Healthcare Brew covers pharmaceutical developments, health startups, the latest tech, and how it impacts hospitals and providers to keep administrators and providers informed.

Healthcare Brew

Will Peischel

Healthcare Brew delivers the latest news and trends in healthcare.

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Coffee cup paired with a clock striking midnight

How the two-midnight rule influences Medicare coverage

A whole lot goes into whether a physician admits a beneficiary.

Quinn Sental

The US government opens probe into Change cyberattack

Among its goals, the Department of Health aims to ascertain if “protected health information” was breached.

Shannon Young

Biden admin: Short-term health plans must be ‘truly short-term’

New federal rules will restrict short-term health insurance policies to months, not years.

Dollar bill icon denoting healthcare payers

Payers

illustrated headshot of caroline catherman, healthcare brew reporter

Caroline Catherman

One word defined Medicare Advantage (MA) star ratings this year: stability.

The Centers for Medicare and Medicaid Services (CMS) publicly released much-anticipated 2026 

 on Oct. 9. These ratings, ranked from one to five,

determine the distribution of billions of dollars in quality bonus payments from CMS for plans ranking four or higher.

Over the last few years, the weighted proportion of members in plans with four or more stars has jumped around dramatically from 79.5% in 2024 to 64.1% in 2025, according to an analysis from consulting firm 

. But for 2026, the proportion stayed pretty stable at 63.5% by HealthScape’s calculations.

“In some ways, stability is a good thing, especially given how volatile the Medicare market is these days. But the flip side of that is we didn’t really see meaningful improvement,” Alexis Levy, senior partner at HealthScape Advisors, told Healthcare Brew.

Plans have had a rough few years. Their 2024 star ratings were lower than anticipated after CMS adopted a new methodology to calculate star cutoffs, prompting insurer 

 against CMS for how it calculated its scores.

 its 2024 ratings, translating to about $1 billion more in bonus payments, according to healthcare analytics firm Cotiviti.

Plans took issue with the 2025 ratings as well, though. 

 sued CMS over how it calculated its call center measure, which looks at factors like average hold times and disconnect rates. (UnitedHealthcare and Centene 

 Stability isn’t good news for everyone, however.

 benefited. UnitedHealthcare Group, Elevance, and 

 saw their estimated members in plans with four or more stars increase for 2026, with Centene seeing the largest jump from 1% of its members in plans that met that threshold to 19.8%, according to healthcare consultancy Wakely’s October 

The Kaiser Foundation Health Plan maintained nearly 100% of its members in four-star or higher-ranking plans.

But Humana, the second largest MA insurer with 5.8 million members, isn’t doing so great.

 of the top 15 insurers in 2025, according to a 2024 HealthScape analysis. According to an October 2024 8-K filing, enrollment in plans of four or more stars fell from 94% for 2024 to 25% for 2025.

For 2026, the proportion of members in plans four stars and above went down even further, to 20%.

Humana said in an Oct. 2 form 8-K filing it’s “not satisfied” with its 2026 ratings but has already made 

 that should allow it to get back on top for 2027.

The payer will not be “actively selling” most plans in its largest MA contract—which currently has 3.5 stars—and will instead steer new customers toward four- and 4.5-star plans while also focusing on improving other measures that determine star ratings, like member engagement and the call center experience, Humana CEO and President Jim Rechtin said in an update posted Oct. 2.

Based on these ratings, Wakely’s analysis predicts “approximately the same” quality bonus payments in 2027 as in 2026.

In 2025, CMS will dole out $12.7+ billion, according to an estimate from 

. These payments are meant to be reinvested to benefit plan members, though some researchers say there’s 

Levy thinks this year could lend itself to less legal drama, at least.

“There weren’t as many huge programmatic changes to the measure calculations that a lot of the plans were suing over in the previous years,” Levy said.

Stability returns to Medicare Advantage star ratings

No news is good news, apparently.

Cassie McGrath

UnitedHealth Group, Cigna, and Humana all have something in common—besides being major health plans, that is.

They’re all currently facing lawsuits from patients alleging AI programs led to denied care. These suits claim (pun not intended) the insurance companies used AI-based algorithms to deny care without human oversight.

 of healthcare by leaders across the industry. AI scribes have 

 to give clinicians more face time with patients and better work-life balance, while also saving hospitals money. 

, able to carry out complex tasks autonomously, have turbocharged the tech’s potential.

 these tools are being adopted faster than safeguards, despite concerns about 

. Now, with all the emerging lawsuits, the outlook of AI in healthcare is looking even more complicated.

Fawad Butt, former chief data officer of Kaiser Permanente, UnitedHealthcare, and Optum, told Healthcare Brew there’s been a lack of oversight regarding “whether algorithms are behaving as good actors or bad actors.”

UnitedHealth spokesperson Eric Hausman told us it isn’t used for “adverse coverage decisions,” Cigna spokesperson Justine Sessions told Healthcare Brew AI isn’t being used to deny claims, and Humana didn’t respond to a request for comment.

But providers say the opposite—that plans 

 using AI for denials. While bigger health systems have more resources to appeal denials, some experts say independent rural hospitals

could be hit harder. A 2023 Stat investigation 

 UnitedHealth was using predictive algorithms to decide when some patients should be cut off from care.

Alexa McKinley Abel, director of government affairs and policy at the National Rural Health Association, said the research and advocacy organization is hearing rural hospitals are increasingly burdened by responding to prior authorization and claims denials because they have 

“If plans’ use of AI means even more prior authorization denials, then we would have concerns about the increasing paperwork and time associated with rectifying the denials for hospital staff as well as delays for rural patients that need to receive care,” she said.

The Centers for Medicare and Medicaid Services doesn’t require insurance companies to share how prior authorization decisions are made or how predictive technology is used in the process, so most of the evidence comes from providers, patients, or insurers that choose to self-report.

 from the National Association of Insurance Commissioners found 84% of 93 insurers used AI, with 50% saying they use it or are exploring its use to detect fraudulent claims, 68% for prior authorization approvals, 61% for disease management programs, and 45% for sales and marketing.

Only 9 of the 93 (12%) said they used or were considering using it to deny prior authorization requests.

Infinitus is an agentic communication platform that currently works with providers such as Medicare Advantage company Zing Health and Gramercy Surgery Center. The voice agent software can do things like conduct health risk assessments and handle specialty pharmacy prior authorization approvals for plans.

“The direction of travel for the industry is to introduce things that we fundamentally couldn’t do today because of a lack of human capital,” Infinitus CEO and founder Ankit Jain said.

On the other hand, healthcare providers and patients are using AI, too, for tasks like appealing denials. Startups 

 are an example of this, creating tools that collect patient and coverage information, then format and send a letter to the plan.

But insurers say some providers are taking AI too far.

Elevance CEO Gail Boudreaux alleged in a July earnings call “isolated pockets” of hospitals are using AI to “increase documented acuity,” driving up unit costs for the insurer. And Centene CEO Sarah London said in her company’s July earnings call that the insurer uses AI in response to that trend.

“As [hospitals] integrate AI into the revenue cycle, we’re integrating AI into payment integrity to make sure that we are sort of keeping pace with all of that,” London said.

Marc Douek, managing partner and co-owner at physiotherapy chain Renew Wellness, told us the chain cuts hours of work down to minutes by using a tool called Spry to automate prior authorization requests and appeals.

A 2024 American Medical Association survey found physicians and their staff spend an average of 13 hours a week completing prior authorization requests. It’s also an expensive process, as the healthcare industry 

 on prior authorization in 2023, according to the 2024 CAQH Index Report.

“Without using Spry in the automation…we wouldn’t be able to expand. We wouldn’t be able to treat our patients. We’d have to just turn people away,” Douek said.

Based on his conversations with insurers, Butt said providers have adopted AI faster—and insurers, which “haven’t adopted agentic [AI] as quickly,” now feel the tech has them “under the gun.”

“They’re left with old technology and humans responding to this deluge of appeals that are coming in from providers who just bought a software or an agent that essentially keeps appealing everything,” he said.

Butt is also co-founder of startup Penguin Ai, a platform intended to be a one-stop shop where both payers and providers can create AI agents. He believes both will need them in the future.

“What I predict is that it’s going to be agent wars galore,” he said.

Virtual Digital hand of Artificial Intelligence (AI). Healthcare technology and innovation concept. Hologram. 3d rendering

The AI arms race between insurers, providers has begun

Health plans have already been accused of using AI to deny patients. 

As people across the country consider their 2026 health insurance options, there’s a massive elephant in the room: Some aren’t thrilled with the industry right now.

, global research and advisory firm Forrester found only 54% of 12,036 insurance customers describe health insurers as trustworthy.

 of consumers were satisfied with their coverage, that is the past.

Forrester found waning trust may impact business. Survey results included in the report show that of 7,512 customers, those with less trust in their insurer were 10.3x more likely to switch insurers compared to high-trust customers, up from 2.4x more likely in 2024.

“As consumer choices expand, including not buying health insurance, the risk of churn becomes more pronounced,” Forrester Principal Analyst Arielle Trzcinski told Healthcare Brew.

Over the last few years, allegations of health insurers’ wrongdoings have come to the forefront, Katherine Hempstead, senior policy advisor for nonprofit the Robert Wood Johnson Foundation, told us.

 that found UnitedHealthcare had pressured clinicians to follow algorithms that cut off certain patient care. 

“That kind of reporting has left a really bad taste in peoples’ mouths and confirmed a lot of suspicions,” Hempstead said. “[Insurers] have to do a lot of work to undo that damage.”

Since then, many health insurers have talked the talk in an effort to bridge the divide. In June, UnitedHealth and other major health insurers 

, which 93% of physicians say delays patient care, according to a 2024 American Medical Association survey.

, however, found 6 in 10 adults feel it’s “not too likely” or “not at all likely” health insurance companies will follow through.

Trzcinski said she’s talked to some insurers who are walking the walk, too.

Other survey results in the report show that, of 562 adults, only 53% felt they understood claim decisions. Trzcinski said Forrester client 

 is an example of a company “overhauling” the explanation of benefits to include more straightforward language.

Trzcinski also pointed to Blue Shield of California, which has committed to answering “at least 80% of prior authorization requests in near real time” in 2027. Prior authorization “typically” takes 24 to 72 hours, according to a page on the insurer’s website last updated in October. (Specific data on this is not required to be published and thus hard to track.)

“Health insurers must put in the hard work to repair trust and their brand image. Rebuilding trust and improving brand experience is much more than just a marketing campaign or a messaging problem,” Trzcinski said.

Illustration of a business man getting rained on by downward arrows.

Trust in health insurers ‘nearing the point of no return,’ survey finds

You can’t trust anyone these days, apparently.

As of 12:01 Wednesday morning, the US government has shut down.

The shutdown, the first since 2018, came about because congressional Democrats and Republicans 

 on a spending bill. A key line in the sand: Democratic leaders want to 

 2021 enhanced Affordable Care Act (ACA) premium subsidies while Republican leaders want to allow them to expire at the end of the year.

If they expire, premiums are expected to spike for the 24+ million people enrolled in the 

, and providers are expected to lose billions in revenue, per a recent 

 from nonprofit Robert Wood Johnson Foundation.

In the meantime, as Congress dukes it out, healthcare is going to look a little different.

For one, without a spending plan, several pandemic-era Medicare flexibilities are no longer in effect.

A 2020 waiver allowing hospitals to deliver inpatient care to Medicare patients 

As of July 2025, 400 hospitals across 142 systems and 39 states were approved to provide hospital-at-home services, according to a July American Hospital Association (AHA) fact sheet.

The Centers for Medicare and Medicaid Services (CMS) ordered all hospitals with active waivers to 

their hospital-at-home patients or return them to the hospital on Sept. 30, according to an alert on the agency’s page.

This pause may “hamper long-term progress for the hospital-at-home program,” AHA spokesperson Colin Milligan told Healthcare Brew.

Flexibilities that reimbursed telehealth care for Medicare beneficiaries at their homes regardless of where they lived also expired Oct. 1, despite 

 must take telehealth appointments from locations such as a provider’s office or skilled nursing facility within a rural health professional shortage area, a federal telehealth demonstration project, or in a county that isn’t in a metropolitan statistical area.

Exceptions are made for behavioral health and substance use treatment and for people with some other medical conditions such as kidney failure, according to the Department of Health and Human Services (HHS).

Some providers and hospital systems have reportedly started blocking these patients from scheduling visits, though 

 are still providing telehealth care in the hopes of later retroactive payment, according to an Oct. 1 letter from the American Telemedicine Association’s advocacy arm, ATA Action.

 urged President Trump and Congress to extend the flexibilities and enact a retroactive telehealth reimbursement program so those medical professionals can be reimbursed.

“Medicare patients woke up this morning without telehealth coverage for the first time since the pandemic, five years ago. Our healthcare services are regressing, falling woefully short for millions of patients in need,” Kyle Zebley, executive director of ATA Action and SVP of public policy at ATA, said in an Oct. 1 press release.

 41% (32,460) of staff “as of day two of a funding lapse.” About 59% (47,257) will stay on to conduct essential activities such as monitoring for disease outbreaks, conducting crucial research and clinical tasks, and reviewing drug and medical devices.

Medicare and Medicaid payments will continue, and CMS has enough cash on hand to fund Medicaid through Q1 2026, according to a CMS contingency 

. But some survey activity, contract oversight, and beneficiary casework has been paused.

 new drug applications during the shutdown, according to the agency’s contingency plan.

an illustration of the US Capitol building being unplugged

What a government shutdown means for healthcare

New drug submissions, Medicare coverage of telehealth, and hospital-at-home are all paused. 

In August, CVS Health’s insurance arm Aetna announced a new reimbursement approach for its 

Right now, when an emergency lands a patient in the hospital for one or more nights and a provider submits a claim for inpatient reimbursement, Aetna either denies or approves it based on whether it deems the stay medically necessary.

Starting Nov. 15, Aetna said in an announcement it will automatically approve claims and do “severity” reviews instead for many of its approximately 4.2 million MA members. Rather than denying a claim it feels is inappropriate, it will just pay less for inpatient stays of lower “severity.”

Health systems have long complained about excessive MA 

. This automatic approval would appear to, in theory, reduce them.

So why, then, has the professional and lobbyist group the American Hospital Association (AHA) put out a 

 saying it is “deeply concerned” by this shift?

Advocates told us this rule makes it harder for hospitals to fight unfairly low payments and may even break federal policy that guides inpatient-level reimbursement.

Under the current system, when Aetna denies an inpatient care claim, providers can choose to appeal or resubmit it at a lower rate.

This new rule would still allow providers to request a “review and discussion with Aetna,” dispute the decision, or appeal for the full inpatient rate, Aetna spokesperson Phillip Blando told us.

But it’s harder to identify and appeal underpayments than denials, Becky Greenfield, a partner at law firm Wolfe Pincavage, which represents hospitals and health systems, told us. 

“If you had a straight-up denial, it’s really easy to see when the claim has been denied. You’re going to have zero pay,” Greenfield said, adding that providers might need additional resources to spot underpayment cases, like built-in codes in electronic health records or staff dedicated to the task.

Faced with an underpayment rather than denial, hospitals will likely need to go through the dispute resolution process laid out in their contracts with insurers rather than the traditional appeals process, the AHA’s Sept. 15 letter read.

“In most cases, this will be arbitration, a more costly and burdensome endeavor than traditional appeals and the outcomes of which almost always go undisclosed,” the AHA wrote.

This policy may also violate the Centers for Medicare and Medicaid Services (CMS) 

, the Healthcare Association of New York State alleged in an Aug. 20 

CMS did not respond to a request for comment before publication.

CMS issued the two-midnight rule for traditional fee-for-service (FFS) Medicare in 2013. MA plans have been officially required to follow it since 2024. The rule generally requires insurers to approve claims at an inpatient payment rate if the admitting physician thinks the patient’s condition is severe enough to require more than two midnights of care.

Aetna’s policy could result in lower outpatient-like rates being applied to these patients, Greenfield said.

“This—in my mind and in the minds of many hospital executives and many people that represent hospitals—is Aetna’s way of skirting the two-midnight rule,” she said.

Greenfield said CMS hasn’t done much enforcement against plans violating this rule.

 found Medicare—traditional FFS, at least—isn’t great at enforcement against hospitals, either. The report found from 2017 to 2021, FFS Medicare paid $23.9 billion in “improper payments” to hospitals for inpatient stays, $7.8 billion of that for short inpatient stays.

Aetna’s new policy is set to take effect less than five months after a 

Aetna’s move also follows another policy 

 by Cigna to reduce reimbursement. Effective Oct. 1, the payer will downcode (i.e., reduce reimbursement) for providers that it has identified as having “a consistent pattern” of upcoding routine services such as treatment for an earache or sore throat.

Cigna estimates “almost 99% of all in-network providers will not be affected,” according to a Sept. 9 release.

Why are hospital leaders mad about Aetna’s plan to reduce MA denials? 

Hospital advocates say Aetna’s new payment policy sounds OK…until you read the fine print.

It was May 2011 when then-Vermont Gov. Peter Shumlin signed a “universal and unified health system” act into law and the state began developing plans for broad public health coverage.

—to accomplish what had previously been impossible: establish a single-payer health system in the US.

Single-payer systems are a type of universal healthcare that work by having one entity—in this case, the Vermont government—pay for residents’ healthcare through taxes and other public funding. These plans can eliminate the need for private health plans, with countries like Canada, England, Germany, Singapore, Sweden, and Taiwan already offering this kind of insurance.

The hope is if one big group is negotiating costs, then spending would generally come down, as that negotiator would have more power and it would require less administrative work for providers.

Now, Oregon is looking to become the first successful state to implement universal healthcare.

To understand what’s going on in the Beaver State, we must first go back to 2019 when it established a task force for universal healthcare.

In 2022, that task force released a report with early insights into how universal healthcare could work in the state, projecting it would cost an estimated $980 million less in 2026 than the existing healthcare system.

The next year, at the recommendation of the task force, the state legislature created a follow-up Universal Health Plan Governance Board (UHPGB) to make a “comprehensive plan to finance and administer” universal healthcare in the state.

The board has until September 2026 to present that plan.

 are already on a health plan of some kind, according to the Oregon Health Authority, but UHPGB Executive Director Miriam McDonell said many people are underinsured, meaning they have some coverage but don’t use their health plan because care is still too expensive.

This aligns with national trends, too: Nonprofit the 

 about 1 in 4 US adults have health insurance but are considered underinsured.

So while most people in Oregon have some kind of coverage, McDonell said it doesn’t accurately demonstrate “the affordability of healthcare” or “the stress that it’s putting on families.”

The goal is to establish “unified financing,” McDonell said, meaning pulling together state, county, and federal funding to remove the need for private health plans (with some exceptions, like for beneficiaries receiving insurance through the Department of Veterans Affairs).

McDonell said the hope is for the publicly funded plan to be “desirable and less expensive” so Oregon-based employers wouldn’t need to have their own offerings anymore.

UHPGB is looking to understand how much the plan would cost, working with consulting group Milliman to conduct a review of healthcare spending data from 2023, McDonell said. This differs from Vermont, where the payment plan was to be determined after the law passed.

 are also looking to establish universal health plans, and 

 to make sure they build out the best options, though an established system is not yet in place in either state.

Taking many years to build out the plan is intentional, McDonell said, as there are a lot of different moving pieces and UHPGB wants to make sure to get it right.

“We’re in it for the long term,” McDonnell said.

 Vermont’s plan was doomed from the start, as the law never spelled out exactly how the single-payer plan would be paid for. By 2014, the program was nixed before anyone got coverage.

These days, Vermont is still facing high insurance costs, ranking 

 for how much residents spend, according to a study from personal finance company WalletHub. Nearly 20% of a household’s median monthly income (roughly $1,275 on average for silver-level plan premiums) is spent on health insurance.

But current Vermont state Rep. Brian Cina told us he isn’t giving up on universal healthcare.

For now, he said the state is focused on trying to cut costs as much as possible, including through the independent Green Mountain Board, which was established back in 2011 alongside the single-payer care act to keep healthcare spending down.

Cina said now that there’s an effort to “control costs” for healthcare, he hopes it will put the state in a position to afford single-payer insurance and “provide more of a universal program” in the future.

The Oregon state board has until next September to present its official plan.

Nearly 15 years ago, Vermont failed to pass universal healthcare. Now Oregon is looking to do it successfully 

The Oregon state board has until next September to present its official plan. 

A Medicare value-based care payment pilot is set to end Dec. 31, 2026, and health organizations are trying to figure out what to do about it.

What’s now called the ACO Realizing Equity, Access, and Community Health (ACO REACH) model was launched in 2021 under a different name by the Centers for Medicare and Medicaid Service (CMS) Innovation Center.

 (ACO), a group of hospitals and healthcare professionals that work together to provide 

 to patients with traditional Medicare. These organizations receive monetary bonuses or penalties if they save Medicare money based on historical or expected expenses. They do this through approaches like ensuring patients get primary care and reducing unnecessary treatments and tests.

The 161,765 providers within 103 ACOs participating in ACO REACH will have to decide whether to transition to another ACO model or exit the program altogether if it ends. The National Association of ACOs is lobbying for an extension, but CMS has not said whether that will happen.

“There’s a big question mark right now,” Lauren Makhoul, a healthcare regulatory consultant, told us.

ACO REACH is significant because it focuses on 

, requiring participating ACOs to make and follow an equity plan to reduce care disparities for underserved communities.

It’s also the first CMS Innovation Center model to include a track dedicated to high-needs Medicare patients, meaning patients with one or more chronic conditions that impact mobility, Makhoul said.

This track, along with a different risk adjustment structure and other flexibilities for things like telehealth and home visits, made it easier for smaller high-needs-focused provider groups to join an ACO, Makhoul said. For instance, high-needs ACOs only need 1,000 traditional Medicare beneficiaries in 2025 to participate in ACO REACH. Organizations in CMS’s permanent and biggest ACO program, the Medicare Shared Savings Program (MSSP), must have 5,000+ Medicare fee-for-service beneficiaries.

“There are many smaller, very focused, more niche provider groups that serve a much higher-need population,” Makhoul said. “[ACO REACH] made it possible for these folks to participate when they otherwise would not have been able to.”

In 2023, ACO REACH organizations were accountable for 2+ million patients, about half of them new to the model, according to CMS.

The 14 high-needs ACOs, though only accountable for 21,600 of those patients, averaged a 13.3% net savings rate in 2023 compared to a 2.8% net savings rate for standard ACOs, preliminary CMS data shows.