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

The White House
  • President Trump signed an executive order titled “Lowering Drug Prices by Once Again Putting Americans First” that directs the Secretary of the Department of Health and Human Services to take steps to lower prescription drug costs for patients.  The order addresses several prescription drug-related policies, including:
    • the Medicare Drug Price Negotiation Program
    • seeking better Medicare prices for drugs not subject to the Medicare Drug Price Negotiation Program
    • accelerating FDA drug approvals
    • requiring fee transparency from pharmacy benefit managers
    • calling for recommendations on managing Medicaid drug costs
    • requiring that community health centers pass 340B savings on insulin and injectable epinephrine to certain individuals

The order appears to pave the way for reintroducing Medicare payment reductions for 340B-covered drugs and possibly recommending their adoption in Medicaid as well by directing the Secretary to:

    • publish in the Federal Register a plan to conduct a survey to determine the hospital acquisition cost for covered outpatient drugs at hospital outpatient departments and use the results to consider and propose any appropriate adjustments that would align Medicare payments with the cost of acquisition, consistent with budget neutrality requirements and other legal requirements, and
    • evaluate and propose site-neutral payment regulations to ensure that Medicare payments do not encourage a shift in drug administration away from less costly physician office settings to more expensive hospital outpatient departments.

An accompanying fact sheet conveys the President’s hope that the HHS directive would align Medicare payments with what hospitals pay to acquire them, “which can be 35% lower than what the government currently pays.”

Learn more from the executive order and this fact sheet.

  • The White House has issued an executive order titled “Directing the Repeal of Unlawful Regulations” that directs federal agencies to “…immediately take steps to effectuate the repeal of any regulation, or the portion of any regulation, that clearly exceeds the agency’s statutory authority or is otherwise unlawful.”  Learn more from the executive order.
  • The White House has issued an executive order titled “Reducing Anti-Competitive Regulatory Barriers” that calls on federal agencies to identify regulations that “create, or facilitate the creation of, de facto or de jure monopolies; create unnecessary barriers to entry for new market participants; limit competition between competing entities or have the effect of limiting competition between competing entities; create or facilitate licensure or accreditation requirements that unduly limit competition; unnecessarily burden the agency’s procurement processes, thereby limiting companies’ ability to compete for procurements; or otherwise impose anti-competitive restraints or distortions on the operation of the free market” and to initiate efforts to repeal or modify those regulations.  Learn more from this executive order.
  • In support of this objective, CMS has issued a request for information (RFI) to solicit public feedback on potential changes to Medicare regulations “…with the goal of reducing the costly private healthcare expenditures required to comply with Federal regulations.”  Through this RFI, the agency seeks public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries, Medicare Advantage and Part D plans, and other stakeholders.  Learn more from this RFI, which includes specific questions and a form for submitting responses.
  • In addition, the Federal Trade Commission (FTC) has launched a public inquiry into the impact of federal regulations on competition with the goal of identifying and reducing anti-competitive regulatory barriers.  Learn more about the FTC’s effort from this agency news release and its request for information.  The deadline for responding to this request for information is May 27.
Congress

Congress is in recess until April 28.  During this break, House and Senate committees are working on the portions of the reconciliation bill as instructed by the budget resolution that passed last week.  Committees must report their bills to their chamber’s Budget Committee no later than May 9; the Energy and Commerce Committee is expected to mark up its reconciliation legislation the week of May 5.

The proposed cuts to Medicaid that appear to be receiving the most attention include limits to provider taxes and state-directed payments; work requirements for Medicaid beneficiaries; increased enforcement of eligibility requirements; and reducing the federal match rate (FMAP) for the Medicaid expansion population.

A dozen Republican House members have written to House leaders urging them to focus anticipated changes in Medicaid policy on measures that “…improve program integrity, reduce improper payments, and modernize delivery systems to fix flaws in the program that divert resources away from children, seniors, individuals with disabilities, and pregnant women” while also warning that “…we cannot and will not support a final reconciliation bill that includes any reduction in Medicaid coverage for vulnerable populations.”  The letter also notes that such cuts would be especially harmful to hospitals and other health care providers that serve especially large numbers of Medicaid patients.  Learn more from the letter to House leadership.

Proposed Medicare Payment Regulations for FY 2026

Proposed Inpatient Prospective Payment System Regulation

CMS has published its proposed Medicare inpatient prospective payment system regulation for FY 2026.  Highlights of its proposal for how to pay for and govern acute-care hospital inpatient services in the coming year include:

  • A net rate increase of 2.4 percent.
  • A reduction of the Medicare area wage index’s labor-related share from 67.6 percent to 66 percent and the continuation of Medicare’s current wage index transition for low-wage index hospitals, limiting the size of their wage index reductions.
  • A $1.5 billion increase in the pool of money for Medicare DSH uncompensated care payments.
  • A reduction of the hospital outlier threshold from the current $46,217 to $44,305.
  • Changes in the Transforming Episode Accountability Model (TEAM), including a limited deferment period for some hospitals, removing health equity plans and health-related social needs data reporting, expanding the skilled nursing facility three-day rule waiver, and others.  TEAM will still begin as scheduled, on January 1, 2026   in the mandatory areas.
  • Changes in the Hospital Inpatient Quality Reporting Program, Medicare Promoting Interoperability Program, Hospital Readmissions Reduction Program, Hospital-Acquired Condition Reduction Program, and Hospital Value-Based Purchasing Program.
  • Updates of the Extraordinary Circumstances Exception policy.
  • Several requests for information from stakeholders.

For further information about the proposed rule, find the CMS fact sheet here and this preview version of the proposed rule, which is scheduled for publication on April 30.  The deadline for submitting comments is June 10.

Proposed Long-Term-Care Hospital Prospective Payment System Regulation

CMS has published its proposed Medicare long-term-care hospital (LTCH) prospective payment system regulation for FY 2026.  Highlights of its proposal for how to pay for and govern LTCH services in the coming year include:

  • A net rate increase of 2.6 percent.
  • An increase in the high-cost outlier threshold from the current $77,048 to $91,247.
  • Changes in the LTCH Quality Reporting Program.
  • Several requests for information from stakeholders.

For further information about the proposed rule, find the CMS fact sheet here and this preview version of the proposed rule.  The deadline for submitting comments is June 10.

Proposed Inpatient Rehabilitation Facility Prospective Payment System Regulation

CMS has published its proposed Medicare inpatient rehabilitation facility (IRF) prospective payment system rule for FY 2026.  Highlights of its proposal for how to pay for and govern IRF services in the coming year include:

  • A net rate increase of 2.6 percent.
  • Removing several measures from the IRF Quality Reporting Program and social determinants of health data elements.
  • Several requests for information from stakeholders.

Learn more about these and other proposed changes from this CMS fact sheet and this preview version of the proposed rule.  The deadline for stakeholders to submit comments is June 10.

Proposed Skilled Nursing Facility Prospective Payment System Regulation

CMS has published its proposed skilled nursing facility prospective payment system rule for FY 2026.  Highlights of its proposal for how to pay for and govern skilled nursing facility services in the coming year include:

  • A net rate increase of 2.8 percent.
  • Changes to the Patient-Driven Payment Model (PDPM) ICD-10 code mappings.
  • Changes in the skilled nursing facility value-based purchasing program.
  • Removal of some standardized patient assessment data elements.

Learn more about these and other proposed changes from this CMS fact sheet and this preview version of the proposed rule.  Stakeholder comments are due 60 days after the proposed rule’s official publication, currently scheduled for April 30.

Proposed Hospice Wage Index and Payment Rate Regulation

CMS has published its proposed hospice wage index and payment rate rule for FY 2026.  Highlights of its proposal for how to pay for and govern hospice services in the coming year include:

  • A net rate increase of 2.4 percent.
  • An increase in the proposed hospice cap amount for FY 2026 to $35,292.51, a 2.4 percent increase over the FY 2025 cap of $34,465.34.
  • Two requests for information.

Learn more about these and other proposed changes from this CMS fact sheet and this preview version of the proposed rule.  The deadline for stakeholders to submit comments will be 60 days after the proposed rule’s official publication, which is currently scheduled for April 30.

Proposed Inpatient Psychiatric Facility Prospective Payment System Regulation

CMS has published its proposed inpatient psychiatric facility prospective payment system rule for FY 2026.  Highlights of its proposal for how to pay for and govern inpatient psychiatric facility services in the coming year include:

  • A net rate increase of 2.4 percent.
  • Updating inpatient psychiatric facility-level adjustment factors for teaching status and rural location.
  • Changes of the inpatient psychiatric facility quality reporting program.
  • Three requests for information.

Learn more from this CMS fact sheet and this preview version of the proposed rule.  The deadline for stakeholders to submit comments is June 10.

Centers for Medicare & Medicaid Services
  • CMS has issued a news release introducing its new Administrator, Mehmet Oz, M.D., and sharing his vision for the agency.  Find it here.
  • CMS has written to state Medicaid directors to explain that while it has approved several section 1115(a) demonstrations that provide federal matching funds for state expenditures for designated state health programs (DSHP) and designated state investment programs (DSIP), it has reviewed those programs and determined that they were funded entirely without federal Medicaid funds prior to those approvals and the addition of federal Medicaid funding does not render these programs as integral components of section 1115 demonstration programs.  Consequently, CMS has concluded that it does not anticipate approving new state proposals of section 1115 demonstration expenditure authority for federal DSHP or DSIP funding or renewing existing section 1115 demonstration expenditure authority for federal DSHP or DSIP funding, including when current DSHP or DSIP authority concludes before the expiration date of the demonstration.  Learn more from this letter from CMS to state Medicaid directors and this CMS news release.
  • CMS has written to state Medicaid directors to “… ensure that state Medicaid agencies are aware of growing evidence regarding certain procedures offered to children, and to remind states of their responsibility to ensure that Medicaid payments are consistent with quality of care and that covered services are provided in a manner consistent with the best interest of recipients.”  The letter warns states that “…Federal financial participation (FFP) is strictly limited for procedures, treatments, or operations for the purpose of rendering an individual permanently incapable of reproducing.”  Learn more from this letter from CMS to state Medicaid directors.  At the same time, HHS has published new guidance and launched a new online portal where whistleblowers can submit tips or complaints about the chemical and surgical mutilation of children to the HHS Office of Inspector General.  Find that announcement and a link to further HHS guidance here.
  • CMS has published a bulletin describing the April 2025 update of the hospital outpatient prospective payment system.  Find that bulletin here.
  • CMS has published a bulletin describing the July 2025 update of ICD-10 and other coding revisions to National Coverage Determinations.  Find that bulletin here.
  • CMS has posted a bulletin describing the April 2025 update of the durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) fee schedule.  Find that bulletin here.
  • CMS has published a notice explaining that it intends to alter the template it uses for state plan amendment requests addressing medication-assisted treatment to align with changes in federal law.  Learn more about what CMS proposes from this regulatory announcement.  The deadline for submitting comments is April 30.
  • CMS has issued a news release explaining that it is reviewing its coverage policies for skin substitute products and that because of this review, the Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers Final Local Coverage Determinations effective date will be delayed until January 1, 2026.  CMS also is soliciting peer-reviewed studies and other research on the efficacy of such treatments; the deadline for submitting such materials is November 1.  Learn more from this CMS news release.
  • CMS has approved the following state plan amendments for Medicaid and CHIP programs.
    • To Kansas, allowing the state to enter into value/outcomes-based agreements with drug manufacturers on a voluntary basis.
    • To the District of Columbia, updating the fee schedule reimbursement rates for home health services.
    • To North Dakota, amending its state plan to reimburse hospital leave days for psychiatric residential treatment facilities.
    • To North Dakota, updating the inflation factor for psychiatric residential treatment facility daily rates.
    • To North Dakota, updating the recipient and provider qualifications for targeted case management for individuals with a behavioral health condition.
    • To North Dakota, amending the state plan to reimburse hospital leave days for psychiatric residential treatment facilities.
    • To North Carolina, updating state plan assurances in accordance with federally mandated quality reporting requirements for the Child Core Set and the behavioral health quality measures on the Adult Core Set.
    • To Maryland, updating state plan assurances in accordance with federally mandated quality reporting requirements for the Child Core Set and the behavioral health quality measures on the Adult Core Set.
    • To Nevada, updating the licensed practitioner benefit to allow school-based providers with Department of Education endorsement and a current licensure to include school counselors, school social workers, and school psychologists to provide services to school-aged Medicaid recipients.
Department of Health and Human Services

Fewer than one in five Medicare enrollees receive medication to treat their opioid use disorder, HHS’s Office of the Inspector General (OIG) concludes in a new report that includes recommendations for addressing this shortcoming.  Find that report here.

HHS Newsletters, Reports, and Videos
  • CMS – MLN Connects – April 11 and April 17
  • AHRQ News Now – April 15
  • CMS – a video of a webinar providing an overview of the suggested Qualified Clinical Data Registry measure development and evaluation processes.
  • CMS – a video of a February 5 support call for Medicare Shared Savings Program Accountable Care Organizations that are reporting quality data through the CMS Web Interface for the 2024 performance period.  This video highlights important information and updates regarding the reporting of quality data and includes a question-and-answer session with CMS subject matter experts.
  • CMS – a video of a February 19 support call about the same subject.
  • CMS – video of a webinar that provides an overview of the Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) maintenance feedback process for the 2025 performance year of the Quality Payment Program.
Medicare Payment Advisory Commission (MedPAC)

MedPAC’s commissioners met virtually last week in Washington, D.C.  Their agenda consisted of the following subjects:

  • reforming physician fee schedule updates and improving the accuracy of relative payment rates
  • structural differences between the prescription drug plan and Medicare Advantage prescription drug markets
  • assessing the utilization and delivery of Medicare Advantage supplemental benefits
  • exploring the effect of Medicare Advantage on rural hospitals
  • paying for software technologies in Medicare
  • access to hospice and certain services under the hospice benefit for beneficiaries with end-stage renal disease and beneficiaries with cancer
  • regulations, star ratings, and fee-for-service Medicare policies aimed at improving nursing home quality

Go here for descriptions of these issues, the key points associated with each of these agenda items, the presentations MedPAC’s staff made during the meeting, and a transcript of the meeting.

Medicaid and CHIP Payment and Access Commission (MACPAC)
  • MACPAC has posted a policy brief on state options to address Medicaid spending growth.  Find it here.
  • MACPAC has published a policy brief on alternative approaches to federal Medicaid financing.  Find it here.
  • MACPAC’s commissioners met virtually last week in Washington, D.C.  Their agenda consisted of the following subjects:
  • Medicaid in Context:  Key Statistics and Trends
  • Medicaid in Context:  Payment and Financing
  • Children and Youth with Special Health Care Needs Transitions of Care
  • Timely Access to Home- and Community-Based Services:  Level of Care Determinations and Person-Centered Planning Processes
  • Access to Medications for Opioid Use Disorder in Medicaid
  • Understanding the Program of All-Inclusive Care for the Elderly (PACE) Model
  • Self-Direction for Medicaid Home- and Community-Based Services
  • Panel on Automation and Artificial Intelligence in the Prior Authorization Process
  • Medicaid Payment Policies to Support the Home- and Community-Based Services Workforce:  Policy Considerations
  • Health Care Access for Children in Foster Care:  Study Findings
  • Appropriate Access to Residential Treatment for Behavioral Health Needs for Children in Medicaid
  • Medicare-Medicaid Plan Transition: Procurement, Information Technology, and Enrollment

Go here for links to the presentations for each of these agenda items and a summary of the meeting.