Don’t Miss:

  • CMS proposes CY 2027 Medicare outpatient rates, reviving 340B cuts, expanding site-neutral payments
  • CMS calls for modest Medicare home health pay hike, more ways to oust providers
  • Court halts borrowing limit that jeopardized supply of qualified health professionals

The following is the latest health policy news from the federal government for June 25-July 2.  Some of the language used below is taken directly from government documents.

Proposed CY 2027 Medicare Outpatient Prospective Payment and Ambulatory Surgical Center Rule

CMS has published its proposed Medicare FY 2027 outpatient and ambulatory surgical center prospective payment system rule.  The proposed rule calls for a net increase of 2.4 percent in Medicare outpatient payments but a 340B clawback related to past 340B litigation has been raised to three percent, leaving a proposed net increase in outpatient payments of 0.6 percent.  CMS proposes a 2.4 percent net increase in ambulatory surgical center payments.

Other highlights from the proposed rule include:

  • Proposed site-neutral outpatient payments for imaging without contrast when performed at grandfathered off-campus provider-based departments.
  • Paying for 340B drugs at drugs’ average sales price minus 33.4 percent.
  • New requirements that would prohibit Medicare outpatient payments for off-campus outpatient departments beginning in 2028 unless each such department has its own National Provider Identifier (NPI).
  • The removal of 638 procedures from the inpatient-only procedures list.
  • A request for information seeking comments on how to strengthen the standardization and comparability of hospital price transparency data.
  • The addition of Medicare prior authorization requirements for eight additional botulinum toxin injections.
  • The introduction of cost-of-living increases to the non-labor share of outpatient hospital services provided in Alaska and Hawaii.

Learn more about the proposed Medicare FY 2027 outpatient and ambulatory surgical center prospective payment system rule from this CMS news release, CMS’s fact sheet, and the proposed rule in its preview form.  The deadline for submitting comments about the proposed rule will be 60 days after its official publication, which is currently scheduled for July 7.

Proposed CY 2027 Medicare Home Health Prospective Payment System Rule

CMS has published its proposed CY 2027 Medicare home health prospective payment system rule.  Highlights include:

  • A net 2.4 percent increase in rates but a temporary three percent cut to achieve budget neutrality as part of implementation of the Patient-Driven Groupings Model (PDGM).
  • Changes in Medicare provider enrollment policies, including greater use of retroactive revocations for providers and expansion of the grounds for revoking or denying provider enrollment.
  • Recalibration of the PDGM case-mix weights.
  • An update of the outlier threshold.
  • An update of the low utilization payment adjustment thresholds, functional impairment levels, and comorbidity adjustment subgroups.
  • A request for information on a home health-specific wage index.
  • Changes in the home health quality reporting program.
  • Changes in the definition of durable medical equipment to expand coverage for certain external infusion pumps and associated home infusion drugs.
  • Changes in the DMEPOS competitive bidding program.

Learn more about these and other aspects of the proposed CY 2027 Medicare home health rule from this CMS fact sheet and this preview version of the proposal rule.  The deadline for stakeholder comments is August 31.

Congress
  • The House Ways and Means Committee approved a number of tax-related bills, including R. 9504, the “Tax Exempt Hospital Transparency Act,” a revised version of the non-profit hospital reporting discussion draft circulated in May.  Though less invasive than the May draft, this bill would expand reporting requirements for non-profit hospitals at the hospital organization level and at the individual hospital level.  The proposal could ultimately be incorporated into a reconciliation package, FY 2027 appropriations legislation, or other end-of-year congressional action. See the Joint Committee on Taxation’s description of the bill here; details about the committee markup, including a link to a video, here; and the chairman’s opening statement here.
  • Both the Senate and House will return to session after the Independence Day recess on July 13.
The Courts

A federal court has blocked implementation of a new U.S. Department of Education definition of “professional degree” that would have imposed new federal student loan limits on individuals pursuing graduate-level and professional degrees in a variety of health care professions.  While the court rejected the scheduled July 1 implementation of the Department of Education’s definition of the degrees to which the new borrowing limits would apply, it provided no guidance on how the agency should interpret the passage in H.R. 1, last year’s budget reconciliation bill, that called for such limits.  Health care interests feared that the new borrowing limits could affect the supply of qualified health care professionals in a number of fields.  Learn more from the federal court ruling in the case.

The White House

President Trump has announced that he will nominate Christopher Klomp to serve as deputy secretary of the Department of Health and Human Services.  Klomp has served as HHS’s chief counselor since February of this year and as director of HHS’s Center for Medicare and deputy CMS administrator since last year.  Before joining the federal government, Klomp worked for Bain & Co. and after that was CEO of the health information technology company Collective Medical.

Centers for Medicare & Medicaid Services (CMS)
  • To facilitate greater hospital price transparency, CMS has posted guidance on encoding outlier contracting clauses in hospitals’ machine-readable files. Find that guidance here.
  • CMS has asked the Office of Management and Budget for permission to introduce a new information collection instrument for its Acute Hospital Care at Home program. Learn more from this CMS notice.  The deadline for stakeholders to submit comments is August 3.
  • CMS has announced that its Hospital Quality Reporting system is now open for the mandatory submission of EHR-derived clinical data and linking variables for the FY 2028 Hybrid Hospital-Wide Readmission measure and Hybrid Hospital-Wide measure for the July 1, 2025 through June 30, 2026 reporting period. The data submission deadline is October 1.  Learn more from this CMS notice.
  • Version 5.19 of the specifications manual for National Hospital Inpatient Quality Measures is now available from CMS. Learn more about the document and where to find it from this CMS notice.
Department of Health and Human Services (HHS)
  • HHS’s Health Resources and Services Administration (HRSA) has announced that it will give state primary care offices additional time to review and update certain Health Professional Shortage Area (HPSA) designations identified through the agency’s 2025 National Shortage Designation Update. Learn more from this HRSA announcement.
  • HHS’s Office of the National Coordinator for Health Information Technology (ONC) has unveiled its new 2026 standards approved through the agency’s Standards Version Advancement Process. In a new blog post, ONC highlights the updates, introduces its new standards, and presents a list, with links, to its approved standards for 2026.  Find the ONC announcement here.
  • ONC has awarded a contract to strengthen oversight of the network and verify that organizations participating in TEFCA follow required policies and procedures. TEFCA – the Trusted Exchange Framework and Common Agreement – is the nationwide network that helps patients and health care providers securely share electronic health information.  ONC also is conducting additional reviews of Qualified Health Information Networks (QHINs) and their participants to help ensure compliance with TEFCA’s rules and operating requirements.  Learn more about ONC’s actions from this HHS news release.
  • HHS is terminating two emergency use authorizations issued to facilitate the response to the COVID-19 public emergency. The declaration for medical devices will expire on December 26, 2026 and the declaration for drugs and biological products will expire on June 29, 2027.  Learn more from this HHS announcement.
  • HHS’s Office of the Assistant Secretary for Planning and Evaluation has posted a brief report on ACA exchange enrollment in 2026. Find that report here.
  • HHS’s Office of the Inspector General has issued an unfavorable opinion regarding a home health agency’s payments to a vendor for the use of online referral management software. Find that opinion here.
Medicaid State Plan Amendments

CMS has approved state plan amendments for Medicaid and CHIP programs in the following states:

  • Colorado, clarifying language and adding exemptions for nursing home eligibility review
  • Montana, implementing a primary care case management program
  • Washington, updating the Medicaid program’s third-party liability protocol
  • Wyoming, adopting a change in the state’s Medicaid fee schedule
Health Policy Newsletters, Reports, and Videos
Centers for Disease Control and Prevention (CDC)
As of the end of June, the CDC has confirmed 2,134 cases of measles in 41 jurisdictions and 30 new outbreaks for 2026.  Learn more about measles cases and find resources for identifying, treating, and communicating about measles from the CDC’s updated Measles Cases and Outbreaks web page.
Congressional Budget Office (CBO)

The CBO released an analysis of the President’s FY 2027 budget, projecting continued growth in mandatory spending driven in part by Social Security and Medicare.  Under current law, combined outlays for those programs would rise from 8.7 percent of GDP in 2027 to 10.1 percent in 2036.  The CBO also found that eliminating the Prevention and Public Health Fund would reduce mandatory outlays by $14 billion through 2036.  See the report here for more information.

Stakeholder Events

CMS – 2026 National Provider Compliance Conference – August 11–12

On Tuesday, August 11 and Wednesday, August 12, CMS will hold a national provider compliance conference that will bring together Medicare Administrative Contractors (MACs) and Center for Program Integrity experts to provide compliance professionals with the information and tools they need to submit Medicare Part A, Part B, home health and hospice, and durable medical equipment claims.  Learning opportunities will include individual presentations, Q&A segments, panel discussions, and a dedicated exhibit area for engagement between MACs and providers.  The target audience for this conference is Medicare fee-for-service providers only, including medical review contractors, compliance officers, nurse and billing managers, medical record staff, coders, and provider associations.  Go here to learn more about the conference and to register to participate.  The conference will be held in Charlotte and will have no virtual component and a limited number of participants.

MedPAC – Commissioners Meeting – September 3-4

MedPAC’s commissioners will hold their next public meeting virtually on Thursday, September 3 and Friday, September 4.  An agenda for the meeting and information about how to participate has not yet been posted; when they are, they will be found here.

MACPAC – Commissioners Meeting – September 24-25

MACPAC’s commissioners will hold their next public meeting on Thursday, September 24 and Friday, September 25.  An agenda for the meeting and information about how to participate has not yet been posted; when they are, they will be found here.