Monday, August 3, 2026

CMS finalized the Hospice Wage Index and Payment Rate Update for fiscal year 2027, effective October 1, 2026. The rule implements a 2.3% payment rate increase, which reflects a 2.5% inpatient hospital market basket update reduced by a 0.2 percentage point productivity adjustment. The final rule also updates the hospice wage index and clarifies certain quality reporting program requirements for the Hospice Quality Reporting Program. Practices that contract with or bill for hospice services should plan for this rate change for services on or after the effective date.

A data breach at the RCM platform CareCloud exposed protected health information and financial data for approximately 345,000 individuals. The incident underscores the cybersecurity and operational continuity risks associated with third-party billing and practice management vendors. While the breach notification process will be managed by CareCloud, practices using the platform should proactively communicate with their point of contact to confirm their patient data's status and understand any required internal response steps related to patient inquiries or potential service disruptions.

CMS's proposed 2027 Outpatient Prospective Payment System rule features a new round of 340B drug payment cuts and advances the agency's push for site-neutral payments. The rule aims to lower Medicare spending by reducing payments for drugs purchased under the 340B discount program for off-campus provider-based departments. Simultaneously, CMS is proposing to further align payment rates for clinic visits across different settings. The final rule will be published in November, with an effective date of January 1, 2027. Legal challenges from hospitals and 340B-covered entities are expected. The comment period closes September 30, 2026.

The Michigan Supreme Court rejected Eli Lilly's effort to block a state investigation into its insulin pricing. The court's ruling allows Michigan Attorney General Dana Nessel to proceed with a probe under the state's consumer protection laws, examining whether the company's pricing practices constitute unfair or deceptive conduct. This state-level action adds to the ongoing national scrutiny of drug pricing and could influence similar investigations in other states, even as federal legislation on insulin costs remains stalled. The ruling does not determine liability but affirms the state's authority to investigate.

Sens. Jerry Moran (R-Kan.) and Tina Smith (D-Minn.) introduced the Rural Hospital Support Act, bipartisan legislation focused on shoring up financially distressed rural facilities. The bill seeks to make permanent the Medicare-dependent hospital and low-volume adjustment programs, which provide enhanced payments to small, rural hospitals. These payment adjustments are currently subject to periodic congressional extension, creating uncertainty for hospital budgeting. The legislation responds to the continued wave of rural hospital closures and service reductions. Its fate will be tied to year-end legislative packages.