Weekly Spotlight: Hospitals Answer the 2027 Rules on Every Front at Once
The comment period on CMS’ CY 2027 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center proposed rule closed Aug. 31, and the American Hospital Association, AAMC and AMGA each filed letters in late August urging the agency to withdraw or scale back key provisions. The objections did not arrive one at a time. Across outpatient payment, 340B, the physician fee schedule, remote monitoring and Medicaid state-directed payments, the same organizations filed against the same agency in the same three weeks.
Two provisions in the 299-page outpatient rule draw the heaviest fire. CMS would cut Medicare payment for 340B drugs and accelerate repayments tied to an earlier 340B cut, and hospitals and health systems name those as their leading concerns in the rule.
The scale of the claim is what distinguishes this cycle. Hospitals have mounted a lobbying blitz against forthcoming Trump administration regulations they say would cost them hundreds of billions of dollars — an impact they argue exceeds the GOP’s Medicaid cuts. That is a striking assertion from a sector that spent the last year describing those cuts as existential.
Physician payment is running on a parallel track. A JAMA Network Open study published Sept. 1 found Medicare’s final valuations came in below specialty-society recommendations for 39.9% of the physician services examined, a finding that lands while the CY 2027 physician fee schedule is still open and gives the societies a quantified grievance to attach to their comments.
The digital health objections are the most specific. An Alliance for Connected Care report released Sept. 2 warns that the remote patient monitoring changes proposed in the CY 2027 physician fee schedule would undercut state digital-health investments made under the Rural Health Transformation Program unless CMS revises them — one arm of the government cutting against money another arm just distributed. Digital health groups separately asked CMS to delay and overhaul the RPM policies, arguing they would fall hardest on small and rural providers, and to rebuild the approach with stakeholders at the table.
On the Medicaid side, stakeholders told CMS to rework the proposed state-directed payments rule, flagging administrative hurdles and grandfathering problems that reach beyond the proposed cap expansion that has drawn most of the attention.
None of these comment files forces CMS to move. Taken together, though, they set up the final rules as the year’s decisive test of how much of the proposed agenda survives contact with the sector that has to implement it.
Centers for Medicare and Medicaid Services (CMS)
Work Requirements Meet the Workforce
Three items this week put numbers to the gap between how Medicaid work requirements are written and how work actually happens. The common finding is that the people most likely to fail an hours test are the ones least able to absorb losing coverage, and the litigation is narrowing to exactly that point.
- 10M expansion state adults risk losing Medicaid coverage over inconsistent work hours
- Disabled workers at greater risk of losing health insurance (subscription)
- States Narrow Their Challenges In Medicaid Work Requirement Lawsuit, Hearing Set For Oct. 20
Tags: #PATIENT #PAYER #HOSPITAL
Rural Systems Look for Buyers Before the Medicaid Cuts Arrive
Rural health systems are seeking acquisition and partnership deals ahead of the Medicaid reductions scheduled under H.R. 1, and larger systems report a rise in inbound inquiries. The consolidation raises the familiar trade-off between preserving access and accepting the higher negotiated prices that follow a merger.
- STAT (subscription)
Tags: #HOSPITAL #PATIENT #PAYER
Nine More Manufacturers Sign Most-Favored-Nation Medicaid Pricing Deals
The Trump administration announced most-favored-nation drug pricing agreements with nine midsize biotechnology and pharmaceutical companies on Aug. 31, under which the companies will charge state Medicaid programs the lowest price available anywhere in the world. The agreements bring the total to 26 manufacturers, covering 89% of the branded drug market, according to a White House fact sheet.
- Inside Health Policy The Hill STAT (subscription)
Tags: #DRUG #PAYER #PATIENT
OIG Finds Part D Paid $587.7 Million for Over-the-Counter Drugs
HHS’ Office of Inspector General found Medicare Part D sponsors paid $587.7 million for over-the-counter drugs carrying obsolete prescription-only labels. Part D does not cover OTC drugs, making the payments a program-integrity gap in Part D payment controls. CMS concurred with OIG’s recommendations.
Tags: #DRUG #PAYER
Prior Authorization Loosens, and One Insurer CEO Says Scrap It
UnitedHealthcare will eliminate prior authorization requirements for about 1,700 services effective Oct. 1, part of its pledge to cut 30% of prior auth requirements by the end of 2026. The voluntary retreat is happening alongside a sharper argument from inside the industry that the tool should not exist at all.
- UnitedHealthcare to nix prior auth on 1,700 services on Oct. 1
- Health insurer CEO: ‘Make prior authorization illegal’
Tags: #PAYER #PROVIDER #PATIENT
CMS Sets the FY 2028 New Technology Add-On Payment Town Hall
CMS announced a virtual town hall on FY 2028 applications for New Technology Add-On Payments under the inpatient prospective payment system. The town hall is where manufacturers and hospitals argue whether a new device or service meets the NTAP substantial-clinical-improvement standard, which is the point at which the case for an add-on payment is made or lost in public. For device sponsors it fixes the calendar that decides whether a technology reaching market in 2028 arrives with incremental inpatient payment attached.
Tags: #DEVICE #HOSPITAL
Also in CMS
On coverage, new maternity care billing codes take effect for payers in 2027, unbundling payment across the continuum of care rather than a single global fee and landing on Medicaid agencies already absorbing that year’s changes (Georgetown CCF); a new study finds Medicare Advantage disenrollment rises with each additional complex diagnosis, adding to the evidence that sicker beneficiaries leave MA for traditional Medicare (Becker’s Payer); and enrollment in state-run ACA marketplaces is down 8.5% following the expiration of enhanced premium subsidies (Becker’s Payer). On hospital payment, a federal court vacated a 2023 CMS rule that retroactively changed disproportionate share hospital calculations for 2005-2013, finding it unlawfully retroactive, with implications for a larger pending case (HFMA), and CMS’s new Medicare Worksheet S-12 adds reporting obligations for most IPPS hospitals for cost-reporting periods ending on or after Jan. 1, 2026 (HFMA). On site of care, the Blue Cross Blue Shield Association estimates site-neutral payment for imaging could save $9.7 billion across Medicare and commercial markets, adding payer-side pressure to the congressional site-neutral proposals hospitals oppose (Becker’s Payer), and six payer reimbursement changes take effect this month (Becker’s Payer).
Tags: #PAYER #HOSPITAL #PATIENT
Food and Drug Administration (FDA)
First US Implant of a Pulmonary Valve That Grows With the Patient
A US surgeon performed the first American implant of a size-adjustable pulmonary heart valve still under FDA review, developed by Autus Valve Technologies and acquired by Edwards Lifesciences for $128.9 million. The valve is designed to be expanded by balloon procedure as pediatric patients grow, addressing the reoperation burden that shadows congenital pulmonary valve replacement, where a valve sized to a child is outgrown within years.
Tags: #DEVICE #PATIENT #PROVIDER
FDA Names the First Cohort for Its Outcomes-Based Device Pilot
FDA has named the first four participants in its TEMPO (Technology-Enabled Meaningful Patient Outcomes) pilot for digital health devices used in chronic disease care, with Dexcom joining in late July and three more companies added as of Aug. 21. The pilot allows release to patients before marketing authorization and is the agency’s test bed for a lighter-touch, outcomes-based review path for connected and AI-enabled devices, so the first cohort signals how CDRH intends to operationalize the program.
- STAT (subscription) Becker’s Hospital Review
Tags: #DEVICE #PROVIDER #PATIENT
FDA and SEC Sign Their First Information-Sharing Agreement
FDA and the Securities and Exchange Commission signed their first information-sharing agreement, giving securities regulators greater access to nonpublic FDA information when assessing whether companies misled investors about trial results, approvals or other regulatory developments. For device and drug sponsors, it means regulatory correspondence that was previously seen only by FDA can now inform a securities enforcement question.
Tags: #DRUG #DEVICE
FDA Approves Four Updated COVID Vaccines as the Recommendation Pathway Stalls
FDA approved four updated COVID-19 vaccines targeting the XFG variant. The approvals land while the CDC’s Advisory Committee on Immunization Practices remains in legal limbo, leaving the downstream recommendation and coverage pathway for the updated shots unsettled — an approval without the mechanism that normally turns one into access.
Tags: #DRUG #PATIENT #PROVIDER
Also in FDA
FDA officials reviewed best practices for validating digitally derived endpoints used in clinical studies (RAPS). Multiple academic medical centers are positioning to join FDA’s new expedited IND pilot, which would have research institutions consult IND sponsors during submission (Inside Health Policy). And pancreatic cancer patients are stranded between an FDA approval and insurer coverage decisions, losing access when manufacturer early-access programs close before payers finish their coverage review (STAT(subscription)).
Tags: #DEVICE #DRUG #PATIENT
Department of Health and Human Services (HHS)
Medical Societies Write Their Own Vaccine Schedule
The Vaccine Integrity Project and the American Medical Association released independent 2026-27 flu, COVID-19 and RSV vaccine recommendations based on their own evidence review, and major medical associations reaffirmed that adults and children should receive all three for the season. The societies are bypassing the HHS and CDC advisory process rather than waiting on it, which deepens the split between mainstream medical organizations and the current ACIP and CDC recommendations. The practical consequence is that what a clinician tells a patient this respiratory season now depends on which set of recommendations that clinician follows.
Tags: #PROVIDER #PATIENT
Pressure Builds on CDC’s Credibility and Its Vaccine Overhaul
Three threads converged on the agency’s standing this week: an omission from its own outbreak data, an assessment of what the Secretary’s vaccine agenda will leave behind, and the litigation testing whether the overhaul survives.
- Schwartz Under Fire As CDC Dashboard Omits Measles-Associated Deaths
- RFK Jr.’s partial vaccine legacy
- Trump Admin Fights Uphill To Beat Vaccine Overhaul Suit
Tags: #ALL
Federal Scrutiny and Private Litigation Converge on CPT
Two separate challenges to the AMA’s control of the CPT code set landed within days of each other. The Secretary attacked the arrangement publicly; a lawsuit then went after the licensing fees behind it. CPT is the layer beneath Medicare and commercial payment alike, so pressure on who owns and prices the code set reaches every claim either system processes.
- Kennedy Blasts AMA’s Control of CPT System, Says President Is Changing That
- AMA Sued Over Its ‘Paywalled’ Billing Codes
Tags: #PROVIDER #PAYER #HOSPITAL
Federal Research Faces Caps, Restrictions and Prosecutions
Four separate pressures landed on federally funded science this week, running from how grants are awarded to who gets investigated for having held one.
- NIH proposal to cap research grants draws mixed reception, agency says (subscription)
- How Proposed OMB Funding Restrictions May Reshape Research
- Will House delay Trump plan to politicize NIH grants? (subscription)
- Inside the D.O.J.’s Investigation of Fauci and Other Virus Scientists
Tags: #ALL
ARPA-H Commits $125 Million to Personalized RNA Drug Production
ARPA-H committed $125 million to biotechs building personalized RNA-based drug production capacity, continuing the agency’s pattern of funding manufacturing capability rather than individual therapies.
Tags: #DRUG
Also in HHS
HHS awarded $77 million in SAMHSA grants for substance use prevention and treatment, mental health, suicide prevention and crisis services (MedCity News), and HRSA awarded $11.2 million to establish 15 new physician residency programs in rural communities across 14 states under the Rural Residency Planning and Development Program (HHS).
Tags: #PROVIDER #HOSPITAL #PATIENT
Heard on the Hill
Stopgap Funds the Government Through Dec. 11 and Delays a Grant Rule
Congress passed a stopgap funding the government through Dec. 11 on a 370-48 House vote following a 90-6 Senate vote, and President Trump signed the Continuing Appropriations and Extensions Act, 2027, into law. The measure delays a proposed federal grant rule that the American Hospital Association had flagged as a threat to hospital research funding.
Tags: #HOSPITAL #PROVIDER
Pentagon Sought to Divert NIH Funds, DeLauro Says
Rep. Rosa DeLauro (D-CT), the top Democrat on House Appropriations, said the Pentagon signed an interagency agreement to divert billions of dollars from NIH to the Defense Department budget, disclosed to Congress only recently. The claim adds an appropriations dimension to the research-funding fight running through HHS this week.
Tags: #ALL
Pallone Demands Records From Six No Surprises Arbiters
House Energy and Commerce ranking member Frank Pallone (D-NJ) is investigating No Surprises Act independent dispute resolution entities, demanding information from six IDR entities over their arbitration practices. His stated concern is that IDR case volume, administrative costs and outcomes are driving health care costs upward rather than restraining them.
Tags: #PAYER #PROVIDER #HOSPITAL
Bipartisan Bill Would Require a Human Behind Every AI Denial
A bipartisan group of House lawmakers will introduce AI legislation permitting insurers to use artificial intelligence for claims processing but requiring a human in the loop for any denial of care based on medical necessity. The bill draws the line at the denial rather than at the technology.
Tags: #PAYER #PATIENT #PROVIDER
Also on the Hill
The House Democratic Doctors Caucus urged CMS Administrator Mehmet Oz to reverse the policy requiring medically frail Medicaid applicants to prove their condition impairs their ability to work before qualifying for a work-requirement exemption, calling it beyond the statute and an unfunded mandate on the providers who must perform the assessments (Inside Health Policy). With enhanced ACA premium tax credits expired since last year, Democratic lawmakers and policy groups are floating competing reform platforms for the midterms and have yet to settle how ambitious a coverage agenda to run on (The Hill), while CBO found nearly half of small-business employees are not offered employer coverage (Becker’s Payer). Separately, UnitedHealth Group executives and board members donated more than $100,000 to House Democratic Whip Katherine Clark during the 2025-2026 cycle (STAT (subscription)).
Tags: #PAYER #PATIENT #PROVIDER
Notable Notes
TAVI Before PCI Is Noninferior to the Conventional Order
A major randomized trial presented as late-breaking data at ESC Congress 2026 found that performing TAVI before PCI is noninferior to the conventional PCI-first sequence in patients who need both procedures, supporting either order. The finding bears directly on how heart teams sequence care for aortic stenosis patients who also have coronary artery disease, a scheduling question that until now has been settled by institutional habit rather than randomized evidence.
Tags: #DEVICE #PROVIDER #PATIENT
Tricuspid Repair Cuts Death and Heart Failure Hospitalization
Transcatheter tricuspid valve repair added to medical therapy reduced death and heart failure hospitalization in patients with severe tricuspid regurgitation, with a marked cut in heart failure admissions, according to late-breaking data presented at ESC Congress 2026. The result extends the evidence for T-TEER beyond the quality-of-life benefit already established, which has been the therapy’s principal justification to date.
Tags: #DEVICE #PROVIDER #PATIENT
Two Trials Give Mixed Answers on Anticoagulation After TAVI
Two randomized trials presented at ESC Congress 2026 reached different conclusions about direct oral anticoagulants after TAVI. ACASA-TAVI, which randomized 360 patients at three Norwegian centers to 12 months of DOAC monotherapy or aspirin, found subclinical leaflet thrombosis in 16.2% of DOAC patients versus 28.6% on aspirin, with grade 3-4 thrombosis at 0.6% versus 9.0% and no excess on the composite safety endpoint. NOTION-4, testing three months of DOAC followed by nine months of aspirin, cut leaflet thrombosis at three months but showed a worse composite safety endpoint at 8.2% versus 2.3%. Better valve protection and acceptable safety do not yet travel together across both regimens.
Tags: #DEVICE #PROVIDER #PATIENT
SCAI and HRS Open Comment on a Focused LAAO Update
SCAI and the Heart Rhythm Society opened public comment through Sept. 28 on the 2026 SCAI/HRS Focused Update of the Clinical Practice Guidelines on Transcatheter Left Atrial Appendage Occlusion. The update reexamines the evidence comparing LAAO with oral anticoagulation for stroke prevention in nonvalvular atrial fibrillation, prompted by the OPTION, CHAMPION-AF and CLOSURE-AF trials. The guidance governs structural-heart device use and reaches Boston Scientific and Abbott LAAO products directly.
Tags: #DEVICE #PROVIDER
Employer Health Costs Projected to Rise 11% in 2027
A new US employer survey projects average health benefit costs will rise 11% in 2027 absent benefit cuts, which the survey describes as the steepest increase in decades. The figure sets the backdrop for the plan-design decisions employers make this fall.
Tags: #PAYER #PATIENT #HOSPITAL
The Bill Arrives Earlier and Larger
Four items this week track the same shift from different angles: more of the cost of care is landing on patients directly, sooner, and hospitals are already recording what goes uncollected.
- The Market Forces Quietly Adding Thousands To Patient Bills
- Why More Hospitals And Doctors Are Asking Patients To Pay First
- Bad debt and charity care expenses climbing, expected to go even higher
- HDHPs don’t slow long-term healthcare spending growth: Study
Tags: #PATIENT #HOSPITAL #PAYER
Also Worth Noting
Companies building agentic AI models for clinical use are pushing for a national AI licensure system that would let them bypass the Interstate Medical Licensing Compact, and at least one is seeking informed-consent changes that would shift malpractice liability from developers onto patients (Inside Health Policy). A second essay argues Medicare Advantage plans face no meaningful penalty for wrongful denials and proposes enforceable accountability standards (The Health Care Blog). HaloMD claims the No Surprises Act has saved at least $1 billion in out-of-network emergency spending, though independent researchers question the billing firm’s methodology (Healthcare Dive). The American Hospital Association is pressing the National Association of Insurance Commissioners on three affordability asks, urging state regulators to look past a hospital-price-only view of costs (Health Exec). Mark Cuban laid out five affordability policy changes before a Texas House panel (Fierce Healthcare), an industry op-ed argues academic medical centers can prevent rural healthcare deserts by acquiring struggling community hospitals (Fierce Healthcare), and the pharmaceutical industry is facing its largest patent cliff in decades (The Wall Street Journal).
Tags: #ALL