purchaser Coalitions, Feb. 3, 2026, 3 p.m. (ET)

Panelists:

• Shawn Gremminger, President & CEO, National Alliance

• John Cerulli, Senior Manager, Health Policy & Strategic Communications, Reservoir Communications Group

The FDA and Its Changing Relationship to Industry

Health Affairs, Feb. 17, 2026, 11 a.m. (ET)

Panelists:

• Genevieve Kanter, USC Sol Price School of Public Policy

• Holly Fernandez Lynch, Perelman School of Medicine at the University of Pennsylvania

• Chris Meekins, Raymond James

• Rachel Sachs, Washington University in St Louis (Moderator)

What Excites Insiders About Health Care in 2026?

Health Affairs, Feb. 25, 2026, 1 p.m. (ET)

Panelists:

• Martin Cauz, Beechwood Consulting Group

• Renée Landers, Suffolk University Law School on the Health Equity Compact

• Mark Speicher, American Association of Colleges of Osteopathic Medicine

• Michael Gerber, Health Affairs (Moderator)

What’s New:

• Medicare Part D drug costs continue to rise, though growth rates are beginning to slow, according to a Milliman analysis. From Q3 2024 to Q3 2025, total drug costs per member per month increased by 20%, driven primarily by growth among non-low-income beneficiaries. Specialty drugs remain the main cost driver, but quarterly increases slowed in Q3 2025. Utilization of GLP-1 drugs such as Ozempic and Mounjaro doubled between Q1 2024 and Q3 2025, accounting for 8% of total Part D spending in 2025. Adoption of Humira and Stelara biosimilars also increased significantly over the same period. Looking toward 2026, Part D costs face mixed pressures: negotiated maximum fair prices are expected to reduce gross spending by about 10%, while GLP-1 coverage, increased use of the Medicare Prescription Payment Plan, and patient assistance program eligibility changes may raise utilization and total costs.

• All three major pharmacy benefit managers have more than 600 drugs on their 2026 formulary exclusion lists, with growth slowing at Caremark and Optum Rx but accelerating at Express Scripts, according to Drug Channels’ analysis. The Inflation Reduction Act’s Maximum Fair Price negotiations have not yet meaningfully shaped commercial formulary decisions, as coverage changes reflect generic or biosimilar competition rather than MFP status. PBMs are increasingly favoring private-label biosimilars for Humira and Stelara, steering utilization toward products affiliated with their parent companies. The 2026 exclusion lists also highlight a shift toward the Net Pricing Drug Channel, where net prices, rather than list prices, drive access, economics and competitive strategy. As rebate-driven economics weaken, PBMs may increasingly shift from rebate arbitrage toward benefit administration and upfront price negotiation.

• Medicare Advantage enrollment has steadily grown over the past 20 years, driven mainly by new beneficiaries choosing MA plans rather than switching from Traditional Medicare, according to an Urban Institute report. While annual open enrollment switches remained uncommon, recent trends showed an increasing tendency for beneficiaries to move from TM to MA, particularly early in their Medicare experience. Older beneficiaries were less likely to switch; men were slightly more likely to leave TM for MA and less likely to return. Non-Hispanic Black beneficiaries were nearly twice as likely as Non-Hispanic White beneficiaries to switch from TM to MA, whereas Non-Hispanic White beneficiaries were more likely to leave MA for TM. Geographic differences were also substantial, reflecting state- and county-level MA plan availability. Overall, these patterns suggested that managed care organizations’ market decisions, rather than individual preferences alone, strongly shape enrollment and switching behavior.

Next Up:

The Future of Accountable Care

Health Affairs, Jan. 27, 2026, 4 p.m. (ET)

Panelists:

• Hongmai (Mai) Pham, President, Institute for Exceptional Care

• Gary Bacher, Chief Strategy Officer, CMMI

• Frank McStay, Assistant Research Director, Duke-Margolis Institute for Health Policy

• Hope Glassberg, president of Decipher Health Strategies (Moderator)

Employers Beware: Hidden Risks of 340B Shared Savings Models

National Alliance of Healthcare Purchaser Coalitions, Feb. 3, 2026, 3 p.m. (ET)

Panelists:

• Shawn Gremminger, President & CEO, National Alliance

• John Cerulli, Senior Manager, Health Policy & Strategic Communications, Reservoir Communications Group

The FDA and Its Changing Relationship to Industry

Health Affairs, Feb. 17, 2026, 11 a.m. (ET)

Panelists:

• Genevieve Kanter, USC Sol Price School of Public Policy

• Holly Fernandez Lynch, Perelman School of Medicine at the University of Pennsylvania

• Chris Meekins, Raymond James

• Rachel Sachs, Washington University in St Louis (Moderator)

While 2025 saw portfolio reassessments and a slight cooling of merger and acquisition activity among health care payers, industry leaders remain cautiously optimistic about 2026, according to a new KPMG report.

In its annual Healthcare and Life Sciences Investment Outlook, KPMG found that industry leaders anticipate an increase in M&A activity across the health sector in 2026. The survey is based on responses from 500 executives in the life sciences and health care industries.

The focus for 2026 is “efficiency and innovation,” Drew Corrigan, KPMG’s U.S. sector leader for healthcare, tells Payer Perspectives. “It’s being smarter and thinking of ways that it really helps [the organizations] with their strategy as opposed to trying to get bigger and have more scale.”

Dealmaking slowed in 2025 as payers grappled with rising medical utilization, uncertainty around federal health policy, reimbursement pressures and heightened regulatory scrutiny. Transaction volume fell 5% year over year to 71 deals, the report found, with third-party administrators, compliance platforms and value-based care enablers emerging as the most active dealmakers.

Megadeals were scarce in 2025, and several large insurers instead opted to divest assets. The Cigna Group completed the sale of its Medicare Advantage, Medicare supplemental benefits, Medicare Part D and CareAllies businesses to Health Care Service Corp. for $3.7 billion. UnitedHealth Group was also reportedly selling its remaining South American business, Banmedica, to private-equity firm Patria Investments for $1 billion.

Rather than pursuing large acquisitions, health plans increasingly turned to partnerships and strategic affiliations. For instance, Kaiser Permanente announced its entry into Nevada through a joint venture with Reno-based Renown Health. Cambia Health Solutions and Blue Cross Blue Shield of North Dakota also announced plans for a strategic affiliation that would place the Fargo-based insurer under Cambia’s management while allowing it to retain local governance and its mutual status.

But heading into 2026, industry leaders expressed cautious optimism. “I think we’re hopeful and a little bit more bullish” that 2026 is going to get rolling again, Corrigan says.

KPMG expects capability-building, rather than megadeals, to define payer M&A in 2026, favoring organizations that combine operational discipline with strategic partnerships and joint ventures. Deal activity is expected to center on targeted, value-enhancing investments in analytics, value-based care enablement and provider integration.

Corrigan says the shift from full ownership to collaborative partnerships reshapes payer governance, prompting organizations to adopt more agile, collaborative frameworks.

“In practice, managing shared financial risk requires embedding flexible risk-sharing agreements into the governance structure from the outset,” he says. “Maintaining appropriate data control similarly depends on establishing trust through transparent protocols for data sharing, interoperability and cybersecurity.”

He adds that it is also important to place the right senior leaders with the appropriate expertise and authority in board or formal governance roles to ensure balanced oversight and sound decision-making.

“Ultimately, effective governance in this new era is less about unilateral control and more about creating a clear, mutually beneficial framework — one that balances leadership representation, manages risk and allows innovation to thrive for all parties,” Corrigan says.

For payers, rising medical costs, tight oversight from federal and state authorities, and ongoing staffing challenges are expected to persist in 2026, according to the report.

Heightened federal and state scrutiny, especially around antitrust, coverage and access, continues to constrain dealmaking, with states focused on rural service continuity and competition. Even so, the report noted that transactions remain possible, as many companies mitigate risk and accelerate closings through negotiated settlements with the DOJ, FTC and state regulators.

Payers Prioritize Data Analytics, Clinical AI

Dealmakers also see growth potential in artificial intelligence across health care settings. All payers surveyed by KPMG ranked investments in data analytics and clinical AI solutions among their top three priorities for supporting clinical services in 2026, with nearly 35% of respondents citing clinical AI solutions as their top priority.

More than 85% of survey respondents said they expect their organizations to use generative AI in back- or middle-office functions in 2026, while 70% anticipate its use in clinical care management. Only about 25% expect to see GenAI deployed in front-office functions such as actuarial or underwriting processes.

The survey found greater optimism among leaders in the life sciences sector than among those in health care. About 41% of health care leaders said they expect valuations to increase in 2026, compared with 60% in the 2025 survey.

Compared with life sciences, “valuations [in the health care sector] are high, and operating performance has been challenging enough that people are being very judicious about where they spend their money,” Corrigan says, adding that cuts to reimbursement rates in Medicare Advantage are also dampening M&A appetite and prompting boards to scrutinize potential returns more closely.

“People are looking for more profit and things to be able to drive margin through these acquisitions, whether that’s in health care IT, AI or some of the other areas like behavioral health.”

Many industry experts have touted the promise of biosimilars to bring down patients’ out-of-pocket (OOP) costs. A new study finds that this may very well be true for Medicare Advantage (MA) beneficiaries, a finding that contrasts with a similar study of commercially insured beneficiaries.

For the article, which was published Jan. 15 in JAMA Network Open, researchers studied MA claims in Optum’s deidentified national commercial database, Clinformatics Data Mart Database, for beneficiaries using one of seven provider-administered biologics — filgrastim, infliximab, pegfilgrastim, epoetin alfa, bevacizumab (which was excluded for ophthalmic diagnosis codes), rituximab and trastuzumab — from 2009 to 2022. Each of the agents had a minimum of four years of data before biosimilar competition and three years after.

Results included 273,774 patient-years. The mean age was 76, 57.6% of patients were female, 53.4% were treating cancer with biologics, 49.7% had biologics administered in outpatient clinics or offices, and 13.0% of patients received biosimilars. Of those, 11.1% received only biosimilars, while 1.9% received both biosimilars and brand-name drugs.

Slightly more than half of the patients — 52.2% — paid coinsurance or deductibles, which are directly tied to the cost of the drug, while 5.2% paid copayments only, and 40.8% had no OOP costs.

The mean annual OOP costs for the drugs in the study declined by $94 after they faced biosimilar competition, dropping from $233 in the year before competition to $165 four years after competitors became available. All seven drugs had lower annual costs, and the greater cost decreases were found in patients responsible for coinsurance or deductibles compared with those responsible for copayments only.

“This cross-sectional study found that biosimilar competition was associated with lower OOP spending for Medicare patients, likely because many patients paid a percentage of drug costs,” concluded the authors.

Commercially Insured Had Different Findings

A study published March 29, 2024, in JAMA Health Forum, however, found that biosimilar competition for the same seven biologics in the current study did not bring down OOP spending for commercially insured patients.

Commercial insurers vary in their reimbursement for provider-administered biologics and sometimes will reimburse clinics and hospitals at a price three or four times higher than that of the drug. Because patient OOP costs are based on this reimbursement, even if competition pushed down drug prices, that wouldn’t bring down OOP costs.

In contrast, Medicare reimburses these drugs based on average sales price, so lower ASPs “could directly translate to lower OOP spending for those with Medicare,” write the authors. “Understanding whether biosimilar competition lowers OOP spending for patients with Medicare may offer insights into whether competition has improved access to biologic medications, which could lead to improved adherence and patient outcomes.”

Several studies have found that Medicare beneficiaries forgo filling prescriptions for high-cost specialty drugs. But when biosimilars can reduce these patients’ OOP costs, the agents can help counter that trend.