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CMS Issues Additional Payment Reform Rules After publishing a far-reaching rule Monday, the Centers for Medicare and Medicaid Services (CMS) issued today a proposed reform rule as well as proposed rates for outpatient hospitals and ambulatory surgery centers. Outpatient rates for hospitals would increase by 2.4% in 2026. Ambulatory surgery centers also would increase by 2.4% in 2026. Most important, CMS proposes important reforms to reduce the costs in Medicare over time. Many of these were proposed earlier during Trump 45, but the Biden administration rescinded the proposals upon coming to office. The reforms include: — Phasing out the inpatient only list over a 3-year period and allowing the services to be performed in a hospital outpatient setting or ambulatory surgery center. — Reforming the ambulatory surgery center list by updating its general criteria and shifting five exclusion criteria into a new, nonbinding section to allow the expansion of services,

Medicare Physician 2026 Rate And Reforms The Centers for Medicare & Medicaid Services (CMS) released its 2026 physician fee schedule on Monday evening, announcing an increase of 3.62% over the 2025 rate. The budget reconciliation bill increased rates for that year by 2.5%. The added amount was due to other changes in the rate-setting system. Physicians in alternative payment models will see an increase of 3.83%. CMS also unveiled a series of rate and other reforms, including rewarding certain physicians for avoiding hospitalizations, coordinating better with primary care, and early intervention. CMS also proposed removing 10 quality measures that do not improve patient health outcomes and introduced five new ones, with an emphasis on preventive services and expanding Medicare diabetes prevention. Additional articles: https://www.fiercehealthcare.com/regulatory/cms-proposes-36-pay-bump-docs-takes-aim-chronic-conditions-physician-fee-schedule and https://www.beckershospitalreview.com/finance/cms-pitches-2026-physician-pay-plan-with-2-conversion-factors-8-things-to-know/ and https://www.beckershospitalreview.com/finance/cms-proposes-2026-medicare-rule-6-notes/ and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-pfs-proposed-rule-cms-1832-p and https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-proposed-rule-cms-1832-p-medicare-shared and https://www.cms.gov/newsroom/press-releases/cms-proposes-physician-payment-rule-significantly-cut-spending-waste-enhance-quality-measures-and (Some articles may require a subscription.) #cms #medicare #regulations #providers #physicians #acos https://www.modernhealthcare.com/politics-regulation/mh-medicare-physician-pay-cms-2026 A Second Budget

Mergers and Acquisitions Down Due to the major healthcare reductions in the budget reconciliation bill, mergers and acquisitions between hospitals and health systems were down in Q2 2025 against recent years. Eight transactions were announced in the second quarter, the lowest in the quarter since at least 2017. Another report says that employers need to brace for continuing increases in healthcare costs. This is in part due to underlying utilization trends but also the probable price hikes providers will demand due to the losses in other lines of business under the reconciliation bill as well as the threat of tariffs. Hospital uncompensated care costs are expected to grow by $443 billion over ten years. Additional article: https://www.healthcaredive.com/news/hospital-health-system-ma-falls-q2-medicaid-cuts-2025/752685/ #employercoverage #manda #mergers #acquisitions https://www.beckerspayer.com/payer/why-2026-may-hit-employers-with-a-one-two-punch-on-healthcare-costs Record Data Breaches In 2024 A record-high number of organizations reported healthcare data breaches in 2024. This year will be challenging as well. The Department of Health and

PAYGO Politics President Donald Trump and Republicans said they would not cut Medicare, but the budget reconciliation could very well do that. Since the bill actually increases the deficit in future years, what is known as PAYGO sequestration kicks in to address the increase. Medicare is one program that can be cut under the law to a cap of 4%. On an earlier version of the bill, the Congressional Budget Office (CBO) said about $500 billion in cuts could be triggered beginning in 2026. PAYGO can be overruled but the Senate Democrats would have to join Republicans to overrule PAYGO by 60 votes. In this political world, will that happen this time as it has in the past? Will Democrats blame Republicans for passing the budget bill and not overrule or would that then put the blame on Democrats? See my blog this week for all the details of the

A Second Budget Bill Coming? Capitol Hill was abuzz today when the budget chairs of each house signaled that they both would like to see a second bill. While budget reconciliation rules allow for only one bill per year, the GOP had FFY 2025 and FFY 2026 budget years they could use for the process. And technically, after October 1, 2025, FFY 2027’s budget could also be acted on with a budget reconciliation bill. Budget Chairs Mike Crapo, R-ID, and Rep. Jodey Arrington, R-TX, each confirmed a desire for a second bill later this year but did not specify what might be included. Separately, Ron Johnson, R-WI, said that he has a commitment from the White House and Senate GOP leadership to get another chance to repeal part of the Affordable Care Act’s (ACA) expansion of Medicaid. Johnson’s proposal would end the 90 percent federal cost-share at the end of

Good News, Bad News On Drug Tariffs President Trump said Tuesday that he could levy up to 200 percent tariffs on pharmaceutical products imported into the U.S. soon. “If they have to bring the pharmaceuticals into the country, the drugs and other things into the country, they’re going to be tariffed at a very, very high rate, like 200 percent,” Trump said during a Cabinet meeting. That is the bad news. In good news, Trump said any tariffs would not take effect immediately. “We’re going to give people about a year, year and a half, to come in, and after that, they’re going to be tariffed,” Trump said. America imports the majority of its generic drugs from abroad and Trump wants this production onshored for national security reasons. Many brand drugs are also imported. Levies on drugs would increase already steep spending trends in healthcare. #tariffs #drugpricing https://thehill.com/homenews/administration/5390505-trump-200-percent-tariffs-pharma-imports Employer Coverage Changes Not

Gearing Up For 2026 Election and Medicaid Interesting The Hill article on Medicaid being a huge election 2026 issue. Democrats will try to argue that the $1 trillion in cuts in the budget reconciliation bill will devastate coverage and providers, especially rural ones. Republicans will argue they are attacking fraud, waste, abuse, and improper enrollment. As the article notes, while many policy changes will not  be in effect yet, in prior midyear cycles issues still resonated. See my recap of what is in the budget reconciliation bill: https://www.healthcarelabyrinth.com/saga-over-big-beautiful-bill-has-passed-for-good-or-bad/ In other news, another study details impacts of healthcare cuts on providers throughout the nation. As well, Molina Healthcare released preliminary results from its second-quarter financials and is bracing for elevated medical costs. Centene pulled its earnings forecast earlier. Molina sees ongoing financial troubles in its Affordable Care Act (ACA) Exchange, Medicaid, and Medicare Advantage lines of business. The budget reconciliation bill