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Oops, All Health Tech
September 17, 2026
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Welcome to TrustWorks On Call, here with your healthcare business and strategy 411 for the week. If you enjoy our work, please consider forwarding it along to a friend and encouraging them to subscribe.
This week, we go Beyond the Whiteboard to discuss which states are the winners and losers one year into the Rural Health Transformation Program, before Dialing In on the strategic questions physician groups should ask themselves going into 2027. But first the news, starting with some healthcare confirmation hearings—somehow the only story we cover this week not explicitly about healthcare technology (and even then, there’s an angle for it).
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Behind the Headlines
Unpacking the forces driving healthcare’s biggest stories.
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1. Senate questions three health nominees.
- On Wednesday, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held the confirmation hearings of Nicole Saphier, MD, for surgeon general, Chris Klomp for deputy secretary of the Department of Health and Human Services (HHS), and Timothy Westlake, MD, for assistant secretary for Mental Health and Substance Use.
- When the nominees were asked about measles, vaccines, and political interference in evidence-based policymaking, they asserted that vaccines are good and the law should be followed, although Senator Bill Cassidy noted that past nominees had left themselves “wiggle room to do things that are quite contrary.”
- The nominees still face a HELP committee vote, which has yet to be scheduled, before advancing to a full Senate confirmation vote.
TrustWorks Take: It would be surprising if any of these three nominees are rejected by the Senate, as nothing particularly controversial or nomination-sinking has emerged about any of them. After two failed nominations for surgeon general has left the position unfilled for all of Trump’s second term, Dr. Saphier’s nomination is being judged against a low bar. She may not have public health experience, and she has questioned some vaccine requirements, but at least she did not exaggerate her medical credentials, like the first nominee Janette Nesheiwat, MD, and she is now saying the “right” things about vaccines, unlike the second nominee Casey Means, MD. Dr. Saphier should clear her nomination on the principle of “could be worse.”
Chris Klomp’s nomination draws from a very different context. A political outsider brought in at the start of Trump’s second term to run Medicare, Klomp has risen the ranks to become the de facto Chief Operating Officer of HHS. His confirmation as deputy secretary merely elevates his title to reflect his true role. Senators used the hearing as a window to seek accountability on the drug pricing deals he negotiated and the inner workings of HHS under Secretary Robert F. Kennedy Jr., including the Center for Disease Control and Prevention’s decision to not report measles deaths in Pennsylvania. No one asked Klomp directly about the tech modernization efforts he has spearheaded at HHS, but that policy domain remains the one where we will be watching his efforts most closely. |
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2. CMS expands ACCESS model.
- The Centers for Medicare and Medicaid Services (CMS) announced an expansion of the voluntary Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) model to include heart failure, chronic obstructive pulmonary disease, substance use disorders, and tobacco cessation, on top of its original list of chronic conditions including diabetes, high blood pressure, chronic musculoskeletal pain, depression, and anxiety.
- The ACCESS model, which launched in July 2026 and will run for 10 years, relies on technology companies to work with clinicians to manage Medicare enrollees’ health, paying everyone more when patient outcomes improve.
TrustWorks Take: The ACCESS model’s primary innovation is having Medicare pay tech companies directly when their digital health tools measurably improve patient outcomes. However, the low payment rates—e.g. $35 per patient per month (with no opportunity for additional Medicare billing) for a condition normally reimbursed at over $200 per month—disincentivize participation from traditional digital health and medical device companies, who can get better Medicare rates elsewhere. Instead, ACCESS is courting only the lowest-cost solutions powered, inevitably, by AI. Any voluntary model will suffer from the tradeoff that insufficiently generous payments will fail to induce participation, whereas overly generous payments will fail to generate savings. CMS has early evidence the model’s incentives are well aligned because initial applications exceeded expectations, with over 150 vendors approved to participate.
ACCESS is too new to report results, so the expanded list of covered conditions is not a sign that the model is succeeding. Instead, it fits squarely within the administration’s other priorities. Tackling chronic diseases is a central plank of the “Make America Healthy Again” movement, and lowering Medicare spending through more efficient care fits the theme of reducing “waste, fraud, and abuse,” but the ACCESS model’s greatest advantage for this administration may be the opportunity it presents to accelerate AI-driven clinical care. Tech companies looking to test their digital health products now have a direct channel to patients in need, with the backing of the federal government, and if they can prove their tools work, payers and health systems could be lining up as customers willing to pay above the Medicare ACCESS rate. |
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3. Medicare prior auth pilot plagued with problems.
- The Wasteful and Inappropriate Service Reduction (WISeR) model, which launched in January in six states, introduced prior authorizations to traditional Medicare, with each state contracting with a tech company to implement approval processes powered by AI.
- Documents obtained via a Freedom of Information Act lawsuit revealed that the program suffered from a rushed launch, non-functioning portals, insufficient communication between vendors and providers, and a payment system that incentivizes vendors to deny care.
| TrustWorks Take: A recent New York Times piece paints the Trump administration as genuinely believing in AI’s potential for healthcare, while also having an overly cozy relationship with the Silicon Valley venture capitalists. As the piece describes, and the botched WISeR rollout illustrates, federal healthcare AI policy risks prioritizing rapid technological development over patient safety. At least one WISeR vendor warned CMS that it would not be ready for the January go-live date, which the agency ignored, and problems only compounded from there. Rushed deadlines and imperfect product launches are common in the “move fast and break things” tech industry, but when applied to seniors’ medical care can result in harmful, frustrating, and unacceptable care delays. The role of regulators should be to ensure the safety and viability of a tech product prior to its approval or implementation, but under the Trump administration, this may be more of a rolling process. |
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Beyond the Whiteboard
Visualizing key trends from the healthcare industry
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Winners and Losers of Rural Health Fund Year One
The Rural Health Transformation Program, created by the One Big Beautiful Bill Act as a $50B offset to Medicaid cuts for rural healthcare, has doled out this year’s $10B allotment. Although the total pot of money pales in comparison to the projected impact of Medicaid cuts, it still provides an opportunity for states to invest in modernizing their rural health delivery systems. FY2026 awards ranged from $147M (New Jersey) to $281M (Texas), with an average of $200M, but total funding can be deceiving. Because half the funding was distributed equally among all states, the real winners were rural residents of low population states, which includes both Rhode Island ($1,589 per rural resident) and Alaska ($1,056 per rural resident), two states with nothing in common but their low populations. In contrast, the two states with the largest rural populations got by far the fewest dollars per rural resident: Texas at $59, and North Carolina at $61.
Since the money is meant for transformation, not covering individuals’ care, a state like Texas must hope it can generate more efficient returns with the scale of its investments. The Lone Star State has announced six initiatives tackling chronic disease, access, workforce, technology, and infrastructure, with grants open for various provider organizations and tech vendors to apply. At least eight other states, including Louisiana, have created rural health tech catalyst funds, which will invest in technology companies targeting rural health needs. These catalyst funds address an important investment gap, as technologies targeting rural health can be underappreciated and underfunded by Silicon Valley, but they also put millions of dollars in the hands of state officials, who are not professional investors and may not know how to pick winners. The opportunity for graft, such as picking a friend’s company, is significant, and so oversight of these public dollars must be robust.
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Dialing In
Sharing insights from our work with clients
Five+ Strategic Questions for Physician Groups
While prepping for an upcoming strategic retreat with a physician group, we were asked the question that officially marks the beginning of the end of the year: “What should be on the strategic agenda heading into 2027?” Of course, this group—an independent orthopedic practice in a growing metro area—must have its own unique strategic priorities, but there are still several questions that belong on everyone’s radar.
Although AI and technology have been present in every strategic conversation, we are still believers that technology maximization is not a strategy onto itself. Instead, it is an enabling tool that changes the outlook, sometimes radically, on the classic components of a strategic initiative:
- Care model: What do you want to change about the way you deliver and get reimbursed for care, and how will you use new technologies, including clinical and administrative AI, in service of that vision? Does your organization want to be “bleeding edge” or “wait and see”?
- Workforce and compensation: How do your physicians and other clinicians reallocate their time within a team-based care model supported by labor-saving technologies? How are they paid for that time, such that their incentives reinforce the new care model?
- Access: What opportunities exist to create new or enhanced front doors, engineer clinical capacity, and improve patient experience?
- Practice economics: Where will future margin come from, and how will payer strategy, value-based care, ancillaries, site-of-care shifts, and reimbursement affect the business model?
- Scale and partnerships: What capabilities should you own, where do you need scale, and where does partnering make more sense than building? For independent groups, that culminates in an increasingly important question: What will it take to remain successfully independent?
These are not new focus areas, but groups are seeing them differently: in a more integrated way, with more clearly defined interdependency. We are looking forward to all the conversations we have in store for this fall, and we have high hopes that even familiar topics will be discussed with new energy.
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Thank you for tuning into this week’s TrustWorks On Call. We’ll see you next Thursday with another round of TrustWorks Takes. With your help in sharing TrustWorks On Call (subscribe here!), we’re living up to the “Collective” in TrustWorks Collective. And if you ever need help thinking through a healthcare problem, don’t hesitate to reach out to us.
Falling back into a travel rhythm,
Anthony D’Eredita,
Lisa Bielamowicz, MD,
and TrustWorks Collective
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