The following is the latest health policy news from the federal government for August 2-7.  Some of the language used below is taken directly from government documents.

Congress

The House and Senate are both in recess.   When Congress returns in September its top priority will be funding the federal government before the fiscal year ends on September 30, likely requiring a continuing resolution to avoid a shutdown.  Several major health care programs and extenders are set to expire at the end of the fiscal year, including Medicaid disproportionate share (Medicaid DSH) allotments, telehealth flexibilities, the Acute Hospital Care at Home program, and the Medicare-dependent hospital and low-volume hospital programs.  Lawmakers are preparing a broad health care package for action this fall that could address these expirations along with potential reforms in Medicare Advantage, pharmacy benefit manager regulation, Medicare site-neutral payment policies for hospitals, and Medicare reimbursement changes for long-term acute-care hospitals.

The White House

President Trump has sent letters to 17 pharmaceutical companies outlining “steps they must take” to lower prescription drug prices for Americans, including matching the lowest price offered in other developed nations.  Learn more from this White House notice, which includes a link to the letters.

Medicare Payment Regulations

Over the past week CMS has published five final regulations presenting how Medicare will pay and regulate certain types of providers in FY 2026.

Medicare Inpatient Prospective Payment System and Long-Term Care Hospital Prospective Payment System

  • A net increase of 2.6 percent in Medicare inpatient payments that, after changes in the standardized amount, will be more like approximately 1.9 percent.
  • A net increase of 2.7 percent in Medicare payments to long-term-care hospitals (LTCHs).
  • A $2 billion increase in funding for Medicare disproportionate share (Medicare DSH) uncompensated care payments.
  • Termination of the Medicare low wage index hospital policy and introduction of a one-year budget-neutral narrow transition exception for those low wage index hospitals.
  • Changes in the Medicare Transforming Episode Accountability Model (TEAM), which is still scheduled to launch on January 1, 2026 and will still be mandatory for all hospitals located in the program’s designated geographic areas.
  • Modifications in the Inpatient Quality Reporting Program, Medicare Promoting Interoperability Program, Hospital Readmissions Reduction Program, Hospital-Acquired Condition Reduction Program, Hospital Value-Based Purchasing Program, and Long-Term Care Hospital Quality Reporting Program.
  • Updates in the Office of Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology’s Health Information Technology Certification Program that seek to enhance the ability of providers to engage in electronic prescribing, real-time prescription benefit checks, and electronic prior authorization.
  • For further information about these and other changes in this regulation, see this CMS fact sheet and the final rule itself.

Skilled Nursing Facility Prospective Payment System

CMS will increase payments to skilled nursing facility rates a net 3.2 percent in FY 2026.  Learn more about this final rule from this CMS fact sheet and the final rule itself.

Inpatient Rehabilitation Facility Prospective Payment System

CMS will increase payments to inpatient rehabilitation facilities a net 2.6 percent in FY 2026.  For further information, see this CMS fact sheet and the final rule itself.

Inpatient Psychiatric Prospective Payment System

CMS will increase payments to inpatient psychiatric facilities a net 2.6 percent in FY 2026.  For further information, see this CMS fact sheet and the final rule itself.

Hospice Wage Index and Payment Rate System

CMS will increase Medicare payments for hospice care a net 2.6 percent in FY 2026.  For further information see this CMS fact sheet and the final rule itself.

340B
  • HHS’s Health Resources and Services Administration (HRSA) has announced a 340B Rebate Model Pilot Program “… as a voluntary mechanism for qualifying drug manufacturers to effectuate the 340B ceiling price on select drugs to all covered entities, and to collect comments on the structure and application process of the 340B Rebate Model Pilot Program…”  The program would apply only to drugs on the CMS Medicare Drug Price Negotiation Selected Drug List for 2026 from qualifying manufacturers meeting specific criteria.  According to the agency, it “…has received inquiries from manufacturers related to different proposed rebate models for the 340B Program, primarily to address 340B and Maximum Fair Price (MFP) deduplication, but also to facilitate other aims such as the prevention of 340B Medicaid duplicate discounts and diversion.”  HRSA explains that  “A ‘rebate’ for purposes of this pilot program, means a reimbursement made from the manufacturer to the covered entity in the amount of the standard acquisition cost ( i.e., wholesale acquisition cost) of a covered outpatient drug less the statutory 340B ceiling price as defined at section 340B(a)(1) of the Public Health Service Act (PHSA).”  HRSA also explains that “Whereas the 340B Program has traditionally operated as an upfront discount program ( i.e., a covered entity purchases a covered outpatient drug at the discounted 340B price), under a rebate model, a covered entity would pay for the drug at a higher price upfront and then later receive a post-purchase rebate that reflects the difference between the higher initial price and the 340B price.”  HRSA is inviting certain drug manufacturers that meet its criteria to apply to participate in the program for a minimum of one year.  Learn more about the program from this HRSA news release and this formal announcement.  The deadline for qualified pharmaceutical companies to apply to participate is September 15.  HRSA intends to announce its decisions by October 15 with the intention of launching the program next January 1.  HRSA also is inviting stakeholder comments on the program; those comments are due by September 8.
  • HRSA has proposed updating the enrollment and recertification forms used by entities participating in the 340B drug discount program.  The proposed changes are technical and generally minor.  Learn more about changes from this CMS notice.  The deadline for interested parties to submit written comments is October 6.
Centers for Medicare & Medicaid Services
  • CMS announced that it has awarded $66 million in grants, ranging from $850,000 to $3 million over five years, through its Connecting Kids to Coverage Outreach and Enrollment Cooperative Agreement program.  This program provides funding to increase the number of eligible children enrolled Medicaid and CHIP and to improve the retention of eligible children, parents, and pregnant women in these programs.  Learn more about the program and find a list of the grant recipients in this CMS notice.
  • CMS has posted a Medicare bulletin presenting its national coverage determination addressing transcatheter tricuspid valve replacement.  The bulletin covers criteria, coverage with evidence development study criteria, and claims processing requirements.  Find the bulletin here
  • CMS has posted a Medicare bulletin on how to bill the laboratory specimen collection travel allowance to the one-tenth of a mile.  Find that bulletin here.
  • CMS has sent a memo to state Medicaid officials providing updated guidance on state compliance with regulatory requirements for Medicaid Enterprise System modules and solutions.  The memo updates 2022 guidance.  Find the CMS memo here.
  • A series of waivers that CMS established in response to COVID-19 were no longer in effect after the May 11, 2023 expiration of that public health emergency.  Now, CMS has published a notice that they are now officially considered expired as of that date.  Find a list of those waivers here.
  • CMS has added the following items to its Quality Payment Program resource library.  The following links are direct downloads of zip files.

Another addition to the resource library – Links to 2024 MIPS Performance Category Measure Specifications, Activity Inventory, and Supporting Documentation – is a regular link.

Department of Health and Human Services
  • HHS has announced the beginning of a coordinated wind-down of its mRNA vaccine development activities, including the cancellation and “de-scoping” of various contracts and solicitations.  Learn more about this decision from this HHS news release.
  • The recently published FY 2026 inpatient prospective payment system and long-term care prospective payment system regulation included provisions introducing changes in HHS’s Health Information Technology Certification.  In a new blog post, HHS’s Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology’s Health Information Technology Certification Program (ASTP) describes what is in the rule and its implications for providers and patients.  Find that blog post here.
  • ASTP has announced that the beta version of an interactive, searchable map for TEFCA participation is now available.  Learn more about the map and its uses from this ASTP blog post.
  • HHS’s Office of the Inspector General (OIG) has posted a report quantifying the savings to Medicare and its enrollees as a result of CMS’s application of its price-substitution policy to drugs identified and referred by OIG.  According to the report, CMS’s application of its price-substitution policy to these drugs has saved Medicare and its enrollees $76 million since 2013, including $1.6 million in 2023.  Find the report here.
  • HHS’s OIG has published an analysis of selected nursing facilities’ use of Medicaid reimbursement for direct care compensation.  Find that report here.
  • HHS’s OIG has posted a roadmap for new physicians to avoid Medicare and Medicaid fraud and abuse.  Find it here.
  • HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE) has posted HHS’s evaluation plan for FY 2026.  The plan includes four evaluations reflecting evidence-building activities in different HHS operating and staff divisions and highlights activities that seek to generate actionable evidence in FY 2026 on priority topics.  Find the plan here.
  • ASPE has published a report documenting the prevalence of prescription psychiatric medicine use among children and adolescents in the U.S. between 2006 and 2023.  Find that report here.
Approved Medicaid State Plan Amendments

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

  • To Illinois, describing coverage and adding per diem reimbursement for private duty nursing care for Early and Periodic Screening, Diagnostic and Treatment (EPSDT) beneficiaries.
  • To Pennsylvania, increasing the funding for Medicaid disproportionate share hospital (Medicaid DSH) payments to qualifying acute-care general hospitals that provide enhanced access to multiple types of medical care in economically distressed areas.
  • To Colorado, amending vision services providers eligible to order, prescribe, refer, or render vision services to include those providing services within their scope of practice under state law.
  • To Oregon, expanding nursing home visiting targeted case management services program to Coos County.
  • To Washington, adding the reentry targeted case management service to its list of services and updating the portion of its state plan addressing its medication for opioid use disorder treatment service.
  • To California, rescinding the alternative payment methodology for federally qualified health centers, rural health centers, and tribal health programs when COVID-19 vaccines are administered on their own and outside of a billable visit.
HHS Newsletters, Reports, and Videos
Centers for Disease Control and Prevention (CDC)

The CDC has launched a new campaign to address youth substance use and mental health.  Learn more about the campaign from this CDC announcement.

Food and Drug Administration (FDA)
  • The FDA is requiring safety labeling changes for all opioid pain medications to better emphasize and explain the risks associated with their long-term use.  Learn more about the FDA’s decision and the specific changes it is requiring from this FDA news release.  In support of this action, the FDA also is requiring opioid pain medicine manufacturers to update prescribing information explaining the long-term use of their products.  Learn more about this action from this FDA notice.
  • The FDA has published a notice calling for corrective actions on previously recalled Philips Respironics BiPAP A30, A40, and V30 ventilators.  Find that notice and its accompanying instructions here.
Medicare Payment Advisory Commission (MedPAC)

The Government Accountability Office (GAO) has reappointed four current members of the MedPAC board and appointed two new members:  Thomas Diller, M.D., MMM, Vice President of the Population Health Services Organization at AdventHealth and President of the AdventHealth Provider Network in Maitland, FL; and Gokhan Metan, M.Sc., Ph.D., NACD.DC., Co-founder and Chief Executive Officer of WiseCareAI and founder and Chief Technology & Analytics Officer of Full Spectrum Insights in St. Louis, MO.  Go here to learn more about the new and returning commissioners.

Justice Department

The Justice Department has issued a memo to all federal agencies with guidance for recipients of federal funding regarding unlawful discrimination.  The memo states that “This guidance clarifies the application of federal antidiscrimination laws to programs or initiatives that may involve discriminatory practices, including those labeled as Diversity, Equity, and Inclusion (“DEI”) programs.  Entities receiving federal funds, like all other entities subject to federal antidiscrimination laws, must ensure that their programs and activities comply with federal law and do not discriminate on the basis of race, color, national origin, sex, religion, or other protected characteristics-no matter the program’s labels, objectives, or intentions.”  Learn more from the complete Justice Department memo.

Government Accountability Office (GAO)

The GAO has issued its final comprehensive COVID-19 report, providing updates on its work about the impact of the pandemic on public health, the economy, and federal spending.  Learn more from the GAO report “COVID-19:  Update on Key Indicators, the Federal Response, and Implementation of GAO Recommendations.”

Stakeholder Events

CMS Listening Session: Opportunities to Enhance Real-Time Claims Processing & EDI Cybersecurity Controls — August 13

CMS will hold a listening session on Wednesday, August 13 at 3:00 (eastern) to gather feedback from its industry partners on innovative ideas and opportunities for real-time claims processing.  It also is seeking ideas on how to improve Medicare’s Electronic Data Interchange cybersecurity controls that support the security and integrity of electronic transactions physicians, suppliers, and other providers use to submit Medicare Part A and Part B claims and stakeholder feedback based on experiences with other insurers with real-time claims processing integration and solutions in the industry.  Learn more about the event from this CMS notice, which includes information on how to register to participate.

CDC – Update on Measles Cases and Outbreaks – August 14

The CDC will hold a webinar for providers on measles cases and outbreaks in the U.S. on Thursday, August 14 at 3:00 (eastern).  During the webinar, CDC experts will discuss the current epidemiology of measles in the U.S. and address the most common questions from clinicians about preventing, identifying, and testing for measles.  Presenters also will summarize measles, mumps, and rubella (MMR) vaccination recommendations and considerations.  Learn more about the event, including its objectives and the presenters, from this CDC notice.  Continuing education credits are available for participants.

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.

MedPAC – Commissioners Meeting – September 4-5

MedPAC’s commissioners will hold their next public meeting virtually on Thursday, September 4 and Friday, September 5.  An agenda and registration information are not yet available but when they are they will be posted here.

MACPAC – Commissioners Meeting – September 18-19

MACPAC’s commissioners will hold their next public meeting virtually on Thursday, September 18 and Friday, September 19.  An agenda and registration information are not yet available but when they are they will be posted here.