Health News for July 15, 2026
3 Russians indicted in $62M cybercrime scheme that hit hospitals
Three Russian nationals and two St. Petersburg-based “bulletproof hosting” companies face federal charges for running criminal infrastructure that enabled cyberattacks causing more than $62 million in U.S. victim losses, including against hospitals. The Justice Department unsealed the indictment July 14 in the Northern District of Ohio.
The indictment names Alexander Alexandrovich Volosovik, 43; Kirill Andreevich Zatolokin, 34; and Yulia Vladimirovna Pankova, 29, along with Medialand LLC and ML.Cloud LLC. Prosecutors allege the companies leased server infrastructure to cybercriminals, enabling ransomware deployment, phishing, brute-force attacks and fraudulent domain registration while helping clients evade law enforcement detection.
U.S. Attorney David M. Toepfer for the Northern District of Ohio said victims spanned Ohio and 20 other states, and included hospitals, banks, schools, government entities and media companies. According to the indictment, 42 victims across 21 states were targeted by criminal groups using Medialand’s and ML.Cloud’s services.
The charges follow November 2025 Treasury sanctions against the same defendants and companies, joined by the United Kingdom and, in part, Australia. The State Department’s Rewards for Justice program is now offering up to $10 million for information on the defendants’ foreign government-linked associates or activities.
The FBI’s Cleveland Division led the investigation with the Cybersecurity and Infrastructure Security Agency and the Treasury Department’s Office of Foreign Assets Control. The action is part of Operation Riptide, the FBI’s ongoing campaign against cybercrime infrastructure, as Americans reported more than $20 billion in cybercrime losses last year, a 26% single-year increase.
CVS Caremark, FTC settle insulin pricing case for $13B
The Federal Trade Commission reached a settlement with CVS Caremark that requires the pharmacy benefit manager to change its business practices as part of the agency’s antitrust case alleging the PBM inflated insulin list prices through rebate practices.
The FTC said the settlement will secure up to $8.5 billion in consumer savings over the next 10 years and unlock up to $4.5 billion in additional patient savings through point-of-sale rebates over the same period, according to a July 14 FTC news release.
Under the settlement, CVS Caremark must pass rebates through to patients at the point of sale, delink manufacturer fees from drug list prices, increase transparency for health plans and give plan sponsors options to move away from rebate guarantees and spread pricing. The agreement also prohibits Caremark from interfering with pharmacies that work with hub service providers intended to improve medication access and affordability.
The case dates back to September 2024, when the FTC sued Caremark, Express Scripts and Optum Rx, accusing the three PBMs of excluding low-cost insulins from formularies to secure higher rebates. The PBMs pushed back, and litigation stalled in April 2025 when the case was paused due to a lack of participating commissioners, before FTC Chair Andrew Ferguson ended his recusal and cleared the way for proceedings to resume.
The FTC reached a similar settlement with Express Scripts in February, requiring the PBM to pass through rebates at the point of sale, allow plan sponsors move away from rebate guarantees and pay community pharmacies based on drugs’ actual costs, while offering access to TrumpRx. The FTC’s case against Optum has been withdrawn from adjudication as the agency considers a consent agreement.
Blue Cross regains North Carolina’s state health plan contract while Aetna loses out
Blue Cross and Blue Shield of North Carolina won the state’s third-party administrator and pharmacy benefit manager contracts for the state health plan effective Jan. 1, 2028.
Blue Cross NC previously lost its TPA contract and challenged Aetna’s 2025 contract award in 2023. The state court ultimately sided with Aetna over Blue Cross NC.
The state health plan has nearly 750,000 members, covering teachers, state employees and retirees. The board of trustees voted in favor of the Blue Cross NC contracts July 10. The contracts will run through Dec. 31, 2031, with two optional yearlong renewal periods.
“In the months ahead, our focus is on ensuring a seamless experience for members and partnering with plan leadership to deliver practical solutions that reduce costs and support better health outcomes,” Blue Cross NC told Becker’s July 13.
A state treasurer’s office news release from the same day said Blue Cross NC’s TPA bid enables possible savings of up to $1 billion throughout the contract’s duration, thanks to discounts and value-based payment potential coupled with the preferred provider approach. While Aetna, the current TPA, also bid, the state treasurer’s office previously told Becker’s that it did not anticipate the contract extending into 2028 due to the administration’s “different priorities.”
“We believe Aetna is the strongest partner for the state health plan, and our results have proven it,” a CVS Health spokesperson told Becker’s. “We will review this decision in the coming weeks and decide how best to move forward.”
Blue Cross NC beat several vendors for the PBM contract. The news release said the insurer was the only one to meet all minimum requirements. CVS Caremark — the current PBM, which has the same parent company as Aetna — previously faced tensions with the state treasurer over contractual obligations, but the issue was eventually resolved.
“From a pharmacy benefit management perspective, we lead the marketplace in advancing a PBM model built to improve transparency, lower costs and deliver a better member experience,” the CVS Health spokesperson said. “Not every client is prepared to move at this rate of progress, and we continue to focus on providing best-in-class service and market leading innovation to everyone we serve.”
The board of trustees also approved preferred provider contracts with Chapel Hill, N.C.-based UNC Health and Winston-Salem, N.C.-based Novant Health, effective Jan. 1, 2027.
Starting in 2027, providers will be considered preferred, access, non-preferred or out of network. Preferred provider use will result in lower deductibles, out-of-pocket maximums and copays. Access providers will be cost neutral or perhaps have lower out-of-pocket costs, while non-preferred provider use will cause increases.
The board greenlit 2027 premium rates and benefit changes, which include some decreased copays linked to the new tiered provider network. Members will have monthly increases from less than $2 to about $8 for individuals and less than $29 to $42 for families.
CMS orders corrective action plan for AI vendor in Medicare prior authorization pilot
CMS is requiring one of the companies it hired to use artificial intelligence to review prior authorization requests under a traditional Medicare pilot program to submit a corrective action plan because it allegedly was not responding to claims quickly enough, NPR affiliate KUOW reported June 25.
Virtix Health, a Phoenix-based healthcare technology and utilization-management company, failed to meet the pilot’s 72-hour turnaround for prior authorization and pre-payment determinations, according to the report.
CMS’ Wasteful and Inappropriate Service Reduction model launched Jan. 1 in Arizona, Ohio, Oklahoma, Texas, Washington and New Jersey. The pilot runs through Dec. 31, 2031, and tests whether enhanced technologies, such as artificial intelligence and machine learning, can streamline prior authorization and medical review for items and services vulnerable to fraud, waste, abuse or inappropriate use.
Virtix was audited across five areas following complaints about operational delays: clinical determinations, communications, portal functionality, customer service and timeliness. Federal officials will now hold biweekly meetings with Virtix to track progress. Virtix is compensated based on a share of averted Medicare expenditures under the program. Virtix did not respond to a message from Becker’s seeking comment.
The WISeR program has been scrutinized by some federal lawmakers. The House Appropriations Committee on June 9 moved forward with an amendment that would block federal funding for the program.
“The committee believes that any proposal to impose prior authorization requirements in traditional Medicare should be subject to robust congressional oversight and transparent evaluation of impacts on beneficiary access to care, provider burden and program costs,” the amendment said.
The amendment also called for CMS to provide an update in its fiscal 2028 congressional justification on the selection of states and the pilot’s impact on patients.
On June 22, more than two dozen House lawmakers sent a letter to CMS Administrator Mehmet Oz, MD, requesting data on appeals and denials during WISeR’s first six months, according to the report.
CMS said turnaround times, which averaged about five days in the program’s first four months, have since improved to 1.7 days for prior authorization and just over three days for prepayment review, according to the report.
The Medicaid squeeze hospitals can’t lobby their way out of
Hospitals have spent months lobbying Congress over Medicaid. The fight that matters now is shifting away from Capitol Hill and into federal rulemaking.
The Trump administration’s 2026 Unified Agenda, published July 2, outlines a series of Medicaid regulations expected over the next 18 months. Read individually, they are technical adjustments. Read together with the coverage changes already rolling out, they describe one strategy: shrink the financing tools hospitals depend on, tighten who qualifies for coverage and widen federal authority over who gets paid.
Unlike recent legislation, many of these changes will be implemented through regulations and statutory deadlines rather than congressional negotiations.
Medicaid dollars are shrinking — and getting harder to earn
One of the most significant proposals targets provider taxes, a financing mechanism nearly every state uses to help fund Medicaid.
CMS is expected to propose lowering the Medicaid provider tax hold harmless threshold this month, according to America’s Essential Hospitals. Forty-nine states and the District of Columbia used at least one provider tax to finance Medicaid in fiscal year 2025, while 39 states and the District of Columbia used three or more, according to a report from Georgetown University’s McCourt School of Public Policy.
Provider taxes generate roughly $37 billion annually for states — about 18% of the nonfederal share of Medicaid spending nationwide, according to The Commonwealth Fund. States use this revenue to draw down federal matching dollars before directing much of the funding back to hospitals through higher Medicaid payment rates.
Federal law is already reducing those financing options. HR 1 lowers the provider tax safe harbor from 6% of net patient revenue to 3.5% by 2031 for Medicaid expansion states, The anticipated CMS rule would further tighten those limits through regulation.
The impact could be greatest in the 17 Medicaid expansion states that already tax hospitals above the future 3.5% threshold, according to the New Hampshire Fiscal Policy Institute, according to a Feb. 6 report from the New Hampshire Fiscal Policy Institute.
Provider taxes are not the only financing mechanism under pressure.
CMS has also moved to cap state directed payments in a change it says saves $775 billion, then clarified which arrangements can be grandfathered, and separately finalized a rule phasing out certain provider taxes. Federal forecasters put the provider tax restrictions alone at nearly $226 billion in reduced federal spending over 10 years.
The paying population is shrinking, and some states aren’t waiting
As Medicaid financing tightens, enrollment is also expected to decline.
Beginning Jan. 1, 2027, HR 1 requires most Medicaid expansion adults ages 19 to 64 to complete at least 80 hours per month of work or other qualifying activities to maintain coverage. Some states have already implemented work requirements.
Nebraska became the first state to adopt the new federal work requirements May 1. Montana and Arkansas followed July 1, though Arkansas is running a soft launch and will not disenroll anyone for noncompliance until January 2027. Iowa plans to begin Dec. 1.
Georgia’s Pathways to Coverage program offers the longest operating example. Since launching in 2023, the program had enrolled about 16,183 people through March 2026, with critics arguing administrative costs have exceeded expectations.
The Commonwealth Fund estimates Medicaid work requirements could reduce operating margins by an average of 13.3% for hospitals in Medicaid expansion states. Safety-net hospitals could see margins decline by as much as 29.6%, with some rural hospitals facing larger reductions.
The Congressional Budget Office estimates work requirements to reduce federal Medicaid spending by more than $325 billion over 10 years while leaving 4.8 million fewer people insured. Many health policy analysts expect much of the coverage loss to stem from eligible beneficiaries who fail to complete required paperwork rather than individuals who do not meet work requirements.
For hospitals, fewer Medicaid enrollees could translate into more uninsured patients, higher bad debt and increased uncompensated care, particularly in Medicaid expansion states that are simultaneously facing reduced financing flexibility.
Oversight is expanding
CMS also plans to increase Medicaid program oversight.
In October, the agency is expected to issue a proposed rule addressing provider enrollment and program integrity following its Comprehensive Regulations to Uncover Suspicious Healthcare request for information. Additional proposals would expand CMS’ authority to terminate providers, require states to conduct more provider audits and revise budget neutrality policies for Section 1115 waivers beginning in January 2027.
CMS has also scrapped its expedited approval process for certain Medicaid waivers, giving states fewer administrative tools to modify their programs. At the same time, several states are pursuing legislation aimed at limiting commercial hospital prices, adding another layer of financial pressure beyond Medicaid policy.
How states respond to reduced Medicaid financing remains uncertain. Policymakers could increase other taxes, reduce spending elsewhere or lower Medicaid payment rates and eligibility, each carrying different implications for hospitals.
Safety-net and essential hospitals — which rely most heavily on Medicaid financing mechanisms and typically have fewer alternatives for replacing lost revenue — are likely to face the greatest exposure.
For hospitals, the immediate opportunity may be less about influencing legislation than participating in the federal rulemaking process before proposed regulations are finalized.
Why healthcare AI often goes ‘dead on arrival’
The industry conversation around healthcare AI has shifted. Health system leaders are no longer being asked whether to adopt the technology; they’re being held accountable for what adoption actually delivers. That accountability often rests on the answer to a simple question: does the tool reduce friction or create it?
“We see so many great ideas that end up being dead on arrival because they’re not able to complement existing, strenuous workflows that our clinicians are already facing,” said Jason Szczuka, chief digital officer of Cincinnati-based Bon Secours Mercy Health and president of Accrete Health Partners, the health system’s digital venture arm, in a recent “Becker’s Healthcare Podcast” episode.
The standard has real consequences. Clinicians are stretched, and tools that promise efficiency while creating new burdens tend to get abandoned regardless of how they performed in a pilot. That tension fuels much of the gap between what health systems have invested in AI and the hard return.
“The most important problem is moving from AI as a set of promising tools to AI as a repeatable operating capacity,” said Mr. Szczuka. “That means identifying your highest friction workflows, making sure the technology is safe and usable, and then importantly holding teams accountable for measuring the improvements that it does or does not deliver. In healthcare, technology only matters if it helps someone make a better decision, get care more easily, or spend less time doing work that could be automated.”
That standard has grown more urgent as financial pressure narrows health systems’ tolerance for speculative investment. Health systems across the country are working to turn AI pilots into measurable outcomes as budget cycles tighten and earlier bets on AI come up for review. Organizations that accumulated proofs of concept without clear ownership or defined outcomes are beginning to feel the pressure.
“The winners are not going to be the organizations with the most pilots out and going,” he said. “They’re going to be the ones that connect AI and digital tools to real operating problems with clear ownership and measurable outcomes.”
Health systems are governing AI deployment more deliberately, moving away from pilot accumulation toward structured governance and explicit value thresholds for deployment, which organizations that built early AI programs without accountability frameworks have since had to reckon with.
Bon Secours Mercy Health’s entry point for any technology starts with the operating problem, not the product. The health system uses AI, digital ventures and operating partnerships to improve access, experiences and efficiencies, but only where those improvements can be embedded inside the system rather than layered on top of it.
“It can’t become just another dashboard layer,” Mr. Szczuka said. “It has to reduce friction. It has to improve decisions, and at the end of the day, it has to create capacity that can be reinvested and redeployed into the higher quality, lower cost delivery of healthcare.”
That philosophy runs through both sides of his role — the operating mandate as digital chief and the investment discipline he applies through Accrete Health Partners. Innovation that doesn’t connect to a measurable operational outcome fails to support the health system’s mission.
“We’re not pursuing technology just for its own sake,” Mr. Szczuka said. “We’re asking how can digital tools help people access our care better, help our clinicians and our operators work smarter, and most importantly, help our ministry deliver on its mission more effectively.”
