What Town Hall Sees in 2025
What Town Hall Sees in 2025
9 Key Healthcare Shifts: From MAHA to Consumer Accountability to Pharmacy Reform and Beyond
9 Key Healthcare Shifts: From MAHA to Consumer Accountability to Pharmacy Reform and Beyond
By Andy Slavitt & Andie Steinberg
Introduction
Every five to seven years, healthcare experiences a year of significant transformation. 2025 will be one of those years.
Since the advent of Medicare in 1965, transformative changes—ranging from episode-based DRGs and Children’s Health Insurance to Medicare Part D, Health Savings Accounts, Medicare Advantage, the ACA, and the birth of ACOs—have fundamentally reshaped how care is delivered. These shifts have also created innovative pathways to invest in our healthcare infrastructure and improve the nation’s health and future.
At Town Hall Ventures, as we vet upcoming changes, the question for us is whether these developments will improve health outcomes, access, efficiency, and fairness—especially for underserved populations—or merely serve as cosmetic shifts, benefiting a few while leaving core challenges unaddressed.
2025 has the potential to drive transformative change and opportunity on a scale we haven’t seen in a decade or more. While it will take several years to know if the potential for progress delivers the improvements we need, we are at a unique moment of opportunity driven by a new activist Administration and technology that is primed to power that change.
Seismic change in healthcare is often driven by government action, and Town Hall’s senior policy team spent the last few months meeting with members of the incoming Trump transition and health officials, new Congressional leaders, and state officials to gather insights and share ideas. We hosted two live invitation-only sessions for you to hear from some of the new policy leaders directly. From these conversations, we’re developing a clear sense of the significant changes we expect in 2025 and beyond—shifts that will shape consumer incentives, the chronic disease burden, drug pricing, and the cost and margins of care for years to come.
Technology will play a central role in this transformation. While the healthcare system has historically underutilized new technologies, two key factors may disrupt that pattern this time around: (1) the potential of generative AI to transform or replace processes affecting patients, providers, and other stakeholders in a way that is both personalized and at scale, and (2) the government’s growing focus on accelerating AI adoption under the new Administration.
Below we lay out 9 themes from these conversations and our own analyses. Some represent critical new areas for investment, while others offer fresh perspectives on familiar ideas. Notably, many of the changes we expect challenge the typical advantages of incumbency. Startups and founders will find fertile ground for innovation, while payors and providers will need to embrace new solutions, driving greater adoption, partnerships, and M&A activity.
These aren’t just predictions—they’re opportunities for you to evaluate your position in the face of these changes. As the country puts a renewed focus on chronic disease, are you ready to meet the demands of advancing chronic disease prevention, managing high blood pressure, or improving cancer and kidney care outcomes? Can you demonstrate you’re reducing illness, keeping people healthy, and doing so efficiently? These questions are just some at the heart of what lies ahead.
1. Health Outcomes, Not Healthcare
We expect the theme of Trump 2.0 to center on MAHA— Make America Healthy Again. This has been made clear to us in a number of first-hand conversations with leadership as well as polling data the new Administration has commissioned.
What This Might Look Like:
Payment models & contracting approaches with a focus on chronic disease reduction. We could see models that reward both providers for reducing disease burden, and patients via tangible benefits for meeting health milestones (see our theme 2 for more).
An emphasis on prevention, including non-pharmaceutical and non-invasive approaches, centering many of the environmental factors that are causing illness, such as nutrition.
Adjusting quality bonus measures to directly tie payment to improved patient outcomes by re-orienting incentive systems like Stars towards improved health outcomes rather than administrative compliance or equity measures currently in place.
Implications:
We should expect a strong need for investment in new data collection and analysis, outcomes measurement, consumer engagement, and quality efforts, as well as adoption of the most successful disease management and prevention programs like Strive Health in kidney disease and Thyme Care in cancer care.
2. Consumers, Incentives, and Prevention
Core to the new Administration’s philosophy is empowering individuals to improve their health through evidence-based digital capabilities, price and quality transparency, consumer-focused design, and reward systems. Policies will likely align financial incentives with preventive care, encourage leveraging technology to enhance patient education and engagement, and embrace new AI-approaches to care navigation through patient-centric solutions.
What This Might Look Like:
Increased adoption of AI-driven digital health tools accelerated by incentive models, quality payments, and rewards.
New CMMI models focused on consumer incentives and rewards.
Medicaid waivers incentivizing preventive health measures, behavioral changes, and care plan adherence.
State-level initiatives integrating preventive care in schools and community settings, targeting pediatric and family wellness.
Implications:
Few organizations have the consumer trust or service capabilities to succeed alone—partnerships will be key. Generative AI unlocks efficient scalability previously unavailable, making this a prime area for new business models and company creation.
3. Medicare Advantage (MA) Positioned for Expansion
Starting in 2026, we should see policies that ease regulatory measures and financial margin pressures, support growth opportunities, and help providers deliver more integrated, patient-centered care for an aging population.
What This Might Look Like:
With one more year of V28 implementation, risk scoring revisions are likely to follow, restoring several key Hierarchical Condition Categories (HCCs) and balancing some of the needed changes in V28 with improvement to areas with adverse consequences.
Adjusting quality measures and Stars scores to be outcomes-oriented, directly tying payment to improved patient outcomes, and rewarding plans that achieve chronic disease reduction & better health results for their members. This approach would drive innovation in care delivery and improve accountability for clinical improvements. MA plans, which focus explicitly on chronic disease management like Zing Health, should be well-positioned.
Anticipated rate increases after years of negative updates could help MA plans recover financially and reinvest in care quality improvements.
Implications:
In 2026 and beyond, we anticipate that changes could collectively add approximately 200-400 basis points of margin for Medicare Advantage stakeholders even after potential offsets from reconciliation efforts, with variation depending on geography and risk mix.
4. Pharmacy in the Spotlight
The rising cost of drugs remains a key focus for policymakers. The Inflation Reduction Act (IRA) introduces major Medicare Part D changes in the coming years, and the expanding indications of GLP-1s raises questions about Medicare coverage. The new Administration will add another angle: the view that drug costs are a trade issue. International benchmarks could become an important tool to align U.S. pricing with global standards.
What This Might Look Like:
Revisiting the 2020 Most Favored Nations (MFN) pricing model, linking reimbursements for drugs to the lowest international prices, phased in over time. This could be implemented at CMMI or in conjunction with the IRA negotiation processes.
FDA leadership under Dr. Marty Makary, in collaboration with CMS, may emphasize price transparency alongside clinical outcomes during drug approvals, potentially driving more outcomes-based contracts in the pharmaceutical industry.
Increased transparency and oversight of the 340B program could ensure discounts directly benefit intended recipients, with clearer requirements for covered entities to demonstrate patient impact and refined eligibility criteria for participants.
Shifts in the pharmacy benefit management (PBM) system toward more transparency and challenging traditional rebate and fee approaches.
A potential re-examination of Part D drug caps and resulting premium shifts.
Implications:
Expect continued shifts in both cost and coverage decisions with a resulting impact on formularies and contracting, as well as overall medical costs.
5. CMMI 2.0
The Center for Medicare and Medicaid Innovation (CMMI) has launched over 50 models since its inception, testing and scaling innovative payment and care delivery approaches to improve quality and reduce costs. These models, focused on ACOs, bundled payments, and targeted initiatives, have had a number of important successes. However, some models face scrutiny for burdensome requirements and unpredictable outcomes, leading to limited enthusiasm among physicians. Others face scrutiny for generating insufficient government savings.
We believe the Administration, including the new Division of Government Efficiency (DOGE), will conclude that CMMI remains a vital policymaking tool in the quest to save billions in government spending, as well as in its potential to reshape care delivery and payment systems. The focus will likely shift toward refining underperforming models, addressing participation barriers, and launching high-impact initiatives aligned with cost-containment goals.
What This Might Look Like:
Models tying reimbursement and patient rewards to preventive care and chronic care management, aligning incentives with behavior change and long-term savings.
Enhanced price and quality transparency, including episode-based bundled payments (e.g., joint replacements, cardiac surgeries) with total cost, quality, and out-of-pocket comparisons. Mandatory bundles for market-dominant systems could improve efficiency and care quality, with readmission penalties included.
Reintroducing the “Geo Model” to enhance care coordination for disadvantaged populations, particularly in rural areas. Hopscotch, which focuses on delivering value-based care to underserved rural populations, could play a pivotal role in scaling such models effectively.
Identifying and phasing out models that fail to achieve cost savings or improve care quality, reallocating resources to more impactful initiatives.
Transitioning from retroactive adjustments to prospective payments to reduce financial uncertainty and encourage greater participation in CMMI models.
Implications:
Models should attract more participants as they become more appealing to those who can deliver savings like Curana Health in senior care residential settings and Empassion in end of life care. New models should be seen as a potential opportunity to invest in new capabilities that may later be broadly scaled.
6. GenAI Seeps in Everywhere
Extensive conversations with the new Administration suggest that one of CMS’s biggest opportunities lies in using generative AI to scale care delivery and beneficiary interactions in a way that is both efficient and deeply personalized. The new Administration recognizes AI’s potential to accelerate progress across key policy goals—whether improving access, reducing costs, or enhancing quality. The sky is the limit, and we expect the Administration to engage with leading healthcare AI companies to implement the most impactful solutions at scale.
What This Might Look Like:
Initially focused on clinical workflows, AI will evolve to empower consumers directly, enabling personalized health tools, data-driven decision-making, and better engagement with preventive care and treatment plans.
Accelerating AI adoption through grants and state waivers, focusing on high-value administrative and clinical workflows to improve efficiency and care delivery.
Leveraging AI tools to strengthen CMS oversight by detecting fraud, waste, and abuse, monitoring MCO compliance, streamlining prior authorizations, and improving provider directory accuracy.
Mandating reporting on AI’s performance in pilot programs to establish best practices and regulatory guardrails for safe and effective implementation.
Implications:
Healthcare companies should prioritize building a secure AI environment—such as those offered by Qualified Health—to ensure safe adoption. By systematically evaluating clinical, administrative, and patient-facing processes, high-impact opportunities for leveraging AI will emerge. AI integrations will no longer be optional—they have become essential. Investment in upfront AI will establish a new best-in-class margin standard that startups and incumbents alike will be measured against. Partnering with AI innovators focused on enhancing productivity, access, and personalization will be critical to achieving both competitive advantage and meaningful improvements in patient outcomes and experiences.
7. The Chase for Duals
Dual-eligible populations—those covered by both Medicare and Medicaid—represent over 12 million individuals, accounting for some of the highest-need, highest-cost patients in the healthcare system. These individuals often experience fragmented care due to poor coordination between Medicare and Medicaid programs, with overlapping services like post-acute care contributing to inefficiencies and waste. Duals are a significant driver of cost to the healthcare system and, when managed properly, represent a coveted population to serve, particularly for plans with established Medicaid populations.
To address these challenges, federal and state efforts have increasingly focused on integrating Dual Eligible Special Needs Plans (D-SNPs), consolidating Medicare and Medicaid benefits under a single organization to streamline care. While current rulemaking encourages D-SNP integration, it stops short of mandating it, leaving room for further policy innovation to improve coordination. Additionally, individuals with disabilities—a key segment of the dual-eligible population—are often the last group to transition into managed care, creating an untapped opportunity to improve outcomes for this medically vulnerable demographic.
What This Might Look Like:
Rapidly integrate dual-eligibles into fully-integrated models with Medicare and Medicaid providers and services. Organizations like Cityblock are essential partners for organizations aiming to serve dual-eligibles.
As the aging low-income population grows and nursing homes struggle to meet demand, scale national programs like PACE, where Habitat Health and Welbe Health deliver comprehensive care capabilities. Additionally, innovative models like New York’s FIDA-IDD provide specialized, holistic care for high-need populations, offering a roadmap for addressing the unique challenges of dual-eligible individuals.
Support holistic, value-based models that include coverage of relevant non-medical costs (e.g., respite and caregiving) for dementia that companies like Brigade Health are providing.
Accelerate effective integration by limiting Lookalike MA plans that mimic D-SNPs but lack true service integration, or implement opt-out enrollment based on provider relationships or coverage areas.
State-led efforts to unify D-SNP plans under single parent organizations to streamline and enhance care for dual-eligible populations.
Implications:
Medicare Advantage providers will need to access full Medicaid and LTSS capabilities, while Medicaid providers will need Stars and risk adjustment, even as they work to provide a seamless integrated experience to dual-eligibles. Partnerships and acquisitions will likely be favored.
8. ICHRA will be a Long, Slow Development
Individual Coverage Health Reimbursement Arrangements (ICHRAs), first introduced under Trump 1.0, allow employers to offer tax-advantaged reimbursements for employees to purchase individual coverage tailored to their needs. This approach could empower employees with greater choice and flexibility, while helping employers manage exposure to rising healthcare costs. We believe this shift will be gradual, with adoption progressing steadily over time as market dynamics and regulatory support evolve.
The looming expiration of ACA enhanced subsidies at the end of 2025 adds uncertainty to Marketplace growth prospects. While ACA repeal is unlikely, reforms may cap subsidies at certain income levels (e.g., 400% of the federal poverty line) and change benefit flexibility, allowing cheaper plans with reduced benefits and higher deductibles.
These broader Marketplace changes are critical to ICHRA’s success, as they directly affect the affordability and stability of individual coverage options. If subsidies expire or are reduced, healthier individuals may opt out due to higher costs, leaving a sicker, high-risk population in the insurance pool. This adverse selection could drive premiums higher, reduce coverage accessibility, and strain the healthcare system with more uncompensated care costs for payors and hospitals.
What This Might Look Like:
Small groups and targeted segments of large employers may adopt ICHRA, but this evolution is likely to remain slow unless external incentives or regulatory changes accelerate uptake.
The Administration or Congress could expand ICHRA’s role by addressing barriers to adoption or positioning it as a platform to complement or replace certain ACA functions.
Implications:
Investments in ICHRA capabilities should be deliberate and incremental. Solutions should be low-cost, scalable, and adaptable to evolving regulations. Employers and insurers should evaluate tools, like private exchanges, to determine their viability in supporting ICHRA adoption while maintaining competitive and accessible coverage options.
9. Hot Reconciliation Battle
The upcoming reconciliation battle(s) in Congress will be one to watch, with nearly every area of healthcare spending and policy under review. With tax cuts expected to reduce revenue by $3 trillion through 2034, policymakers will be under pressure to reduce spend. Given the thin Republican margins in the House, healthcare and tax negotiations may stretch into the summer. Viewed as must-pass legislation, reconciliation will be influenced by interest group lobbying, with tremendous pressure to include (or exclude) key healthcare provisions. This is an “everything is on the table” moment, where cost-containment measures and reforms could reshape Medicare, Medicaid, and ACA programs, with ripple effects across the healthcare system.
What This Might Look Like:
Medicaid reform proposals, such as block grants or FMAP reductions, will be discussed but are highly unlikely due to the complexity, state pain, and lack of prominent sponsorship. Instead, certain states may consider work requirements or stricter eligibility criteria. Consumer rewards and value-based requirements could become more dominant. Companies like Equality Health and Playground Pediatrics, focused on enabling value-aligned arrangements among Medicaid populations, are well-positioned to help navigate these shifts.
In Medicare, reforms like site-neutral payments, 340B transparency, and expanded competitive bidding will take center stage as major cost-containment tools.
Telemedicine extensions, hospital-at-home programs, PBM reform, and other proposals—ranging from cost-saving measures to spending initiatives—will be on the table. These will align with the Trump Administration and DOGE's priorities to address drug pricing, streamline system inefficiencies, and manage rising medical costs.
Implications:
Advocacy agendas in Washington, D.C. will be in full swing. Whatever legislation passes will likely include adjustment periods and opportunities for exceptions. The final outcomes will hinge on the fiscal discipline applied during the process.
Conclusion
2025 and 2026 will be pivotal years for the incoming Administration to advance its policy and technology agenda. These years will also represent an essential window for healthcare companies to strategically invest in targeted areas. How healthcare participants navigate these 9 themes will determine shifts in market leadership, measured both in improving outcomes for Americans and achieving financial success.
2025 will be a uniquely transformative year, offering higher margins and new growth opportunities but demanding greater accountability and rewards for those who deliver tangible improvements in care outcomes. At Town Hall Ventures, our mission is to support this transformation by investing in and driving the innovation needed to reshape healthcare for a healthier future.
Town Hall Ventures is eager to collaborate in navigating these changes and explore potential new opportunities in healthcare. Please reach out to begin a dialogue about how these themes may impact your practice, healthcare business, or new ideas.
We can be reached at steinberg@townhallventures.com
Mainstreaming Value-Based Care
Town Hall Ventures’ Take on a New Value-Based Care Proposal
3 New Medicare Proposals That Better Patient Care and Unlock Potential Income Opportunities for Physicians
Town Hall Ventures’ Take on a New Value-Based Care Proposal
By Andy Slavitt & Andie Steinberg
Introduction
There has been much noise and some disruption as advanced primary care providers struggle with recent adjustments to Medicare Advantage (MA) reimbursement. In healthcare’s latest addition to the cadre of mysterious acronyms, you cannot go far without hearing talk of “V28”, an adjustment to certain risk codes used to determine MA reimbursement. But, for those focused on patient care, managing population health, and reducing total cost of care by increasing quality, the news is not all bad – far from it. The “value” in value-based care is only growing stronger.
In fact, physician practices serious about providing better care at a lower cost to Medicare patients have a meaningful opportunity with the recent release of the CY 2025 Medicare Physician Fee Schedule proposed rule: additional payments from Centers for Medicare and Medicaid Services (CMS) for taking better care of traditional (non-MA) Medicare patients. In fact, depending on the acuity mix of patients in a practice, a physician practice’s revenue can increase by as much as 5%, with much of that flowing to the bottom line. In the case of a physician practice with a large panel who sees a mix of dual eligible and chronic Medicare patients, this could drive hundreds of thousands of additional dollars. For value-based physicians who anticipate a reduction in Medicare Advantage reimbursement from payers, this is a welcome relief.
Putting the math aside, we believe it is crucial to pay attention to the signals behind this policy. Based on our analysis and conversations with leaders at CMS, we see this as a significant step towards mainstreaming value-based care, a concept that was the exclusive province of providers who participated in special innovation programs…until now. While traditional Medicare has previously incorporated value-based care potential through models like the Medicare Shared Savings Program (MSSP) and Accountable Care Organizations (ACOs), these changes integrate these principles more deeply and broadly into traditional fee-for-service (FFS) settings. Physicians should no longer need to see their Medicare Advantage and traditional Medicare patients as being part of two entirely different models with varied objectives and incentives. Instead, these changes encourage the integration of and investment in population health, prevention, early intervention, and care coordination across an entire practice. Moreover, implementation should be relatively manageable for providers already practiced in providing high-value care.
The proposed rule also presents opportunities to advance health equity and make telemedicine more accessible. Let’s dive into three provisions, along with the potentially transformative implications for healthcare founders, builders, providers, and, most importantly, patients.
1. Advanced Primary Care Management (APCM) Codes
How it Works:
There are 3 proposed new codes aimed at providing comprehensive care management services in primary care settings. Practitioners who are responsible for the patient’s primary care and serve as the continuing focal point, including primary care physicians and non-physician practitioners such as nurse practitioners, physician assistants, and clinical nurse specialists, would be eligible to code for APCM. Certain specialists functioning as primary care providers, such as OB-GYNs or cardiologists, would also bill for APCM services if they are fulfilling the role of the primary care practitioner.
To qualify for these codes, practices would need to offer a range of comprehensive care services such as 24/7 access to care teams, 7-day follow-up after a patient is discharged from the hospital, medication reconciliation, secure patient messaging, and systematic needs assessments to identify and address patients' health and social needs.
Beginning in 2025, payments to providers would be made on a monthly basis on top of the visit fees and are stratified into three levels based on the patient's chronic conditions and social determinants of health:
GPCM1: $10 per month for patients with one or more chronic conditions.
GPCM2: $50 per month for patients with two or more chronic conditions.
GPCM3: $110 per month for dual-eligible patients with two or more chronic conditions.
For a practice with 500 traditional Medicare patients, this could represent a significant income opportunity. If 35% of those patients have one chronic condition, 45% with two or more chronic conditions, and 20% are dual-eligible, there could be a total of $24,000 additional revenue per month, or just shy of $300,000 per year. But, as with many new programs, CMS is not banking on significant uptake from physician practices. CMS estimates claims will be submitted for ~200,000 people, or 0.5% of the Medicare population.
The new APCM codes are an important addition, offering a pathway to adopt VBC principles without the need for risk-bearing arrangements, which is particularly beneficial for smaller practices and Managed Services Organizations (MSOs) that lack the resources or cash flow flexibility to engage in full-risk models. The ability to bill for comprehensive care management services may make FFS more favorable relative to MA in the current environment, especially for dual-eligible and rural populations.
For physician practices, this may mean implementing new systems and workflows that support continuous, coordinated care. It involves training staff, utilizing health information technology, and possibly expanding capabilities to meet comprehensive care requirements. The difference here is that these efforts align closely with what patients truly value, resulting in a more rewarding experience for both providers and patients.
Recent research from United States of Care shows this is what patients consider to be high value. Shifting the focus from what health policy experts define as value to what patients truly seek, seems like a positive and long-overdue step. This research also indicates that patients do not understand or resonate with the term “value-based care”. These enhanced services aim to provide patients with more accessible, proactive, and personalized care, improving overall health outcomes and satisfaction.
The days of “succeeding” by being good at risk-coding patients alone has passed. While reimbursements will change over time, and programs will stop and start, the signal is consistent. Those paying the bills, whether government or commercial, want to encourage care providers and patients to invest in prevention and coordination and eliminate extraneous expenditures. Orient your practice towards these principles and it will be better for patients and more satisfying for providers.
Who Should Pay Attention:
Smaller Practices & Providers in Rural and Underserved Areas can benefit from higher reimbursement rates, allowing them to invest in necessary care coordination and infrastructure to better serve their communities.
Managed Services Organizations (MSOs) can use these codes to support smaller affiliated practices by providing shared resources and infrastructure.
Patients with Complex Needs (multiple chronic conditions or dual-eligibles) can receive more coordinated and comprehensive care, improving their overall health outcomes.
Care Management Organizations: Healthcare startups and organizations enabling providers delivering comprehensive care management may see an uptick in demand among providers who currently lack care management capabilities. APCM codes may spark interest to partner with technology-enabled service providers with solutions for medication management, care coordination, SDoH tracking, post-discharge management & care transitions, telehealth capabilities etc.
Additional Considerations:
While the enhanced reimbursement rates from APCM codes provide significant income potential, there may be associated costs for practices that have not been delivering value-based care:
Staffing: Additional clinical and administrative staff may be required to meet the care management and coordination needs.
Technology: Investment in electronic health records (EHRs), secure communication platforms, and care management vendors (discussed above).
Training: Providers and staff need training to effectively implement and manage the new care coordination and communication protocols.
Practices should assess their patient demographics to identify potential beneficiaries for APCM services and evaluate existing care management capabilities to determine gaps in their ability to provide APCM services.
2. Prepaid Quarterly Shared Savings in MSSP and Health Equity Benchmark Adjustments (HEBA)
How it Works:
CMS is proposing to make quarterly prepayments to physician practices that are part of Accountable Care Organizations (ACOs) and focused on improving health equity and delivering high-quality care to patients in greater need. ACOs are groups of doctors, hospitals, and other healthcare providers who come together to provide coordinated high-quality care and deliver better outcomes.
The proposed prepayments represent new upfront cash flow opportunities for practices that focus on improving health equity, encouraging investment in essential infrastructure, staffing, and services that enhance care delivery for underserved communities. These prepayments are designed to help ACOs better serve their patients without having to wait for end-of-year savings distributions.
In 2024, CMS introduced Advance Investment Payments (AIP), offering upfront payments ($250,000) to eligible ACOs to support their participation in the Medicare Shared Savings Program (MSSP) in the beginning of the performance year. These payments must be spent on increased staffing, healthcare infrastructure, or addressing social determinants of health. Now, the prepaid quarterly shared savings outlined in the CY 2025 PFS propose to build on that by providing ongoing quarterly payments to ACOs. While 50% of the payments must be used for direct beneficiary services (i.e. meals and transportation), the rest can be allocated to staffing and infrastructure to serve underserved beneficiaries.
With the new Health Equity Benchmark Adjustments (HEBA) for ACOs, benchmarks are adjusted based on the proportion of an ACO's assigned beneficiaries who are enrolled in the Medicare Part D low-income subsidy (LIS) or are dually eligible for Medicare and Medicaid. This proposal ensures that ACOs are not financially disadvantaged by lower benchmarks that do not reflect the true cost of care (think of this as RAF for Medicare FFS).
At Town Hall Ventures, we’re dedicated to partnering with mission-driven and heroic founders and teams to provide better care to underserved communities. Caring for historically marginalized populations with limited access to healthcare calls for a heightened level of commitment and dedication. These initiatives by CMS aim to support physicians to deliver care to any community using government resources to get there. This proposal represents a step towards creating a more inclusive and equitable healthcare environment.
Who Should Pay Attention:
ACOs Serving High-Need Populations such as dual-eligible and low income beneficiaries can benefit from the upfront financial resources & adjusted benchmarks that more accurately reflect the cost of care to support healthcare in underserved communities.
Managed Services Organizations (MSOs) focused on ACOs are well-positioned to provide necessary infrastructure and support via leveraging the prepared shared savings and HEBA adjustments.
Additional Considerations:
While the enhanced financial support from prepaid shared savings and the Health Equity Benchmark Adjustments provide opportunities, ACOs must carefully consider the associated obligations:
Repayment Obligations: Prepaid savings are not grants but advances on expected shared savings. ACOs must achieve the required savings to repay these amounts. Failure to do so could result in financial penalties.
Administrative and Care Coordination Costs: Ongoing expenses, including care coordination, data management, and regulatory compliance, require ACOs to invest in additional staff and technology.
ACOs should evaluate their patient populations to determine eligibility for HEBA uplift and identify areas where prepaid savings can have the most significant impact. Developing a comprehensive plan to use prepaid savings and benchmark adjustments to shore up care coordination, technology infrastructure, and other areas can drive quality improvements and cost savings. These considerations beg the “buy or build” question: ACOs must consider whether partnering with vendors or building the infrastructure themselves is more financially sound and impactful on care delivery and outcomes.
3. Expanded Telehealth Definition and Commitment to Audio-Only Telehealth
How it Works:
The new proposed rule extends telehealth flexibilities beyond its current statutory deadline of December 2024, including a revision of the definition of telecommunications to include audio-only telehealth visits. This initiative is particularly aimed at expanding care delivery modalities for patients without reliable internet access, ensuring that telehealth remains a viable option for a broader range of beneficiaries.
This expansion is especially relevant for managing chronic conditions, mental health services, and substance use disorders (SUD), where consistent follow-up and accessible care are essential.
Who Should Pay Attention:
Mental Health and SUD Treatment Providers now have the flexibility to use audio-only telehealth for initial intake and periodic assessments in opioid treatment programs which can significantly improve access to services for patients with substance use disorders.
Practices & Patients, particularly in Rural or Underserved Areas, can benefit from the increased accessibility of healthcare services, reducing the need for long distance travel and overcoming the limitations posed by internet connectivity.
Telehealth Platforms and Startups may see increased demand from providers looking to partner with telehealth vendors that offer secure HIPAA-compliant audio services. This policy update broadens market reach for startups focusing on user-friendly, low-bandwidth telehealth solutions.
Additional Considerations:
While the expanded telehealth definition offers significant opportunities, staff and providers can benefit from appropriately training and establishing protocols to effectively conduct audio-only visits, including ensuring patient privacy and comprehensive care delivery through this medium. Patient education and engagement will be a critical component here too; providers should construct outreach strategies to inform patients about the availability and benefits of audio-only telehealth services.
Despite ongoing negotiations in Congress for a two-year extension of telehealth services, there has been limited progress in both the House and the Senate. Therefore, CMS is moving forward where it has the authority. This expansion supports the growth of telehealth platforms and services, creating opportunities for startups and healthcare providers to innovate and reach a wider patient base.
Conclusion
We read the CY 2025 Medicare Physician Fee Schedule proposal by CMS to represent a significant shift towards making value-based care priorities more accessible within a fee-for-service payment framework. The proposal offers potentially meaningful payment opportunities for better care without the traditional risk, regulatory loopholes, and delayed payments traditionally associated with qualifying for value-based payments. This should make what we think of as value-based care more mainstream. By supporting advanced primary care management, incentivizing investments in underserved communities, and expanding telehealth access, CMS is paving the way for a more inclusive and effective healthcare system, presenting opportunities for healthcare early-stage founders & builders, as well as providers, to innovate and contribute to a more accessible, equitable and effective healthcare landscape.
At Town Hall Ventures, these initiatives reinforce our commitment to health and prevention while driving innovation, growth, and adoption of advanced tools, data and technology infrastructure, AI, and comprehensive healthcare solutions. Rather than being a silver bullet for increased revenue, these measures are designed to reward practices that make meaningful improvements in areas that matter to patients.
If you would like to provide feedback on the proposals before CMS finalizes them, you can do so here.
Town Hall Ventures is eager to collaborate in navigating these changes and explore potential new opportunities in healthcare. Please reach out to begin a dialogue about how these proposals may impact your practice, healthcare business, or new ideas.
We can be reached at steinberg@townhallventures.com.
