Government-run health care programs fueled the rise of Centene Corp., but cuts to federal assistance could cause it to slide. Centene has grown to be the largest Medicaid managed care provider in the country. And it’s the largest carrier in the ACA, created by President Barack Obama's signature healthcare law. But now, Centene's focus on Medicaid and the ACA insurance exchange is posing new challenges: The federal government is tightening Medicaid eligibility and cutting subsidies for marketplace health insurance plans. The "One Big Beautiful Bill Act," which President Donald Trump signed into law on July 4, is expected to have a major, largely negative, impact on Centene and other healthcare providers.
Beginning in CY 2026, CMS proposes to implement two separate conversion factors: one for qualifying alternative payment model participants and one for physicians and practitioners who are not qualified participants. The rule would increase the APM conversion factor by 3.83% in CY 2026 as compared to CY 2025. It would increase the non-conversion factor by 3.62% in CY 2026 as compared to CY 2025. These updates include statutory updates of 0.75% and 0.25% for the APM and non-factors, respectively, another update of 2.5% as required under the One Big Beautiful Bill Act, and 0.55% that CMS states is necessary to account for proposed changes in work relative value units.
CMS also proposes that, for CY 2026, it would make an efficiency adjustment to certain work RVUs of -2.5%. In addition, the agency is proposing significant updates to its practice expense methodology that it says will recognize greater indirect costs for practitioners in office-based settings compared to facility settings. It also proposes to utilize data from auditable, routinely updated hospital data to set relative rates and inform cost assumptions for some technical services paid under PFS. Specifically, for CY 2026, it proposes to use this data in setting rates for radiation treatment services, and for some remote monitoring services.
HHS officially laid off employees on Monday, following an order from the Supreme Court on July 8 that allowed its restructuring plans to proceed, according to emails viewed by Bloomberg. Many employees who were supposed to be released during the agency's first round of 10,000 layoffs in April have been in limbo as the effort made its way through the court system and was paused by federal judges. The reorganization, in addition to cutting staff, was supposed to consolidate the department’s 28 divisions into 15 and cut regional offices from 10 to five.
HHS Secretary Robert F. Kennedy Jr. on Monday refuted the existence of Medicaid cuts due to President Trump's "big, beautiful bill." "First of all, there's no cuts on Medicaid. There is a — there's a diminishment of the growth rate of Medicaid, which is bankrupting our country. And by the way, the national debt is also a determinant, a social determinant, of health," Kennedy told Fox Business Network's Larry Kudlow on his show. "If we're leaving our kids with these giant debts, they can't afford healthcare. They can't afford good food," he added. The "big, beautiful bill" law cuts about $1 trillion from Medicaid, mostly through strict work requirements and reductions to how states can fund their Medicaid programs via provider taxes and state-directed payments. The majority of the cuts will not happen soon, but rural hospitals in particular have said they likely will have to make difficult financial decisions on which services they can afford to hold onto and which may need to be cut.
A federal judge in Texas reversed a Biden-era rule on Friday that permitted medical debt to be wiped from credit reports, according to court documents. U.S. District Judge Sean Jordan, a 2019 appointee of President Trump, said the rule by the previous administration exceeds the authority of the CFPB. The Biden administration estimated that the action would remove nearly $50 billion of medical debt from the credit reports of roughly 15 million Americans.
The new Medicaid work rules in President Trump's tax-and-spending law put states on a tight timetable for setting up systems to notify millions of recipients about the requirements — and to track if they're complying. Previous efforts to set work rules in Georgia and Arkansas showed it could be a messy and expensive process that generally relies on outside vendors to set up the necessary infrastructure.