Friday, July 31, 2026

A federal judge has denied a motion by several states seeking to postpone the implementation of Medicaid work requirements that took effect on July 29, 2026. The requirements, mandated by H.R. 1, compel certain beneficiaries to prove work or community engagement to maintain coverage. The denial means the rules proceed as scheduled, potentially affecting millions of enrollees. Practices in states implementing these requirements should expect increased patient inquiries about coverage status and may see shifts in patient mix as some lose eligibility. Front desk staff should verify Medicaid eligibility more frequently for at-risk populations over the coming weeks.

Daffodil Health has debuted a new No Surprises Act dispute management solution designed for payers and third-party administrators. The platform aims to streamline the independent dispute resolution process mandated by the NSA, which has been a source of administrative burden and arbitration abuse since the law's implementation. This tool could signal a shift in how payers handle out-of-network billing disputes, potentially affecting provider reimbursement timelines and negotiation leverage. While the product is payer-facing, providers should monitor whether their contracted payers adopt this or similar tools, as it may change the dynamics and efficiency of the IDR process. The launch reflects ongoing market adaptation to the complex NSA regulatory environment.

Idaho has clarified the documentation required for Medicaid beneficiaries to qualify for a 'medically frail' exemption from the new federal work requirements. Providers must substantiate exemptions with medical evidence, which will be critical for maintaining coverage for chronically ill patients. The work requirements, which launched July 29 under H.R. 1, mandate that certain Medicaid enrollees prove work or community engagement. Idaho's guidance specifies the types of medical conditions and the proof needed to avoid coverage loss. Billing teams should monitor their state's specific exemption process and be prepared to assist patients in navigating documentation requests.

CMS has finalized payment updates and coverage changes for inpatient rehabilitation facilities for fiscal year 2027. The rule includes a 2.8% market basket increase, effective October 1, 2026. This update follows the proposed rule issued earlier this year and adjusts payment rates for the IRF prospective payment system. The final rule also incorporates changes to the IRF quality reporting program and updates the wage index. Facilities should review the final Federal Register notice to understand the full impact on their Medicare reimbursement for the coming fiscal year. No immediate action is required, but billing staff should prepare for the rate change effective this fall.

CMS will give hospices a 2.3 percent payment bump in fiscal year 2027. The update is part of the annual hospice payment rate adjustment and applies to services furnished on or after October 1, 2026. This finalized increase reflects the agency's annual market basket update for hospice care. Hospice providers should incorporate this rate change into their revenue projections for the next fiscal year. The final rule also typically includes updates to the hospice wage index and may address quality reporting requirements. Review the final rule when published to confirm all provisions affecting hospice reimbursement.