/ en Tue, 29 Jul 2025 23:18:12 -0500 Mon, 28 Jul 25 15:43:12 -0500 /action-alert/2025-07-28-take-action-engage-lawmakers-august-build-support-key-priorities <div class="container"><div class="row"><div class="col-md-8"><p>The House of Representatives has left Washington, D.C., for its August district work period, and senators could return to their states as early as next week. It is important to engage with your lawmakers while they are home and discuss the impact that the recently passed One Big Beautiful Bill Act and additional policy proposals that are under consideration will have on hospitals’ ability to provide care.</p><p>Funding for the federal government, including certain important health care programs, is set to expire Oct. 1. Congress must pass all 12 appropriations bills by Sept. 30 to fund the federal government for the next fiscal year. If lawmakers fail to meet that deadline, they will need to enact a continuing resolution temporarily extending current funding levels to avoid a government shutdown. However, these health care programs including Low-volume Adjustment and Medicare-Dependent Hospital, telehealth and hospital-at-home waivers — as well as prolonging Medicaid DSH cuts from going into effect — are not guaranteed to be extended. Additionally, Congress needs to act before the end of the year to extend the Enhanced Premium Tax Credits. Meanwhile, some legislators are discussing another reconciliation package on deficit reduction efforts. Those efforts could include additional Medicaid and Medicare cuts. It is important that your legislators understand hospitals and health systems cannot sustain any additional cuts, especially as we are facing the implementation of Medicaid cuts in the <a href="/advisory/2025-07-18-detailed-summary-one-big-beautiful-bill-act-obbba-public-law-no-119-21">OBBBA</a>.</p><p>While your lawmakers are home next month, please make plans to visit them in their offices, speak with them at a community event or invite them to your hospital to show them the importance of supporting policies that allow hospitals to provide care to their communities. And share with them the impact that funding reductions would have on your ability to provide services and care for the people they represent.</p><p>The following are some of the top priority issues and resources that can assist you and your team in conversations with your lawmakers.</p><h2>Advocacy Priorities</h2><ul><li><strong>Extend the </strong><a href="/fact-sheets/2025-02-07-fact-sheet-enhanced-premium-tax-credits"><strong>Enhanced Premium Tax Credits</strong></a><strong>.</strong> The Enhanced Premium Tax Credits help individuals and families purchase insurance on the Health Insurance Marketplaces. Policies enabling these credits will expire at the end of 2025. Urge your members of Congress to extend the enhanced premium tax credits that enable millions of people to have health care coverage.</li><li><strong>Reject </strong><a href="/advocacy/advocacy-issues/2023-09-11-advocacy-issue-site-neutral-payment-proposals"><strong>Site-neutral Payments</strong></a><strong>.</strong> Site-neutral payments would compensate hospital outpatient departments the same as independent physician offices and other ambulatory sites of care, ignoring the very different level of care provided by hospitals and the needs of the patients and communities cared for in that setting. Ask your members of Congress to reject efforts to enact additional site-neutral payments proposals.</li><li><strong>Protect the </strong><a href="/fact-sheets/fact-sheet-340b-drug-pricing-program"><strong>340B Drug Pricing Program</strong></a><strong>.</strong> Hospitals depend on the 340B program to manage rising prescription drug costs and expand access to care for patients. Ask your members of Congress to oppose any harmful changes to the 340B program.</li><li><strong>Extend </strong><a href="/fact-sheets/2025-02-07-fact-sheet-telehealth"><strong>Telehealth</strong></a><strong> and </strong><a href="/fact-sheets/2024-08-06-fact-sheet-extending-hospital-home-program"><strong>Hospital-at-home</strong></a><strong> Programs.</strong> These programs enable providers to care for patients at home, without having to make long drives to a facility. These programs are set to expire Sept. 30. Urge your lawmakers to extend these programs so providers can ensure continuity of care.</li><li><strong>Prevent </strong><a href="/advocacy/advocacy-issues/medicaid-dsh-payment-cuts"><strong>Medicaid Disproportionate Share Hospital</strong></a><strong> Cuts.</strong> The Medicaid DSH program provides essential financial assistance to hospitals that care for our nation’s most vulnerable populations, including children and those who are disabled and elderly. The Medicaid DSH cut for fiscal year 2026 is $8 billion and will go into effect on Oct. 1 unless Congress acts. Urge your lawmakers to provide relief from the Medicaid DSH cuts given the vital need for the program.</li><li><strong>Extend the </strong><a href="/advocacy/advocacy-issues/2024-10-31-advocacy-issue-rural-mdh-and-lva-programs"><strong>Low-volume Adjustment and Medicare-dependent Hospital</strong></a><strong> Programs.</strong> The enhanced low-volume adjustment and Medicare-dependent hospital programs provide rural, geographically isolated and low-volume hospitals additional financial support to ensure rural residents have access to care. Without action from Congress, the enhanced LVA and MDH programs will expire Sept. 30. Urge your lawmakers to extend these vital programs.</li><li><strong>Protect </strong><a href="/fact-sheets/2023-04-19-fact-sheet-workplace-violence-and-intimidation-and-need-federal-legislative-response"><strong>Health Care Workers</strong></a><strong> from Violence.</strong> The Save Healthcare Workers Act (H.R. 3178/S. 1600) is bipartisan legislation (that would make it a federal crime to assault a hospital staff member on the job. Urge your lawmakers to support this legislation.</li></ul><h2>AHA Resources</h2><p>Your voice is extremely important and your legislators listen to you. Be ready to tell your hospital’s story. Prepare for a successful encounter with these <a href="/advocacy/2023-03-07-advocacy-tips-and-best-practices">tips and best practices</a> for meeting with lawmakers and hosting them at your hospital. Visit the <a href="/advocacy/action-center">AHA Action Center</a> for information and resources to assist you in your advocacy.</p><h2>Further Questions</h2><p>If you have further questions, please contact the AHA at <a href="tel:1-800-424-4301">800-424-4301</a>.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/07/Action-Alert-TAKE-ACTION-Engage-Lawmakers-in-August-to-Build-Support-for-Key-Priorities.pdf" target="_blank" title="Click here to download the Action Alert: TAKE ACTION: Engage Lawmakers in August to Build Support for Key Priorities"><img src="/sites/default/files/inline-images/Page-1-Action-Alert-TAKE-ACTION-Engage-Lawmakers-in-August-to-Build-Support-for-Key-Priorities.png" data-entity-uuid="f8d7fe18-60fc-49cc-9704-cacdc239ac3a" data-entity-type="file" alt="Action Alert: TAKE ACTION: Engage Lawmakers in August to Build Support for Key Priorities page 1." width="695" height="900"></a></div></div></div> Mon, 28 Jul 2025 15:43:12 -0500 Medicare /advisory/2025-07-28-hospital-outpatient-ambulatory-surgical-center-proposed-rule-cy-2026 <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 17 published its calendar year (CY) 2026 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) <a href="https://www.federalregister.gov/documents/2025/07/17/2025-13360/medicare-and-medicaid-programs-hospital-outpatient-prospective-payment-and-ambulatory-surgical" target="_blank" title="CY 2026 outpatient prospective payment system (OPPS) and ambulatory surgical center (ASC) proposed rule.">proposed rule</a>. The rule would increase OPPS rates by a net 2.4% in CY 2026 compared to CY 2025. It also includes proposals to pay at the site-neutral rate for drug administration services in grandfathered off-campus hospital outpatient departments (HOPDs), phase out the inpatient-only (IPO) list, expedite the 340B remedy timeline for repayment for non-drug services and conduct a new drug acquisition cost survey, and modify the price transparency requirements for hospitals.</p><div><h2 id="keyhighlights">Key Highlights</h2><p>CMS’ proposed policies would:</p><ul><li>Increase Medicare hospital OPPS rates by a net 2.4% in CY 2026.</li><li>Pay for drug administration services in grandfathered off-campus HOPDs at the site-neutral rate of 40% of the OPPS rate and request comment on expanding site-neutral payment to on-campus clinic visits and other grandfathered off-campus services.</li><li>Phase out the IPO list over three years, starting with removing 285 musculoskeletal services in 2026.</li><li>Expedite the 340B remedy timeline for repayment of $7.8 billion for non-drug services through a 2% annual cut to the OPPS conversion factor (CF), concluding by CY 2031.</li><li>Permanently revise the definition of direct supervision for cardiac rehabilitation (CR), intensive cardiac rehabilitation (ICR) and pulmonary rehabilitation (PR) services and diagnostic services in HOPDs to include virtual direct supervision.</li><li>Remove three measures on health equity and one on COVID-19 vaccination among health care personnel from the Outpatient, ASC and Rural Emergency Hospital (REH) quality reporting programs.</li><li>Adopt a new ED timeliness measure for the Outpatient and REH quality reporting programs and a new patient-reported outcome measure for the ASC program.</li><li>Change the methodology for the Overall Hospital Star Rating to emphasize Safety of Care measures.</li><li>Make several changes to the hospital price transparency requirements, including to data elements of the machine-readable file, the attestation requirements and the enforcement process.</li><li>Collect market-based payment rate data on the Medicare cost report for purposes of setting the inpatient PPS relative weights beginning in FY 2029.</li></ul></div><p>The final rule will be published on or around Nov. 1 and provisions generally take effect Jan. 1, 2026. CMS will accept comments on the proposed rule through Sept. 15, 2025.</p><h2 id="ahatake">AHA Take</h2><p>The AHA is disappointed that CMS proposes an inadequate Medicare outpatient hospital payment update, as many hospitals — especially those in rural and underserved communities — operate under challenging financial pressures.</p><p>We oppose the proposal to expand “site-neutral” cuts and eliminate the inpatient-only list, as both policies fail to account for the real and crucial differences between hospital outpatient departments and other sites of care. Studies show hospital outpatient departments are more likely to serve Medicare patients who are sicker, more clinically complex, and more likely to be disabled or living in poorer, rural communities than patients treated in independent physician offices.</p><p>We are also concerned with CMS’ proposal to claw back billions of dollars from hospitals at a far faster rate than originally promised. It is important to remember that this clawback punishes 340B hospitals for the agency’s own mistake in implementing a policy that a unanimous Supreme Court held to be unlawful. Doubling down on that unlawfulness, the proposed recoupment is both illegal and unwise, and it should not be finalized.</p><p>Finally, we are concerned about the proposal to pursue a burdensome acquisition cost survey, especially if the agency’s goal is to drastically reduce Medicare payments to hospitals that serve the nation’s most vulnerable communities.</p><p>We look forward to reviewing these proposals in more detail and participating in the comment process with the agency.</p><h2 id="whatyoucando">What You Can Do</h2><ul><li><strong>Participate in an AHA members-only webinar on Thursday, Aug. 7, at 3 p.m. ET</strong> to share your questions and feedback on this regulation for AHA’s comment letter to CMS. <a href="https://aha-org.zoom.us/webinar/register/WN_59Aqo3t6QQm_hIfNApweCg" target="_blank">Register for this 60-minute webinar.</a></li><li><strong>Share this advisory with your senior management team</strong> and ask your chief financial officer to examine the impact of the proposed payment changes on your Medicare revenue for CY 2026. Spreadsheets comparing the proposed changes in the ambulatory payment classification (APC) payment rates and weights from 2025 to 2026 are available on the <a href="/topics/outpatient-pps">AHA’s OPPS webpage</a>. To access these, you must be logged on to the website.</li><li><strong>Share this advisory with your billing, medical records, quality improvement and compliance departments and your clinical leadership team</strong> to apprise them of the proposals around the APCs, CoPs and quality measurement requirements.</li><li><strong>Submit comments to CMS with your specific concerns by Sept. 15 at </strong><a href="http://www.regulations.gov/" target="_blank"><strong>www.regulations.gov</strong></a><strong>.</strong></li></ul><hr><h2>Table of Contents</h2><p><a href="#keyhighlights">KEY HIGHLIGHTS</a></p><p><a href="#ahatake">AHA TAKE</a></p><p><a href="#whatyoucando">WHAT YOU CAN DO</a></p><p><a href="#rulechanges">CY 2026 OPPS PROPOSED RULE CHANGES</a></p><p class="toc-indent"><a href="#oppspaymentupdate">OPPS Payment Update and Linkage to Hospital Quality Data Reporting</a></p><p class="toc-indent"><a href="#oppspaymentupdate"></a><a href="#dataproposed">Data Proposed for Use in CY 2026 OPPS/ASC Rate Setting</a></p><p class="toc-indent"><a href="#proposedrecalibration">Proposed Recalibration and Scaling of APC Relative Weights</a></p><p class="toc-indent"><a href="#proposedsiteneutral">Proposed Site-neutral Payment Policies for Off-campus Provider-based Departments</a></p><p class="toc-indent"><a href="#paymentsfordrugs">Payments for Drugs, Biologicals and Radiopharmaceuticals</a></p><p class="toc-indent"><a href="#proposaltoexpedit">Proposal to Expedite Recoupment Timeline Under 340B Remedy Rule</a></p><p class="toc-indent"><a href="#hospitaldrugacquisition">Hospital Drug Acquisition Cost Survey</a></p><p class="toc-indent"><a href="#addonpayment">Add-on Payment for Radiopharmaceutical Technetium-99m</a></p><p class="toc-indent"><a href="#paymentforintensive">Payment for Intensive Outpatient and Partial Hospitalization Programs</a></p><p class="toc-indent"><a href="#areawageindex">Area Wage Index</a></p><p class="toc-indent"><a href="#ruralschadjustment">Rural SCH Adjustment</a></p><p class="toc-indent"><a href="#cancerhospital">Cancer Hospital Payment Adjustment</a></p><p class="toc-indent"><a href="#comprensiveapcs">Comprehensive APCs</a></p><p class="toc-indent"><a href="#rfi">RFI: Payment Policy for Software as a Service</a></p><p class="toc-indent"><a href="#virtualdirect">Virtual Direct Supervision of Certain Rehabilitation and Diagnostic Services Furnished to Hospital Outpatients</a></p><p class="toc-indent"><a href="#proposedelimination">Proposed Elimination of the IPO List</a></p><p class="toc-indent"><a href="#proposednonopioid">Proposed Non-opioid Policy for Pain Relief Under the OPPS and ASC Payment System</a></p><p class="toc-indent"><a href="#paymentforskin">Payment for Skin Substitute Products Under the OPPS</a></p><p class="toc-indent"><a href="#hospitaloutpatientoutlier">Hospital Outpatient Outlier Payments</a></p><p class="toc-indent"><a href="#transitionalpassthrough">Transitional Pass-through Payments</a></p><p class="toc-indent"><a href="#beneficiarycoinsurance">Beneficiary Coinsurance</a></p><p class="toc-indent"><a href="#outpatientquality">Outpatient Quality Reporting Program</a></p><p><a href="#cy2026asc">CY 2026 ASC PROPOSED RULE CHANGES</a></p><p class="toc-indent"><a href="#ascpaymentupdate">ASC Payment Update</a></p><p class="toc-indent"><a href="#proposedchangestothelist">Proposed Changes to the List of ASC-covered Surgical Procedures</a></p><p class="toc-indent"><a href="#ascqualityreporting">ASC Quality Reporting Program</a></p><p><a href="#otherqualityrelated">OTHER QUALITY-RELATED PROPOSALS</a></p><p class="toc-indent"><a href="#proposedmodifications">Proposed Modifications to the Overall Star Rating Methodology to Emphasize Safety of Care</a></p><p class="toc-indent"><a href="#rehquality">REH Quality Reporting Program</a></p><p><a href="#otherproposals">OTHER PROPOSALS</a></p><p class="toc-indent"><a href="#marketbasedweights">Market-based Weights for the Inpatient PPS</a></p><p class="toc-indent"><a href="#changestothehospitalprice">Changes to the Hospital Price Transparency Requirements</a></p><p class="toc-indent"><a href="#medicarepartbdrugs">Medicare Part B Drugs Without a Medicaid National Drug Rebate Agreement</a></p><p class="toc-indent"><a href="#graduatemedicaleducation">Graduate Medical Education Accreditation</a></p><p class="toc-indent"><a href="#allinclusive">All-inclusive Rate Add-on Payment for High-Cost Drugs Provided by Indian Health Services and Tribal Facilities</a></p><p><a href="#furtherquestions">FURTHER QUESTIONS</a></p><hr><h2 id="rulechanges">CY 2026 OPPS Proposed Rule Changes</h2><h3 id="oppspaymentupdate">OPPS Payment Update and Linkage to Hospital Quality Data Reporting</h3><p>The CY 2025 OPPS conversion factor is $89.169. To calculate the proposed conversion factor for CY 2026, CMS adjusted the 2025 conversion factor by the fee schedule increase factor and made further adjustments for various budget neutrality factors. The fee schedule increase factor equals the proposed hospital market-basket increase factor of 3.2%, reduced by a statutorily required productivity adjustment that CMS proposes at 0.8 percentage points, for a net 2.4% increase. Hospitals that do not meet outpatient quality reporting (OQR) program requirements are subject to a reduction of 2.0 percentage points, resulting in a proposed fee schedule increase factor of 0.4%. In addition, the agency notes that under its 340B remedy offset proposal (described further below), payments for services at hospitals subject to the 340B remedy offset will be reduced by 2.0 percentage points, resulting in a CY 2026 estimated reduction in OPPS spending $1.1 billion. Thus, the proposed CY 2026 OPPS conversion factor is $91.747 for hospitals meeting OQR requirements and $89.958 for hospitals not meeting OQR requirements.</p><p>The increase in federal spending due only to changes in the 2026 OPPS proposed rule is estimated to be approximately $1.61 billion or 2.0%. CMS also estimates spending increases taking into account estimated changes in enrollment, utilization and case mix; under this, for 2026, it estimates that such OPPS expenditures, including beneficiary-cost sharing, would be approximately $100 billion, which is approximately $8.1 billion higher than estimated expenditures in 2025. The table below details the full impact of the proposed policies.</p><table><thead><tr><th>All Hospitals</th><th>2.0%</th></tr></thead><tbody><tr><td>Urban Hospitals</td><td>2.0%</td></tr><tr><td>Large Urban</td><td>1.9%</td></tr><tr><td>Other Urban</td><td>2.2%</td></tr><tr><td>Rural</td><td>2.0%</td></tr><tr><td>Sole Community</td><td>2.2%</td></tr><tr><td>Other Rural</td><td>1.5%</td></tr></tbody></table><hr><h3 id="dataproposed">Data Proposed for Use in CY 2026 OPPS/ASC Rate Setting</h3><p>To set proposed OPPS and ASC payment rates, CMS would use the most updated cost reports and claims data available. Therefore, the agency proposes using the CY 2024 claims data and the most updated cost report extract available from the Healthcare Cost Report Information System.</p><h3 id="proposedrecalibration">Proposed Recalibration and Scaling of APC Relative Weights</h3><p>For 2026, CMS proposes recalibrating the APC relative weights using hospital claims for services furnished during CY 2024. As in previous years, the agency standardizes all relative payment weights to the APC 5012 (Level 2 Examinations and Related Services) because that is the APC to which Healthcare Common Procedure Coding System (HCPCS) code G0463 (hospital outpatient clinic visit) is assigned. G0463 is the most frequently billed OPPS service. That is, CMS calculates an “unscaled” — i.e., not adjusted for budget neutrality — relative payment weight by comparing the geometric mean cost of each APC to the geometric mean cost of the APC 5012.</p><p>To comply with budget neutrality requirements, CMS compares the estimated unscaled relative payment weights in CY 2026 to the estimated total relative payment weights in CY 2025 using the service volume in the CY 2023 claims data. Based on this comparison, the CY 2026 unscaled APC payment weights are proposed to be adjusted by a weight scalar of 1.4624. The effect of the adjustment is to increase the unscaled relative weights by about 46.24% to ensure that the CY 2026 relative payment weights are budget neutral.</p><h3 id="proposedsiteneutral">Proposed Site-neutral Payment Policies for Off-campus Provider-based Departments</h3><h4>Background</h4><p>Section 603 of the Bipartisan Budget Act of 2015 requires that services, except for dedicated emergency department (ED) services, furnished in off-campus provider-based departments (PBDs) that began billing under the OPPS on or after Nov. 2, 2015, or that cannot meet the 21st Century Cures Act "mid-build" exception, will no longer be paid under the OPPS, but under another applicable Part B payment system. For 2026, the agency continues to identify the Physician Fee Schedule (PFS) as the applicable payment system for most of these non-grandfathered (non-excepted) services and sets this site-neutral payment rate at 40% of the OPPS rate.</p><p>In the CY 2019 OPPS/ASC final rule, CMS applied a previously unused statutory authority to develop a “method to control for unnecessary increases in the volume of outpatient services.” Under this method, CMS pays the site-neutral rate for clinic visit services furnished in off-campus PBDs that had previously been protected from site-neutral provisions under the Bipartisan Budget Act of 2015. For CY 2026, CMS will continue to pay for hospital outpatient clinic visit services furnished in grandfathered (excepted) off-campus PBDs at 40% of the OPPS payment amount. It also will continue to exempt excepted off-campus PBDs of rural sole community hospitals (SCHs) from this clinic visit payment policy.</p><h4>Proposed Use of the “Method to Control Unnecessary Increases in the Volume of Outpatient Services” to Establish Site-neutral Payment for Drug Administration Services in Grandfathered (Excepted) Off-campus PBDs</h4><p>CMS claims that financial incentives continue to drive service volume increases in HOPDs, particularly for drug administration services, leading to “unnecessary” Medicare spending and higher out-of-pocket costs for beneficiaries. The agency attributes this trend to site-of-service payment disparities and hospital acquisitions of physician practices, which enable billing at higher hospital-based rates.</p><p><strong>Therefore, starting in CY 2026, CMS proposes to again use the statutory authority described above to impose a site-neutral payment reduction. Under its proposal, it would pay the site-neutral rate of 40% of the OPPS rate for drug administration procedures furnished in grandfathered (excepted) off-campus PBDs. In addition, it discusses its interest in assessing additional service families for site-neutral payment, such as imaging without contrast, in future rulemaking.</strong></p><p>Consistent with its previous decision to exempt rural SCHs from site-neutral clinic visit payment policies, CMS also proposes to exempt rural SCHs from its proposed drug administration site-neutral policy. It bases this exemption on the unique challenges faced by rural SCHs, such as limited access to care, higher costs and the fact that they are often the sole outpatient provider in their communities. CMS notes that rural SCHs have not shown evidence of unnecessary volume increases for drug administration services and that applying lower PFS-equivalent rates could harm access. The exemption would maintain current full OPPS payment levels for drug administration services in grandfathered (excepted) rural SCHs, avoiding an estimated $16 million in savings that would result from implementing the policy without the exemption. CMS requests comments on this proposed exemption for rural SCHs, its potential impact and whether other hospital types should also be considered for similar exemptions.</p><p>The drug administration APCs to which this policy would apply are:</p><ul><li>APC 5691 (Level 1 Drug Administration).</li><li>APC 5692 (Level 2 Drug Administration).</li><li>APC 5693 (Level 3 Drug Administration).</li><li>APC 5694 (Level 4 Drug Administration).</li></ul><p>There are currently 61 HCPCS codes describing various drug administration procedures that map to the four APCs above. Once again, the site-neutral payment rate proposed by CMS would be 40% of the OPPS payment rate.</p><p><strong>As in CY 2019, CMS again proposes to implement this payment reduction in a non-budget-neutral manner. As such, the agency estimates that the proposal will reduce hospital payments by $280 million in CY 2026 and $10.88 billion over 10 years (CY 2026 to CY 2035).</strong></p><p>A summary of CMS’ rationale for this proposal follows.</p><h5>Utilization of Drug Administration Services</h5><p>CMS reports it has observed a significant increase in the volume of drug administration services provided in HOPDs, particularly at grandfathered (excepted) off-campus PBDs, which the agency claims is driven in part by the large payment differentials between HOPDs and physician offices. It claims that drug administration services can be safely performed in both settings, but notes that services have increasingly migrated to the HOPD setting. CMS therefore believes that applying its volume control methodology to drug administration services will curb unnecessary growth, improve efficiency and reduce beneficiary financial burden.</p><h5>Payment for Drug Administration Services at PBDs</h5><p>CMS analyzed claims data for the top 20 most frequently billed drug administration codes and found that the most commonly used codes are nearly identical, with only slight variations in the order based on volume between grandfathered (excepted) and non-grandfathered (non-excepted) off-campus PBDs. CMS argues that this suggests the lower site-neutral payment rate is sufficient and can support the provision of these services in an off-campus PBD.</p><p>The agency also compared PFS and OPPS payment rates for drug administration by creating a “PFS proxy” APC payment rate for each of the four drug administration APCs and found that the volume-weighted PFS payment for the drug administration APCs ranged from 24% to 33% of the OPPS payment. CMS concludes that this difference in payments creates financial incentives that unnecessarily shift services from lower-cost physician offices to higher-cost hospital outpatient settings. CMS asserts that such migration is unjustified when services can be safely delivered in less expensive settings and views the continued growth in OPPS drug administration volume as unnecessary and driven by payment incentives.</p><p>Finally, it notes that if the PFS payment rate for drug administration services ranges from 24% to 33% of the OPPS rate, then a site-neutral rate set at 40% of the OPPS amount should sufficiently cover the cost of these services. CMS concludes that the shift of services from the physician office to the HOPD is unnecessary if the beneficiary can safely receive the same services in a lower-cost setting but is instead receiving services in the higher-cost setting due to payment incentives.</p><h5>Patient Severity and Cost of Care</h5><p>In response to its previous rulemaking, CMS reports that some commenters argued that higher payments for services in HOPDs are justified due to the greater complexity of patients, higher operational costs, and the need to maintain emergency and standby capabilities. While CMS acknowledges that HOPDs serve more medically complex patients, it nevertheless does not support higher payments for services that it believes can also be safely and effectively provided in lower-cost settings, like physician offices and ASCs. CMS cites studies that it asserts demonstrate no quality differences in services delivered across these settings. Finally, while CMS acknowledges that HOPD patients have higher risk scores than in other settings, it argues that patient severity does not meaningfully affect the cost of care for low-complexity services such as drug administration.</p><h4>Request for Information (RFI): Expanding the Method to Control for Unnecessary Increases in the Volume of Covered HOPD Services to On-campus Clinic Visits</h4><p>CMS requests comments on whether its current site-neutral payment policy should be expanded to include on-campus clinic visits. The agency notes that over 60% of clinic visits still occur on campus and remain unaffected by its site-neutral payment policy. It believes clinic visits, which are the most commonly billed OPPS service, can often be safely performed in lower-cost settings such as physician offices, and seeks input on whether paying on-campus clinic visits at 40% of the OPPS rate would be appropriate. The agency also invites feedback on how to distinguish necessary from unnecessary clinic visits, the potential impact of this policy on hospitals (including rural and other specific hospital types), the implications for patient access and out-of-pocket costs, and whether additional costs justify higher payments for on-campus clinic visits. CMS indicates that these comments will inform future rulemaking efforts on this topic.</p><h4>RFI: Adjusting Payment Under the OPPS for Services Predominately Performed in the ASC or Physician Office Settings</h4><p>CMS is requesting feedback on potential payment reforms for OPPS services that are predominantly performed in lower-cost settings such as ASCs or physician offices. The agency notes that despite its efforts, it continues to observe growth in HOPD service volumes that it believes are influenced by financial differentials. Therefore, it is exploring a more systematic approach to adjusting payments based on where services are most frequently performed. The agency seeks input on a range of issues, including identifying services with unnecessary volume growth, using setting-specific volume to inform payment levels, determining appropriate data timeframes and sources, accounting for the geographic availability of care and addressing packaging differences across payment systems. CMS also asks whether exceptions should be made for services tied to emergency or trauma care, whether certain hospital types (e.g., rural hospitals) should be excluded, and whether other utilization controls, such as prior authorization, should be considered.</p><h3 id="paymentsfordrugs">Payments for Drugs, Biologicals and Radiopharmaceuticals</h3><h4>Proposed Packaging Policy for “Threshold-packaged” and “Policy-packaged” Drugs, Biologicals and Radiopharmaceuticals</h4><p>CMS pays for drugs, biologicals and radiopharmaceuticals that do not have pass-through status in one of two ways: packaged payment or separate payment (individual APCs). For CY 2026, CMS proposes to maintain the packaging threshold for “threshold-packaged” drugs, including non-implantable biologicals and therapeutic radiopharmaceuticals, of $140 per day. This means that such products with a per-day cost of $140 or less would have their cost packaged in the procedure with which they are billed.</p><p>There are exceptions to this threshold-based packaging policy for certain “policy-packaged” drugs, biologicals and contrast agents. CMS proposes to continue to package the costs of all anesthesia drugs; intraoperative items and services; drugs, biologicals and contrast agents and other drugs that function as supplies when used in a diagnostic test or procedure; and drugs and biologicals that function as supplies when used in a surgical procedure (e.g., skin substitutes), regardless of whether they meet the $140 per day threshold.</p><h4>Diagnostic Radiopharmaceuticals Separate Payment</h4><p>In the CY 2025 final rule, CMS established a policy to pay separately for diagnostic radiopharmaceuticals with per-day costs above a threshold of $630 — which was approximately two times the volume-weighted average cost amount then associated with diagnostic radiopharmaceuticals. It also finalized a policy to update the $630 threshold in subsequent years by the Producer Price Index for Pharmaceutical Preparations.</p><p>Using this methodology, CMS proposes setting the packaging threshold for diagnostic radiopharmaceuticals at $655 per day for CY 2026 and proposes to pay for diagnostic radiopharmaceuticals with a per-day cost above this threshold based on their Mean Unit Cost derived from OPPS claims data. In the proposed rule, the agency again encourages manufacturers to begin or continue reporting average sales price (ASP) data for potential future use.</p><h4>Separately Payable Drugs and Biologicals</h4><p>For CY 2026, CMS proposes to continue its current policy and pay for most separately payable non-pass-through Part B drugs and biologicals at the “statutory default rate” of ASP plus 6%.</p><h4>Payment for New Drugs Before ASP Data Is Available</h4><p>Consistent with policy in the PFS, CMS proposes to continue to pay for new non-pass-through Part B drugs and biologicals during an initial sales period (two quarters) for which ASP pricing data are not yet available at a rate of wholesale acquisition cost (WAC) plus 3%. Other drugs and biologicals where ASP data are not available will continue to be paid at WAC plus 6%, as required by statute. If ASP and WAC are unavailable, Medicare will pay 95% of the average wholesale price.</p><h4>Invoice Drug Pricing Proposal for CY 2026</h4><p>In the CY 2025 OPPS final rule, CMS finalized a policy, effective Jan. 1, 2026, for determining payment rates for separately payable drugs and biologicals when standard pricing data (such as ASP, WAC, average wholesale price or mean unit cost) is unavailable.</p><p>Under this policy, if a drug does not appear in Addendum B (meaning there is no CMS-provided rate), Medicare Administrative Contractors (MACs) will calculate payment based on provider invoice costs, defined as the net acquisition cost after subtracting rebates, chargebacks and post-sale concessions. Before setting a payment rate using invoices, MACs must verify that the drug is not policy-packaged and the per-day cost exceeds the applicable packaging threshold. However, CMS clarified that it, not the MACs, will determine whether the drug is policy-packaged, while MACs will still assess whether the per-day cost exceeds the threshold.</p><p>For drugs subject to ASP reporting, invoice pricing is expected to be temporary (lasting 2-3 quarters). For drugs not subject to ASP reporting (e.g., diagnostic pharmaceuticals), invoice pricing may be used for a longer duration. CMS also noted that the National Uniform Billing Committee has created Value Code 92 to facilitate reporting of drug invoice costs on hospital claims, aligning with this new invoice-based pricing policy.</p><h3 id="proposaltoexpedit">Proposal to Expedite Recoupment Timeline Under 340B Remedy Rule</h3><p>Beginning in CY 2018 through CY 2022, CMS instituted a policy to reduce payments for certain providers for separately payable Part B drugs purchased under the 340B Drug Pricing Program from ASP plus 6% to ASP minus 22.5%. Due to budget neutrality requirements, this nearly 30% payment cut was offset by increasing payments for non-drug services to all hospitals paid under the OPPS by 3.19%. Upon successful litigation led by the AHA, the Supreme Court unanimously ruled that the agency’s policy was unlawful. The agency subsequently finalized a remedy that would repay 340B hospitals in one-time lump sum payments totaling $10.6 billion, as well as seek recoupment of $7.8 billion in funds from all hospitals for the increased payments received for non-drug services. The intended goal was to undo the unlawful policy and restore all providers to the same position as if the policy had never been in place. The agency had finalized a recoupment strategy that would reduce the OPPS conversion factor by 0.5% annually beginning in CY 2026 until the full $7.8 billion was recouped, which was estimated to occur in CY 2041.</p><p>CMS is now proposing to expedite the timeline for this recoupment by adjusting the reduction in the OPPS conversion factor from 0.5% to 2%. As a result, the agency estimates that it will recoup the entire $7.8 billion by CY 2031, or about six years. <strong>Under this approach, the agency estimates an impact of $1.1 billion in reduced payments to all OPPS hospitals in CY 2026.</strong> The agency’s stated rationale for a shorter recoupment timeline is to minimize the impact of potential changes in non-drug services over time and ensure a more equitable impact on all hospitals. Specifically, CMS states “…the longer it takes for us to fully recover the $7.8 billion, the less likely that the relative burden on hospitals from the adjustments will match the relevant benefits those hospitals previously received.” Further, the agency notes that it will not seek any interest or account for any inflation on the $7.8 billion to be recouped.</p><p>CMS also noted that it is considering an alternative proposal that would expedite the timeline even further by adjusting the reduction in the OPPS conversion factor to 5% which would result in the full $7.8 billion being recouped in approximately three years. <strong>Under this approach, the agency estimates an impact of $2.7 billion in reduced payments to all OPPS hospitals in CY 2026.</strong></p><p>The agency also notes that the ASC standard rate setting methodology adopts OPPS payment rates for the device offset amount. Therefore, any changes to the OPPS conversion factor can have an indirect impact on ASC payment rates. To mitigate this impact, the agency proposes not applying any changes to the OPPS conversion factor to the ASC payment system for the device offset amount, as it would not accurately reflect the device costs of covered surgical procedures performed in the ASC setting.</p><h3 id="hospitaldrugacquisition">Hospital Drug Acquisition Cost Survey</h3><p>CMS announced a notice of intent to conduct an acquisition cost survey of all hospitals for covered outpatient drugs. This follows an April 18 Executive Order by President Trump (E.O. 14273), “Lowering Drug Prices by Once Again Putting Americans First,” that directed the HHS secretary to publish in the Federal Register a plan to conduct a hospital acquisition cost survey for covered outpatient drugs. The survey is anticipated to go live starting the end of CY 2025, and responses will be collected into early CY 2026. Results of the survey will be used to set payment rates for covered outpatient drugs in the CY 2027 rulemaking.</p><p>The survey will ask hospitals to report, by individual National Drug Code (NDC), the total number of units purchased and the total acquisition costs net of all rebates (including prompt pay discounts, wholesaler discounts, etc.). For 340B hospitals, the agency wants a separate accounting of the total number of units and total acquisition costs purchased under the 340B program and outside of the 340B program. CMS also stated that it will release the list of NDCs that will be included in the survey in advance of the survey going live. The agency estimates it will take 73.5 hours for a hospital to complete the survey at a cost of approximately $4,000 per hospital.</p><p>The agency is also considering various approaches to account for hospital non-responses to the survey to meet the statutory requirement of a large enough sample size and statistically significant results for its usability in setting and varying payment rates among hospitals. The agency outlines two primary reasons why hospitals may not respond to the survey: 1) because the hospital has minimal acquisition costs, or 2) because the hospital has lower acquisition costs than other hospitals, so it is “withholding its response strategically.” As a result, the agency lays out various options it could use to estimate acquisition costs for a non-responding hospital:</p><ol><li>Assume the lowest average acquisition cost reported by a similar responding hospital.</li><li>Use supplemental data sources such as pricing from the Federal Supply Schedule (FSS) or, for 340B drugs, use 340B ceiling price data from HRSA.</li><li>Apply a percentage of the drug’s ASP (e.g., ASP plus 0%) as the average acquisition cost for each NDC for a non-responding hospital.</li><li>Determine that for certain hospitals, drugs should be packaged as part of an Ambulatory Payment Classification (APC) rather than paid separately. This assumes that a hospital's non-response means it has minimal acquisition costs for certain drugs and could support viewing those drug costs as ancillary or supportive.</li></ol><p>The agency is specifically seeking comments on these and other possible methodologies to interpret hospital non-responses to the survey for the purpose of setting payment rates in future rulemaking.</p><h3 id="addonpayment">Add-on Payment for Radiopharmaceutical Technetium-99m</h3><p>Radioisotopes are widely used in modern medical imaging, particularly for cardiac imaging and predominantly for the Medicare population. Technetium-99m (Tc-99m), the radioisotope used in most of such diagnostic imaging services, is produced through the radioactive decay of molybdenum-99 (Mo-99). The United States makes-up roughly half of the global demand for Mo-99. However, 100% of this radioisotope is produced outside of the United States.</p><p>In the CY 2025 OPPS final rule, CMS noted that the Department of Energy had raised concerns about an issue affecting the domestic supply chain for Mo-99 and Tc-99 that, left unaddressed, could cause payment inequity among outpatient hospital providers. That is, foreign Mo-99 production has historically been subsidized by foreign governments, resulting in prices below the true cost of production. These artificially low, foreign government-subsidized prices have created a disincentive for domestic investments in Mo-99 production infrastructure and a barrier to entry for new producers, including U.S. companies, which in turn has resulted in unreliable production and periodic shortages. Unlike many foreign producers, U.S. companies must price their products high enough to cover the full cost of operating their production facilities. Based in part on these differences in pricing models, U.S. companies have experienced challenges in competing with foreign producers for customers in the past.</p><p>As a result, in the CY 2025 final rule, CMS addressed this payment inequity by establishing a new add-on payment, starting Jan. 1, 2026, of $10 per dose for radiopharmaceuticals that use Tc-99m derived from domestically produced Mo-99. While CMS recognizes that there may not be domestic production of Mo-99 and Tc-99m in CY 2026, it believes it is better to have a regulatory framework for this policy in place for when domestic production of Tc-99m radiopharmaceuticals begins. This is because providers will be knowledgeable about the availability of additional payments for domestically sourced Tc-99m radiopharmaceuticals, and producers of domestic Mo-99 will have certainty that the Medicare OPPS payment policy takes into account the additional costs of domestic production of Mo-99.</p><p>To qualify for this add-on payment, at least 50% of the Mo-99 used in the Tc-99m generator that produces a dose of Tc-99m must be domestically produced. CMS proposes to adopt criteria for “domestically produced Mo-99” developed by the Department of Energy’s National Nuclear Security Administration.</p><p>The agency further proposes establishing a new HCPCS C-code C917X to identify Tc-99m from domestically produced non-Highly Enriched Uranium Mo-99. CMS notes that it expects that hospitals requesting this additional payment will perform standard due diligence to ensure that their claims are supported by internal records, such as payment certification and tracking.</p><h3 id="paymentforintensive">Payment for Intensive Outpatient and Partial Hospitalization Programs</h3><p>Intensive Outpatient Programs (IOP) and Partial Hospitalization Programs (PHP) are distinct outpatient behavioral health treatment programs that involve several hours of hospital-based psychiatric and substance use treatment services without inpatient admission. In the CY 2024 OPPS final rule, CMS established regulatory requirements to implement a new Medicare benefit category for IOP services as directed by the Consolidated Appropriations Act of 2023. Beginning Jan. 1, 2024, CMS established distinct PHP and IOP APC per diem rates, differentiating hospital-based programs and programs delivered by Community Mental Health Centers (CMHCs). Payment rates are based on the geometric mean per diem costs of a service day consisting of either four or more services or three services or fewer. For further details on this methodology, see AHA’s CY 2024 OPPS Final Rule <a href="/advisory/2023-11-17-hospital-outpatient-ambulatory-surgical-center-final-rule-cy-2024">Regulatory Advisory</a>.</p><p>In this rule, CMS proposes payment updates for both hospital-based IOP and PHP based on methodologies established in previous rulemaking. For CY 2026, CMS proposes to continue to use the latest available cost information and CY 2024 OPPS claims to update the payment rates for the APCs finalized in last year’s rule.</p><p>The agency also proposes revising the methodology for calculating IOP and PHP rates for CMHCs, specifically by applying the 40% Medicare PFS Relativity Adjuster. Under this methodology, CMS would establish CMHC IOP and PHP APC payment rates at 40% of the rates for hospital-based IOP and PHP APCs. The agency believes this process would align with that used for other grandfathered (nonexcepted) OPPS services furnished by nonexcepted off-campus HOPDs (i.e., the application of the Medicare PFS Relativity Adjuster) and reflect the differences between PHP and IOP costs in the hospital and CMHC settings. CMS would use the same calculations for CMHC outlier policies as previously finalized.</p><p>The table below shows the proposed APCs and calculated geometric mean per diem costs for CY 2026; this data will be used to inform payment rates and copayments in the final rule.</p><h3>Proposed CY 2026 IOP Geometric Mean Per Diem Costs</h3><table><thead><tr><th>CY 2025 APCs</th><th>Group Title</th><th>Geometric Mean Per Diem Costs</th></tr></thead><tbody><tr><td>5851</td><td>Intensive Outpatient (3 services) for CMHCs</td><td>$136.36</td></tr><tr><td>5852</td><td>Intensive Outpatient (4 or more services) for CMHCs</td><td>$169.84</td></tr><tr><td>5861</td><td>Intensive Outpatient (3 services) for Hospital-based IOPs</td><td>$340.90</td></tr><tr><td>5862</td><td>Intensive Outpatient (4 or more services) for Hospital-based IOPs</td><td>$424.60</td></tr><tr><td>5853</td><td>Partial Hospitalization (3 services) for CMHCs</td><td>$136.36</td></tr><tr><td>5854</td><td>Partial Hospitalization (4 or more services) for CMHCs</td><td>$169.84</td></tr><tr><td>5863</td><td>Partial Hospitalization (3 services) for Hospital-based PHPs</td><td>$340.90</td></tr><tr><td>5864</td><td>Partial Hospitalization (4 or more services) for Hospital-based PHPs</td><td>$424.60</td></tr></tbody></table><hr><h3 id="areawageindex">Area Wage Index</h3><p>The area wage index adjusts payments to reflect differences in labor costs across geographic areas. For CY 2026, CMS proposes to continue its policy of applying a 60% labor-related share to determine hospital outpatient payments.</p><p>In addition, as it has done in previous years, CMS proposes to adopt the final fiscal year (FY) inpatient PPS post-reclassified wage index as the calendar year wage index for the OPPS. Thus, any policies or adjustments finalized in the FY 2026 inpatient PPS final rule would be reflected in the final CY 2026 OPPS wage index. For example, consistent with the FY 2026 inpatient PPS proposed rule, CMS is proposing to discontinue the low-wage index hospital policy under the OPPS for CY 2026 and subsequent years.</p><p>For hospitals paid under the OPPS but not the inpatient PPS, CMS proposes to continue its longstanding policy to assign the wage index that would be applicable if the hospital were paid under the inpatient PPS, based on its geographic location and any applicable wage index adjustments.</p><p>For more information on proposed wage index policies for 2025, see the AHA FY 2026 inpatient PPS proposed rule <a href="/advisory/2025-05-07-inpatient-pps-proposed-rule-fy-2026">Regulatory Advisory</a>.</p><h3 id="ruralschadjustment">Rural SCH Adjustment</h3><p>CMS proposes to continue increasing payments to rural SCHs, including essential access community hospitals, by 7.1% for all services paid under the OPPS, except for separately payable drugs and biologicals, brachytherapy sources, items paid at charges reduced to costs, and devices paid under the pass-through payment policy. The adjustment is budget neutral to the OPPS and applied before calculating outliers and coinsurance.</p><h3 id="cancerhospital">Cancer Hospital Payment Adjustment</h3><p>For CY 2026, CMS proposes to continue to provide additional payments to cancer hospitals so that a cancer hospital’s payment-to-cost ratio (PCR) after the additional payments is equal to the weighted average PCR for the other OPPS hospitals — the target PCR. The change in these additional payments from year to year is budget-neutral.</p><p>For CY 2026, CMS proposes a target PCR of 0.87, the same PCR as non-cancer hospitals using the most recently submitted or settled cost report data, to determine the CY 2026 cancer hospital payment adjustment to be paid at cost report settlement. That is, the payment adjustments would be the additional payments needed to result in a PCR equal to 0.87 for each cancer hospital. Table 7 in the proposed rule shows the estimated hospital-specific payment adjustment for each of the 11 dedicated cancer centers, with increases in OPPS payments for 2026 ranging from 11.9% to 51.6%.</p><h3 id="comprensiveapcs">Comprehensive APCs</h3><p>There are currently 72 comprehensive APCs (C-APCs) that package an expanded number of related items and services on the same claim into a single payment for a comprehensive primary service under the OPPS. Each year, CMS reviews and revises the services within each APC group and the APC assignments under the OPPS.</p><p>After its annual review, CMS does not propose to convert any additional standard APCs to C-APCs in CY 2026. Thus, it proposes that the number of C-APCs for CY 2026 would remain at 72. These 72 C-APCs are listed in Table 2 in the proposed rule and displayed in Addendum J to the proposed rule (available on the CMS website).</p><p>For CY 2026, CMS requests comments regarding making refinements to the current C-APC complexity adjustment criteria. Specifically, CMS seeks feedback on the expansion of code combinations for complexity adjustments and the identification of clinically appropriate service pairings or clusters that are not currently included in complexity adjustment determinations. If there is an expansion of the complexity adjustment criteria, CMS also seeks comments specific to the cost and frequency thresholds in identifying code clusters that accurately reflect complexity and resource consumption code combinations routinely performed in hospital outpatient departments.</p><h4>Exclusion of Cell and Gene Therapies from C-APC Packaging</h4><p>CMS considers all items and services reported on a C-APC claim as integral, ancillary, supportive, dependent, and adjunctive to the primary service, and representative of the comprehensive service components.</p><p>CMS finalized a proposal for CY 2025 and subsequent years to exclude specific cell and gene therapies from C-APC packaging when those therapies are not functioning as integral, ancillary, supportive, dependent, or adjunctive to the primary C-APC service. As such, CMS continues to propose adding product-specific HCPCS codes as they are developed to the C-APC exclusion list. The current list of qualifying cell and gene therapy products is reflected in Table 1 in the proposed rule. The complete list of proposed exclusion categories is available as part of Addendum J with this proposed rule.</p><h3 id="rfi">RFI: Payment Policy for Software as a Service</h3><p>In the proposed rule, CMS issues an RFI on payment policies related to Software as a Service (Saas). The agency acknowledges that technology continues to evolve with the integration of new software-based technologies, like artificial intelligence in outpatient and physician settings. Historically, SaaS services were considered ancillary services, and payment was included in the underlying clinical service. Recently, CMS paid separately for SaaS outpatient services through New Technology APCs, although the payment methodology has not been standardized.</p><p>Based on stakeholder interest in more consistent payment options, the agency seeks feedback on payment policies for SaaS. Specifically, CMS requests comments on the factors for consideration when setting SaaS payment rates, how the agency should assess SaaS costs, data sources, and how CMS can best assess the quality and efficacy of SaaS technologies. CMS issued a similar request for information in the CY 2026 Physician Fee Schedule proposed rule.</p><h3 id="virtualdirect">Virtual Direct Supervision of Certain Rehabilitation and Diagnostic Services Furnished to Hospital Outpatients</h3><p>In CY 2025, CMS extended virtual supervision flexibilities for cardiac rehabilitation, intensive cardiac rehabilitation services and pulmonary rehabilitation services and diagnostic services. Specifically, it allowed direct supervision to be furnished via two-way, audio/visual communication technology (excluding audio only) for these services. In this rule, CMS proposes to extend these virtual supervision flexibilities for OPPS <em>permanently.</em></p><h3 id="proposedelimination">Proposed Elimination of the IPO List</h3><p>The IPO list was created to identify services for which Medicare will make payment only when furnished in the inpatient hospital setting because of the invasive nature of the procedures, the underlying physical condition of the Medicare patient, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged.</p><p><strong>For CY 2026 and subsequent years, CMS proposes to eliminate the IPO list in a 3-year transition, completing the elimination by Jan. 1, 2029.</strong> While in previous rulemakings, it agreed with commenters that the IPO list was necessary, it has now reconsidered comments from interested parties requesting that the IPO list be eliminated. CMS states that it no longer believes there is a need for the IPO list to identify services that require inpatient care. The agency agrees with past commenters’ views that a physician should use his or her clinical knowledge and judgment, together with consideration of the beneficiary’s specific needs, to determine whether a procedure can be performed appropriately in a HOPD or whether inpatient care is required, subject to the general coverage rules requiring that any procedure be reasonable and necessary. CMS also notes that this change would ensure maximum availability of services to beneficiaries in the outpatient setting.</p><p>Currently, there are 1,731 procedures/services included on the IPO list. <strong>The phase-out of the IPO list over three years would begin in CY 2026 with the removal of 285 services, mostly musculoskeletal, but also including 16 non-musculoskeletal services spanning cardiovascular, lymphatic, digestive, gynecological and endovascular procedures.</strong> Table 69 in the proposed rule presents the complete list of 285 services, including the CPT/HCPCS code, descriptors, proposed payment indicators, and APC. With this proposal, CMS further proposes establishing a 7-level Musculoskeletal Procedures APC series, allowing for the assignment of musculoskeletal procedures removed from the IPO list to an APC with a relevant range of estimated costs.</p><p>Additional related proposals upon which CMS solicits comments include:</p><ul><li>The elimination of the criteria used to determine whether procedures should be removed from the IPO list.</li><li>Whether three years is an appropriate timeframe for the transition.</li><li>Whether there are other services that CMS should consider for removal from the IPO list in the near term.</li><li>Whether to restructure or create any new APCs or C-APCs to allow for OPPS payment for services removed from the IPO list.</li></ul><h4>Effects on Beneficiary Cost Sharing</h4><p>CMS acknowledges stakeholder concerns that removing procedures from the IPO list and allowing them to be performed in outpatient settings under the OPPS could increase financial burdens for Medicare beneficiaries, particularly for complex services. Under current law, cost-sharing for each individual OPPS service (defined as a single APC) is capped at the Part A inpatient deductible for that year. However, some stakeholders have expressed concerns that if a beneficiary receives multiple separately payable outpatient services, the combined cost-sharing could exceed what would have been incurred had the care been provided in an inpatient setting.</p><p>In response, CMS notes that procedures removed from the IPO list are typically surgical and, when paid under OPPS, are usually assigned to a C-APC. This means they are treated as a single episode of care with one payment and one copayment, rather than generating multiple copayments for individual services. As a result, in most cases, beneficiaries should not face multiple copayments, and the inpatient deductible cap would apply to the overall claim.</p><h4>Two-midnight Rule Medical Review Activities Exemptions</h4><p>CMS proposes to continue its existing policy, which indefinitely exempts procedures removed from the IPO list from certain medical review activities related to the two-midnight policy. Per this policy, procedures removed from the IPO list are exempted from site-of-service claim denials and Beneficiary and Family-Centered Care Quality Improvement Organization referrals to Recovery Audit Contractors for noncompliance with the two-midnight rule, and RAC reviews of “patient status” (i.e., site-of-service). This exemption, which began in 2021, would remain in place for each procedure until the secretary determines it is more commonly performed in the outpatient setting than the inpatient setting. CMS is also seeking feedback on whether alternative exemption periods would be more appropriate.</p><p>CMS clarifies that while initial medical review contractors may still review these claims to educate providers, they would not deny claims based on noncompliance with site-of-service requirements under Medicare Part A. In addition, despite pausing some review activities, contractors will continue to respond to beneficiary quality-of-care complaints and assess the medical necessity of services, with the authority to deny claims if the service is found to be unreasonable or not medically necessary.</p><p>CMS believes that its enhanced ability to monitor outpatient safety and care quality supports the continuation of this exemption and is unlikely to negatively impact patient outcomes, but it invites public comments on any potential effects of eliminating the IPO list.</p><h3 id="proposednonopioid">Proposed Non-opioid Policy for Pain Relief Under the OPPS and ASC Payment System</h3><p>The Consolidated Appropriations Act of 2023 requires CMS to unpackage and provide separate payments for three years, beginning Jan. 1, 2025, for non-opioid treatments for pain relief. A non-opioid treatment for pain relief is defined as having “demonstrated the ability to replace, reduce, or avoid intraoperative or postoperative opioid use or the quantity of opioids prescribed in a clinical trial or through data published in a peer-reviewed journal.”</p><p>The agency proposes continuing the policies it finalized in the CY 2025 OPPS to provide temporary additional payments for certain non-opioid treatments for pain relief in the HOPD and ASC settings, without modification, through Dec. 31, 2027, consistent with statute.</p><p>CMS proposes that five drugs and six devices, listed in Table 82 in the proposed rule, would qualify as non-opioid treatments for pain relief. These products would be paid separately in both the HOPD and ASC settings. CMS requests comments and supporting documentation from interested parties on additional products that may qualify for separate payment under this provision.</p><h3 id="paymentforskin">Payment for Skin Substitute Products Under the OPPS</h3><p>Starting in CY 2026, CMS proposes to pay separately for certain groups of skin substitute products as supplies when they are used during a covered application procedure paid under the PFS in the non-facility setting or under the OPPS.</p><p>This proposal includes grouping skin substitutes that are not drugs or biologicals using three Food and Drug Administration (FDA) regulatory categories (PMAs, 510(k)s, and 361 HCT/Ps) to set payment rates. To accomplish this categorization and incorporation into OPPS payment policy, CMS proposes to create three new APCs for HCPCS codes describing skin substitute products organized by clinical and resource similarity and by their FDA regulatory pathway. CMS proposes an initial payment rate of $125.38 for each of the new proposed APCs.</p><p>The proposed APCs are:</p><ul><li>APC 6000 (PMA Skin Substitute Products).</li><li>APC 6001 (510(k) Skin Substitute Products).</li><li>APC 6002 (361 HCT/P Skin Substitute Products).</li></ul><h3 id="hospitaloutpatientoutlier">Hospital Outpatient Outlier Payments</h3><p>Outlier payments are added to the APC amount to mitigate hospital losses when treating high-cost cases. CMS again proposes establishing separate thresholds for hospitals and CMHCs. For CY 2026, CMS proposes setting the projected target for outlier payments at 1% of total OPPS payments. The agency proposes to allocate 0.01% of outlier payments to CMHCs for PHP and IOP outlier payments.</p><p>CMS continues to include both a fixed-dollar and a percentage outlier threshold. In CY 2026, it proposes to decrease the fixed-dollar threshold for outliers to $6,450 from $7,175 for CY 2025 to ensure that outlier spending does not exceed the outlier target.</p><p>Thus, to be eligible for an outlier payment in CY 2026, the cost of a hospital outpatient service would have to exceed 1.75 times the APC payment amount (the percentage threshold) and be at least $6,450 more than the APC payment amount. When the cost of a hospital outpatient service exceeds these applicable thresholds, Medicare would make an outlier payment that is 50% of the amount by which the cost of furnishing the service exceeds 1.75 times the APC payment rate.</p><h3 id="transitionalpassthrough">Transitional Pass-through Payments</h3><p>Congress created temporary additional, or “transitional pass-through payments,” for certain innovative medical devices, drugs and biologicals to ensure that Medicare beneficiaries have access to new technologies in outpatient care. For CY 2026, CMS projects that pass-through payments will be 0.59% of total OPPS payments (approximately $100 billion), or $587 million. This includes $571.8 million in pass-through payments for devices and $15.2 million for drugs and biologicals. These payments are implemented in a budget-neutral manner.</p><h3 id="beneficiarycoinsurance">Beneficiary Coinsurance</h3><p>Medicare law provides that the minimum coinsurance is 20% of the OPPS payment amount. The statute also limits a beneficiary’s actual cost-sharing amount for a service to the inpatient hospital deductible for the applicable year, which is yet to be determined for FY 2026. CMS estimates that the aggregate beneficiary coinsurance percentage will be 18.0% for all services paid under the OPPS in CY 2026.</p><h3 id="outpatientquality">Outpatient Quality Reporting Program</h3><p>CMS proposes several updates to the measure set used in the OQR, including the removal of four measures, the replacement of two measures with one new measure, and the modification of one measure to extend voluntary reporting. The table below summarizes finalized and proposed measures for the OQR Measure Set for the CYs 2026-2028 reporting periods, including each measure’s Consensus Based Entity (CBE) identifier (if the measure has been endorsed by a CBE).</p><h3>OQR Measures by Reporting Period</h3><table><thead><tr><th>Measure Name</th><th>CBE #</th><th>CY 2026</th><th>CY 2027</th><th>CY 2028</th></tr></thead><tbody><tr><td>OP-8: MRI Lumbar Spine for Low Back Pain</td><td>Endorsement Removed</td><td>X</td><td>Z</td><td> </td></tr><tr><td>OP-10: Abdomen CT – Use of Contrast Material</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-13: Cardiac Imaging for Preoperative Risk Assessment for Non-Cardiac, Low-Risk Surgery</td><td>Endorsement Removed</td><td>X</td><td>Z</td><td> </td></tr><tr><td>OP-18: Median Time from ED Arrival to ED Departure for Discharged ED Patients</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>OP-22: Left Without Being Seen</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>OP-23: Head CT or MRI Scan Results for Acute Ischemic Stroke or Hemorrhagic Stroke who Received Heat CT or MRI Scan Interpretation within 45 Minutes of ED Arrival</td><td>0661</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-29: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients</td><td>0658</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-31: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery</td><td>1536</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>OP-32: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy</td><td>2539</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-35: Admissions and ED Visits for Patients Receiving Outpatient Chemotherapy</td><td>3490</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-36: Hospital Visits after Outpatient Surgery</td><td>2687</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-37: OAS CAHPSa-e (five individual measures)</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-38: COVID-19 Vaccination Coverage Among Health Care Personnel</td><td>3636</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>OP-39: Breast Cancer Screening Recall Rates</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>OP-40: ST-Segment Elevation Myocardial Infarction (STEMI) eCQM</td><td>None</td><td>X</td><td>X</td></tr><tr><td>Risk-standardized Patient-reported Outcomes Following Elective Primary Total Hip and/or Total Knee Arthroplasty</td><td>None</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>Excessive Radiation Dose or Inadequate Image Quality for Diagnostic Computed Tomography (CT) in Adults</td><td>3663e</td><td>X*</td><td>X**</td><td>X**</td></tr><tr><td>Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery PRO-PM</td><td>4210</td><td>X*</td><td>X</td><td>X</td></tr><tr><td>Hospital Commitment to Health Equity</td><td>None</td><td>Y</td><td>Y</td><td>Z</td></tr><tr><td>Screening for Social Drivers of Health (SDOH)</td><td>None</td><td>Y</td><td>Y</td><td>Z</td></tr><tr><td>Screen Positive Rate for SDOH</td><td>None</td><td>Y</td><td>Y</td><td>Z</td></tr><tr><td>Emergency Care Access & Timeliness</td><td>4625e</td><td> </td><td>Y*</td><td>Y</td></tr></tbody></table><p>X= Measure currently included in OQR</p><p>Y=Measure proposed for adoption</p><p>*=Voluntary reporting</p><p>**=Proposed for voluntary reporting</p><p>Z=Proposed for removal</p><hr><h4>Proposed Measure Removals</h4><p>CMS proposes to remove six measures from the OQR. Each of these measures, its proposed timeline for removal, and CMS’ rationale for its removal is listed below.</p><h5>COVID-19 Vaccination Coverage Among Healthcare Personnel</h5><p>CMS proposes to remove this measure beginning with the CY 2024 reporting period/CY 2026 payment determination. The measure was adopted in the CY 2022 OPPS/ASC final rule. Citing the end of the COVID-19 public health emergency as well as the decreasing number of deaths from the condition, CMS believes the costs and burdens of reporting this measure outweigh the benefits of its continued use in the program. If finalized, hospitals that did not report their CY 2024 reporting period data for this measure would not be penalized in the CY 2026 payment determination.</p><h5>Hospital Commitment to Health Equity</h5><p>CMS proposes to remove this measure beginning with the CY 2025 reporting period. The measure was adopted in the CY 2025 OPPS/ASC final rule. Citing the agency’s priority to re-focus quality reporting programs on measurable clinical outcomes as well as identifying quality measures on topics of prevention, nutrition and well-being, CMS believes that this structural measure results in more burden for hospitals than benefit. If finalized, hospitals that do not report their CY 2025 reporting period data would not be penalized in the CY 2027 payment determination.</p><h5>Screening for and Screen Positive Rate for SDOH</h5><p>CMS proposes to remove these two measures beginning with the CY 2025 reporting period. The measures were adopted in the CY 2025 OPPS/ASC final rule. Data collection for these measures was scheduled to begin voluntarily in 2025 and mandatory in 2026. However, citing the high costs of manual screening processes, data storage, staff training and workflow alterations, as well as the questionable usefulness of aggregated results gleaned by the measures, CMS believes the burdens associated with them outweigh their benefit. If finalized, hospitals would not be required to collect or submit data for these measures.</p><h5>Median Time for Discharged ED Patients and Left Without Being Seen</h5><p>CMS proposes to remove these two measures beginning with the CY 2028 reporting period. As described in the next section, the numerators overlap with those included in the proposed Emergency Care Access & Timeliness measure and would thus be duplicative. In addition, these two measures are informed by chart abstraction, which CMS believes is more burdensome than the proposed eCQM.</p><h4>Proposed Adoption of the Emergency Care Access & Timeliness eCQM</h4><p>CMS proposes to adopt this measure related to ED throughput into the OQR beginning with voluntary reporting in CY 2027 and mandatory reporting in CY 2028 and beyond. An eCQM, the measure is informed by data extracted electronically from the hospital’s EHR.</p><p>The measure calculates the proportion of all ED encounters during a 12-month period where the patient experiences any one of the following:</p><ol><li>Waited more than one hour after arrival in the ED to be placed in a treatment room/area for evaluation.</li><li>Left the ED without being evaluated.</li><li>Boarded in the ED for longer than four hours, as defined by the time between the Decision to Admit order and ED Departure for admitted patients, excluding encounters with ED observation stays.</li><li>Had an ED length of stay longer than eight hours, as defined by the time from ED arrival to ED physical departure, excluding encounters with ED observation stays.</li></ol><p>Raw measure scores are standardized by ED case volume using z-scores; this process provides a comparison to the average for EDs with similar volumes (in strata of 20,000 ED visits). For CMS Certification Numbers with more than one ED, the adjusted scores are combined as a weighted average. Results are stratified into four groups based on age (18 years and older, under 18 years) and whether or not the patient received a principal diagnosis of mental illness (not including substance use disorder diagnoses).</p><p>The measure received conditional endorsement by a CBE in February 2025. The conditions included monitoring of outcomes by the measure developer within three years, such as unintended consequences to patients and providers, and identification of data elements that may address challenges with the measure.</p><h4>Proposed Modification of Excess Radiation Dose eCQM</h4><p>CMS proposes extending the voluntary reporting period for this measure indefinitely. The measure was originally adopted in the CY 2024 OPPS/ASC final rule, beginning with voluntary reporting in CY 2025 and mandatory reporting beginning in CY 2027. CMS makes this proposal in response to concerns from the field about the financial burden and operational infeasibility of translating CT radiology data into standardized eCQM-consumable data for the measure.</p><h4>Proposed Extraordinary Circumstances Exception (ECE) Policy Updates</h4><p>CMS can grant exceptions to data submission deadlines and requirements for quality reporting programs in the event of extraordinary circumstances beyond the control of the facility (hospital, REH or ASC), such as natural disasters. In this rule, CMS proposes to update regulations to specify that the agency can provide an extension of time to comply with data reporting requirements as part of an ECE. Under this proposal, a facility may request an ECE within 30 calendar days of the date of the extraordinary circumstance; this is a change from the current 90-day window for these programs. Additionally, CMS proposes to be able to grant an ECE to facilities that have not requested one if the agency determines that either a systemic CMS problem or an extraordinary circumstance has affected an entire region or locale.</p><h4>RFI: Measure Concepts Under Consideration for Future Years — Well-Being and Nutrition</h4><p>CMS seeks comments on tools and measures that assess overall health, happiness, and satisfaction in life, and optimal nutrition and preventive care. The agency intends to use this input to inform future measure development efforts.</p><h2 id="cy2026asc">CY 2026 ASC Proposed Rule Changes</h2><h3 id="ascpaymentupdate">ASC Payment Update</h3><p>For CYs 2019 through 2023, CMS adopted a policy to update the ASC payment system using the hospital market basket. In light of the impact of the COVID-19 public health emergency on health care utilization, the agency extended this policy through CYs 2024 and 2025. In this proposed rule, the agency proposes extending the utilization of the hospital market basket update as the update factor for the ASC payment system for one additional year, through CY 2026.</p><p>As such, CMS proposes to increase payment rates by 2.4% for ASCs that meet the quality reporting requirements under the ASC QRP. ASCs that fail to meet their quality reporting requirements would have a 2.0 percentage point reduction to this market basket update for CY 2026, resulting in a 0.4% update. The proposed CY 2026 ASC conversion factor is $56.207 for ASCs that successfully meet the quality reporting requirements. For ASCs not meeting quality reporting requirements, CMS proposes a conversion factor of $55.109.</p><h3 id="proposedchangestothelist">Proposed Changes to the List of ASC-covered Surgical Procedures</h3><p>CMS proposes revising the regulatory criteria used to evaluate potential additions to the ASC covered procedures list (CPL). This would include modifying the general standard criteria and eliminating five of the general exclusion criteria and instead moving them into a new section as nonbinding physician considerations for patient safety.</p><p>Utilizing these revised criteria, CMS proposes adding, beginning in CY 2026, 276 procedure codes spanning the musculoskeletal, respiratory, cardiovascular, digestive, genitourinary, endocrine and nervous systems to the ASC CPL. It would also add an additional 271 procedure codes to the ASC CPL that are proposed for removal from the IPO list for CY 2026. These codes, including their long descriptors and proposed payment indicator assignments, are listed in Tables 80 and 81 with this proposed rule.</p><h3 id="ascqualityreporting">ASC Quality Reporting Program</h3><p>CMS proposes adopting the same three health equity-focused measures in the ASCQR as proposed for the OQR and adopting one new measure. In addition, CMS issues a RFI on the development of new frameworks for quality reporting in ASCs.</p><p>The table below summarizes finalized measures for the ASCQR Measure Set for the CY 2025-CY 2026 payment determinations, including each measure’s CBE identifier (if the measure has been endorsed by a CBE).</p><h3>Proposed and Finalized ASCQR Measures by Reporting Year</h3><table><thead><tr><th>Measure Name</th><th>CBE #</th><th>CY 2026</th><th>CY 2027</th><th>CY 2028</th></tr></thead><tbody><tr><td>ASC-1: Patient Burn</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-2: Patient Fall</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-3: Wrong Site, Wrong Side, Wrong Patient, Wrong Procedure, Wrong Implant</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC- 4: All-Cause Hospital Transfer/Admission</td><td>Endorsement Removed</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-9: Endoscopy/Polyp Surveillance: Appropriate Follow-Up Interval for Normal Colonoscopy in Average Risk Patients</td><td>0658</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-11: Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery</td><td>Endorsement Removed</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>ASC-12: Facility 7-Day Risk-Standardized Hospital Visit Rate after Outpatient Colonoscopy</td><td>2539</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-13: Normothermia Outcome</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-14: Unplanned Anterior Vitrectomy</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-15a-e: OAS CAHPS (five individual measures)</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-17: Hospital Visits after Orthopedic ASC Procedures</td><td>3470</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-18: Hospital Visits after Urology ASC Procedures</td><td>3366</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-19: Facility-Level 7-Day Hospital Visits after General Surgery Procedures Performed at ASCs</td><td>3357</td><td>X</td><td>X</td><td>X</td></tr><tr><td>ASC-20: COVID-19 Vaccination Coverage Among Health Care Personnel</td><td>3636</td><td>X</td><td>X</td><td>Z</td></tr><tr><td>Risk-Standardized PRO-PM Following Elective THA/TKA in the ASC</td><td>None</td><td>X*</td><td>X*</td><td>X*</td></tr><tr><td>Facility Commitment to Health Equity</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Screening for Social Drivers of Health</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Screen Positive Rate for Social Drivers of Health</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery</td><td>4210</td><td> </td><td>Y*</td><td>Y*</td></tr></tbody></table><p>X= Measure included</p><p>Y= Measure proposed for adoption</p><p>Z= Measure proposed for removal</p><p>*=Voluntary reporting</p><hr><h4>Proposed Measure Removals</h4><p>CMS proposes to remove the same three health equity-related measures from the ASCQR as proposed for the OQR. Beginning with the CY 2025 reporting period, CMS would no longer use the Facility Commitment to Health Equity, Screening for SDOH, and Screen Positive Rate for SDOH measures. The proposals are identical to those for the OQR (see above).</p><h4>Proposed Adoption of the Patient Understanding of Key Information Related to Recovery After a Facility-Based Outpatient Procedure or Surgery Patient Reported Outcome-Based Performance Measure</h4><p>CMS proposes to adopt this patient-reported outcome measure with voluntary reporting in CY 2027 and CY 2028 and mandatory reporting beginning in CY 2029. The measure was adopted for the OQR in the CY 2025 OPPS/ASC final rule.</p><p>The measure reports the average score of a patient’s ratings on a three-domain, nine-item post-operative survey regarding the clarity of clinical information given before, during, and after an outpatient surgery or procedure. The domains include:</p><ol><li>Applicability to patient needs: whether the information the patient received about their recovery considered their health needs, such as medical conditions, and personal situation, such as transportation needs and financial status (on a scale of yes, somewhat, or no).</li><li>Medications: how clear the information the patient received about their recovery was regarding the purpose, potential side effects, and course of new medications (on a scale of very, somewhat, or not clear or does not apply).</li><li>Daily activities: how clear the information the patient received about their recovery was regarding changes to diet and physical activities, when they could return to work, and when they could drive (on a scale of very, somewhat, or not clear or does not apply).</li></ol><p>Data would be collected via web-based (email or text message) survey administered two to seven days after the surgery or procedure; patients would have 65 days to respond for responses to be considered valid. CMS notes that ASCs could administer the survey directly or work with authorized third-party vendors, although the survey is currently specified to be anonymous. CMS acknowledges the issues with anonymous surveys, including limited ability to follow up and potentially necessitating the use of a third-party vendor. The measure has been tested in English and Spanish and was endorsed by the CBE in 2024.</p><p>ASCs would submit their data in aggregate numerators and denominators by May 15 of the year prior to the applicable payment determination year in CMS’ online system. ASCs would be required to collect at least 200 completed surveys to ensure measure reliability; if the ASC is unable to do so, it would be required to submit data on survey responses from all completed surveys received. If the ASC has a large patient population and anticipates collecting more than 200 completed surveys, it would be allowed to perform random sampling of its patient population to administer the survey; otherwise, ASCs would be required to offer all patients meeting the measure’s denominator specifications the opportunity to complete the survey.</p><h2 id="otherqualityrelated">Other Quality-Related Proposals</h2><h3 id="proposedmodifications">Proposed Modifications to the Overall Star Rating Methodology to Emphasize Safety of Care</h3><p>To calculate a hospital’s Overall Star Rating, CMS uses hospital performance on measures in five categories: Safety, Mortality, Readmissions, Patient Experience, and Timely & Effective Care. To have a score calculated for each category (or “group”), a hospital must report at least three measures in that category; in addition, to have an Overall Star Rating, a hospital must report at least three measures in either the Safety or Mortality group. For details on how the Overall Star Ratings are calculated, see AHA’s 2022 <a href="/2022-07-13-hospital-star-ratings-details-help-you-prepare-july-update?check_logged_in=1">Member Advisory</a>.</p><p>In the CY 2025 OPPS/ASC proposed rule, CMS requested feedback on how it could more heavily emphasize the Safety measure group.</p><p>Based on analysis of the July 2024 calculation of Overall Star Ratings, CMS found that there was generally a strong relationship between hospital performance on measures in the Safety group and the hospital’s Overall Star Rating (i.e., hospitals that had good scores on measures related to patient safety tended to also have higher star ratings, and vice versa). However, the agency found that a small number of hospitals (14, or 0.5 percent of all rated hospitals) had scores in the bottom quartile of performance on Safety measures and still received the highest Overall Star Rating of five stars. CMS interprets this information to mean that it is possible for a hospital to be rated highly while delivering unsafe patient care and thus believes that a methodological change to increase the importance of the Safety measure group is appropriate.</p><p>To address this issue, CMS proposes making methodological updates to the Star Ratings in two phases. First, in 2026, CMS would limit hospitals in the lowest quartile of scores in the Safety group that were eligible to receive a score for that group (that is, hospitals that reported at least three measures in that group) to a maximum of 4 stars. Using this cap on stars as a transition to a permanent change, CMS would implement a blanket reduction in score of 1 star for hospitals in the lowest quartile of scores in the Safety group that were eligible to receive a score beginning in 2027. The minimum possible Overall Hospital Star Rating would remain one star.</p><p>Based on a simulation using 2024 data, just 14 hospitals would be affected by the first stage of the methodological change (cap on Stars), while 459 hospitals (out of 2,847 receiving a Star Rating) would be affected by the second stage (blanket 1-Star reduction). According to CMS’ analysis, affected hospitals would more likely be urban, large (more than 100 beds), and non-specialty; this follows the methodology for the Overall Star Rating, as these hospitals are more likely able to report data for all measures and thus be eligible for scores in the Safety group.</p><h3 id="rehquality">REH Quality Reporting Program</h3><p>The Consolidated Appropriations Act of 2021 established requirements for a new type of provider, the REH, for payment beginning Jan. 1, 2023. As part of this program, an REH must submit quality measure data for the REH Quality Reporting Program (REH QR). In this rule, CMS proposes to remove several of the same measures proposed for removal from the OQR and ASCQR, establish new requirements for REH reporting of eCQMs, and adopt one new eCQM beginning CY 2027. Proposed and Finalized REHQR Measures by Reporting Year</p><table><thead><tr><th>Measure Name</th><th>CBE #</th><th>CY 2026</th><th>CY 2027</th><th>CY 2028</th></tr></thead><tbody><tr><td>Abdomen Computed Tomography (CT) – Use of Contrast Material</td><td>None</td><td>X</td><td>X</td><td>X</td></tr><tr><td>Median Time from ED Arrival to ED Departure for Discharged ED Patients</td><td>None</td><td>X</td><td>X*</td><td>X*</td></tr><tr><td>Risk Standardized Hospital Visits within 7 Days After Hospital Outpatient Surgery</td><td>2687</td><td>X</td><td>X</td><td>X</td></tr><tr><td>Facility 7-Day Risk-Standardized Hospital Visit Rate After Outpatient Colonoscopy</td><td>2539</td><td>X</td><td>X</td><td>X</td></tr><tr><td>Hospital Commitment to Health Equity</td><td>None</td><td>Z</td><td>Z</td><td>Z</td></tr><tr><td>Screening for Social Drivers of Health</td><td>None</td><td>Z*</td><td>Z</td><td>Z</td></tr><tr><td>Screen Positive Rate for Social Drivers of Health</td><td>None</td><td>Z*</td><td>Z</td><td>Z</td></tr><tr><td>Emergency Care Access & Timeliness</td><td>4625e</td><td> </td><td>Y*</td><td>Y*</td></tr></tbody></table><p>X= Measure included in program</p><p>Y= Measure proposed for adoption</p><p>Z= Measure proposed for removal</p><p>*=Voluntary or Optional reporting</p><hr><h4>Proposed Measure Removals</h4><p>CMS proposes to remove the same three health equity-related measures from the REHQR as proposed for the OQR and ASCQR. Beginning with the CY 2025 reporting period, CMS would no longer use the Hospital Commitment to Health Equity, Screening for SDOH, and Screen Positive Rate for SDOH measures. The proposals are identical to those for the OQR (see above).</p><h4>Proposed Adoption of the Emergency Care Access & Timeliness eCQM</h4><p>CMS proposes to adopt this measure related to ED throughput into the REHQR beginning with optional reporting in CY 2027. The same measure is being proposed for adoption in the OQR and is described above.</p><p>Unlike in the OQR, CMS proposes that REHs may choose to report this measure or the Median Time for Discharged ED Patients measure. The measure was tested at only one REH; further, CMS acknowledges the differences in EHR infrastructure across REHs. Accordingly, CMS believes allowing REHs to choose between reporting the new eCQM or the chart-abstracted measure currently used in the program will provide greater flexibility for facilities.</p><h4>eCQM Submission Requirements</h4><p>With the proposed introduction of eCQMs into the REHQR, CMS proposes to establish corresponding eCQM data submission and reporting requirements. These requirements would apply to the proposed Emergency Care Access & Timeliness measure if adopted as proposed, and align with requirements of the OQR, Inpatient Quality Reporting Program, and Medicare Promoting Interoperability Program.</p><p>Policies include:</p><ul><li>Utilization of technology certified to the Office of National Coordinator for Health Information Technology’s health IT most recent certification criteria for all available eCQMs under the REHQR program.</li><li>Submission of eCQM data via the QRDA Category I file format, either by using third parties to submit files on their behalf or by using abstraction or pulling data from non-certified sources to input into certified EHR technology for reporting.</li><li>Submission of zero denominator qualifies as a successful submission.</li><li>Case threshold exemption declaration if an REH’s EHR system has five or fewer outpatient encounters or discharges per quarter or 20 or fewer per year across Medicare and Medicaid.</li><li>Data submission by May 15 of the following year for the applicable reporting period.</li><li>Application of the review and corrections period to eCQM data.</li></ul><h2 id="otherproposals">Other Proposals</h2><h3 id="marketbasedweights">Market-based Weights for the Inpatient PPS</h3><p>In the FY 2021 inpatient PPS final rule, CMS finalized a requirement that hospitals report the median payer-specific charge negotiated by Medicare-severity diagnosis-related group (MS-DRG) with Medicare Advantage organizations (MAOs) on their Medicare cost reports. This information was intended to be used to set the inpatient PPS relative weights beginning in FY 2024. These policies were repealed one year later.</p><p>However, CMS is now proposing to collect market-based payment rate data on the Medicare cost report for cost reporting periods ending on or after Jan. 1, 2026. Hospitals would use the payer-specific negotiated charges from their most recent machine-readable file (MRF) published prior to the submission of their cost report to report the median payer-specific negotiated charge that they negotiated with their MAOs. CMS cites the requirements in sections 1815(a) and 1833(e) of the Act as the authority under which it is requiring this information to be furnished. These provisions provide that no Medicare payments will be made to a provider unless it has furnished the information, as may be requested by the secretary, to determine the amount of payments due to the provider under the Medicare program.</p><p>The proposed rule provides a 4-step process for determining the weighted median payer-specific negotiated charge by MAO by MS-DRG from the hospital’s most recent MRF. If the payer-specific negotiated charge is based on a percentage or algorithm, the hospital would substitute the dollar amount for the percentage or algorithm. Negotiated charges that represent capitated payment are excluded. If the payer-specific negotiated charge is not by MS-DRG, the hospital would reclassify the case to an MS-DRG rate using the MS-DRG Grouper (software that uses information on each claim to classify or group a case to an MS-DRG).</p><p>These requirements would apply to subsection (d) hospitals in the 50 states and Puerto Rico. As such, they would not apply to, for example, critical access hospitals, rural emergency hospitals, children’s hospitals or cancer hospitals. Maryland hospitals would be subject to these reporting requirements once the Maryland Total Cost of Care Model ends.</p><h3 id="changestothehospitalprice">Changes to the Hospital Price Transparency Requirements</h3><p>CMS proposes several changes to the Hospital Price Transparency requirements, specifically related to the machine-readable files (MRFs) and enforcement processes.</p><p>These changes include four new required data elements for payer-specific negotiated charges based on a percentage or algorithm:</p><ul><li>Median allowed amount.</li><li>10th percentile allowed amount.</li><li>90th percentile allowed amount.</li><li>Count of all allowed amounts.</li></ul><p>CMS also proposes two new general data elements:</p><ul><li>The name of the hospital leader responsible for overseeing MRF creation and attesting to the file’s completeness and accuracy.</li><li>The hospital’s National Provider Identifier(s).</li></ul><p>In addition, CMS proposes a new attestation statement and an optional change to the civil monetary penalty process. These changes build on CMS’ previous updates to these requirements, including the substantial changes finalized in the CY 2024 OPPS/ASC rule.</p><h4>New Allowed Amount Data Elements</h4><p>CMS proposes requiring several new MRF data elements in instances when payer-specific negotiated charges are based on a percentage or algorithm, beginning Jan. 1, 2026. The new data elements would be the median allowed amount, the 10th percentile allowed amount, the 90th percentile allowed amount, and a count of all allowed amounts. These data elements would replace the “estimated allowed amount” in the machine-readable files, which was added in the final CY 2024 OPPS/ASC rule and went into effect Jan. 1, 2025. CMS argues these changes are necessary to address ongoing confusion around the “estimated allowed amount,” citing recent audits and public feedback received since the value went into effect. CMS also notes that these changes are consistent with the recent <a href="/advisory/2025-02-26-administration-releases-executive-order-health-care-price-transparency">executive order on price transparency</a>.</p><p>To create more consistency across calculations, CMS proposes requiring a specific methodology to calculate these values, including a set lookback period and data source.</p><h5>Methodology</h5><p>To calculate each of the new data elements, CMS would require hospitals to calculate a <em>total allowed amount,</em> defined as the total amount a hospital was reimbursed by a third-party payer for an item, service or service package. This value is necessary for the calculations but would not need to be encoded in the machine-readable files.</p><p>For the <em>count of allowed amounts,</em> hospitals would encode the total number of non-zero allowed amounts within the claims transaction data set (discussed in more detail below). This count would not include claims where the payment amount is zero, for example, when the service is provided in conjunction with a mix of other services. CMS argues that including the count will provide necessary context for patients and researchers assessing the median, 10th percentile, and 90th percentile data elements.</p><p>For the <em>median, 10th percentile,</em> and <em>90th percentile allowed amounts,</em> the hospital would need to calculate the median, 10th percentile and 90th percentile of the total allowed amount using the count of allowed amounts. Should these calculations fall between two observed allowed amounts (i.e., in instances when the count of allowed amounts is an even number), the encoded value should be the higher of the observed allowed amount values. In other words, if the allowed amounts were: $20, $20, $30, $40, the median allowed amount for this purpose would be $30, not $25. CMS expects that providing this range of numbers will give patients and researchers valuable insights into what to expect in terms of a final payment amount, while keeping the range narrow enough to exclude most outlier payments.</p><p>Should a hospital have no valid claims remittance history for an item, service or service package for a particular payer and plan, they should encode 0 as the <em>count of allowed amounts</em> value and leave the <em>median, 10th percentile and 90th percentile</em> fields blank. In this instance, the hospital should explain why there is insufficient data to calculate the data elements in the <em>additional notes</em> field. In instances when hospitals cannot calculate the value due to a new or revised payer contract, CMS proposes requiring hospitals to encode “new or recently revised payer contract” in the <em>additional notes</em> field.</p><h5>Data Source</h5><p>CMS proposes to require hospitals to use electronic data interchange (EDI) 835 electronic remittance advice (ERA) transaction data to calculate the new data elements.</p><h5>Lookback Period</h5><p>CMS proposes to require hospitals to base their calculations, whenever possible, on EDI 835 ERA transaction data from the period 12 months prior to posting the MRF. However, in instances when the contract terms change during the 12-month period, the lookback period should only include the months that include allowed amounts based on the current contract terms. CMS acknowledges that transaction data can lag at times and notes that hospitals are only expected to use the data available at the time the MRF is created.</p><p>CMS seeks comment on these new data elements, as well as the methodology, data source, and lookback period. In particular, CMS questions whether a range of counts would suffice, rather than encoding the exact count. CMS also ask whether the 10th and 90th percentiles are the correct outer bounds of the allowed amount range to provide a reasonable expectation of variance while eliminating outliers.</p><h4>Updated Attestation Language</h4><p>CMS also proposes updating the required affirmation statement that hospitals must attest to in their machine-readable files, beginning Jan. 1, 2026. The new attestation would state: “The hospital has included all applicable standard charge information in accordance with the requirements of § 180.50, and the information encoded is true, accurate, and complete as of the date in the file. The hospital has included all payer-specific negotiated charges in dollars that can be expressed as a dollar amount. For payer-specific negotiated charges that cannot be expressed as a dollar amount in the machine-readable file or not knowable in advance, the hospital attests that the payer-specific negotiated charge is based on a contractual algorithm, percentage or formula that precludes the provision of a dollar amount and has provided all necessary information available to the hospital for the public to be able to derive the dollar amount, including, but not limited to, the specific fee schedule or components referenced in such percentage, algorithm or formula.”</p><p>If finalized, this affirmation statement would replace the current affirmation statement declaring that a hospital has made a good faith effort to ensure that the machine-readable file data is true, accurate and complete. CMS argues that updating the affirmation statement language would provide greater assurance to CMS auditors, patients, and researchers that the machine-readable files are complete and accurate. CMS also states that this language establishes CMS’ expectation that hospitals include all available information needed to derive payer-specific negotiated rates in their machine-readable files.</p><p>In addition, CMS proposes to add a new general data element to the machine-readable file, <em>attester name,</em> which would be defined as the hospital CEO, president, or alternative senior official designated to oversee the creation of the machine-readable file and attest to its accuracy and completeness.</p><p>CMS notes that the new attestation language and data element do not change monitoring or enforcement of these requirements and that the False Claims Act is outside of the scope of these proposed changes.</p><p>CMS seeks comments on these proposals.</p><h4>New National Provider Identifier (NPI) General Data Element</h4><p>CMS proposes to require hospitals to encode a new NPI general data element in their machine-readable files, beginning Jan. 1, 2026. Specifically, CMS would require hospitals to include any active Type 2 NPI(s) that have a primary taxonomy code beginning with “28” or “27” in their machine-readable file. CMS argues that including a standard identifier would better allow for cross-comparison between the hospital machine-readable files and other data sources, including the insurer machine-readable files. CMS seeks comments on this proposal, including whether another standard identifier should be considered.</p><h4>Changes to Civil Monetary Penalties (CMP)</h4><p>CMS proposes that the CMP amount be reduced by 35% in certain instances when a hospital admits to a price transparency violation and waives its right to an administrative law judge (ALJ) hearing. CMS notes that the CMP reduction would not be available should the violation continue. The right to an ALJ hearing would still be waived, however, and would not be available to the hospital. In addition, hospitals would be ineligible to receive the reduced CMP if the violation is due to the hospital failing to disclose a machine-readable file and/or a shoppable service list or price estimator tool.</p><p>CMS argues that this change would help to expedite CMP payments. In the proposed rule, CMS expresses concerns that 20 out of the 27 hospitals that have received a CMP notice to date have appealed the decision to an ALJ, which has delayed payment of the CMPs. CMS also argues that this opportunity would be beneficial to hospitals as they would incur a lower CMP and would avoid expending resources on the ALJ process.</p><p>CMS seeks comments on this proposal.</p><h4>Burden Estimate</h4><p>CMS estimates that hospitals will only incur a one-time cost of $478.08 per hospital to implement the proposed changes to the machine-readable files. This estimate is based on CMS’ assumption that hospitals have already built the necessary infrastructure to easily create the new required data elements. In total, CMS calculates a total national cost of $3,545,441.28 ($478.08 × 7,416 hospitals).</p><h3 id="medicarepartbdrugs">Medicare Part B Drugs Without a Medicaid National Drug Rebate Agreement</h3><p>CMS proposes that manufacturers or labelers of identified covered outpatient drugs who do not have in effect a Medicaid National Drug Rebate Agreement (NDRA) and who do not enter into one will no longer receive Medicare Part B payment for the drugs, which includes payment made under the OPPS and ASC payment systems. Per statutory requirements, to receive a payment for a covered outpatient drug under Medicare Part B, the manufacturer must have a Medicaid NDRA in effect.</p><p>In their review, CMS identified 20 HCPCS codes describing single-source drugs, biologicals and radiopharmaceuticals that are manufactured by labelers without a Medicaid NDRA. If manufacturers do not enter a Medicaid NDRA, HCPCS codes will be assigned a non-payable status by Medicare (i.e., OPPS status indicator of E1 and ASC payment indicator of B5). CMS lists these single-source drugs, biologicals, and radiopharmaceuticals in Table 66 in the proposed rule. No effective date is specified for this policy.</p><h3 id="graduatemedicaleducation">Graduate Medical Education Accreditation</h3><p>To receive direct graduate medical education (GME) and indirect medical education payments from Medicare, hospitals must be in an “approved medical residency training program.” A GME program may be an approved medical residency training program if it is accredited by the Accreditation Council on Graduate Medical Education (ACGME).</p><p>In this rule, CMS indicates that ACGME has identified “diversity, equity, and inclusion” as a primary value of the organization and a central component of its vision for graduate medical education. The rule states that many such diversity, equity and inclusion programs unlawfully discriminate against Americans based on race. Therefore, the agency says to ensure compliance with federal law, it proposes that accreditors may not require, as part of accreditation, or otherwise encourage institutions to put in place, diversity, equity and inclusion programs that encourage unlawful discrimination based on race, beginning Jan. 1, 2026. In addition, the rule indicates that CMS may recognize other organizations that meet or exceed Medicare’s requirements as accreditors to increase the potential for competition in the accreditation space and improve the quality of the accreditation process.</p><h3 id="allinclusive">All-inclusive Rate Add-on Payment for High-Cost Drugs Provided by Indian Health Services and Tribal Facilities</h3><p>Currently, the Indian Health Service (IHS) and tribal outpatient departments are excluded from the Medicare OPPS and are paid the Medicare outpatient hospital all-inclusive rate (AIR). The IHS determines the AIR from cost reports and updates the rate annually. However, IHS and tribal hospitals have increasingly provided higher-cost drugs along with more complex and expensive services, such as cancer-related services. Therefore, beginning on Jan. 1, 2025, CMS began separately pay IHS and tribal hospitals for high-cost drugs furnished in hospital outpatient departments through an add-on payment in addition to the AIR. CMS proposes to continue this policy in CY 2026.</p><h2 id="furtherquestions">Further Questions</h2><p>CMS will accept comments on the proposed rule until Sept. 15, 2025. The final rule will be published around Nov. 1, and the policies and payment rates will generally take effect Jan. 1, 2026.</p><p>If you have further questions, contact Roslyne Schulman, AHA’s director of outpatient payment policy, at <a href="mailto:rschulman@aha.org?subject=RE: Regulatory Advisory: Hospital Outpatient, Ambulatory Surgical Center Proposed Rule for CY 2026">rschulman@aha.org</a>.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/07/Regulatory-Advisory-Hospital-Outpatient-Ambulatory-Surgical-Center-Proposed-Rule-for-CY-2026.pdf" target="_blank" title="Click here to download the Regulatory Advisory: Hospital Outpatient, Ambulatory Surgical Center Proposed Rule for CY 2026 PDF."><img src="/sites/default/files/inline-images/Page-1-Regulatory-Advisory-Hospital-Outpatient-Ambulatory-Surgical-Center-Proposed-Rule-for-CY-2026.png" data-entity-uuid="da7c207b-59a3-4297-81e9-d5d5c971be9f" data-entity-type="file" alt="Hospital Outpatient, Ambulatory Surgical Center Proposed Rule for CY 2026 page 1." width="695" height="900"></a></div></div></div> table, th, td { border: 1px solid; } tr:nth-child(even) { background-color: #b9d9eb33; } th { background-color: #002855; color: white; } div.sticky { position: sticky; top: 0; } .meta.custom-lock-position { position: relative; top: 0px; right: inherit; display: block; float: right; } .views-field-title { font-weight: bold; } .views-field-created { color: #000000 !important; } .views-row { margin-bottom: 20px; } .toc-indent { margin-left: 20px; } Mon, 28 Jul 2025 13:43:00 -0500 Medicare /news/chairpersons-file/2025-07-28-chair-file-obbba-and-whats-next-health-care <p>The recently enacted One Big Beautiful Bill Act will bring big changes to health care. AHA President and CEO Rick Pollack joined me for a Leadership Dialogue conversation earlier this month to talk about the key provisions that apply to health care. If you missed that episode, you can <a href="/news/chairpersons-file/2025-07-16-chair-file-leadership-dialogue-continuing-work-strengthen-health-america-aha-president-and">watch the video or listen to the podcast</a>.</p><p>Our health care field, supported by patch after patch since 1965, is not sustainable for today’s world of 2025. Some of the patches that we needed to keep going are gone, and it’s unrealistic to think they’re coming back. This time doesn’t just feel different, it is different. So what should we be focused on as hospitals and health systems?</p><p>First, we have to accept reality and make the smartest choices we can with the resources and constraints we have to maximize our delivery on our mission. The AHA has already begun some of this work and will be assisting hospitals to help individuals retain eligibility for coverage, as well as sharing best practices for improvements and operational efficiencies. We also are looking ahead at several hospital priorities that will need to be addressed before the end of the year — from waivers for telehealth and hospital at home, Medicaid disproportionate share hospital cuts, the Medicare rule making process, regulatory relief and more. Now more than ever, we are here to help you do what you do best: care for our communities.</p><p>While the AHA is pulling all the levers in Washington, D.C., to advocate for priorities that advance health, all of us have an important role to play in engaging our legislators. There’s nothing more powerful than hearing from you, their constituents, about the impact certain policies will have on the people they represent. You can find resources and more information on how to best do this below.</p><p>Our second, and most important, job is to actually reform and transform health care for the long term. We need to do the hard work and create a health care model that is sustainable for the world of 2065, not 1965. We have to start putting proposals on the table that challenge the status quo yet move us forward.</p><p>At the AHA Leadership Summit in Nashville last week, I heard so many incredible stories of how you have started this work. As a field, we are using technology and innovation to transform care delivery, improve quality and patient safety, and meet people where they need care. And that is what makes me hopeful and optimistic.</p><p>We’ve been dealt a difficult hand, but it’s our opportunity to open the door wide for transformation and innovation. We owe it to ourselves, our team members, our patients and our communities to make the very best choices we can today — and to transform our health care system for tomorrow.</p><h2>Helping You Help Communities — Key AHA Resources</h2><ul><li><a href="/resources-one-big-beautiful-bill-act-signed-law-july-4-2025">Advocacy Resources on OBBBA</a></li><li><a href="/advocacy/action-center">AHA Action Center</a></li><li><a href="/advocacy-issues">Key Advocacy Issues and Resources</a></li><li><a href="/advocacy/working-with-congress">Guide to Working with Congress</a></li></ul> Mon, 28 Jul 2025 10:16:20 -0500 Medicare /fact-sheets/2022-08-30-fact-sheet-rural-hospital-support-act-s4009-assistance-rural-community <div class="container"><div class="row"><div class="col-md-8"><h2><span>Background</span></h2><p>Medicare pays most acute care hospitals under the inpatient prospective payment system (IPPS). Some of these hospitals receive additional support from Medicare to help address potential financial challenges associated with being rural, geographically isolated and low volume. These programs are Medicare-dependent Hospitals (MDHs), Low-volume Adjustment (LVA) and Sole Community Hospitals (SCHs).</p><p><span><strong>Without action from Congress, the enhanced LVA and MDH programs will expire Sept. 30, 2025.</strong></span></p><h3><span>Why are these programs important?</span></h3><p>The network of providers that serves rural Americans is financially fragile and more dependent on Medicare revenue due to the high percentage of Medicare beneficiaries who live in rural areas. Rural residents also on average tend to be older, have lower incomes and higher rates of chronic illness than urban counterparts. This greater dependence on Medicare may make certain hospitals more financially vulnerable. Indeed, Medicare only pays 82% of hospital costs on average according to our latest analysis. Additionally, over 150 rural hospitals have closed or converted to other provider types since 2010. These designations protect the financial viability of small, rural hospitals to ensure they can continue providing patients access to care.</p><h3><span>Medicare-dependent Hospitals</span></h3><p>Congress established the MDH program in 1987 to help support small rural hospitals for which Medicare patients make up a significant percentage of inpatient days or discharges. MDHs are small, rural hospitals where at least 60% of their admissions or patient days are from Medicare patients. MDHs receive the IPPS rate plus 75% of the difference between the IPPS rate and their inflation-adjusted costs from one of three base years.</p><h3><span>Low-volume Adjustment</span></h3><p>Certain factors beyond providers’ control can affect the costs of furnishing services, including patient volume. This is particularly relevant in small and isolated communities where providers frequently cannot achieve economies of scale like larger hospitals. Congress established the LVA program in 2005 to help isolated, rural hospitals with a low number of discharges. Currently under the enhanced program, they must be more than 15 miles from another IPPS hospital and have fewer than 3,800 annual total discharges. These LVA hospitals receive a payment adjustment based on a sliding scale formula to ensure the patients and communities these hospitals serve continue to have access to care.</p><h3><span>Sole Community Hospitals</span></h3><p>The SCH program was created to maintain access to needed health services for Medicare beneficiaries in isolated communities. In order to be eligible for the program, SCHs must show that because of distance or geographic boundaries between hospitals, they are the sole source of inpatient hospital services reasonably available in a certain geographic area. They receive increased payments based on their cost per discharge in a base year.</p><h2><span>AHA Position — Cosponsor the Rural Hospital Support Act (S.335) & the Assistance for Rural Community Hospitals (ARCH) Act</span></h2><p>The Rural Hospital Support Act (S.335) includes the following important AHA-supported policies to ensure access to care:</p><ul><li>Permanently extends the MDH program and adds an additional base year that hospitals may choose for calculating payments.</li><li>Permanently extends the enhanced LVA program, which would continue to allow hospitals more than 15 miles from another IPPS hospital and have fewer than 3,800 annual total discharges to be eligible.</li><li>Adds a base year that SCHs may select for calculating their payments.</li></ul><p>The ARCH Act helps rural hospitals continue to serve their patients and communities by extending the current MDH and LVA programs by five years and will soon be reintroduced in the House.</p></div><div class="col-md-4"><a href="/system/files/media/file/2022/08/fact-sheet-rural-hospital-support-act-s4009-the-assistance-for-rural-community-hospitals-act-hr8747.pdf" target="_blank" title="Click here to Download the Fact Sheet: Rural Hospital Support Act (S.4009) & the Assistance for Rural Community Hospitals Act (H.R.8747)"><img src="/sites/default/files/inline-images/Page-1-fact-sheet-rural-hospital-support-act-the-assistance-for-rural-community-hospitals-act-20250205.png" data-entity-uuid="60a4126d-3db7-4725-81d8-adc2020afcef" data-entity-type="file" alt="Fact Sheet: Rural Hospital Support Act (S.1110) & the Assistance for Rural Community Hospitals Act (H.R.6430) page 1." width="681" height="900"></a></div></div></div> Fri, 25 Jul 2025 11:28:44 -0500 Medicare /news/headline/2025-07-22-aha-supported-bill-would-repeal-discriminatory-medicare-policy <p>The AHA today <a href="/lettercomment/2025-07-22-aha-letter-support-medicare-mental-health-inpatient-equity-act" target="_blank">expressed support</a> for the Medicare Mental Health Inpatient Equity Act, a bill that would eliminate the 190-day lifetime limit on inpatient psychiatric hospital services for Medicare patients.  </p><p>“As the nation’s population ages and an increasing number of seniors and people with disabilities seek inpatient care to address their behavioral health needs, now is the time to repeal this discriminatory policy and ensure that Medicare beneficiaries can receive necessary inpatient psychiatric care,” the AHA wrote in comments to the bill’s sponsors, Reps. Paul Tonko, D-N.Y., Bill Huizenga, R-Mich., Lloyd Doggett, D-Texas, and Brian Fitzpatrick, R-Pa. </p> Tue, 22 Jul 2025 14:29:01 -0500 Medicare /advisory/2025-07-15-cms-issues-cy-2026-physician-fee-schedule-proposed-rule <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) July 14 issued a <a href="https://public-inspection.federalregister.gov/2025-13271.pdf">proposed rule</a> that would update physician fee schedule (PFS) payments for calendar year (CY) 2026. The rule also includes proposals related to the Medicare Shared Savings Program (MSSP) and the Quality Payment Program (QPP), both of which were created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. It also would create a new mandatory payment model focused on specialists’ care for beneficiaries with heart failure and low back pain. </p><p> CMS will accept comments on the proposed rule through Sept. 12.</p><div class="panel module-typeC"><div class="panel-heading"><p><strong>KEY HIGHLIGHTS</strong></p><p>CMS’ proposed policies would:</p><ul><li>Implement two separate conversion factors: one for alternative payment model (APM) qualifying participants (QPs) and one for physicians and practitioners who are not QPs.<ul><li>The APM QP conversion factor would increase by 3.83% in CY 2026 as compared to CY 2025.</li><li>The non-QP conversion factor would increase by 3.62% in CY 2026 as compared to CY 2025.</li></ul></li><li>Make an efficiency adjustment of -2.5% to certain work relative value units (RVUs).</li><li>Modify the practice expense (PE) methodology to decrease facility PE RVUs and increase non-facility PE RVUs.</li><li>Extend some, but not all, telehealth waivers, either permanently or through 2026.</li><li>Create a new claims-based methodology to remove units of drugs purchased under the 340B program for the purposes of calculating Medicare drug inflation rebates. The agency is also proposing to create a 340B claims data repository allowing voluntary data submission by 340B providers to potentially use for the same purpose.</li><li>Create a new mandatory payment model, the Ambulatory Specialty Model (ASM), focused on specialists who care for beneficiaries with heart failure and low back pain, to begin Jan. 1, 2027, and run for five years.</li><li>Make several updates to the Medicare Share Savings Programs policies on performance and beneficiary assignment methodology.</li><li>Establish a MIPS performance threshold of 75 points for the CY 2026 performance period through the CY 2028 performance period, as well as adopt six new MIPS Value Pathways and make modifications to performance categories under the Quality Payment Program.</li></ul></div></div><h2>AHA TAKE</h2><p>The AHA is pleased that CMS, as directed by Congress, is proposing a positive payment update for physicians, which will be the first in several years. However, we will be closely evaluating the proposed efficiency adjustment and changes to PE RVUs, which both redistribute payments and may inappropriately disadvantage certain providers, including physicians who are largely hospital-based. </p><p>We also thank CMS for its proposal to extend or make permanent certain telehealth flexibilities, such as permanently removing frequency limitations for subsequent inpatient visits, nursing facility visits and critical care consultations. However, we were disappointed the agency did not propose extending a waiver that allows providers to report practice addresses instead of home addresses when they perform telehealth services from their home. </p><p>We appreciate the recognition of the complexity of identifying Medicare Part D drug units purchased under the 340B drug pricing program. As we review the agency’s proposals in more detail, we caution against any approach that would add unnecessary burden on 340B hospitals or would allow sensitive 340B data to be used outside the scope of the Medicare drug inflation rebate program to diminish the value of the program to 340B hospitals and their patients.</p><p>Finally, while we support moving towards more coordinated and accountable care through APMs, we are concerned about CMS’ proposal to create another mandatory model, as many physicians may not be in a financial position to support the investments necessary to transition to mandatory models.</p><p>Highlights of the PFS rule follow.</p><h2>CY 2026 PROPOSED PAYMENT UPDATE</h2><p>As required by law, beginning in CY 2026, CMS proposes implementing two separate conversion factors: one for APM QPs and one for physicians and practitioners who are not QPs. The rule would increase the APM QP conversion factor by 3.83% in CY 2026 as compared to CY 2025. It would increase the non-QP conversion factor by 3.62% in CY 2026 as compared to CY 2025. These updates include statutory updates of 0.75% and 0.25% for the APM QP and non-QP factors, respectively, another statutory update of 2.5% as required by the One Big Beautiful Bill Act and an increase of 0.55% that CMS states is necessary to account for proposed changes in work RVUs (described below).</p><h3>Efficiency Adjustment</h3><p>CMS proposes an efficiency adjustment to the work RVUs. It states that its proposal is based on an assumption that both the provider’s time directly providing the service to a patient as well as their work intensity would decrease as they develop expertise in performing the service. The agency expects non-time-based codes, such as codes describing procedures, radiology services and diagnostic tests, to become more efficient as they become more common, professionals gain more experience, technology is improved and other operational improvements (including but not limited to enhancements in procedural workflows) are implemented.</p><p>To calculate the efficiency adjustment, CMS proposes using the Medicare Economic Index (MEI) productivity adjustment. This adjustment reflects the most recent historical estimate of the 10-year moving average growth of private nonfarm business total factor productivity, as calculated by the Bureau of Labor Statistics. It is substantively similar to the productivity adjustment used in other Medicare payment systems, such as the inpatient prospective payment system (PPS) and outpatient PPS.</p><p>For CY 2026, CMS would apply the efficiency adjustment using a look-back period of five years. This methodology yields a proposed efficiency adjustment of -2.5%, which will be updated in the final rule. The agency states that, generally, specialties that bill more often for timed codes (such as family practice, clinical psychologists, clinical social workers, geriatrics and psychiatry) would see an increase in RVUs, while specialties that bill more often for procedures, diagnostic imaging and radiology services (such as radiation oncology, radiology, and some surgical specialties) would see a decrease in RVUs. That said, CMS estimates that almost all specialties would experience no more than 1% increase or decrease in RVUs as a result of this proposed policy, although the effect on individual services may be greater. It would be implemented in a budget neutral manner overall, however, and there would be a net increase to the conversion factor because of its implementation. </p><p><u></u></p><h2>Practice Expense Methodology</h2><p>CMS states that over the past two decades or so, there has been a steady decline in the percentage of physicians working in private practice, with a corresponding rise in physician employment by hospitals, as well as growth in the percentage of physicians who practice exclusively, or almost exclusively, in the facility setting. When the PFS was established, the methodology for allocating indirect PE was based in part on an assumption that the physician maintained an office-based practice while also practicing in a facility setting. However, CMS is concerned that this methodology may now overstate the indirect costs incurred by facility-based physicians.</p><p>Beginning in CY 2026, for each service valued in the facility setting under the PFS, CMS proposes to reduce the portion of the facility PE RVUs allocated based on work RVUs to half the amount allocated to non-facility (office-based) PE RVUs. The agency states that specialties that practice primarily in the facility setting would see a decrease in PE RVUs as a result of this redistribution. Specialties that perform services primarily in the non-facility (office-based) setting would see an increase in PE RVUs.</p><h2>Use of Outpatient PPS Data for PFS Rate-setting</h2><p><u> </u></p><p>For several types of PFS services, CMS proposes deviating from its historic use of American Medical Association survey data and instead using auditable, routinely updated hospital data. Specifically, for CY 2026, the agency proposes to:</p><ul><li>Use the relationship between outpatient PPS ambulatory payment classification payment rates to establish PE RVUs for radiation oncology treatment delivery and superficial radiation treatment services.</li><li>Use outpatient PPS cost data to establish the value for the PE portion of remote physiologic monitoring because it believes that these cost data are more accurate than the PE inputs currently used.</li><li>Use hospital outpatient utilization patterns to set payment rates for three categories of skin substitutes.</li></ul><h2>TELEHEALTH SERVICES</h2><p><strong>Medicare Telehealth Services List</strong></p><p>CMS proposes changing its review process for the Medicare Telehealth Services List by removing the distinction between provisional and permanent services. It also would limit its review to whether the service can be furnished using an interactive, two-way audio/video telecommunications system.</p><p><strong>Telehealth Waivers</strong></p><p>The proposed rule would make changes to several telehealth waivers, including:</p><ul><li>Permanently removing frequency limitations for subsequent inpatient visits, nursing facility visits and critical care consultations.</li><li>Permanently adopting a definition of direct supervision to include virtual presence via audio/video real-time communications technology.</li><li>Extending the ability for federally qualified health centers and rural health clinics to bill telehealth services through Dec. 31, 2026.</li></ul><p>CMS does not appear to address its prior waiver that allowed providers to report practice addresses instead of home addresses when they perform services from their home. In addition, for services provided in metropolitan statistical areas (MSAs), it does not propose to continue to allow virtual supervision of residents when the service is performed virtually across teaching settings. Instead, this would only be allowed for services provided in non-MSAs. </p><h2>MEDICARE PRESCRIPTION DRUG INFLATION REBATE PROGRAM</h2><p>CMS proposes new methodologies to calculate units of Medicare Part D drugs purchased under the 340B drug pricing program that must be excluded from the calculation of Medicare inflation rebates starting on Jan. 1, 2026, as required under the Inflation Reduction Act of 2022. The agency proposes a claims-based methodology that would determine which Part D drug units are 340B-eligible for exclusion from the inflation rebate calculation and solicits comments on two such methodologies: a prescriber-pharmacy methodology and a beneficiary-pharmacy methodology.  One method assumes that any drug that is prescribed by a provider that is affiliated with a 340B provider and is dispensed by a 340B retail pharmacy is a 340B drug. The other assumes that any drug prescribed to a patient of a 340B provider and is dispensed by a 340B retail pharmacy is a 340B drug. The agency notes that these methodologies may overestimate the number of 340B units for exclusion from the inflation rebate calculation.</p><p>As a potential future alternative to the claims-based methodology, CMS proposes establishing a claims data repository to receive voluntary submission from 340B covered entities of certain Part D claims data elements to identify which drug units are 340B-eligible. The agency has issued an Information Collection Request alongside the proposed rule that details the format and process of submitting data elements to the repository.</p><p>The agency anticipates the repository would go live in Fall 2026 with the goal of testing the usability of a 340B repository in identifying and excluding 340B drug units in the calculation of Medicare Part D inflation rebates. The agency encourages all 340B covered entities to participate in the voluntary submission process and notes that it may require mandatory reporting in future rulemaking.</p><h2>AMBULATORY SPECIALTY MODEL</h2><p>CMS proposes creating the ASM, which would focus on low back pain and congestive heart failure. ASM would begin on Jan. 1, 2027, and run for five performance years, through Dec. 31, 2031.</p><p>ASM would include specialists who frequently treat low back pain or heart failure, practice within selected core-based statistical areas or metropolitan divisions, and have historically treated at least 20 fee-for-service (FFS) Medicare patients with low back pain or 20 FFS Medicare patients with heart failure over a 12-month period. Physicians would be assessed individually, not at the practice level. Low back pain specialists would include those practicing in anesthesiology, pain management, interventional pain management, neurosurgery, orthopedic surgery, and physical medicine and rehabilitation. Heart failure specialists would include those practicing in cardiology.</p><p>ASM participants would be assessed across four categories: quality, cost, care improvement activities and improving interoperability. Their scores across these categories would determine whether they receive positive, neutral or negative payment adjustments on future Medicare Part B claims for covered services. In the first payment year, these adjustments would range from -9% to +9%. All participants would be subject to this risk. Total positive adjustments for high performers would not exceed the total negative adjustments for low performers.</p><p><strong>BEHAVIORAL HEALTH SERVICES</strong></p><p>CMS proposes updates intended to enhance integration of behavioral health into primary care. First, the agency clarifies that marriage and family therapists and mental health counselors can bill Medicare directly for Community Health Integration and Principal Illness Navigation services. Next, CMS proposes creating add-on codes for Advanced Primary Care Management services that complement previously established Behavioral Health Integration or psychiatric Collaborative Care Model services. Lastly, CMS proposes deleting the HCPCS code finalized in the CY 2024 PFS final rule that describes social determinants of health risk assessment and altering language throughout the regulations to refer to “upstream drivers” of health rather than “social determinants.”</p><p>The agency also proposes updates to previously established payment codes for services provided using digital mental health treatment (DMHT) devices, including expanding payment for use of DMHT for attention deficit hyperactivity disorder. CMS seeks comments on other ways to enhance the use of digital tools, such as those used to maintain or encourage a healthy lifestyle; administration of an FDA-authorized eye-tracking technology in the diagnosis of autism spectrum disorder on pediatric patients; and payment policies for the use of software-based clinical decision support technologies (referred to Software as a Service, or SaaS).</p><p><strong>MEDICARE SHARED SAVINGS PROGRAM</strong></p><p>CMS proposes several changes to the Shared Savings Program’s policies regarding performance, financial methodology, beneficiary assignment methodology, participation options and availability of new payment options (among other changes) beginning with performance year 2027. One such change would be to reduce the time an accountable care organization (ACO) can participate in a one-sided model of the BASIC track from seven to five years to encourage participation in two-sided risk models. CMS also would modify eligibility and financial reconciliation requirements related to the statutory requirement that ACOs have at least 5,000 assigned Medicare FFS beneficiaries; the agency believes these changes would allow for flexibility in the minimum number of assigned beneficiaries required in benchmark years.</p><p>CMS also proposes updates to the quality performance standards and other quality reporting requirements in the program. The agency would revise the definition of a beneficiary eligible for Medicare Clinical Quality Measures to overlap more with the beneficiaries assignable to an ACO. CMS proposes to remove the health equity adjustment applied to an ACO’s quality score beginning with performance year 2025 and remove the screening for social drivers of health measure from the APP Plus quality measure set. The agency also would require Consumer Assessment of Healthcare Providers and Systems for Merit-based Incentive Payment System (MIPS) survey vendors to offer the survey via web mode (in addition to mail and phone) beginning in 2027. CMS also proposes to expand the application of extreme and uncontrollable circumstances policies to ACOs affected by cyberattacks.</p><p><strong>QUALITY PAYMENT PROGRAM</strong></p><p>CMS proposes several changes to further the goal of phasing out MIPS in favor of participation in specialty-specific MIPS Value Pathways (MVPs). Several of these are administrative, including a new requirement for the MVP group registration process to include a multispecialty self-attestation requirement and the maintenance of the MVP group reporting option for multispecialty groups with a small practice designation.</p><p>The agency also makes proposals to support clinicians in data collection and reporting. First, CMS would update the MVP inventory to stratify quality measures by clinical conditions and/or episodes of care to help clinicians select the most clinically relevant measures. Next, the agency would allow qualified clinical data registries additional time (i.e., through the CY 2025 performance period) to support finalized MVPs.</p><p>The agency proposes six new MVPs around the following topics:</p><ul><li>Diagnostic radiology.</li><li>Interventional radiology.</li><li>Neuropsychology.</li><li>Pathology.</li><li>Podiatry.</li><li>Vascular surgery.</li></ul><p>CMS also proposes modifications to the following performance categories:</p><p><strong>Quality Performance.</strong><em> </em>CMS proposes establishing an updated inventory of 190 MIPS measures. The agency would remove 10 measures that are topped out, no longer aligned with clinical guidelines, no longer maintained by measure stewards or focused on process. CMS would adopt five new MIPS electronic clinical quality measures as well as measures that focus on outcomes. CMS also proposes substantive changes to 42 MIPS quality measures.</p><p><strong>Cost Performance.</strong> CMS proposes to modify the total per capita cost measure beginning with the CY 2026 performance period. The agency also proposes updating the operational list of care episodes and patient condition groups and codes to reflect recent coding changes. Finally, CMS proposes adopting, beginning with the CY 2026 performance period, an informational-only feedback period for MIPS cost measures with a lookback period of two years.</p><p><strong>Improvement Activities.</strong> In alignment with the administration’s focus on preventive care and well-being, CMS proposes adding a new “Advancing Health and Wellness” subcategory within the improvement activities performance category. Moreover, CMS will add three new improvement activities into the Population Management and Patient Safety and Practice Assessment subcategories and remove the Achieving Health Equity subcategory.</p><p><strong>Promoting Interoperability. </strong>CMS proposes modifying two measures in this category and adopting one new optional bonus measure related to public health reporting. The agency also proposes measure suppression and exclusion processes and seeks comments on other measures in this category.</p><p>The agency would continue using the CY 2017 performance period (2019 MIPS payment year) to establish the performance threshold, which would be 75 points for the CY 2026 performance period (2028 MIPS payment year) through the CY 2028 performance period (2030 MIPS payment year).</p><p>Finally, CMS seeks comments on several topics related to digital quality measurement in MIPS, specifically the use of Fast Healthcare Interoperability Resource (FHIR)-based quality reporting.</p><h2>REQUEST FOR INFORMATION: EXECUTIVE ORDER 14192 ‘UNLEASHING PROSPERITY THROUGH DEREGULATION’</h2><p>On Jan. 31, 2025, President Trump issued Executive Order 14192, “Unleashing Prosperity Through Deregulation,” which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. Accordingly, CMS is soliciting public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. CMS is <a href="https://www.cms.gov/medicare-regulatory-relief-rfi">collecting</a> responses and requests stakeholders submit comments through the provided web link.</p><h2>FURTHER QUESTIONS</h2><p>CMS will accept comments on the proposed rule through Sept. 12. The final rule will be published around Nov. 1. The policies and payment rates will generally take effect Jan. 1, 2026.</p><p>If you have further questions, contact Joanna Hiatt Kim, AHA’s vice president of payment policy, at <a href="mailto:jkim@aha.org">jkim@aha.org</a>. </p></div><div class="col-md-4"><a href="/system/files/media/file/2025/07/cms-issues-cy-2026-physician-fee-schedule-proposed-rule-advisory-7-15-2025.pdf" target="_blank" title="Click here to download the Regulatory Advisory: CMS Issues CY 2026 Physician Fee Schedule Proposed Rule PDF."><img src="/sites/default/files/2025-07/image-cms-issues-cy-2026-physician-fee-schedule-proposed-rule-advisory-7-15-2025-638-px.png" data-entity-uuid data-entity-type="file" alt="Regulatory Advisory: CMS Issues CY 2026 Physician Fee Schedule Proposed Rule Cover." width="NaN" height="NaN"></a></div></div></div> Tue, 15 Jul 2025 17:09:53 -0500 Medicare /news/headline/2025-07-08-aha-house-bill-would-repeal-15-year-ban-new-physician-owned-hospitals-destabilize-health-care-access <p>The AHA July 8 <a href="/lettercomment/2025-07-08-aha-opposes-house-bill-proposing-expand-physician-owned-hospitals" target="_blank">wrote</a> in opposition to the “Patient Access to Higher Quality Health Care Act” (H.R. 4002), which would repeal current law banning the creation and limiting the expansion of physician-owned hospitals. “H.R. 4002 would result in additional gaming of the Medicare program, jeopardizing patient access to emergency care, potentially harming sicker and lower-income patients, and severely damaging the safety-net provided by full-service community hospitals across the nation,” AHA said in its letter to the bill’s sponsors. In 2010, Congress enacted a ban on the establishment of new POHs and restricted the ability of existing POHs to expand.</p> Tue, 08 Jul 2025 14:35:20 -0500 Medicare /news/headline/2025-06-26-cms-warns-phishing-fax-scheme-aha-monitoring-other-reported-social-engineering-schemes <p>The Centers for Medicare & Medicaid Services today <a href="https://www.cms.gov/training-education/medicare-learning-network/newsletter/2025-06-26-mlnc#_Toc201664984">announced</a> it has identified a fraud scheme targeting Medicare providers and suppliers. CMS said scammers are impersonating the agency, sending phishing fax requests for medical records and other documentation while falsely claiming to be part of a Medicare audit. CMS said it does not initiate audits by requesting medical records via fax. The agency advised against responding if someone suspects they received a suspicious request and to work with their medical review contractor to confirm the validity of the request. <br> <br>“In typical fashion, scammers are taking advantage of the latest headlines to steal funds and information from individuals and organizations,” said John Riggi, AHA national advisor for cybersecurity and risk.  <br> <br>In addition to the fax scam, Riggi said the AHA continues to receive reports of increased social engineering schemes targeting hospital IT, human resources, vendor and patient portal help desks. “These schemes may involve a combination of phone, text and synthetic audio and video,” Riggi said. “Organizations should ensure strict multifactor authentication protocols are in place, train help desk staff on these schemes and enhance help desk challenge questions. If your organization becomes a victim of a social engineering scheme, report the incident to the FBI Internet Crime Complaint Center at <a href="https://www.ic3.gov/">www.ic3.gov</a>.<br><br>For more information on this or other cyber and risk issues, contact Riggi at <a href="mailto: jriggi@aha.org">jriggi@aha.org</a>. For the latest cyber and risk resources and threat intelligence, visit <a href="/cybersecurity">aha.org/cybersecurity</a>. </p> Thu, 26 Jun 2025 16:04:13 -0500 Medicare /news/headline/2025-06-17-norc-coalition-report-finds-ma-patients-face-longer-hospital-stays-reduced-follow-care-access <p>A <a href="https://strengthenhealthcare.org/wp-content/uploads/2025/06/PAC-Analysis-Findings.pdf">report</a> released June 17 by NORC at the University of Chicago, commissioned by the Coalition to Strengthen America’s Healthcare, found that patients enrolled in Medicare Advantage plans are more likely to experience longer hospital stays and experience delays in transfer to post-acute care facilities than those on Traditional Medicare. The report found that MA patients had 40% longer hospital stays, on average, than those with Traditional Medicare.  <br><br>The study, which analyzed data from 2018 to 2022, highlights growing concerns about how MA plans may be limiting access to medically necessary post-acute care services through the use of prior authorization.  <br><br>The AHA is a founding member of the Coalition. </p> Tue, 17 Jun 2025 14:51:31 -0500 Medicare /news/headline/2025-06-10-aha-comments-cms-fy-2026-ipps-proposal <p>The AHA <a href="/system/files/media/file/2025/06/aha-comments-on-cms-fy-2026-inpatient-prospective-payment-system-proposed-rule-letter-6-10-2025.pdf" target="_blank">commented</a> to the Centers for Medicare & Medicaid Services June 10 on the fiscal year 2026 <a href="/news/headline/2025-04-11-cms-issues-hospital-ipps-proposed-rule-fy-2026" target="_blank">inpatient prospective payment system proposed rule</a>, expressing support for several provisions, including a proposed increase in disproportionate share hospital payments and several aspects of the agency’s quality-related proposals. However, the AHA said it was strongly concerned about proposed payment updates.</p><p>“The proposed net payment update of 2.4% is simply inadequate given the unrelenting financial headwinds faced by hospitals and health systems,” the AHA wrote. “We are particularly concerned with the inappropriately large productivity cut that is being proposed. We urge the agency to re-examine the magnitude of this adjustment and its impact on Medicare payments.”</p><p>The AHA was also concerned about CMS’ proposal to include Medicare Advantage patients in the Hospital Readmissions Reduction Program, saying that including MA patients in calculating readmissions penalties would effectively hold hospitals accountable for excessive and inappropriate coverage delays and denials on the part of MA plans.</p> Tue, 10 Jun 2025 15:41:20 -0500 Medicare