Tuesday, July 14, 2026

The HHS Office of Inspector General named Medicare Advantage and Medicaid as top fraud, waste, and abuse enforcement priorities for fiscal year 2027. This signals an upcoming wave of targeted audits and investigations into risk-adjustment practices, prior authorization denials, and provider enrollment. The OIG cited growing program integrity concerns in both lines of business as justification. Practices billing Medicare Advantage and Medicaid should expect heightened documentation requests and potential prepayment reviews. Monitor the OIG's Semiannual Report to Congress for detailed work plan items due later this summer.

CMS issued a proposed rule revising the Medicare overpayment reporting and refund process. The changes aim to clarify the 60-day repayment timeline and define when a provider has 'identified' an overpayment, which triggers the refund obligation. This rule directly addresses provider confusion following court cases that questioned CMS's enforcement authority. The proposal also refines the lookback period for overpayment identification. The comment period will open soon; billing teams should review internal compliance protocols for identifying and reporting overpayments to prepare for the final rule.

CMS issued its proposed Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center payment rule for calendar year 2027. The rule includes the annual payment rate update, changes to the Inpatient Only list, and potential modifications to the 340B drug payment policy. Hospitals and ASCs must analyze the proposed conversion factor and payment weights for their top procedures. The rule also contains quality reporting program updates. The comment period closes in mid-September 2026; financial analysts should model the payment impact on their facility's top 20 revenue-generating services before the deadline.

A second wave of lawsuits from Medicare Advantage insurers challenges CMS's methodology for recalculating 2025 star ratings. The suits follow Elevance Health's July 2 complaint and allege the recalculations, based on audit findings, unfairly reduce quality bonuses and create financial instability. This legal pushback highlights the high stakes of the star rating system, where a single rating point can shift hundreds of millions in bonus payments. For providers, the ongoing dispute underscores the volatility of MA plan economics and the downstream risk to provider contracts if plan revenue is disrupted.

CMS issued a national framework to guide states implementing Medicaid work and community engagement requirements. The move standardizes the approval process for state waivers under H.R. 1 and signals federal support for expanding these policies. States including New York, Indiana, and Montana have already begun enrollment changes, leading to coverage losses. For practices, this means a growing number of Medicaid patients may lose eligibility, disrupting care continuity and increasing uncompensated care. Track your state's Medicaid agency announcements for implementation timelines and patient communication plans.