Overview
Healthcare policy is evolving rapidly at both the federal and state levels, creating a complex environment for health plans and healthcare organizations. In Avalon’s webinar, Brett Meeks, Vice President of Government Affairs for Health Technology and AI at Jeffrey J. Kimbell and Associates, and Alex Sommer, Avalon’s Vice President of Government Affairs and Public Policy, explored developments shaping healthcare—from federal activity and the 2026 midterm elections to state-level changes involving prior authorization, AI, and biomarker testing.
Federal Policy and the 2026 Midterms
Federal policymaking remains active, with much of the Trump administration’s activity centered on executive actions, proposals, requests for information, and industry engagement rather than finalized legislation. At the same time, CMS continues to advance work related to prior authorization, interoperability, risk adjustment, and healthcare payment systems.
Interoperability remains a key focus, particularly as health plans prepare for requirements that support more efficient healthcare data exchange. CMS’s interoperability and prior authorization rule includes requirements around FHIR APIs, data access, prior authorization decision timeframes, and public reporting for certain impacted payers.
The speakers also highlighted healthcare pricing, Medicare Advantage, laboratory payment policy, and the potential evolution of CPT coding as areas to watch. PAMA laboratory payment policy will continue to require attention; CMS has issued 2026 Clinical Laboratory Fee Schedule updates reflecting changes enacted by Congress.
The 2026 midterm elections add another layer of uncertainty. With Congress largely focused on campaigning, significant legislative activity may be limited through the remainder of the year. Still, several issues could remain active, including healthcare price transparency, Medicare Advantage risk adjustment, drug pricing, prior authorization, interoperability, site-neutral payments, and laboratory payment policy.
The election outcome could shape the 2027 healthcare agenda, including the level of congressional oversight and potential activity related to drug pricing, Medicaid, and Affordable Care Act policies.
State Policy: Prior Authorization, AI, and Biomarker Testing
While federal activity develops, states are continuing to advance their own healthcare policies—particularly in prior authorization, AI, and biomarker testing.
Prior authorization remains a major focus, with states establishing requirements around turnaround times, denials, clinical review, and notification processes. Gold carding is also gaining attention as a way to reduce or eliminate prior authorization requirements for providers with consistently high approval rates. The speakers expect this to remain an important area of state activity as policymakers balance provider concerns with health plan utilization-management practices.
AI is also becoming a central healthcare policy issue. State policymakers are examining how health plans use AI in utilization review, medical-necessity decisions, and claims processing. Several state laws and proposals focus on ensuring human clinical involvement in certain coverage decisions and limiting the use of AI as the sole basis for denials, delays, modifications, or down-coding decisions.
Biomarker testing coverage mandates continue to evolve as well. The speakers noted that states are continuing to introduce or amend coverage requirements, while regulators begin to provide further guidance on how these laws should be interpreted and implemented. Clarity, interpretation, and enforcement will remain important considerations heading into 2027.
Preparing for What Comes Next
For health plan executives, the key themes to watch over the next 12 months are AI and healthcare data.
Organizations should assess where and how AI is being used—particularly in medical-necessity and utilization-management decisions—and establish clear policies, processes, and documentation to prepare for evolving requirements. On the data side, health plans should continue preparing for increased interoperability expectations and more efficient exchange of claims and transaction data across systems.
The broader message from the webinar is that AI and interoperability are no longer isolated policy issues. They increasingly influence prior authorization, utilization management, transparency, claims processing, and other areas of healthcare operations.
As 2027 approaches, health plans should continue to monitor:
- AI oversight and human clinical-review requirements
- Prior authorization and gold carding
- Healthcare interoperability and data exchange
- Biomarker testing coverage and enforcement
- Drug pricing and price transparency
- Site-neutral payments
- Laboratory payment policy and PAMA
- Federal and state regulatory oversight
Healthcare organizations that proactively monitor policy changes, strengthen data infrastructure, and prepare for evolving requirements will be better positioned to navigate the increasingly complex regulatory environment ahead.
