House Advances Its Reconciliation Bill. The House voted 215-214 to pass the One Big Beautiful Bill Act, Republicans’ reconciliation package designed to advance tax cuts, defense funding, and border security measures. The Medicaid provisions in the bill are estimated to reduce the deficit by $715B and increase the number of uninsured people by 8.6 million over the next ten years. Much of those savings are derived from work requirements and more frequent eligibility checks and verification processes, as well as policies to reduce federal financing to expansion states in certain circumstances. The bill includes a Medicare physician fee schedule payment provision that provides a favorable Medicare Economic Index update for one year and permanently eliminates the split conversion factor, which was set to begin in 2026. The split conversion factor provided an incentive (a higher update) for participants to engage in advanced APMs. This legislation removes that incentive and does not extend any form of advanced APM incentive. A4H has been working with aligned stakeholders to engage the Senate in modifying this provision to restore advanced APM bonuses. The Senate is expected to modify several aspects of the bill before sending it back to the House for a final vote. A4H members should continue outreach to their Republican senators.

CMS Modifies ACO REACH. CMS announced a series of significant changes to the ACO REACH Model beginning in performance year (PY) 2026. The changes indicate heightened financial oversight of model participants and demonstrate CMMI’s desire to find a pathway forward for ACO REACH in an environment prioritizing savings. CMS also released a preview of the evaluation findings from PY 2023, forecasting improvement among standard and new entrant ACOs relative to prior years, with reductions in gross spending and stronger improvements in quality measures. High Needs ACOs also demonstrated reductions in gross spending and significant improvements in quality. The evaluation preview also calls out “inherent difficulties in evaluating” models serving high-cost, medically complex patients – drawing attention to the challenges and limitations A4H and others have raised with regard to the evaluation methods used to determine model savings. A4H looks forward to continuing to work with CMS and CMMI to refine evaluation methods and extend ACO REACH-like approaches beyond 2026.

CMS Extends KCC Model, With Changes Intended to Derive Additional Savings. CMS announced the Kidney Care Choices (KCC) Model, which was slated to end next year, would be extended through 2027 with changes to participation options and financial methodology in the model starting in 2026. CMS intends for these changes to allow the model to generate savings while continuing to increase quality of care and improve patient outcomes. A4H welcomes CMS’ choice to extend the KCC Model for an additional year and will continue to work with CMS on improving and extending other accountable care models over the longer term.

CMS to Audit All Eligible MA Plans. CMS stated it would audit all eligible Medicare Advantage (MA) plans each payment year and complete audits retroactively for payment years 2018 to 2024. To meet these goals, CMS will invest in new personnel and technology to increase its auditing capacity, seeking to increase the number of medical coders it employs from 40 to 2,000. CMS will also work with the HHS Inspector General to recover any overpayments identified by upcoming or previous audits.

HCPLAN Reaffirms Commitment to Value-Based Care. The Health Care Payment Learning & Action Network (HCPLAN) will launch four new initiatives focused on competition, patient empowerment, preventative care, and technology-enabled care, in line with CMMI’s new strategy and HHS’ broader Make America Healthy Again goals. Quotes from Dr. Mark McClellan, co-chair of the HCPLAN and Director of the Duke-Margolis Institute for Health Policy, and Abe Sutton, CMMI Director, highlight the role of public-private partnership in improving health and reducing costs. HCPLAN also noted that as it shifts towards these initiatives, it will discontinue the CMMI-funded APM Measurement Effort, but it will seek alternative pathways to continue the effort to provide data needed to improve outcomes and advance value-based care.

Congressional Hill Briefing on Complex Populations on June 4. Join the Complex Care Alliance for a discussion with experts in health care, policy, and patient advocacy for a briefing on Improving Care for Patients with Serious Chronic Conditions. The meeting will take place at the Rayburn Office Building, Room 2045 from 12pm to 1pm. Register here.