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Twice-Weekly Briefing
Tuesday, August 11, 2026
Issue 260811-53
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The MOC Brief
Health policy, priced and translated for self-funded plan sponsors
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In This Edition
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A KFF Health News investigation prices the same knee replacement at $40,000 and $16,000 in two North Carolina hospitals. | | 2. |
HealthScape Advisors finds nearly three quarters of health plans reported operating losses in 2025. | | 3. |
A bipartisan Senate group introduces the SUSTAIN 340B Act, which would end the rebate pilot within one year. | | 4. |
The White House puts identified federal fraud near $230 billion and opens a public tracking site. | | 5. |
CMS opens comment on a pathway that can finalize Medicare device coverage within 90 days of FDA authorization. |
Five developments from the past week that change what you should be asking your vendors before 2027 renewals close.
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01
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HOSPITAL PRICING
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August 10, 2026
The Same Knee Replacement Costs $40,000 at One Hospital and $16,000 at Another
KFF Health News published an investigation on August 10 tracing how hospital consolidation sets commercial prices in North Carolina. A knee replacement at Mission Hospital in Asheville runs roughly $40,000 under a Blue Cross Blue Shield plan. The same procedure at Catawba Valley Medical Center in Hickory runs roughly $16,000. Mission bills 334 percent of Medicare rates against Catawba Valley's 237 percent, with the state employee plan benchmark set at 280 percent. Under UnitedHealthcare, a breast biopsy runs $7,500 at Mission and $1,700 at Catawba Valley, and a hernia repair runs $17,700 against $9,600. Mission was formed by a 1998 merger and acquired by HCA in 2018. More than 1,000 hospital mergers closed between 2002 and 2020, and the Federal Trade Commission intervened in roughly 1 percent of them. Yale economist Zack Cooper told the reporters that hospitals with bargaining power tend to charge higher prices.
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MOC Perspective
Read those numbers as a description of your own claims file. A 334 percent hospital and a 237 percent hospital can sit in the same network, under the same contract, in the same state, and your plan pays whichever one your member walks into. Nothing in that spread is clinical. It tracks market power, and market power is measurable before the claim arrives. The prices in this investigation came out of files your plan already has a right to read. Hospital transparency files and your own paid claims will both tell you, procedure by procedure, what multiple of Medicare each facility collects from you. Run that calculation on your top twenty procedure codes by spend and you will find your own version of the Asheville gap. Then the question stops being whether it exists and becomes what your plan design does about it. A network that pays every in-network facility the same way, no matter what it charges, is a plan design decision, and it is one your members pay for through their deductible.
What To Do Now
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Calculate each in-network facility's allowed amount as a multiple of Medicare for your top twenty procedure codes by spend. | | ▪ |
Pull the hospital transparency files for the three facilities that carry the most volume in your plan and compare them against what you actually paid. | | ▪ |
Ask your administrator in writing which facilities in your network hold more than half the inpatient market in their metro area. | | ▪ |
Model a steerage or site-of-care benefit differential for the ten procedures where your facility spread is widest. |
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Source: KFF Health News
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02
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PAYER FINANCE
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August 6, 2026
Nearly Three Quarters of Health Plans Lost Money on Operations in 2025
HealthScape Advisors, a Chartis company, released its 2026 Health Plan Financial Performance Report on August 6, built on year-end 2025 statutory filings to the National Association of Insurance Commissioners. Nearly three quarters of health plans reported operating losses in 2025, with premium growth failing to keep pace with medical expense. Not every trend ran one way. Forty-two percent of plans improved their operating margin over 2024, and 16 percent of plans that lost money in 2024 returned to profit. Capital position tracked cost control closely. Plans with strong capital posted median medical expense growth of 9.4 percent, against 11.6 percent for plans with vulnerable capital. Even so, 71 percent of the strongest-capitalized plans still lost money on operations. Roughly a quarter of financially vulnerable plans announced affiliations, acquisitions, partnerships, or market exits across 2024 and 2025.
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MOC Perspective
You do not buy insurance risk from your administrator, so it is tempting to file this under someone else's problem. It is not. The carrier that administers your self-funded plan is running its fully insured book at a loss, and pressure travels through the parts of your arrangement that are not fixed: administrative fee renewals, network access charges, the size of the rebate pool your PBM shares back, and how hard the vendor negotiates against a hospital system it also needs for its insured business. The 9.4 percent to 11.6 percent split in that report is the whole argument for accountability language. Cost control varies by organization, which means it is a capability you can contract for rather than a market condition you accept. Ask what your administrator's medical expense trend was on its own book last year, and ask what it guarantees on yours. A vendor that will not answer the first question is telling you something about the second.
What To Do Now
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Request your administrator's reported medical expense trend for 2025 and compare it against the trend on your own plan. | | ▪ |
Put a performance guarantee with real dollars at risk into the 2027 administrative services agreement, tied to trend, claim accuracy, and data delivery. | | ▪ |
Add change-of-control language so a merger or acquisition of your administrator triggers a plan right to renegotiate or exit. | | ▪ |
Confirm in writing how rebate and network revenue is allocated between the plan and the administrator, with the calculation shown. |
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Source: HealthScape Advisors
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03
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DRUG PRICING
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August 5, 2026
A Bipartisan Senate Bill Would Rewrite 340B and Shut Down the Rebate Pilot
Six senators introduced the SUSTAIN 340B Act on August 5. Jerry Moran, Tammy Baldwin, Shelley Moore Capito, Tim Kaine, John Boozman, and John Hickenlooper make up the Senate 340B bipartisan working group behind it. The bill writes a statutory definition of a 340B patient, codifies contract pharmacy use with registration and audit requirements, bars manufacturers from restricting access to 340B pricing by dispensing location, and requires annual reporting from covered entities on program utilization. It creates an independent third-party data clearinghouse to catch duplicate discounts, requires standardized financial assistance policies for patients at or below 200 percent of the federal poverty level, and gives HHS authority to audit and remove noncompliant entities. It also terminates the HHS 340B Rebate Model Pilot Program within one year, the same pilot HRSA restarted on July 31 for a January 1, 2027 effective date. Oversight funding runs $3 million a year for five years, implementation funding $9 million a year for four, with a user fee program starting in fiscal 2031.
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MOC Perspective
Every provision in this bill governs what a covered entity pays to acquire a drug and what it must report about the program. Not one of them governs what that entity may bill your plan for the same drug. That gap has survived every 340B reform proposal for fifteen years, and it is where your specialty spend goes. A hospital that acquires an infused drug at the 340B ceiling price and bills your plan a multiple of average sales price keeps the difference, and no disclosure requirement in this bill will show it to you. What will show it to you is your own data. Match the drug, the site of care, and the acquisition benchmark for every high-cost infusion your plan paid last year, then look at where those claims were administered. If the answer is a hospital outpatient department, you already know most of what this legislation will not tell you. The transparency worth having is the kind you can obtain through your contract, not the kind you wait for Congress to mandate.
What To Do Now
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Identify every claim over $10,000 for an infused or injected drug in the last twelve months and sort it by site of care. | | ▪ |
Compare what your plan paid for those drugs against the published average sales price benchmark for the same billing codes. | | ▪ |
Ask your administrator which network hospitals are registered 340B covered entities and whether any contract term addresses drug markup. | | ▪ |
Add a site-of-care provision to 2027 plan design that routes eligible infusions to a lower cost setting when it is clinically appropriate. |
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Source: U.S. Senator John Boozman
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04
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PROGRAM INTEGRITY
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August 6, 2026
The White House Puts Identified Federal Fraud Near $230 Billion and Opens a Public Tracker
The White House launched fraud.gov on August 6 as a public tracking site for its anti-fraud work. The announcement puts identified fraud at nearly $230 billion since January 2025, fraudulent payments stopped at $56 billion, and enforcement recoveries at more than $55.5 billion through indictments, settlements, and civil penalties. The health care figures sit inside those totals. Federal prosecutors charged 455 defendants across 45 states in schemes involving more than $6.5 billion in false claims. CMS removed 1,076 hospices from Medicare in California alone and suspended $1.4 billion in home health and hospice payments nationwide, including an estimated $600 million tied to 447 hospices and 23 home health agencies in Los Angeles. Vice President JD Vance convened a task force roundtable on August 5 asking Congress to codify the effort and expand federal and state data sharing.
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MOC Perspective
The providers billing those false claims are not confined to Medicare. They hold commercial contracts, they appear in your network directory, and they bill your plan under the same tax identification numbers. What separates the federal result from yours is method. The government ran cross-agency analytics against complete claims data and found patterns no single reviewer would catch. Most self-funded plans run payment integrity through a vendor their administrator selected, on a contingency fee, reviewing a sample rather than the full file, with the vendor deciding which findings are worth pursuing. That arrangement produces a recovery number, and a recovery number is not the same as knowing what your plan paid for. Ask for the denominator. How many claims were reviewed against how many were paid, what edits were applied, what was found and left unpursued, and who chose. Then check your paid claims against the federal exclusion list yourself, because that file is public and matching it is a batch job, not a project.
What To Do Now
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Run your last twelve months of paid claims against the HHS OIG List of Excluded Individuals and Entities. | | ▪ |
Request your payment integrity vendor's review scope in writing, including sample rate, edit logic, and findings identified but not pursued. | | ▪ |
Confirm whether your administrator or its affiliate keeps any share of recoveries, and require that arrangement in the fee disclosure. | | ▪ |
Set a standing quarterly claims audit in the 2027 agreement with the plan, not the administrator, choosing the auditor. |
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Source: The White House
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05
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COVERAGE POLICY
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August 7, 2026
CMS Opens Comment on a Pathway That Can Cover a New Device Within 90 Days
CMS issued procedural notice CMS-3487-NC on August 7 describing the RAPID coverage pathway, which it announced jointly with the FDA on April 23, 2026. Under the pathway, CMS issues a proposed national coverage determination the same day the FDA authorizes a device for market, takes 30 days of public comment, and targets a final determination within 60 days for Class II devices cleared through De Novo and 90 days for Class III devices. Eligible devices must hold FDA breakthrough designation, be at the investigational device exemption pre-submission stage with Medicare beneficiaries in the planned enrollment, fall outside any existing national coverage determination, and be separately payable under Medicare. In vitro diagnostics and already authorized devices are excluded. Comments on the notice are due 60 days from publication.
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MOC Perspective
Medicare coverage decisions do not bind your plan, and they set the expectation anyway. Once a device carries a national coverage determination, the manufacturer's sales team, the treating physician, and your member all have the same document, and your denial has to survive it. The compressed timeline is the part to plan for. A device can move from authorization to covered Medicare benefit in a quarter, which is faster than most plans review medical policy and far faster than most plan documents get amended. Find out today whether your administrator automatically applies its own medical policy to your plan, or whether the plan retains the decision. Those are different fiduciary positions, and only one of them leaves you able to explain a denial. Then look at price. A new device rarely arrives alone. It arrives with a facility fee, an implant charge, and a professional component, and the coverage decision your plan makes in ninety days will be paid at whatever your contract already allows.
What To Do Now
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Determine whether your plan document lets the administrator adopt medical policy on the plan's behalf, and document who holds that authority. | | ▪ |
Set a standing quarterly review of new national coverage determinations against your plan's investigational and experimental exclusions. | | ▪ |
Ask your administrator how a new device is priced under your contract when no negotiated rate exists for it. | | ▪ |
Record medical policy adoption decisions in your fiduciary committee minutes with the evidence considered. |
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Source: CMS
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The Bottom Line
Four of this week's five stories describe money that is already documented somewhere you can reach. A hospital's multiple of Medicare sits in a transparency file. Your administrator's cost performance sits in its own statutory filings. A drug's acquisition benchmark is published. Excluded providers are on a public list. The gap between what your plan pays and what your plan can prove is not a data problem in 2026. It is a decision about whether anyone is assigned to look. Assign it before your 2027 renewal closes, because after signature the same questions cost you a year.
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Thanks for reading.
Jude Odu
Founder and Principal, Model Optimal Care
Author, Model Optimal Care: End U.S. Healthcare Waste, One Health Plan at a Time
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