The following is the latest health policy news from the federal government for March 27 to April 3.  Some of the language used below is taken directly from government documents.

Proposed and Final CMS Medicare Regulations

Proposed FY 2027 Medicare Inpatient Rehabilitation Facilities Payment Rule

CMS has published a proposed rule updating Medicare payment policies and rates for inpatient rehabilitation facilities (IRF) under its IRF prospective payment system and updating the IRF quality reporting program for FY 2027.  CMS proposes updating FY 2027 IRF rates by 2.4 percent based on a market basket update of 3.2 percent less a proposed 0.8 percentage point productivity adjustment.  The proposed rule includes an update of the outlier threshold to maintain outlier payments at three percent of total payments; would apply the third and final year of the phase-out of the rural adjustment for IRFs transitioning from rural to urban; would revise current regulations to specify that all therapies, not just some, must be initiated within 36 hours of admission to an IRF; would require that interdisciplinary team initial meetings be completed on or before the fourth day of admission; and proposes changes in case-mix-group relative weights, average length of stay values, and the wage index.  It also includes requests for information on potential enhancements to the IRF prospective payment system, including updates on how primary diagnoses and comorbidities are used to classify patients by case-mix, and on adding an advanced care planning measure to the IRF quality reporting program.  Learn more about the proposed rule from this CMS fact sheet and this preview version of the proposed rule, which is scheduled for official publication on April 6.  The deadline for stakeholders to submit written comments is June 1.

Proposed FY 2027 Medicare Skilled Nursing Facilities Payment Rule

CMS has published a proposed rule updating Medicare payment policies and rates for skilled nursing facilities (SNF) under the Medicare SNF prospective payment system for FY 2027.  CMS proposes updating Medicare SNF rates by 2.4 percent based on a proposed market basket increase of 3.2 percent less a 0.8 percent productivity adjustment.  In addition, CMS proposes removing two COVID-19 related measures from the SNF quality reporting program beginning in FY 2028; revising the timeframe for SNF quality reporting program data submission beginning in FY 2029; and requiring the submission of minimum data set data on all SNF residents receiving covered skilled care in a SNF, regardless of payer. The proposed rule also seeks stakeholder feedback on adding an advanced care planning measure to the SNF quality reporting program and on proposed updates in the patient-driven payment model (PDPM) payment system to address case-mix upcoding.  Learn more about CMS’s proposed changes for the FY 2027 SNF prospective payment system from this CMS fact sheet and this preview version of the proposed rule, which is scheduled for official publication on April 7.  The deadline for stakeholders to submit comments is June 1.

Proposed FY 2027 Medicare Inpatient Psychiatric Facilities Payment Rule

CMS has published a proposed update of Medicare payment policies and rates for inpatient psychiatric facilities (IPF) under its IPF prospective payment system for FY 2027.  CMS proposes updating IPF rates by 2.3 percent based on the proposed 2021-based IPF market basket increase of 3.1 percent less a proposed 0.8 percentage point productivity adjustment.  The agency also proposes updating the outlier threshold so estimated outlier payments remain at two percent of total IPF payments.  CMS also proposes changes in the quality measures in the IPF quality reporting program and implementation of a standardized IPF patient assessment instrument (IPF-PAI).  Learn more about CMS’s proposal for updating Medicare IPF payment rates and policies from this CMS fact sheet and from this preview version of the proposed rule, which is scheduled for official publication on April 7.  The deadline for stakeholders to submit written comments is June 1.

Proposed FY 2027 Hospice Payment Rule

CMS has published a proposed hospice payment rate and wage index update rule that would increase Medicare hospice payments rates by 2.4 percent in FY 2027, the result of a 3.2 percent inpatient hospital market basket percentage increase less a proposed 0.8 percentage point productivity adjustment.  The proposed rule also calls for conforming regulation text changes to the hospice telehealth face-to-face policy; includes requests for information on enhancing community palliative care services under current Medicare benefits; and the development of a hospice-specific wage index using Bureau of Labor Statistics data.  In addition, CMS has developed a service and spending variation index (SSVI) that uses metrics collected from claims data that can signal potential inappropriate utilization, quality of care, or compliance concerns and CMS is soliciting comments on this index.  Learn more about the proposed FY 2027 hospice wage index and payment rate update from this CMS news release; an accompanying CMS fact sheet; and this preview version of the proposed rule.  The deadline for stakeholders to submit comments will be 60 days after the rule’s official publication, which is scheduled for April 6.

Final Medicare Advantage Program, the Medicare Prescription Drug Benefit Program (Part D), and the Medicare Cost Plan Program

CMS has published a final rule revising the Medicare Advantage Program, the Medicare Prescription Drug Benefit Program (Part D), and the Medicare Cost Plan Program.  In the final rule CMS finalizes two sets of major changes in the Part C and Part D star ratings systems.  First, it eliminates incentive bonuses for fulfilling certain health equity-related metrics.  Second, CMS is streamlining and refocusing the measure set by removing 11 measures focused on administrative processes and areas where it believes beneficiaries cannot distinguish performance between plans due to high performance and little variation.  In addition, the proposed rule would codify components of the Inflation Reduction Act of 2022, including eliminating the coverage gap phase; establishing a reduced annual out-of-pocket threshold; removing cost-sharing for enrollees in the catastrophic phase; incorporating the Manufacturer Discount Program that replaced the Coverage Gap Discount Program on January 1, 2025; and codifying additional operational changes including updates to true out-of-pocket cost calculations, specialty-tier rules, reinsurance payment methodologies, and implementation of the selected drug subsidy.  The final rule also revises its list of non-allowable special supplemental benefits for the chronically ill to clarify the use of cannabis products; introduces a number of changes designed to reduce regulatory burden; and includes requests for information addressing topics ranging from future directions for the Medicare Advantage program, modernizing marketing oversight and agent/broker regulations, the significant growth in dually eligible individual enrollment in chronic condition special needs plans, supporting well-being and nutrition policy in Medicare Advantage, and opportunities to streamline Medicare regulations.  Learn more from this CMS fact sheet; a separate fact sheet that primarily addresses changes in the star rating system and prescription drug benefits; and this preview version of the final rule, which will officially be published on April 6 and will take effect on June 1 and will be applicable to coverage beginning January 1, 2027.

 Congress

  • President Trump has expressed support for a two-part approach to funding the Department of Homeland Security (DHS):  advancing most DHS appropriations through a bipartisan agreement while addressing immigration enforcement priorities through a party-line budget reconciliation bill.  The administration seeks a solution before June 1.
  • In an attempt to end what has become the longest funding lapse in U.S. history, the Senate passed a continuing resolution (CR) to fund DHS that does not include funding for Immigration and Customs Enforcement (ICE) and the Customs and Border Protection agency.  Now, Republican lawmakers in both chambers are seriously considering a reconciliation package that could extend well beyond DHS funding.  Some Republican members of the House Ways and Means Committee and the House Energy and Commerce Committee are advocating the inclusion of health care policies as potential offsets for their broader budgetary priorities, including some that were excluded from H.R. 1.  Among those health care provisions being discussed are Affordable Care Act reforms; reductions in the federal medical assistance percentage (FMAP), the rate at which the federal government matches state Medicaid spending; changes to Medicaid pharmacy benefit manager (PBM) spread pricing; site-neutral payment policies; and new restrictions on federal payments for gender-affirming care.
  • The House Ways and Means Committee continues to plan for a mid-April hearing on health care affordability, with a focus on hospital costs and consolidation.  Information on the date and time of that hearing will be posted on the committee’s official calendar.

The White House

The Trump administration today sent an outline of its proposed FY 2027 budget to Congress.

The budget document the administration submitted to Congress is a big-picture document and not the detailed, line-item budget that will come later.  The proposed FY 2027 budget for HHS focuses on the administration’s expressed objective of improving the health and well-being of Americans and establishes the Administration for a Healthy America (AHA) as part of a major reorganization of HHS to prioritize programs that improve nutrition, food and drug quality and safety standards, and prevent chronic disease.  The budget would refocus HHS on what the administration views as the agency’s core mission and proposes eliminating programs and measures that do not advance MAHA goals.  It requests $111.1 billion in discretionary budget authority for HHS for 2027, a $15.8 billion or 12.5 percent decrease from the 2026 enacted level.

Find the proposed FY 2027 budget here.  It is important to note that this document is a statement of administration priorities and is not binding.  Congress makes the final decisions on how federal resources are allocated.

Centers for Medicare & Medicaid Services/Center for Medicare and Medicaid Innovation

  • The Center for Medicare and Medicaid Innovation (CMMI) is delaying the WiSER (Wasteful and Inappropriate Service Reduction) Model implementation of two services:  Deep Brain Stimulation for Essential Tremor and Parkinson’s Disease (NCD 160.24).  Percutaneous Image-Guided Lumbar Decompression for Spinal Stenosis (NCD 150.13).  Neither the prior authorization nor the pre-payment review processes described will be available for these services.  Learn more from this preview version of a CMS notice that will officially be publishes on April 6.
  • CMS has released a Request for Applications for its Long-term Enhanced ACO Design (LEAD) Model, a new model from CMMI.  Through the LEAD Model, CMMI seeks to offer enhanced support to small, independent, and rural practices delivering primary care and those serving high-needs beneficiaries while introducing new flexibilities and opportunities for specialist integration and health promotion.  LEAD is a voluntary, 10-year model that will launch on January 1, 2027.  Learn more about the model and find links to the LEAD Model web page, the Request for Applications, and more from this CMS announcement.  The deadline for applying to participate is May 17.
  • CMS and CMMI  have announced that organizations participating in certain CMMI models may begin offering a new Substance Access Beneficiary Engagement Incentive (BEI) starting April 1, 2026.  Through this optional incentive, eligible hemp-derived products can be incorporated into patient care plans under clinician guidance, consistent with model requirements and applicable law.  The Substance Access BEI is a provider-led, model-specific tool within CMMI models that will be available to participants in the ACO REACH Model and the Enhancing Oncology Model and will be available to participants in the Long-Term Enhanced ACO Design (LEAD) Model beginning in 2027.  Under the Substance Access BEI, participating organizations that elect and receive CMS approval may furnish eligible hemp-derived products for up to $500 per year per eligible beneficiary, subject to model requirements and safeguards as well as clinical determination.  Learn more about the Substance Access BEI from this CMS news release and from the new program’s web page.

Centers for Medicare & Medicaid Services (CMS)

  • In cooperation with the Departments of Labor, the Treasury Department, and the Office of Personnel Management (OPM), CMS has issued an FAQ presenting its latest exercise of enforcement discretion under certain provisions of the No Surprises Act.  Find that FAQ here.
  • CMS has issued a memo directing hospitals to meet patient nutrition standards by aligning meals with HHS’s dietary guidelines for Americans by prioritizing whole, nutrient-dense foods and adequate protein while limiting ultra-processed foods and added sugars.  The CMS memorandum also reinforces existing Medicare Conditions of Participation, requiring hospitals to meet individual patient nutritional needs; maintain dietitian oversight; keep therapeutic diet manuals current; and integrate nutrition into quality and performance improvement programs.  CMS also urged hospitals to update menus, procurement practices, and nutrition protocols to reflect current federal dietary guidance.  Learn more from this HHS news release and the CMS memo to hospitals titled “Hospital Nutrition Service Obligations in Light of Updated Federal Nutrition Guidelines.”
  • CMS has posted a bulletin presenting the July quarterly update to the Healthcare Common Procedure Coding System (HCPCS) codes used for skilled nursing facility consolidated billing enforcement.  Find bulletin here.  The updates it presents take effect on July 1.
  • CMS has posted a bulletin presenting an April update of its hospital outpatient prospective payment system.  Find that bulletin here.  The single change it presents took effect on April 1.CMS has awarded a Part C Independent Review Entity (IRE) contract.  The company awarded the contract will be responsible for conducting appeals of adverse reconsiderations issued by Part C plans and reviews of plan dismissals of appellant reconsideration requests.  Learn more from this CMS memo to Medicare Advantage, cost, health care prepayment, PACE, and demonstration organizations.
  • CMS has reminded Medicare Administrative Contractors (MACs) that the Consolidated Appropriations Act of 2026 extended temporary increases in the Medicare low-volume hospital payment adjustment and extended the Medicare-Dependent Hospital program and its enhanced Medicare reimbursement for such hospitals under the Medicare inpatient prospective payment system.  Learn more from this CMS directive to the MACs.
  • CMS has announced the upcoming release of public data assets in open, machine-readable formats under an open license.  This data release is intended to support public engagement in identifying and preventing fraud, waste, and abuse and to promote transparency and accountability.  Learn more about the specific types of data that will be released from this preview version of the CMS announcement that will officially be posted on April 6.
  • CMS has released its 2026 health insurance exchanges open enrollment report, which summarizes plan selection activity for plan year 2026 across the individual exchanges in all 50 states and the District of Columbia.  The report includes data on demographics, premiums, financial assistance, and cost-sharing.  During the 2026 open enrollment period, 23.1 million consumers selected or were automatically re-enrolled in coverage through HealthCare.gov and state-based exchanges.  Learn more from this CMS news release and the agency’s 2026 open enrollment period public use files.
  • CMS’s Open Payments pre-publication review and dispute resolution process is now open through May 15.  Open Payments is a national disclosure program that seeks to promote a transparent and accountable health care system.  Open Payments houses a publicly accessible database of payments that reporting entities, including drug and medical device companies, make to certain health care providers.  Learn more about the Open Payments process and how to use it from this CMS notice.
  • CMS has added the following item to its Quality Payment Program resource library.  (Note:  clicking these links may give a prompt to download a file that may be a zip file.)

Department of Health and Human Services

  • HHS’s Substance Abuse and Mental Health Administration (SAMHSA) has published an advisory exploring innovative, community-driven solutions to close gaps in the availability of behavioral health services in areas with severe shortages of mental health providers, long wait times, high costs, and other barriers to care.  Learn more from the SAMHSA report “Expanding Behavioral Health Teams in Care Deserts With Community Health Workers and Peer Support Specialists.”
  • HHS’s Office of the Assistant Secretary for Planning and Evaluation (ASPE) has released a report on the availability of care for older adults in outpatient behavioral health facilities.  Find that report here.
  • HHS has reversed a 2024 reorganization of much of its health information technology, AI, and interoperability operations.  That reorganization had established a dually titled Office of the National Coordinator for Health Information Technology (ONC) as the Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT (ASTP/ONC), headed by the Assistant Secretary for Technology Policy, dually titled as the National Coordinator for Health IT; moved three HHS-wide technology roles to ONC from the Office of the Chief Information Officer (OCIO); and shifted specific cybersecurity functions out of OCIO.  This reorganization unwinds that effort, creating a unified, department‑wide technology leadership model by returning these enterprise responsibilities to OCIO while sharpening ONC’s mission focus on nationwide health IT interoperability and data liquidity.  Learn more about the reorganization, including what specific responsibilities have been assigned to which office, from this HHS news release.  These changes are reflected in a revised ONC web site and a new web site for HHS’s Office of the Chief Information Officer.

Medicaid State Plan Amendments

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

  • To Alaska, updating the state’s online alternative single, streamlined application.
  • To Arkansas, updating the state’s medication-assisted treatment pages using the CMS-issued template.
  • To California, updating the state FY 2025-2026 Diagnosis Related Group (DRG) payment parameters for general acute inpatient services provided by private hospitals and non-designated public hospitals in California, out-of-state (border and non-border) hospitals, and hospitals designated by Medicare as critical access hospitals.
  • To Massachusetts, updating the methods and standards for adult foster care and group adult foster care services.
  • To Missouri, revising the medication-assisted treatment pages of the state plan to make the coverage permanent as required by the Consolidated Appropriations Act of 2024.
  • To Missouri, giving a two-year extension of the exception from establishing a Medicaid Recovery Audit Contractor (RAC) program.
  • To New Jersey, adding services provided by certified community behavioral health clinics and describing payment methodologies for these services.
  • To New Mexico, capturing the reimbursement methodology for crossover payments for inpatient claims when the billing providers are skilled nursing facilities, institutional care facilities for individuals with intellectual disabilities, residential treatment centers, treatment foster care, or Indian Health Service providers.
  • To North Dakota, amending the state plan to add licensed practical nurses to provide nursing services provided in a school.
  • To North Dakota, amending the state plan to add licensed master social workers as other licensed practitioners.
  • To New York, carving out selected drugs provided in a hospital setting and reimbursing for them in accordance with the state’s prescribed drug reimbursement methodologies.
  • To New York, carving out selected drugs from inpatient hospital rates.
  • To Ohio, amending Attachments 3.1-A and 4.19-B due to an Ohio agency name change from the Ohio Department of Mental Health and Addiction Services to the Ohio Department of Behavioral Health.
  • To Ohio, amending the state’s alternative benefit plan due to an Ohio agency name change from the Ohio Department of Mental Health and Addiction Services to the Ohio Department of Behavioral Health.
  • To Ohio, updating reimbursement for injectable drugs and biologicals that are carved out of bundled inpatient and outpatient hospital payments.
  • To Rhode Island, reimbursing hospitals for selected carved-out drugs separately from the APR-DRG payment when the drugs are approved under the Cell and Gene Therapy Access Model.  A separate outpatient claim will be submitted by the hospital for the reimbursement of these drugs at the acquisition cost.
  • To Vermont, updating the state’s community mental health center services in accordance with special terms and conditions 4.4(c) of the state’s Global Commitment to Health 1115 waiver, wherein rehabilitation mental health services are being transferred from the waiver to the state plan.

HHS Newsletters, Reports, and Videos

Centers for Disease Control and Prevention (CDC)

  • The CDC reports 1,575 confirmed measles cases in 32 states as of March 26.  There have been 16 new outbreaks this year and 94 percent of the total number of cases are outbreak-associated; there have been no measles-related deaths this year.  Learn more from the CDC’s Measles Cases and Outbreaks website.
  • The CDC and the White House Office of National Drug Control Policy issued a health advisory on the increasing reports of medetomidine detection in the illegal drug supply.  The advisory highlights concerns about increased overdose risk, atypical and severe withdrawal symptoms, and reduced responsiveness to naloxone when medetomidine is present alongside opioids such as fentanyl.  For more information see the CDC web page here.

Medicaid and CHIP Payment and Access Commission (MACPAC)

MACPAC has responded to CMS’s request for information on comprehensive regulations to uncover suspicious health care.  MACPAC’s letter to CMS presents four recommendations:  identifying and eliminating ineffective or redundant program integrity activities and requirements; promoting high-value program integrity activities; addressing barriers to program integrity efforts in managed care; and payment and financing transparency. Learn more from MACPAC’s letter to CMS.

Government Accountability Office (GAO)

  • The GAO has examined the history of the Centers for Medicare and Medicaid Innovation’s development, implementation, and testing of new models for health care delivery and payment, including the obligations those models have incurred, the identity of those that have been expanded, the savings they have and have not produced, the improvements in care delivery they have introduced, and more and reported its findings in the new report “CMS Innovation Center:  Obligations and Model Testing Progress.”  Find that report here.
  • The GAO has published the new report “Health Care Funding:  Information on Crisis Pregnancy Centers, Fiscal Years 2018 Through 2024.”  Find it here.

Congressional Research Service

Noting that Congress has had a continuing interest in tax benefits for non-profit hospitals over the years and whether those hospitals offer sufficient community benefits, including charity care, in exchange for those benefits, the Congressional Research Service has published the report “Nonprofit Hospitals, Tax Benefits, and Charity Care.”  Find it here.

Stakeholder Events

CMS – Medicare Drug Price Negotiation Program Public Engagement Events – April 6-23

From April 6 through April 23, CMS will hold a series of public information events to gather stakeholder information about its Medicare Drug Price Negotiation Program and the specific prescription drugs covered by that program.  The agency invites patients, caregivers, clinicians, and others to share their experience relevant to the drugs selected for negotiation and renegotiation under the program.  Learn more from this CMS bulletin about the public informational events and learn more about the individual events, the specific drug or drugs each event will address, and how to participate from this CMS web page and go here to learn about livestreamed town hall meetings.

CMS – Fourth Quarter FY 2025 PEPPER for Short-Term Acute Care Hospitals Webinar – April 7

CMS will hold a webinar to review the FY 2025 fourth quarter Program for Evaluating Payment Patterns Electronic Reports (PEPPERs) for short-term acute-care hospitals on Tuesday, April 7 at 1:00 (eastern). During the session, CMS will provide guidance on navigating the program’s recent changes, including a review of reports published in March of 2026.  Go here to register to participate and to submit questions to be addressed during the webinar.

CMS – Medicare Diabetes Prevention Program Enrollment Procedures Webinar – April 9

CMS will hold a webinar to introduce Medicare Diabetes Prevention Program enrollment procedures, discuss how recent changes affect the program, and answer questions about program enrollment requirements and policies on Thursday, April 9 at 1:00 (eastern).  Go here to register to participate.

MedPAC – Commissioners Meeting – April 9-10

MedPAC’s commissioners will hold their next public meeting virtually on Thursday, April 9 and Friday, April 10.  Go here to find the meeting’s agenda and information about registering to participate.

MACPAC – Commissioners Meeting – April 9-10

MACPAC’s commissioners will hold their next public meeting virtually on Thursday, April 9 and Friday, April 10.  Go here to register to participate.

CMS – Listening Session on Patient Empowerment Care – April 13

CMS will hold a beneficiary listening session focused on patient experiences in health care for improving access, transparency, and affordability on Monday, April 13 at 2:30 (eastern).  Learn more about the event and how to register to participate from this CMS notice.

CMS – Medicare Diabetes Prevention Program 2026 Supplier Summit – April 23

CMS will hold a Medicare Diabetes Prevention Program supplier summit on Thursday, April 23 at noon (eastern) to help program participants and suppliers learn about how the program can benefit their organization and community, learn about the differences between program delivery modalities, and receive important updates from CMS and the CDC about the new online delivery option.  Learn more about the event from this CMS notice and go here to register to participate.

CDC – Clinician Outreach Call on Rabies – April 30

The CDC will hold a call for clinicians on Thursday, April 30 at 2:00 (eastern) during which it will discuss the current rabies landscape in the U.S. and CDC resources to help clinicians and health departments with risk assessments.  Presenters also will highlight animal-related costs and effects from rabies and how risk assessments can help avoid financial damage from costs associated with rabies exposures.  Learn more about the event and its objectives, additional resources, how to participate, and how to obtain continuing education credits for participating from this CDC notice.

HHS Office of the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology/Health Information Technology Advisory Committee – May 7

The Health Information Technology Advisory Committee of HHS’s Office of the Assistant Secretary for Technology Policy will hold its next meeting on Thursday, May 7.  This committee’s role is to identify priorities for standards adoption and make recommendations to the Assistant Secretary for Technology Policy.  Learn more about the committee, its structure, and its purpose from this HHS notice, which also outlines the meeting’s agenda.  Information about how to participate in the meeting is not yet available but when it is it will be posted here.  Other 2026 meetings will be held on September 24 and November 5.