The following is the latest health policy news from the federal government for July 11-17.  Some of the language used below is taken directly from government documents.

Proposed Medicare Outpatient Prospective Payment and Ambulatory Surgical Center Payment System Regulation for CY 2026

CMS has published its proposed Medicare outpatient prospective payment and ambulatory surgical center payment system rule for CY 2026.  Highlights include:

  • A 2.4 percent increase in outpatient rates that is offset by a two percentage point clawback under the 340B final remedy rule, making the actual increase just 0.5 percent.
  • A site-neutral payment policy for the outpatient administration of drugs that would pay 40 percent of the outpatient prospective payment system rate for administering drugs in excepted hospital off-campus provider-based departments.
  • The removal of 285 procedures from the Medicare inpatient only list as the first step of a three-year process to phase out that list entirely.
  • The addition of 276 procedures to the ambulatory surgical center-covered procedures list.
  • Mandating significant changes in current hospital price transparency requirements, including more stringent attestation requirements, beginning on January 1, 2026.
  • Changes in the quality star rating program designed to give greater weight to patient safety.
  • Changes in the hospital, rural emergency hospital, and ambulatory surgical center quality reporting programs.

Learn more about these and other aspects of the 390-page proposed rule from the following resources:

Proposed Medicare Physician Fee Schedule Regulation for CY 2026

CMS has published its proposed Medicare physician fee schedule rule for CY 2026.  Highlights include:

  • A 3.83 percent increase in payments to physicians who participate in alternative payment models (APMs) and 3.62 percent for those who do not.
  • Streamlining the process for adding services to the Medicare telehealth services list; permanently removing frequency limitations for subsequent outpatient visits and critical care consultations via remote patient monitoring; and permanently adopting a definition of “direct supervision” that permits physicians or supervising practitioners to provide such supervision through real-time audio and visual interactive telecommunication.
  • Policies to improve care for chronic illness and behavioral health needs, including the addition of new G-codes to facilitate the integration of behavioral health services into advanced primary care management programs – and similar changes for rural health clinics and federally qualified health centers.
  • The introduction of a new, mandatory Ambulatory Specialty Model that would focus on specialty care for Medicare beneficiaries with heart failure or lower-back pain.
  • A series of changes in Medicare Shared Savings program practices.
  • Prevention and wellness initiatives, including giving more Medicare patients with diabetes access to coaching, peer support, and practical training in dietary change, physical activity, and behavior change strategies.

Learn more about these and other aspects of the 910-page proposed rule from the following resources:

Centers for Medicare & Medicaid Services

  • CMS has announced that 33 states and the District of Columbia will participate in its Cell and Gene Therapy Access Model, a new approach to delivering cutting-edge treatments to people on Medicaid living with sickle cell disease.  Participating states represent approximately 84 percent of Medicaid beneficiaries with the condition.  Under the voluntary model, the federal government has negotiated outcomes-based agreements with cell and gene therapy manufacturers on behalf of state Medicaid agencies.  Participating states receive guaranteed discounts and rebates from participating manufacturers if the therapies fail to deliver their promised therapeutic benefits.  Learn more about the model and the participating states and find a link to the model’s web page in this CMS news release.
  • CMS has updated its manual on chronic care management services.  Find that manual here.
  • CMS has announced resources and flexibilities to support individuals and health care providers affected by the severe storms, winds, and flooding in Texas.  Those resources and flexibilities address health insurance for disaster victims, Medicaid and CHIP, HIPAA and civil rights flexibilities, and more.  Learn more from this CMS news release and CMS’s “current emergencies” web page under “Severe Storms, Straight-Line Winds, and Flooding – Texas (2025).”
  • CMS has sent a memo to state Medicaid directors presenting details, requirements, and expectations for states regarding compliance with mandatory annual state reporting of Core Sets of Health Home Quality Measures for Medicaid (Health Home Core Sets).  These requirements take effect beginning with the federal 2026 fiscal year.  Find the letter here.
  • CMS has added the following items to its Quality Payment Program resource library.  All of these links are direct downloads of zip files.

Approved Medicaid State Plan Amendments

CMS has approved the following state plan amendments for Medicaid and CHIP programs.

  • To South Dakota, addressing screening, diagnostic, and targeted case management services for eligible juveniles who are inmates of a public institution and the termination of coverage of targeted case management services provided to adults with mental illness and to youth transitioning out of residential services.
  • To Hawaii, implementing new third-party liability requirements.
  • To Oregon, updating reimbursement for inpatient hospital psychiatric services delivered by DRG hospitals.
  • To Colorado, revising community mental health centers and adding comprehensive community behavioral health providers and essential behavioral health safety-net providers.

HHS Newsletters, Reports, and Videos

  • CMS – MLN Connects – July 17
  • AHRQ News Now – July 15
  • HRSA – Office for the Advancement of Telehealth – Announcements – July 15
  • CMS – Hospice Outcomes and Patient Evaluation (HOPE) National Implementation Virtual Training Course – five videos
  • CDC – Morbidity and Mortality Weekly Report – “Candida auris Containment Responses in Health Care Facilities that Provide Hemodialysis Services” – New Jersey, North Carolina, South Carolina, and Tennessee, 2020–2023” – July 10

Medicare Payment Advisory Commission (MedPAC)

MedPAC has published its annual “Health Care Spending and the Medicare Program” data book.  The data book provides information on national health care and Medicare spending and Medicare beneficiary demographics, dually eligible beneficiaries, quality of care in the Medicare program, and Medicare beneficiary and other payer liability.  It also examines provider settings, such as hospitals and post-acute care, and presents data on Medicare spending, beneficiaries’ access to care, and the sector’s Medicare profit margins.  In addition, it covers the Medicare Advantage program and prescription drug coverage for Medicare beneficiaries, including Part D.  Find the data book here.

Government Accountability Office (GAO)

HHS needs to do a better job of evaluating the comparative clinical effectiveness research being performed for it by the Patient-Centered Outcomes Research Institute, the GAO concludes in a new report.  Find that report here.

Congressional Research Service

The Congressional Research Service has published an infographic titled “Public Health Prevention and the Determinants of Health.”  Find a link to it here.

Stakeholder Events

CMS – Transition of Hospital Short Stay Patient Status Review Webinar – July 30

CMS will hold an informational session on the upcoming transition of hospital short stay patient status reviews on Wednesday July 30 at 2:00 (eastern), providing an overview of the transition and addressing questions from stakeholders.  For information about registering to participate and submitting questions, see this CMS notice.

CMS – Advisory Panel on Hospital Outpatient Payment Meeting – August 25

CMS’s Advisory Panel on Hospital Outpatient Payment will meet virtually on Monday, August 25 at 9:30 (eastern).  The panel advises CMS on the clinical integrity of the Ambulatory Payment Classification (APC) groups and their associated weights.  Learn more about the panel and the meeting’s agenda from this CMS formal notice.  The deadline for submitting comments and questions is August 1.