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The following is the latest health policy news from the federal government for July 24-30.  Some of the language used below is taken directly from government documents.

Congress

  • Senate Republicans remain focused on advancing a short-term continuing resolution (CR) before the August recess; it is expected to differ from the CR the House passed last week.  The Senate appears unlikely to consider a budget resolution for a third party-line reconciliation bill before September.
  • The Senate Budget Committee announced a hearing titled “Medicaid:  The Reality” on Tuesday, August 4 at 10:00 (eastern).  Statements from the committee’s chair and ranking member, a list of witnesses, and a recording of the hearing will be posted here.
  • Only the Senate was in session this week.  The chamber is scheduled to leave on August 7 and return on September 14 while the House is set to return on August 31.
  • The Senate Finance Committee’s ranking member, Senator Ron Wyden (OR), released a request for information (RFI) seeking stakeholder feedback on potential approaches to creating a new public insurance option.  The RFI explores a range of policy considerations, including the use of standardized plan designs to make it easier for consumers to compare coverage options and select health insurance plans that best meet their needs.  The deadline for submitting comments is October 2.  Find the RFI here and Senator Wyden’s news release here.

New Final Medicare Payment Regulations

FY 2027 Medicare Skilled Nursing Facility Prospective Payment System Final Rule

CMS has published a final rule updating Medicare payment policies and rates for skilled nursing facilities under its skilled nursing facility (SNF) prospective payment system.  For FY 2027, CMS will increase SNF rates 2.4 percent based on a market basket increase of 3.3 percent less a 0.9 percent productivity adjustment.  In addition, the final rule removes two measures from the SNF quality reporting program beginning in FY 2028; revises data submission deadlines for that program beginning in FY 2029; introduces a requirement that all SNFs must submit minimum data set submissions for all SNF residents receiving covered skilled care, regardless of payer; and finalizes SNF performance standards for the SNF value-based purchasing program for FY 2029 and FY 2030.  Learn more from this CMS news release and this preview version of the final rule.  The rule takes effect on October 1.

FY 2027 Medicare Inpatient Psychiatric Facility Prospective Payment System Final Rule

CMS has published a final rule updating its Medicare payment policies and rates for inpatient psychiatric facilities (IPFs) under its inpatient psychiatric facility prospective payment system.  For FY 2027, CMS will increase IPF payment rates by 2.3 percent based on a market basket increase of 3.2 percent less a 0.9 percentage point productivity adjustment.  CMS also is updating the IPF outlier threshold so that estimated outlier payments remain at two percent of total IPF prospective payment system payments.  The final rule also addresses the wage index; introduces a policy to take effect in FY 2028 limiting outlier payments at the facility level to no more than 20 percent of a given facility’s total IPF prospective payment system payments in a year for facilities with at least 50 stays a year; removes two measures from the IPF quality reporting program; and introduces a standardized IPF patient assessment instrument.  Learn more from this CMS news release and this preview version of the final rule.  The rule takes effect on October 1.

The White House

The White House has published a document that calls for banning two types of biomedical research:  “dangerous gain-of-function research” and federally funded life sciences research that is conducted “…in foreign countries of concern or by foreign entities of concern.”  Learn more from the White House document “United States Government Policy for Stopping High-Risk Life Sciences Research” and this HHS news release.

The Courts

  • A U.S. District court in Texas has again vacated a 2023 CMS regulation that excludes inpatient days covered by uncompensated care pools, such as through section 1115 waivers, when quantifying Medicaid days for the purpose of calculating hospitals’ Medicaid disproportionate share hospital payments (Medicaid DSH).  This regulation, overturned in a 2023 decision that later was reversed, applies nationwide and has implications for the computation of some hospitals’ Medicaid DSH payments and for establishing hospitals’ eligibility to participate in the 340B drug pricing program.  Learn more from the court’s decision in the case of Covenant Medical Center v. Kennedy.
  • A federal court in Massachusetts has chosen not to issue a preliminary injunction in a suit seeking to block the implementation of new Medicaid eligibility work requirements beginning next year.  The decision only responds to the request for a preliminary injunction; the court did not rule on the legal merits of the argument against implementation of the work requirement but indicated it will do so before year’s end.  Learn more from the court’s ruling in the case.

Centers for Medicare & Medicaid Services (CMS)

  • CMS has published a Paperwork Reduction Act mandate outlining requirements for collecting Prescription Drug Event data from insurance plans offering Medicare Part D coverage.  While the requirement seeks to ensure that health plans submit complete, claims-level data regarding outpatient prescription drugs dispensed to Medicare beneficiaries, its objective more specifically is to prevent duplicate discounts under the 340B drug pricing program and to track inflation rebates within Medicare Part D.  Learn more from this CMS notice.  (Note that clicking this link leads to the direct download of a zip file.)
  • CMS has published an informational notice updating its master list of items potentially subject to face-to-face encounter and written order prior to delivery and/or prior authorization requirements; updates to the required face-to-face encounter and written order prior to delivery list; and updates to the required prior authorization list.  These updates expand administrative tracking and strict compliance mandates for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).  They impose new financial, operational, and clinical responsibilities on hospitals, physician practices, and others.  Learn more from this CMS notice, which takes effect on October 28.
  • CMS has released preliminary technical Medicare Part D bid information for contract year 2027 to help sponsors finalize their Part D and Medicare Advantage offerings and prepare for Medicare open enrollment.  Included in this notice is CMS’s announcement that at the end of the year it is terminating its Part D Premium Stabilization Demonstration, a voluntary demonstration program for standalone prescription drug plans implemented in 2025 to stabilize monthly premiums for seniors enrolled in stand-alone Part D prescription drug plans following benefit changes mandated by the Inflation Reduction Act.  CMS also announced that the national average monthly bid amount for 2027 will be $296.05 and the national average base beneficiary premium will be $41.33, up from $38.99 per month.  Learn more from this CMS news release.
  • Following a July 16 federal court decision issuing a temporary stay in the implementation of eight provisions in CMS’s Affordable Care Act marketplace rule, CMS has issued guidance directing health insurance exchanges to update their systems to stop removing or denying advance payments of the premium tax credit for any new applicants or existing enrollees because they failed to file and reconcile prior years’ premium tax credits and to make other adjustments.  Learn more from this CMS guidance.  The agency also indicated that it will provide additional guidance in response to the court’s decision as needed.
  • CMS’s audit of its calendar year 2025 Medicare Part C and Part D programs found major compliance failures in Medicare Advantage and Part D plans involving utilization management, beneficiary access, and vendor oversight, leading to more than $1.5 million in penalties.  The report notes that improper prior authorization and appeals processes frequently caused inappropriate delays in the delivery of care and in denials of care.  Auditors also identified widespread issues in handling appeals and managing delegated vendors, prompting CMS to increase oversight of authorization turnaround times, with future oversight to strictly enforce 72-hour and seven-calendar-day authorization timelines to reduce barriers to care.  Learn more from the CMS document “CY 2025 Part C and Part D Program Audit and Enforcement Report.”
  • CMS’s eCQI Resource Center has published its USCDI (U.S. Core Data for Interoperability) v7 and Standards Bulletin 26-2.  The bulletin introduces 31 new data elements and two new data classes intended to strengthen support for patient safety, nutrition care, and the reduction of administrative burden.  Learn more about the new bulletin from this announcement and from the new standards bulletin.
  • CMS has announced that enforcement efforts by its “Medicaid Fraud War Room” stopped more than $203 million in potentially improper Medicaid payments in just under 90 days.  Since its launch on April 23, the program has coordinated actions against 50 high-risk Medicaid providers identified through advanced data analytics.  Learn more from this CMS news release.

Department of Health and Human Services (HHS)

  • HHS’s Health Resources and Services Administration (HRSA) has asked the Office of Management and Budget (OMB) for permission to introduce a new form to collect organizational National Provider Identifiers (Type 2 NPIs) and CMS Certification Numbers (CCNs) from organizations that apply for HRSA award funding through Grants.gov.  The form will be completed as part of the funding application.  This collection is limited to organizational identifiers and will collect NPIs and/or CCNs only from organizations that already have them.  Learn more about the data HRSA seeks and why it seeks it from this formal notice.  The deadline for submitting comments about the proposed data collection is September 28.
  • HHS’s Substance Abuse and Mental Health Services Administration (SAMHSA) has released the results of its 2025 National Survey on Drug Use and Health, its primary source of data on how Americans report their experience with mental health conditions, substance use and addiction, pursuit of treatment, and recovery status.  This year’s survey includes five years of data that documents trends in selected substance use and mental health outcomes.  The major categories in which SAMHSA presents its findings are declines and increases in the prevalence of various behaviors, including mental health; substance use; suicidal thoughts and behaviors; non-suicidal self-harm; substance use treatment services; mental health treatment services; and recovery.  Learn more about the survey and what it revealed from this SAMHSA news release and from the report itself.
  • In letters to organizations previously awarded grants, HHS’s Agency for Healthcare Quality and Research (AHRQ) informs those recipients that it is not providing continued funding for their projects, citing changes in the agency’s priorities.  Learn more about those new priorities and the termination of grants from these partially redacted sample letters from the AHRQ to organizations previously awarded grants.

Consumer Product Safety Commission

Without regulations – and possibly in violation of federal privacy laws that prohibit the sharing of some patient information – the Consumer Product Safety Commission (CPSC) is seeking to require some hospitals to participate in its National Electronic Injury Surveillance System (NEISS), the nation’s principal system for tracking consumer product-related injuries.  Currently relying on manual review and coding of medical records from roughly 70 of the nation’s more than 5,000 hospital emergency departments, the agency seeks to expand its surveillance network across all 50 states and to about 100 hospitals and health systems.  Under the program, the updated NEISS-R will exchange data with participating hospitals through federally designated Qualified Health Information Networks, searching for accident-related diagnosis codes.  The CPSC contractor managing this program is corresponding with selected hospitals about participating in the program and its letters to those hospitals state that participation is mandatory.  Learn more from this CPSC news release and a sample letter sent by the agency’s contractor to a hospital.

Medicaid State Plan Amendments

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

  • Alaska, updating the wholesale acquisition cost rate for out-of-state providers
  • Alaska, updating the effective dates of several Medicaid services
  • Arizona, updating the state’s outpatient differential adjusted payment methodology
  • Arkansas, adding doula services and breastfeeding and lactation consultant services
  • Colorado, reducing the payment percentage for 340B drugs paid through the outpatient hospital payment program
  • Colorado, authorizing payments for community health workers
  • Georgia, aligning the state with federal school-based services guidance
  • Massachusetts, updating the payment methodology for the Children’s Behavioral Health Initiative and other services
  • New Jersey, adding community palliative care services to the preventive services benefit
  • Minnesota, implementing reimbursement for long-term ambulatory electrocardiogram monitoring services
  • New York, providing for mandatory Medicaid services for eligible juveniles leaving incarceration
  • New York, increasing future annual funding for nursing homes
  • North Dakota, updating reimbursement methodologies for prescribed drugs
  • Ohio, updating cooperative arrangements with the Opportunities for Ohioans with Disabilities Agency and the Ohio Department of Developmental Disabilities
  • Ohio, increasing payment rates for pregnancy and prenatal services and authorizing other services
  • Vermont, affirming Vermont’s compliance with Section 5121 of the Consolidated Appropriations Act of 2023
  • Wisconsin, modifying the maximum amount allowed for the maintenance of a home of institutionalized beneficiaries

Health Policy Newsletters, Reports, and Videos

Centers for Disease Control and Prevention (CDC)

The CDC reported an expansion of the cyclosporiasis outbreak, now reaching nine states:  Illinois, Indiana, Kansas, Kentucky, Michigan, Ohio, Oklahoma, Pennsylvania, and West Virginia.  The CDC reports 1,947 cases, 98 hospitalizations, and no deaths since July 24.  For more information, see the CDC’s food safety alert here.

Medicaid and CHIP Payment and Access Commission (MACPAC)

MACPAC has released an issue brief titled “State Medicaid Enterprise Systems” examining how information technology supports key Medicaid program functions and outlining the spending, oversight, and operational challenges facing Medicaid enterprise systems.  For more information, see the publication here.

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.

CMS – Advisory Panel on Hospital Outpatient Payment – August 24

CMS’s Advisory Panel on Hospital Outpatient Payment will meet virtually on Monday, August 24 at 9:30 (eastern).  The purpose of this panel is to advise CMS on the clinical integrity of the Ambulatory Payment Classification groups and their associated weights, which are major elements of the Medicare hospital outpatient prospective payment system and the ambulatory surgical center payment system and supervision of hospital outpatient therapeutic services.  Interested parties are invited to submit comment letters and presentations.  Learn more about submitting such materials and how to participate in the meeting from this CMS notice.

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.