Friday, July 24, 2026

A new STAT News opinion piece flags the cost implications of CMS's proposed overhaul of maternity care billing codes. The commentary warns that moving from bundled global maternity payments to a code-based structure could inadvertently increase administrative costs and practice expenses without a corresponding reimbursement lift. The proposal, detailed in the 2027 Physician Fee Schedule, is drawing increased scrutiny from provider groups. Monitor the final rule release for specific code valuations and implementation timelines.

The Department of Health and Human Services is appealing a federal court decision that vacated the 2025 Notice of Benefit and Payment Parameters final rule. The rule contained key program integrity provisions for the ACA marketplaces, including measures aimed at stabilizing risk pools and curbing adverse selection. CMS issued implementation guidance earlier this week, indicating ongoing uncertainty for insurers preparing for the 2027 plan year. The appeal sets up a potential Supreme Court review of HHS's regulatory authority over ACA market stabilization. Monitor the Second Circuit docket for the government's brief, expected in late 2026.

CMS published a proposed rule amending the indirect hold-harmless threshold for health care-related taxes used by states to fund their Medicaid programs. The rule would lower the safe harbor threshold, limiting the amount of provider tax revenue states can draw down without risking federal matching fund penalties. Virginia hospitals estimate the change could reduce state Medicaid funding by $31 billion if finalized. States and hospital associations are expected to file comments opposing the rule by the September deadline. The proposed change reflects CMS's broader effort to restrict financial arrangements that inflate Medicaid spending without direct care delivery.

Candid Health closed a $120 million Series D funding round to scale its AI-powered revenue cycle management platform. The company focuses on automating claims management and denial prevention. This capital influx signals continued heavy investment in AI-driven RCM tools for provider and payer workflows. The competitive landscape for practice billing software is consolidating, with venture-backed firms seeking to replace legacy systems.

CMS is appealing a federal district court decision that favored Clover Health in a lawsuit over Medicare Advantage star rating recalculations. The case centers on how CMS adjusts star ratings for plan alignment after acquisitions, with billions in bonus payments at stake. This appeal extends the legal uncertainty for MA plans and underscores CMS's aggressive stance on defending its quality payment methodologies. The outcome will influence future MA plan mergers and financial projections.