HealthCare Roundtable e-News – August 10, 2026

Posted on by HealthCare Roundtable

 

 

Top News

Trump Administration Credits Fraud Crackdown for ACA Enrollment Decline

The Trump administration attributed this year’s drop in Affordable Care Act enrollment, which fell by nearly 3 million to about 19.2 million, largely to its anti-fraud efforts. An HHS report released in June estimated that anti-fraud efforts removed 2.9 million of the 5.6 million people the agency found were fraudulently enrolled in ACA plans in 2025. At the same time, ACA premiums have increased by 58 percent since 2025, averaging $178 a month, and deductibles have risen 37 percent to nearly $3,800 a year on average. Some health policy experts are questioning the administration’s fraud estimates, arguing that rising costs are the more likely driver of enrollment declines. Healthcare affordability remains a top concern for voters heading into November’s midterm elections, giving the debate added political weight.

 

Senate Confirms CDC Director

On August 5, the U.S. Senate confirmed Dr. Erica Schwartz as director of the Centers for Disease Control and Prevention (CDC) with a 51-44 vote. She takes over an agency that has lost thousands of employees under the second Trump administration due to layoffs, resignations, and leadership changes. Her confirmation comes nearly a year after the previous director was fired amid a dispute over vaccine policy with Department of Health and Human Services Secretary Robert F. Kennedy.

During her July confirmation hearing, Senator Bill Cassidy (R-LA) pressed Schwartz on whether she’d support vaccines if pressured by Secretary Kennedy. Ultimately Senator Cassidy voted to advance and confirm her after further conversations left him confident that she would “stand against those who do not” support sound vaccine science. Senator Bernie Sanders (I-VT), by contrast, voted against her appointment both in committee and on the floor. Despite being impressed by her credentials, Senator Sanders stated he didn’t believe she was prepared to stand up to Kennedy’s false statements on vaccines and other health topics. Her nomination comes amid surges in measles cases, cyclosporiasis outbreaks, and an Ebola outbreak in the Democratic Republic of the Congo and Uganda.

Administrative Action

CMS Issues FY2027 IPPS and LTCH Final Rule, Expanding Comprehensive Care Joint Replacement Model

On July 31, the Centers for Medicare and Medicaid Services (CMS) issued the Fiscal Year (FY) 2027 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) Prospective Payment System final rule. CMS finalized an increase in IPPS and LTCH payment rates of 2.3%. When combined with other changes, the IPPS payment rate will generally increase hospital payments by $2.1 billion and LTCH payments by $54 million. CMS finalized updates to quality reporting programs for inpatient hospitals, LTCHs, and IPPS-Exempt Cancer Hospitals. The final rule also modifies the requirements for graduate medical education (GME) payments, adopts the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate Following Sepsis Hospitalization measure, penalizes the worst-performing quartile of hospitals in the Hospital-Acquired Condition Reduction Program, and alters the hospital Value-Based Purchasing Program.

Notably, the final rule also expands the Comprehensive Care for Joint Replacement (CJR) Model, mandating most hospitals nationwide to participate in the model starting in 2028. In the CRJ Expanded (CRJ-X) Model, hospitals are accountable for Medicare expenditures related to joint replacement surgery, hospitalization, and the initial 90 days of recovery following a hospital discharge, including follow-up treatments like physical therapy. The CRJ Model ran from April 2016 to December 2024 and produced $100 million in Medicare savings while maintaining quality of care for patients. The CRJ-X Model marks the first mandatory expansion of an episode-based payment model.

The IPPS and LTCH Final rule go into effect on October 1, 2026, while the CRJ-X Model will go into effect January 1, 2028.

 

Proposed Rule Rolls Back Federal Head Start Regulation

On August 6, the U.S. Department of Health and Human Services (HHS) announced a proposed rule, “Reducing Federal Burden for Head Start Programs,” that would roll back regulations for the roughly 1,600 federally funded Head Start programs. The program serves about 700,000 low-income infants, toddlers, and pregnant women nationwide. Key provisions of the proposed rule include strengthening parent engagement through family-led parent committees, requiring nutrient-dense whole foods aligned with federal dietary guidelines, setting minimum physical activity requirements, and capping administrative overhead costs to reduce compliance burdens. The rule would also voluntarily shift authority over group-size ratios, staff education requirements, background checks, and transportation standards to individual states. The rule follows a rocky stretch for the program, including payment delays, a temporary lockout during a federal spending freeze, closures during last fall’s government shutdown, and an earlier draft budget that reportedly proposed eliminating Head Start entirely before Kennedy pledged to preserve it. The Department of Health and Human Services projects these changes could save $2.2 billion.

While some conservative groups, including the Heritage Foundation, have called for the elimination of Head Start entirely, the program generally enjoys bipartisan support. Notably, Secretary Robert F. Kennedy Jr. has defended the program’s effectiveness, noting that 90% of children served are at or below the poverty line, and shielded Head Start from HHS program cuts during the administration’s first year. Congressional Democrats have sharply criticized the plan, warning that removing regulations could increase class sizes and reduce services, thus threatening quality. Public comments are due October 6, 2026.

Congressional Action

Senate Budget Committee Holds Hearing on Medicaid Fraud, Waste, and Abuse

On August 4, the Senate Budget Committee held a hearing titled “Medicaid: The Reality,” examining fraud, waste, and abuse in Medicaid. Republican members focused on Medicaid’s financing structure as a driver of fraud, citing a $9-to-$1 federal match for expansion adult enrollees versus $1.33-to-$1 for traditional enrollees. GOP members highlighted provider taxes and state directed payments as tools states use to unfairly shift costs to the federal government, and cited a witness claim that 1 of every 5 Medicaid dollars is spent improperly. Democrats, on the other hand, argued H.R. 1 reduces coverage rather than targets fraud, citing a Congressional Budget Office (CBO) estimate that 7.5 million Medicaid enrollees will lose coverage due to the law. One witness testified that reducing fraud requires federal-state collaboration, not funding withholdings, citing data showing a 2.3 million-child enrollment decline since January 2025.

Discussion also centered on interpreting Medicaid spending trends. Chairman Ron Johnson (R-WI) presented data showing total Medicaid spending grew from roughly $300 billion in 2014 to a projected $735 billion in 2026. Ranking Member Jeff Merkley (D-OR) countered that Medicaid spending has grown at a slower rate than overall U.S. health spending since 2007, citing a CBO estimate that each additional dollar spent on children’s Medicaid coverage reduces future federal deficits by roughly $2. Federal spending on Medicaid will continue to be a contentious topic for legislators who are hoping to use the issue to garner constituents’ support ahead of the midterm elections.

 

Bipartisan Senators Introduce Bill to Expand Fraud Enforcement

A bipartisan group of senators including Finance Committee Chair Mike Crapo (R-ID), Ranking Member Ron Wyden (D-OR), Senator Chuck Grassley (R-IA) and Senator Catherine Cortez Masto (D-NV) introduced legislation on August 6 that would inject $5 billion in additional funding into the federal Health Care Fraud and Abuse Control Program (HCFAC) and expand its authority to target fraud in Affordable Care Act (ACA) marketplace plans. The bill follows Vice President JD Vance’s call last week for Congress to bolster the administration’s fraud-fighting efforts. It arrives amid a broader partisan clash over health care costs and insurance disenrollment rates ahead of the midterms, with Republicans emphasizing fraud crackdowns while Democrats argue these trends are a result of conservative cuts to Medicaid in the One Big Beautiful Bill Act (H.R.1). The Senate bill is more modest than a companion House GOP measure introduced in June, which would invest $28 billion in HCFAC and is projected to yield $168 billion in net savings, as opposed to the $45 billion in net savings this bill would produce over the same 9-year period.

State Action

200 Nebraskans Lose Medicaid Coverage Due to Community Engagement Requirements

On Saturday, August 1, Nebraska became the first state to remove people from the state’s Medicaid program for failing to meet community engagement requirements. Passed in July 2025, the One Big Beautiful Bill Act (H.R.1) established requirements for most types of Medicaid enrollees to work, volunteer, or provide community service for at least 80 hours every month. Although not mandated to be implemented until January 1, 2027, Nebraska Medicaid Director Drew Gonshorowski in partnership with other state administrators decided to launch the requirement months earlier because he believes the new rules will help people move towards economic stability and that the state’s eligibility system can validate three quarters of individuals’ compliance without asking for additional information.

Medicaid Director Gonshorowski stated that 700,000 Nebraskans were subject to the requirements, and 200 individuals were expected to lose their coverage at the start of the month. Opponents argue the thousands of letters, text messages, emails, and advertisements were confusing for Medicaid enrollees and that the Nebraska Medicaid help line had long wait times and problems connecting to the Spanish-language line. Gonshorowski stated he would take a “hands-on” approach by monitoring termination appeals and Medicaid disenrollments. Estimates indicate that anywhere from 3 to 8.6 million individuals are expected to lose Medicaid coverage by 2028, including 300,000 Nebraskans, due to the new community engagement requirement policy.

Judicial Action

22 States Sue to Block 2027 ACA Marketplace Rule

A coalition of 22 states, co-led by the attorneys general of California and New Jersey, filed suit July 31 in the U.S. District Court for the Northern District of California to block five provisions of CMS’s 2027 ACA marketplace rule: expanded catastrophic plan eligibility, higher out-of-pocket maximums for catastrophic and bronze plans, pre-enrollment verification for 75% of special enrollment sign-ups on the federal exchange, two income verification requirements, and a one-year failure-to-reconcile window for 2027. CMS finalized the rule in May 2026.

The complaint argues four of the challenged provisions closely mirror measures from CMS’s 2025 marketplace integrity rule, which a Maryland federal court partially vacated on June 12, without CMS addressing the court’s concerns. A related challenge to the 2027 rule led the same court to temporarily pause several provisions on July 16.

The states also argue the rule unlawfully opens catastrophic plans to anyone earning below 100% or above 250% of the federal poverty level, expanding eligibility from the typical requirements that enrollees are people under 30 or those with a hardship exemption. It also lets certain bronze plans set 2027 out-of-pocket maximums at up to 130% of the statutory limit (up to $15,600 for an individual, versus the standard $12,000), with a similar policy for catastrophic plans taking effect in 2028.

The Department of Health and Human Services (HHS) estimates the rule will cause 2 million people to lose coverage next year and reduce marketplace enrollment by 5 million by 2030.

Industry News

GAO Releases Report on Future of Wearables

The Government Accountability Office (GAO) released a report on the potential role of wearable devices (such as smartwatches, rings, and patches) in clinical decision-making. Wearables, which encompass both FDA-regulated medical devices and unregulated wellness devices, use sensors to track vital signs, establish health baselines, and alert users or clinicians to potential medical issues. GAO found that wearables could offer real benefits by giving clinicians more continuous data for quicker diagnoses, more personalized care, and better patient compliance, while also expanding remote monitoring for underserved and rural populations. Artificial intelligence (AI) is increasingly augmenting these devices’ analytical capabilities, though fully autonomous wearable-driven diagnosis or treatment remains years to decades away, according to stakeholders GAO interviewed.

The report also highlighted multiple existing challenges within the wearable landscape: wellness devices lack public disclosure of performance testing, post-market monitoring is limited, and manufacturers have little incentive to pursue voluntary certification. Wearables also aren’t well integrated into clinical workflows or medical facility IT systems, raising data privacy, cybersecurity, and liability concerns, and manufacturers face uncertain insurance coverage decisions that can discourage investment. To address these issues, GAO laid out three non-exhaustive policy options for policymakers to consider: (1) continue the status quo and monitor existing federal/nonfederal initiatives; (2) improve integration of wearables into clinical workflows and facility infrastructure; and (3) incentivize better wearable performance through a public database of independently certified devices.

Save the Date: 2026 Annual Conference

HealthCare Roundtable 22nd Annual Conference

November 4-6, 2026

The Mayflower Hotel

Washington, D.C.