Top News
Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Proposed Rule
The Centers for Medicare and Medicaid Services (CMS) released a proposed rule on July 2, 2026, regarding their updated Medicare payment rates for hospital outpatient and ambulatory surgical center (ASC) services for calendar year (CY) 2027.
In the Outpatient Prospective Payment System (OPPS) Proposed Rule, CMS proposed to raise payment rates by 2.4% for the roughly 3,500 hospital outpatient departments and roughly 6,400 ASCs in order to keep pace with rising costs. The rule also continues expanding site-neutral payment policy by now applying the Physician Fee Schedule payment rate to imaging without contrast services. CMS estimates this provision will reduce Medicare Part B expenditures by ~$260 million in the first year alone in savings and reduce premiums. Other changes include updated hospital quality ratings, streamlined emergency-room compliance checks, and eliminating Inpatient Only lists.
The most consequential financial provision is a steep cut to 340B drug payments. Currently, hospitals in the 340B program- which serves lower-income and rural communities- buy drugs at a discount and get reimbursed by Medicare at the average sales price plus 6%. Recently, a government survey found that for many hospitals, the 20% beneficiary copayment for the 340B drug was more than the hospital had paid for the drug. In response, CMS proposes paying 340B-acquired drugs at average sales price minus 33.4%, an estimated $4.55 billion reduction in Medicare drug payments and $1.15 billion in beneficiary savings. CMS also wants to accelerate recovery of the prior 340B remedy overpayment so full recovery of the $7.8 billion owed is expected by CY 2029
CMS also issued requests for information (RFIs) on hospital price transparency standardization and on encouraging domestically procured PPE and essential medicines. Comments on the proposed rule must be submitted by August 31, 2026.
Recent Primary Election Losses Signal Potential Health Committee Leadership Changes
A series of congressional primary defeats has begun reshaping the outlook for committee leadership in the next Congress, with several incumbent lawmakers losing renomination bids ahead of the 2026 general election. Among the highest-profile losses are Senators Bill Cassidy (R-LA) and John Cornyn (R-TX), along with Representatives Diana DeGette (D-CO), Thomas Massie (R-KY), Adriano Espaillat (D-NY), Dan Goldman (D-NY), Al Green (D-TX), Julie Johnson (D-TX), and Dan Crenshaw (R-TX). While the contests were shaped by a range of national, state, and district political dynamics, the results are expected to alter the makeup of Congress and will reshape committee leadership in the upcoming session.
For health policy, the most significant implications involve the congressional committees with jurisdiction over the Department of Health and Human Services (HHS) and federal health programs. Senator Cassidy’s primary loss means the Senate Health, Education, Labor and Pension (HELP) Committee will have a new Republican chairman next Congress, and the Senate Finance Committee, which oversees Medicare, Medicaid, and CHIP funding, will have an open seat.
Ranking Democrat on the House Energy and Commerce Committee Representative DeGette’s primary loss removes a senior health policymaker who would have been well positioned to lead the committee if Democrats regain the House. Her departure leaves an opening on a key committee responsible for Medicare, Medicaid, Food and Drug Administration (FDA), National Institutes of Health (NIH), and broader public health oversight. Although several other incumbents also lost their primaries, the defeats of Senator Cassidy and Representative DeGette are expected to have the most direct implications for congressional health committee leadership in the next Congress.
Administrative Action
New Data Estimates Four Million Medicare Enrollees Eligible to Receive GLP-1s Through Bridge Program
New research from KFF found that 3.8 million Medicare Part D enrollees are eligible to participate in the Medicare GLP-1 Bridge program. Last year, the Centers for Medicare and Medicaid Services (CMS) announced new model that would offer Medicare and Medicaid enrollees access to GLP-1 medications, called the Better Approaches to Lifestyle and Nutrition for Comprehensive Health (BALANCE) Model, which was slated to launch for Medicare Part D beneficiaries in July 2026 and was indefinitely postponed due to inadequate insurer participation. To provide Medicare Part D beneficiaries with access to the medications in the interim, CMS established and expanded a GLP-1 Bridge program, which would provide beneficiaries with GLP-1s outside of the Part D program. Beneficiaries would need to be enrolled in Medicare Part D, meet a clinical threshold, undergo prior authorization, and pay a $50 co-pay.
Using 2023 data on traditional Medicare and Medicare Advantage (MA) enrollees, KFF found that 9.7 million Medicare enrollees met the clinical criteria for the Bridge program. Of these beneficiaries, 39% (3.8 million) were eligible for the Bridge program while the remaining were eligible for the medication through existing Medicare coverage policies. Although the total cost to the federal government depends on utilization of the program, if between 10 percent to 75 percent of eligible Medicare Part D beneficiaries were to participate in the Bridge program in the first 18 months, Medicare would spend between $1.3 to $10 billion dollars by the end of 2027. At the end of 2027, the Bridge program is expected to come to a close, leaving Part D sponsors responsible for beneficiaries access to GLP-1 medications.
ASPE Report Credits Affordable Care Act Program Integrity Measures with Reducing Improper Enrollment
The Office of the Assistant Secretary for Planning and Evaluation (ASPE) at the Department of Health and Human Services (HHS) released a new report estimating that approximately 2.9 million people who were improperly receiving Affordable Care Act (ACA) Marketplace subsidies have been removed from coverage or prevented from enrolling since the Trump administration implemented new program integrity policies. According to the report, the administration’s Marketplace Integrity and Affordability Rule and related enforcement efforts stopped 1.5 million ineligible individuals from receiving subsidies and ended or blocked another 1.4 million enrollments through February 2026. ASPE estimates that 19.2 million people are currently enrolled in ACA Exchange plans, a figure that remains above pre-2024 enrollment levels despite the recent decline.
The issue brief argues that temporary legislative changes and reduced eligibility safeguards between 2021 and 2024 contributed to a surge in improper, phantom, and fraudulent enrollments, which it estimates peaked at 5.6 million people in 2025. ASPE contends that improper enrollment remains an ongoing concern, estimating that approximately 2.6 million questionable enrollments persist. The department said it plans to continue strengthening oversight of brokers, eligibility verification, and subsidy payments to reduce fraud and improve the long-term integrity of the ACA Marketplace.
HHS Moves to End COVID-19 Emergency Use Authorizations
On June 30, the U.S. Department of Health and Human Services (HHS) noted that it will terminate the COVID-19 Emergency Use Authorization (EUA) declarations for drugs, biological products, and medical devices, concluding that the conditions that originally justified the emergency authorities are no longer present. HHS Secretary Robert F. Kennedy Jr. framed the move as a matter of regulatory accountability, saying it reinforces the idea that emergency authorities are meant to be temporary and targeted rather than indefinite. The declaration covering drugs and biological products will end 12 months after the determination, while the medical device declaration will end after 180 days, giving manufacturers, providers, and patients time to adjust.
The EUA framework was first established in 2020 to speed access to medical products during the pandemic’s early, uncertain phase. HHS noted that the landscape has since shifted substantially, with Food and Drug Administration (FDA)-approved and licensed alternatives now widely available and reliance on EUA-authorized products declining. During the transition periods, HHS and the Food and Drug Administration (FDA) say they will continue working with manufacturers seeking to move products toward traditional approval, clearance, or licensure pathways. The agency will publish formal notices of the terminations in the Federal Register and provide legally required notifications to Congress in the coming days.
CY2027 Home Health Prospective Payment System Proposed Rule
The Centers for Medicare and Medicaid Services (CMS) released a proposed rule on July 1, 2026, on the Home Health (HH) Prospective Payment System (PPS). The HH PPS increasing their payment rate by 2.4% for calendar year (CY) 2027. This payment increase, totaling about $420 million in additional spending, combines a 2.1% base rate update with a slight fixed-dollar loss (FDL) related increase. Beyond the rate update, CMS also wants to tighten Medicare’s fraud and enrollment rules across home health, hospice, and medical equipment suppliers, including making it easier to retroactively revoke a provider’s Medicare enrollment and expanding the grounds for denying enrollment. CMS included three requests for information (RFIs) seeking public input on building a home-health-specific wage index, on future measure concepts for HH quality reporting program, and on how to promote community-based palliative care services with existing Medicare benefits. Comments on the proposed rule must be submitted by August 31, 2026.
Congressional Action
House Advances Bipartisan Measure to Expand Flexibility for Medicare ACO Reporting
The House unanimously passed bipartisan legislation that would give accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) additional flexibility in meeting federal quality reporting requirements while the Center for Medicare & Medicaid Services (CMS) continues to develop digital quality measures. The Health Care Efficiency Through Flexibility Act (H.R. 5347), introduced by Representative Vern Buchanan (R-FL-16) and Jimmy Panetta (D-CA-19), would preserve existing reporting pathways through the 2029 performance year rather than requiring ACOs to transition exclusively to digital reporting before the agency has finalized a long-term framework. The bill’s sponsors said the measure is intended to reduce administrative burden and provide greater certainty as CMS modernizes its quality reporting system.
The legislation also directs CMS to launch a voluntary demonstration program to evaluate digital quality measure reporting before broader implementation and to publish recommendations on future expansion. Further, the bill would provide safeguards for ACOs whose participating practices are unable to submit quality data through a selected reporting method under certain circumstances. The legislation now moves to the Senate, where its timeline for consideration remains uncertain.
State Action
25 States File Lawsuit Against HHS Over Medicaid Work Requirements
Democratic attorneys general and governors from 25 states and the District of Columbia filed a lawsuit Monday against the Trump administration, challenging an interim final rule (IFR) issued by the Centers for Medicare and Medicaid Services (CMS) that implements new Medicaid community engagement requirements. In the lawsuit, states argue that CMS’s guidance, particularly its narrower definition of medical frailty, goes beyond what the underlying statute requires. Under the IFR, a qualifying condition must “significantly impair” a person’s ability to meet the community engagement requirement, a standard the states say was introduced without adequate warning or clarity despite months of prior communication with CMS during implementation planning.
The lawsuit contends that the added documentation and verification burdens could cause eligible people including cancer patients, individuals with disabilities, and those with serious health conditions to lose coverage unintentionally. New York Attorney General Letitia James and other officials emphasized concerns about paperwork barriers affecting vulnerable residents while legal experts working with states said CMS’s approach exceeded the statute’s language. The Trump administration has defended the work requirements as a measure to reduce misuse of the program and direct resources toward those who need them most. The case adds to ongoing debate over how the 2025 Medicaid policy reforms will be implemented as states work toward the January 1, 2027 implementation deadline.
Judicial Action
Supreme Court Rules on Presidential Power to Fire Independent Agency Leadership
The Supreme Court ruled 6-3 on June 29 that President Trump legally fired Democratic Federal Trade Commission (FTC) Commissioner Rebecca Slaughter. The ruling overturns the 90-year-old precedent set by Humphrey’s Executor v. United States, which had protected commissioners of independent agencies like the FTC from presidential removal without cause. Chief Justice John Roberts, writing for the majority, argued that because the FTC exercises executive power including rulemaking, investigations, and enforcement it must be controlled by the president. On the other hand, Justice Sotomayor’s dissent warned the ruling grants the president unprecedented power and unwinds a long-standing constitutional practice. The decision extends beyond the FTC to other independent agencies like the Occupational Safety and Health Administration (OSHA) and the Federal Communications Commission (FCC). The ruling has significant implications for health care and pharmaceutical regulation, since the FTC plays a major role in antitrust enforcement, drug patent disputes, and consumer health data protection. As it stands, three of five FTC seats are currently vacant, with both remaining commissioners being Trump appointees.
In a separate opinion the same day, the Court ruled against the administration’s temporary restraining order to force Lisa Cook to be removed from the Federal Reserve Board of Governors in compliance with President Trump’s request. In the ruling, the majority opinion argues the Federal Reserve is uniquely protected from presidential removal power, easing concerns about economic instability. In the ruling, Justices noted the importance of the independence and inelasticity of the Federal Reserve as an important measure to protect the national economy. Governor Cook’s case will retain her seat while the case continues through the legal system.
Save the Date: 2026 Annual Conference
HealthCare Roundtable 22nd Annual Conference
November 4-6, 2026
The Mayflower Hotel
Washington, D.C.
