Tuesday, August 4, 2026

CMS finalized the Inpatient Rehabilitation Facility (IRF) Prospective Payment System rule for fiscal year 2027, effective October 1, 2026. The update includes a 2.3% net payment increase after a 3.0% market basket update is offset by a 0.7% productivity adjustment. The rule also updates the IRF Quality Reporting Program, with three new functional status measures slated for FY 2029. Facilities must ensure their billing systems reflect the new payment rates by the October 1 effective date and review the quality measure changes to avoid payment penalties in future years.

CMS has issued updated billing instructions for telehealth services provided by Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs), effective October 1, 2026. The changes affect HCPCS codes G0071 and G2025, altering how these entities bill for virtual communication and remote monitoring services. RHCs and FQHCs must review the revised guidance from their Medicare Administrative Contractor (MAC) and update their billing and coding protocols before the fall deadline to ensure claims are submitted correctly and avoid denials.

CMS's proposed CY 2027 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rule includes significant policy shifts. The agency proposes to further cut payments for 340B drugs and advance site-neutral payment policies that would reduce reimbursement for hospital outpatient departments. For ASCs, the rule proposes a 2.5% payment update tied to a hospital market basket increase. Hospitals and ASCs should analyze the proposed impact tables, model the financial effect of the 340B and site-neutral changes, and prepare comments before the rule is finalized later this year.

New York's legislature passed the Medical Aid in Dying Act, moving the state closer to allowing terminally ill adults to request life-ending medication. The law requires a multi-step process including two oral requests, a written request, and confirmation from two physicians. Implementation is expected by 2027, which will require clinics to update patient counseling protocols, consent documentation, and pharmacy coordination workflows. New York will join 10 other states and Washington D.C. with similar laws. The comment period for related regulatory changes closes this fall; monitor the state health department's docket for final administrative rules.

The Kaiser Family Foundation's new tracker details state-by-state implementation of Medicaid work and community engagement requirements mandated by the 2025 federal reconciliation law. At least 15 states have submitted or are drafting Section 1115 waiver applications to enact requirements, with Idaho, New York, and Louisiana among the most advanced. The requirements could affect eligibility for millions of non-elderly, non-disabled adults. For clinics, this means increased front-desk burdens to verify beneficiary compliance and potential patient churn as enrollees lose coverage. Monitor your state's Medicaid agency website for public comment periods on waiver proposals; Idaho's comment window opens this month.