Policy Digest — October 13, 2026

Introduction
Cardiologists welcomed CMS’s new TAVR coverage rules while watching for self-referral, hospitals sued to stop the 340B rebate pilot, and CMS named the 2,217 hospitals entering mandatory joint replacement payment in 2028.

Weekly Spotlight

Device Policy: Coverage Opens Up as FDA Sets Its Agenda

Medicare’s new rules for transcatheter aortic valve replacement (TAVR) are drawing a mostly favorable reception from the physicians who use them. Cardiologists largely welcomed CMS’s final national coverage determination, which lifts coverage with evidence development for severe symptomatic aortic stenosis, adds asymptomatic severe aortic stenosis under coverage with evidence development, and drops hospital-level volume thresholds while keeping the on-site cardiac surgery requirement, Medscape reports. A heart team with at least one cardiac surgeon and one interventional cardiologist still reviews the patient’s chart, but a single in-person evaluation by either one now suffices, and either can perform the procedure without the other. American College of Cardiology President Roxana Mehran said the evidence requirement is no longer necessary for aortic stenosis. Some clinicians warned that the looser heart team rules raise the risk of self-referral.

Industry wants the next coverage path to reach further. AdvaMed asked CMS to open its proposed RAPID pathway to more breakthrough devices, including diagnostics, and to set firm timelines for national coverage determinations (MedTech Dive).

On the regulatory side, FDA’s device center published its fiscal 2027 guidance agenda, led by final guidance on lifecycle management for AI-enabled device software and draft guidance on generative AI conversational devices for mental disorders. An independent Booz Allen Hamilton assessment found FDA has met its commitments to date under the fifth Medical Device User Fee Amendments, with authorized predetermined change control plans rising to 88 in fiscal 2025 from 27 the year before (Medtech Insight). Device-safety advocates told Medscape that FDA’s recall system for implanted devices is confusing and ineffective, endangering patients and exposing clinicians to legal liability.

Tags: #DEVICE #HOSPITAL #PROVIDER

From Savage Health Policy

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Centers for Medicare and Medicaid Services (CMS)

Joint Replacement Goes Mandatory: CJR-X Names 2,217 Hospitals

CMS published the final participant list for CJR-X, the mandatory nationwide expansion of the Comprehensive Care for Joint Replacement model: 2,217 acute care hospitals that met the participant definition as of Sept. 30, 2026, up from about 465 under the original model. Beginning Jan. 1, 2028, those hospitals take episode payment for hip, knee and ankle replacements, with episodes running through 90 days after discharge. CMS projects $736 million in savings over five years. Each hospital must name two primary points of contact, and CMS plans regular updates for newly opened and merged hospitals.

Becker’s Hospital Review Becker’s Hospital Review Inside Health Policy

Tags: #HOSPITAL #PAYER #PROVIDER

Hospital Penalties and Payment Signals

CMS is penalizing 2,334 hospitals, about 80% of those evaluated, under the Hospital Readmissions Reduction Program in fiscal 2027. Trilliant Health expects the phaseout of Medicare’s inpatient-only list to move many surgical procedures to outpatient settings with lower payment. CMS also created a Medicare specialty code for physician nutrition specialists, effective Oct. 1, which identifies these physicians in enrollment and claims but creates no new benefit.

Tags: #HOSPITAL #PROVIDER

Medicare Advantage: 2027 Stars, Prior Authorization and an Industry Reform Agenda

CMS released the 2027 Medicare Advantage star ratings, which set plan quality bonus payments, with Humana the biggest winner and uncertainty remaining over the underlying measures. The American Hospital Association told the Medicare Payment Advisory Commission (MedPAC) that Medicare Advantage prior authorization keeps discharge-ready patients in acute care beds, and MedPAC’s preliminary findings show Medicare Advantage enrollees use less post-acute care and stay longer in acute care hospitals than fee-for-service beneficiaries. The Better Medicare Alliance released a 10-point paper urging reforms to prior authorization, risk adjustment and in-home assessments.

Tags: #PAYER #HOSPITAL

Coverage: Medicaid Cuts, Marketplace Losses and CHOICE Plans

Modern Healthcare reports that the administration has stretched the 2025 tax law’s Medicaid cuts further than budget scorekeepers expected. In California, the state medical association and the health plan association asked the state Supreme Court on Oct. 1 to block a law restructuring the managed care organization tax that funds Medi-Cal. Affordable Care Act Marketplace enrollment fell in 2026 for the first time in seven years after the enhanced premium tax credits expired, with uneven changes across and within states, according to KFF’s midterm brief and its congressional district analysis. A proposed rule expanding employers’ ability to fund individual-market plans through health reimbursement accounts, now branded CHOICE plans, is under review at the Office of Management and Budget.

Tags: #PAYER #PATIENT #HOSPITAL

Drug Pricing: PhRMA Sues Over Most-Favored-Nation Pricing as GAO Maps PBM-Owned Pharmacies

PhRMA sued the Trump administration over a pilot that ties Medicare drug prices to prices in peer countries, a new legal challenge as CMS brings most-favored-nation pricing into Medicare Part B. The Government Accountability Office (GAO) found that for four large Part D plan sponsors, the pharmacies they owned accounted for about 28% of the Part D drugs they provided and about 24% of total payments to pharmacies in 2023. GAO reissued the report Oct. 6 to correct those percentages. The Pharmaceutical Care Management Association cites the report to rebut criticism of pharmacy benefit manager (PBM)-owned pharmacies as PBM reform bills move through Congress. Two conservative policy groups argue that barring PBMs from owning pharmacies would not lower drug costs and would reduce access in low-income areas.

Tags: #DRUG #PAYER

Price Transparency: New Insurer Rules, a Drug-Price Format and Thin Enforcement

The administration released rules Oct. 5 that require health insurers to provide standardized spreadsheets showing what they pay doctors and hospitals. HHS will begin developing a standard format for health plans to disclose negotiated prescription drug prices, and CMS Administrator Mehmet Oz said the agency hopes to publish it by May 2027. Enforcement remains thin. CMS has fined one hospital in 2026, Pinnacle Hospital in Crown Point, Ind., a total of $91,971 in two penalties, and 519 hospitals have received warning letters since April. The Federal Trade Commission opened a second front Oct. 5 with warning letters to 24 health systems, and KFF finds that hospital reporting under requirements effective January 2026 still complicates price comparisons.

Tags: #PAYER #HOSPITAL #PATIENT

Also in CMS

CMS Chief Medical Officer Dora Hughes told the National Committee for Quality Assurance’s Health Innovation Summit that the agency has cut its quality measure inventory from roughly 750 to about 490 over five years (NCQA). AI-based coronary plaque analysis moved to a Category I CPT code in January, after CT-derived fractional flow reserve earned one in 2024. Only three of more than 1,614 FDA-cleared clinical AI algorithms hold Category I codes (Cardiovascular Business).

Tags: #ALL

Food and Drug Administration (FDA)

Also in FDA

A MedCity News commentary asks whether operating rooms are ready for the surgical robots contemplated by FDA’s draft premarket testing guidance (MedCity News). FDA’s push to recruit advisory committee members could add up to 10 new members to its vaccine panel (Inside Health Policy). FDA finalized its question-and-answer guidance on postapproval manufacturing changes for biosimilar and interchangeable biosimilar products (FDA).

Tags: #DEVICE #DRUG

Department of Health and Human Services (HHS)

340B: Hospitals Sue Over the Rebate Pilot as HHS Defends the Payment Cut

The American Hospital Association, the Maine Hospital Association and four safety-net hospitals sued HHS on Oct. 9 in the U.S. District Court for the District of Maine to block the revised 340B drug rebate pilot, which they say could impose more than $1 billion a year in administrative costs. The suit is the second legal challenge to the pilot. HHS is also defending the proposed 2027 outpatient cut to 340B drug payments. An HHS brief says the program has expanded beyond its original intent and encourages consolidation, and an HHS leader argues in STAT that a small safety-net discount became a large institutional subsidy. Health systems told CMS the cut would cost them roughly $7 million to $109 million a year each, and a PhRMA-backed analysis questions how 340B sales growth relates to the program’s true size and covered entities’ margins.

Tags: #HOSPITAL #DRUG

Vaccine Injury: An NIH Clinic and Four HHS Initiatives

HHS announced four vaccine injury initiatives on Oct. 8: a National Institutes of Health (NIH) clinic that opened Oct. 5, a modernization of the Vaccine Adverse Event Reporting System, a federal health IT standard requiring electronic health records to capture vaccine-related adverse events, and a CMS proposal to pay physicians for reporting suspected vaccine injuries. An agency memo says data from the clinic’s observational study could inform changes to recommended vaccine schedules. Separately, the administration told the 1st U.S. Circuit Court of Appeals that a lower court erred in blocking Secretary Robert F. Kennedy Jr.’s appointees to a federal vaccine advisory panel.

Tags: #PATIENT #PROVIDER

CDC: A New Director Under Scrutiny

Centers for Disease Control and Prevention Director Erica Schwartz endorsed the MMR vaccine at an Oct. 7 forum, said the risk to Americans from a suspected Russian plague case is extremely low, and pledged to uphold the agency’s scientific recommendations amid staff cuts. She told The Wall Street Journal she wants to change a culture of “paternalism” at the agency. Democratic lawmakers want answers from her on childhood vaccine recommendation changes and the measles response, and Sen. Patty Murray is forming a group of experts to examine how to insulate the agency from political interference.

Tags: #ALL

NIH: Networks Revived, Networks at Risk and a Cancer Vaccine Bet

Administration delays threaten four large NIH-funded research networks that test vaccines and treatments for HIV, tuberculosis and emerging infectious diseases, The New York Times reports. NIH’s infectious disease institute did award $17.9 million to re-establish its emerging infectious disease research network, under restrictions that bar intentional searches for novel viruses. NIH is preparing a cancer vaccine initiative, modeled on the Covid-19 vaccine push, that is expected to begin in December, and the White House plans more than $100 million for STEM programs, including PhD fellowships, as NIH loses scientists. NIH also joined a $1.8 billion effort with Biohub, the Department of Energy and technology companies to build open biological datasets for AI. The National Heart, Lung, and Blood Institute’s October update notes that the most-used dataset in the Gabriella Miller Kids First Data Resource comes from its Pediatric Cardiac Genetics Consortium.

Tags: #PROVIDER #PATIENT

Artificial Intelligence Across HHS and the Hill

AI and tech leaders and senior Trump administration health officials have spent a year in a government-run chat room coordinating a push toward AI-powered apps for managing health care and medical records, KFF Health News reports, as Secretary Kennedy’s embrace of AI confounds some allies. The Agency for Healthcare Research and Quality (AHRQ) launched a $7.95 million prize initiative Oct. 7 to use AI to speed medical evidence reviews, and the Office of the National Coordinator for Health Information Technology announced about $1.5 million in awards for laboratory interoperability and patient control over AI in their care. On the Hill, two senators reintroduced the Transparent Automated Governance Act, and Sen. Maria Cantwell’s AI governance framework calls for transparency in CMS’s WISeR prior authorization model.

Tags: #ALL

Also in HHS

The Advanced Research Projects Agency for Health awarded more than $100 million to four organizations for biosensors, including up to $37.9 million to the Massachusetts Institute of Technology for a wearable patch that continuously senses heart failure biomarkers (MedTech Dive). GAO found HHS violated the Impoundment Control Act by withholding more than $78 million in fiscal 2025 AHRQ funding (The Hill).

Tags: #ALL

Heard on the Hill

Surprise Billing: Pallone Would Replace Arbitration With a Benchmark

House Energy and Commerce ranking member Frank Pallone Jr. introduced a bill Oct. 8 that would replace the No Surprises Act’s arbitration process with a payment benchmark, which consumer advocates say would curb inflated payments and lower premiums. The bill follows an Oct. 1 CMS meeting with every certified dispute resolution entity on rising costs and payment delays in a process that has received and closed more than 7 million disputes since April 2022.

Tags: #PAYER #PROVIDER #PATIENT

Physician Pay: CBO Scores the Patients First Act and the House Weighs In on RPM

Twenty-four patient and health groups urged Congress to pass the bipartisan Patients First Act (H.R. 9693) this year to stabilize Medicare physician pay, and the Congressional Budget Office scores the bill at $5 billion. In an Oct. 2 letter, 32 House members asked CMS Administrator Oz to drop the proposed fee schedule change that would bar remote patient monitoring programs from using third-party clinical staff.

Tags: #PROVIDER #PAYER

Also on the Hill

Democrats are positioning for open Energy and Commerce and Ways and Means health seats after the midterms (STAT), and Rep. Diana DeGette warns incoming candidates against an overly ambitious health care agenda (Roll Call). Secretary Kennedy asked Congress to reauthorize the Older Americans Act (Inside Health Policy), and Rep. Bobby Scott asked the HHS inspector general to investigate whether HHS gave incorrect or fraudulent information in the lawsuits over DOGE access to government information systems (The Hill).

Tags: #ALL

Notable Notes

Cardiology and Structural Heart

Years of follow-up link Abbott’s HeartMate 3 left ventricular assist device to a 16% risk of stroke and other neurological events. A Johns Hopkins study found that pulse oximeters shifted over five years from overestimating blood oxygen to underestimating it at higher levels, with larger errors in patients of color. Also this week: why cardiology services cost more, a review of mitral partial heart transplantation in congenital heart disease, and a new trial comparing right ventricular outflow tract stenting with surgical conduits in adults with cyanotic congenital heart disease.

Tags: #DEVICE #PROVIDER

Costs, Coding and Incentives

Private insurance premiums rose 78.4% from 2011 to 2024, and growth in health care spending accounted for 91% of the increase, a JAMA Health Forum study finds. Rising supply costs are pushing hospitals to demand measurable returns on device purchases, Modern Healthcare reports, while device makers that moved to domestic suppliers say those suppliers are competitive on total cost. Medicare still pays surgeons more for male-specific procedures than for comparable female-specific ones: a Mount Sinai study of 55 procedure pairs found relative value units averaged 30% higher for the male procedure. A patient advocacy group is suing to invalidate the American Medical Association’s copyright on CPT codes, and the administration proposed a $70,000 fee for employers hiring workers on F-1 student visas.

Tags: #ALL

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