Trump Admin Freezes MA Rates While Payor Stocks Plummet, Cigna "Volunteers" to Lose $600M on Transparency, and Hospitals Fight Lilly Over the 340B Pot of Gold

Hey all,

Happy Hump Day! The healthcare industry appears to be suffering from a sudden, acute allergic reaction to accountability, as the Trump administration clamps down on Medicare Advantage "creativity" and Cigna pivots to transparency with a $600 million grimace. Meanwhile, hospitals and Big Pharma are locked in a cage match over 340B data, proving that nothing motivates a "patient-centric" legal battle quite like a threatened revenue stream. It seems the only thing harder than finding a doctor these days is finding a healthcare giant that isn't currently panicking about the end of the gravy train.

Enjoy the rundown!

Jacob Brody (Co-founder & CEO, ZorroRX) 

(Wall Street Journal) Trump Administration Proposes Keeping Steady the Rates Medicare Pays Insurers

The Trump administration has proposed a minimal 0.09% average payment increase for Medicare Advantage plans in 2027, falling far short of Wall Street expectations and triggering a sharp decline in health insurer stocks like UnitedHealth and Humana. A central component of this proposal is the elimination of payments for diagnoses derived from "unlinked" medical chart reviews—diagnoses not tied to specific medical encounters—which regulators aim to cut to reduce overpayments and level the playing field. This crackdown suggests that while the feds celebrate "accuracy," insurers are left frantically figuring out how to explain to shareholders that the gravy train has slowed to a trickle—doubtless while drafting "apologetic" letters to seniors about why their benefits are suddenly shrinking. Full Article

(BenefitsPRO) Ending Drug Rebates to Cost Cigna Up to $600M

Cigna CEO David Cordani revealed to a congressional committee that the company’s strategic decision to eliminate drug rebates is projected to reduce its earnings by $500 million to $600 million in the coming year. This financial impact stems from a pledge to reinvent their pharmacy benefit management (PBM) model to improve transparency and lower costs following consumer criticism. It’s truly heartwarming to see a healthcare giant voluntarily part with half a billion dollars, proving that their sudden pivot to transparency is definitely about altruism and not because their clients finally did the math and realized just how much the rebate game was costing them. Full Article

(STAT News) AHA Urges Trump Administration to Halt Lilly’s New 340B Data Policy

The American Hospital Association is petitioning the Trump administration to block Eli Lilly’s new policy requiring comprehensive claims data from 340B hospitals, arguing the mandate is an unlawful administrative burden designed to restrict access to discounted drugs. While Lilly claims the data is necessary to prevent duplicate discounts, hospitals contend the move will skyrocket costs and potentially sever their access to statutory savings starting February 1. Given that Section 340B of the Public Health Services Act of 1992 offers about as much specific guidance on governance as a cryptic fortune cookie, we can surely expect a polite, drama-free conversation regarding the nearly $100 billion pot of gold sitting in the middle of the table. Full Article