SAN FRANCISCO—Healthcare executives come to the J.P. Morgan Healthcare Conference to make their pitch to investors. Senior federal healthcare leaders were also in town this week to make the case for their proposals.
In a room filled with 200 health system and payer executives, along with digital health entrepreneurs, on Monday evening, Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz, M.D., and his senior leadership team shared future plans following a year of fast-paced policy changes and a massive reshaping of the government.
It was also a recruitment pitch.
"It's a generational opportunity to be part of something that's going to be massive," Oz told the room of healthcare executives during an evening event on the sidelines of JPM. "If we succeed in what we're trying to pull off, you will be part of history, and if we fail, and you didn't come to help us, you'll blame yourself. This is your chance."
Those recruitment efforts have been successful so far, as several healthcare executives have joined Oz's team. Former Unite Us CEO Dan Brillman now leads Medicaid and the Children's Health Insurance Program (CHIP), and Chris Klomp left his position as CEO of Collective Medical to serve as director of Medicare and deputy administrator of the CMS.
The event, co-hosted by Kleiner Perkins, Town Hall Ventures, Blue Venture Fund and Define Ventures, featured Klomp and Brillman as well as Amy Gleason, acting administrator, U.S. DOGE Service and Stephanie Carlton, deputy administrator and chief of staff.
CMS officials had a big presence at this year's JPM as Oz is also slated to speak during a keynote panel today as part of the JPM conference, along with Carlton, Klomp and Gleason. And there is a closed-door roundtable event featuring CMS officials later Tuesday afternoon, Fierce Healthcare has learned.
During a wide-ranging fireside chat, Oz and his senior leaders touted the agency's accomplishments in the past year and shared their vision for reshaping the healthcare system.
Andy Slavitt, former acting CMS administrator during the Obama administration and a vocal Democrat, praised the CMS' bold initiatives to tackle long-standing problems in healthcare.
"You've done a nice job making prior CMS administrators look bad," Slavitt, co-founder and general partner at Town Hall Ventures, quipped during the event. "You've accomplished as much in a year as it took a number of us several years to accomplish."
By 2028, the CMS' vision is to demonstrate advancements with interoperability, price transparency and improved access to digital health tools, Oz said. This past summer, the agency announced a multipronged effort from major payers to reform the oft-criticized prior authorization process.
At the same time, in 2025, the CMS rolled out a slew of new payment models and pilots aimed at providers and value-based care organizations, including drug pricing models, a new 10-year accountable care model to replace ACO REACH, the new ACCESS Model to spur the use of technology in chronic disease treatment, a model targeting chronic care and nutrition, an experiment to test new prior authorization requirements in traditional Medicare and a new Ambulatory Specialty Model, which focuses on specialty care for beneficiaries with heart failure and low back pain.
Trump enacted a rule in October that gives primary care physicians who treat Medicare beneficiaries a 2.5% raise next year. Oz hinted that more changes are in the works to support primary care.
The agency also plans to rebuild the CMS' outdated infrastructure. Of note, just last week, the CMS released a request for information (RFI) to get input on replacing its Medicare claims processing system with a real-time, cloud-based platform The Trump administration has also prioritized rooting out fraud, waste and abuse.
Oz asserted that the biggest problem facing the U.S. healthcare system isn't the cost of care, although he acknowledged it was a challenge.
"The problem is, when we don't deliver high-quality care and give everyone access to it," he said. "If we can fix the quality issue, it actually takes care of justifying the cost, and it will actually save us money."
The Trump administration is also making a big push to drive healthcare interoperability and get health data into Medicare patients' hands through its Health Tech Ecosystem initiative. That announcement, in July, was sprawling and included several spokes: a new CMS Interoperability Framework and a Health Tech Ecosystem that committed to working on conversational AI, modern digital identity verification and diabetes apps.
Gleason told the audience that 600 healthcare organizations have joined the Health Tech Ecosystem pledge. The goal is to have tangible results from these pledges go live by March 31, she said.
Here's some key highlights from the CMS fireside panel:
Rural health transformation
As part of the One Big Beautiful Bill Act (OBBBA), the federal government will dole out $50 billion to rural healthcare providers over five years. The Rural Health Transformation Program will allocate $10 billion annually between fiscal years 2026-2030. The CMS announced the funding awards at the end of the year. The funding comes as providers are facing permanent cuts to federal Medicaid funding, also brought about by the OBBBA. Those cuts are estimated to reach nearly $1 trillion over the next decade.
Oz described the program as an unprecedented uptick in federal funding for rural health providers. He said the program funding represents a 50% annual increase in Medicaid funding for rural healthcare. "It's the largest investment of its kind ever made. And, the goal is not to pay the bills. We need to right-size, provide operating capital to change how we envision rural healthcare. We can actually invest in those changes, whether it's group purchasing arrangements, better IT, so these institutions can catch up with each other, different ways of creating access to care," Oz said.
States are tailoring their programs to meet specific needs for their patient populations, he noted. Alaska plans to invest in drone technology to deliver medications to the North Slope region, a remote area that's difficult to reach, according to Oz.
"Our hope is to catalyze all the governors to do that, and then get them talking and get the best ideas out there," Oz said, while also appealing to health tech entrepreneurs and investors to participate and invest in these initiatives.
Major changes to Medicaid program
The OBBBA, otherwise known as the budget reconciliation bill, made waves for its historic nearly $1 trillion cut to federal Medicaid spending over 10 years. H.R. 1 brings the first-ever national work requirements to the Medicaid program, which will kick in at the start of 2027. The number of uninsured Americans is expected to grow by 10 million in 2034 as a result.
A new Commonwealth Fund analysis estimated U.S. hospitals’ annual operating margins will drop by 12.5% to 14.2% in 2027 should mandatory Medicaid work requirements take effect.
The Trump administration argues that unchecked growth in Medicaid strains budgets and makes the program unsustainable. Annual Medicaid spending growth sits at around 8%, Oz said, and the changes being implemented will drop that growth rate to 5%.
"The catastrophizing over the idea that there are cuts that are going to rip the guts out of the system, I don't think is fair. It is going to challenge some parts of the system, I want to be honest about that," Oz said. "We need to get Medicaid on firm footing so that it's a financially viable asset. We cannot afford to weaken Medicaid in places where it's essential."
H.R. 1 also includes provisions restricting the ability of states to use provider taxes, which are used to help finance the state’s share of the cost of Medicaid.
"This is a very clever way for sophisticated states to get extra money from the federal government, so it effectively changes your federal match," Oz said.
Brillman, the head of Medicaid, said his agency is focused on bringing innovation to the eligibility and enrollment process and has implemented tech requirements as states roll out new community engagement processes.
"If people have a hard time with enrolling in Medicaid, we don't want people falling off the rolls, or if they made a mistake, or if they have barriers. How do we connect them to service? How do we actually make sure we can reduce the burden on beneficiaries filling out this paperwork and make this a data-first approach, which we put that in requirements, and we automate as much of this as possible to make this easy on beneficiaries," Brillman said.
Focus on accountable care
In December, the Trump administration unveiled the Long-Term Enhanced ACO Design, or LEAD, model as its newest accountable care program. LEAD will be a decade-long voluntary program that begins Jan. 1, 2027 and concludes Dec. 31, 2036.
The Center for Medicare and Medicaid Innovation said LEAD is designed to address the barriers to participation that can lead to attrition or prevent providers from joining an ACO at all. Both established and new ACOs will receive enhanced and flexible cash flow payments and will have greater freedom to spend time with patients.
"We really want to migrate patients into accountable relationships, and that means strengthening accountable care," Klomp said during the fireside chat.
"We need principles of choice and competition. We'd like to see a healthy, thriving ACO environment that's much more stable competing against a healthy, stable Medicare Advantage [MA] environment with long-term, serial relationships between providers and patients for whom they care, where there's an alignment of economic incentives not just to render care and move on, but to understand what that beneficiary's objectives are," Klomp said.
He added, "We need to push quality measures down so beneficiaries can choose between good providers and bad providers. They need to know how much they're paying so they can evaluate what they're getting."
The CMS wants to make it easier for providers to enter into accountable care arrangements. "We just made it really hard for good people to do the right thing. We need [to] help good people make good decisions. We need to make it simple for you to take on risk," Oz said.
The MA market is facing a challenging environment, marking a period of correction after years of growth. MA insurers face financial pressures from rising medical costs and tighter government reimbursements. The CMS implemented changes to quality metrics and phased in a new risk adjustment model. As a result, major health insurers scaled back their MA offerings for 2026 and have exited certain counties and states.
"Medicare Advantage has been destabilized, speaking plainly," Klomp said. "We care about stability. We need that to be predictable. We need folks to be able to take risks, but they need to know that we're going to be there. We're going to pay consistently, we're going to set consistent policies. We are extremely focused on that."
The CMS is considering new policies to improve MA, Klomp said, without going into specifics, and he encouraged industry leaders to come forward with ideas.
The agency issued an RFI in November to gather ideas on how to improve and modernize MA—including changes to risk adjustment, quality bonus payment policies and wellness and nutrition policies—through either a time-limited model test under the CMS Innovation Center’s authority or potential programwide regulatory changes.