Week in Washington

CMS Halts Payments

CMS announced it will be cutting off $259 million in Medicaid funding to Minnesota as well as freezing sign-ups for new durable medical equipment supplies in Medicare for six months. CMS alleges the moves are in response to fraud.  CMS is additionally attempting to halt up to $2 billion in Medicaid payments to Minnesota. There is the potential for actions like this in other states as President Trump appointed Vice President Vance to examine other allege fraud in health care spending.

Tariff Updates

The Supreme Court ruled that President Trump’s usage of the International Emergency Economic Powers Act (IEEPA) in enacting most of the tariffs that had been imposed since  President Trump returned to office. In response, President Trump enacted a 10% to 15% global tariff under separate authority. The tariff can only be in place for 150 days and was announced as having an exception for pharmaceutical drugs.  It should be noted that President Trump could still impose tariffs on prescription drugs using a different legal authority. Becker’s health has a good summary here.

CBO updates Medicare Trust Fund Estimates

CBO updated its estimates for when Medicare’s Trust fund would become exhausted. The new estimates find that the Trust Fund will run out of money 12 years earlier (2040) than was projected last year. The primary driver is that the recently passed GOP reconciliation bill included temporary deductions for seniors, which reduced trust fund revenue.

Research You Can Use

Medicare Advantage Coding – Michael Chernew et al provides context for the differences between MedPAC’s estimates of coding effects in Medicare Advantage and CMS’ estimates of coding effects in Medicare Advantage.  The difference is MedPAC’s accounting for a trend in coding between 2022 and 2026.