TrustWorks On Call: $30M Superyacht

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. Proposed 2026 OPPS rule would accelerate site neutrality.

Last Tuesday, the Centers for Medicare & Medicaid Services (CMS) published its 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgery Center (ASC) proposed rule, headlined by a 2.4 percent net payment update for both hospital outpatient departments and ASCs.
The proposed rule includes several provisions to advance site neutrality, including phasing out the inpatient-only list (i.e., broadening the hospital outpatient covered procedures list) over three years, adding almost 300 procedures to the ASC covered procedures list, and expanding a prior authorization process for certain off-campus outpatient departments to include drug administration services.
To promote price transparency, the proposed rule would require hospitals to publish 10th percentile, median, and 90th percentile allowed amounts of charges negotiated with payers for any given service.
In a change to a plan correcting for the 340B budget fix ordered by the Supreme Court in 2022, CMS is proposing a payment plan that would make the agency whole again in 2031 instead of 2041, by turning an ongoing 0.5 percent payment reduction into a 2 percent payment reduction.

TrustWorks Take: Proposed Medicare payment rules can be considered starting points of negotiation and opportunities to learn more about the administration’s priorities. In turn, the American Hospital Association has decried the payment update as “inadequate,” called the accelerated 340B recoupment plan “illegal and unwise,” and expressed opposition to the march toward site neutrality. From now until the final rule (or even after, if Congress chooses to intervene), rates and timelines may change, but the administration’s goals will remain the same. CMS wants to gradually equalize per-procedure payments for hospital outpatient departments, physician offices, and ASCs. Some health systems, like Tenet, have embraced this shift by developing highly efficient ASC operations. Other systems can fight to preserve legacy payment models, but it’s becoming an increasingly uphill battle, in which the traditional components of a hospital’s margin are suffering a death by a thousand cuts.

2. Steward Health Care sues ex-CEO for financial misconduct.

Last Tuesday, plaintiffs representing Steward Health Care filed an adversary proceeding in Bankruptcy Court for the Southern District of Texas against former CEO Dr. Ralph de la Torre and other company leaders, alleging that “their misconduct ultimately led to Steward’s collapse.”
Steward, a (formerly) physician-owned 31-hospital system which filed for Chapter 11 bankruptcy last year with $9B of debt, is seeking to recoup tens of millions of dollars from de la Torre and other insiders, as well as $1.1B from Tenet Healthcare to reverse a 2021 sale of five Miami-area hospitals engineered by de la Torre.
Highlights of the 14 separate instances of alleged wrongdoing include: an $111M dividend de la Torre paid out to himself and other defendants despite the system’s insolvency; a sale of the system’s value-based care assets to (now bankrupt) CareMax, the proceeds of which were funneled back to the defendants; and the Tenet transaction, in which de la Torre pushed through a $200M overbid due to his “personal desire to build a hospital empire in the Miami area.”

TrustWorks Take: This case offers an extreme (bordering on absurd, with the inclusion of a superyacht) lesson in the importance of good governance and oversight. Unchecked insider control allegedly caused Steward to collapse under billions of dollars of debt, generated by opaque sale-leaseback schemes, wasteful corporate spending, and conversions of company assets into private wealth. Boards should use this as a wakeup call not only to evaluate their own governance structures but also their exposure to other local or regional hospital failures. Likewise, partnerships with private equity firms and real estate investment trusts should only be undertaken with a well-constructed purpose and plan to balance short-term capital and long-term operational goals. (In defense of other private equity firms, Cerberus Capital has earned a particular infamy, thanks to leading Chrysler to bankruptcy, owning arms manufacturers and defense contractors known only for the worst reasons, and now this Steward fiasco.) In the end, it’s the patients, providers, staff, vendors, community, and local governments who suffer the most from these instances of financial malfeasance. Governors have a responsibility and fiduciary duty to protect their communities by preventing anything close to this from ever happening.

3. Leadership shake-ups continue at HHS, NIH.

Last week, a Department of Health and Human Services (HHS) spokesperson confirmed that Secretary Robert F. Kennedy Jr. fired his chief of staff and deputy chief of staff after only a few months on the job, with Kennedy having reportedly “lost confidence” in them “following internal clashes.”
Separately, Nature has reported that the National Institutes of Health (NIH) is disinviting dozens of scientists who serve on advisory councils to review grant applications, with their replacements expected to better align with the administration’s political views.

TrustWorks Take: RFK Jr.’s tenure as Health Secretary has been marked by turnover, turmoil, and dysfunction, and the exit of two of his top aides demonstrates that the inside of his operation is as messy as it appears on the outside. Supporters of the “Make America Healthy Again” movement can justify the need for leadership change from one administration to the next, but RFK’s fired aides were politically aligned and still couldn’t work together. As for the changes at the NIH, making new policies is hard work and requires expertise. When nonpartisan civil servants and scientists are pushed out for political appointees and ideological allies, they take their knowledge of how the system works with them. Political agendas have never before been so pronounced in key health and scientific policy decisions, which should (where legally possible) inspire providers and payers to look outside the federal government for consensus recommendations.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

The Big Picture and Little Details of the OBBBA
Healthcare coverage of the One Big Beautiful Bill Act (OBBBA), including ours, has rightfully focused on the massive cuts to federal healthcare spending, with the final Congressional Budget Office score coming in at $1.1T over ten years. As detailed by KFF analysis, 37 states will see over 13 percent of their 10-year federal Medicaid outlays cut, and Medicaid expansion states that have larger rural populations will bear the worst brunt. However, there are other direct and indirect healthcare policy changes that have significant care delivery implications. Two pieces of relief for providers relate to an expansion of reimbursement permissions for employer-based plans with health savings accounts (HSAs). As introduced during COVID but briefly allowed to expire, high-deductible health plans can (now permanently) pay for telehealth services before the deductible is reached without affecting HSA eligibility. Similarly, direct primary care arrangements, in which a subscription fee covers a set of primary care services outside of insurance, are now compatible with HSA-eligible plans. These changes should broaden the patient pool for direct primary care and telehealth, providing marginal, but welcome, relief.

Three of the law’s other statutory changes are decidedly less generous. Charitable giving to health systems and other nonprofits may decline, as itemizers now face a one-percent net-income floor for claiming charitable deductions, and the top tax bracket now has a lower cap on the benefit of charitable deductions. The pipeline of future physicians will be affected by the new $200K lifetime cap on federal student loans for graduate students, as prospective students may choose not to pursue a medical education or take on private loans that alter their career choices after graduation. And finally, cuts to the Supplemental Nutrition Assistance Program (SNAP) will worsen food insecurity for millions of families, many of whom are also affected by Medicaid cuts, resulting in a less healthy population with worse health outcomes.

Dialing In

Sharing insights from our work with clients

Designing Incentives vs. Building Culture
“If we’re investing more and more in our physicians every year, shouldn’t we expect to see better productivity gains and higher volumes? How can we optimize their performance-based incentives to get the results we want?” I can’t tell you how many times I’ve heard this line of thinking. When collaboration lags or accountability slips, the first instinct is to restructure incentives: shift more dollars for productivity, drive bigger panels, share bonuses to encourage teamwork, or rework various performance metrics, including patient satisfaction. This approach only gets you so far, however, because it doesn’t address the culture, which is the ultimate driver of performance.

Compensation is designed to reward outcomes, not beliefs. Culture, by contrast, is about shared understanding and deeply held values. Of course, fair and adequate compensation is an important building block of a positive culture. However, when values like accountability, collaboration, or compassion are treated as line items in a bonus formula, the work starts to feel transactional and intrinsic motivation can begin to erode.

To build a truly aligned culture, medical groups must start by naming what matters. Be explicit not just about what needs to get done, but how it should be done. Compensation can reinforce values, but it should never define them. When we lead with compensation, we end up managing hundreds of individual economic relationships, each with a laundry list of incentives, instead of a cohesive entity working in partnership and held together by its culture. And just as important, leaders must create space for connection. Culture breakdowns are often relationship breakdowns in disguise. If leaders aren’t setting the tone, reinforcing expectations, and building trust, no amount of financial design will fix what’s broken.

TrustWorks On Call,straight to your inbox.

A five-minute read each week, giving you the healthcare 411.