Government Funding Update

This week, Congress passed legislation to reopen the government, including several health care policies. These recent actions delay major payment cuts and extend key care‑delivery flexibilities that hospitals rely on. Some major wins — Medicaid Disproportionate Share Hospital (DSH) cuts are postponed through September 30, 2027, while telehealth waivers remain in place through December 31, 2027, and Hospital‑at‑Home is extended through September 30, 2030.

Below are other important provisions:

Funding for rural hospitals was extended through December 31, 2026, for Low‑Volume Hospitals and Medicare Dependent Hospitals.

Beginning January 1, 2028, require all off-campus Hospital Outpatient Departments (HOPDs) to have a distinct National Provider Identifier (NPI). This policy was adopted with the intent of extending site neutral payments (reimbursing HOPDs as physician offices) to all off-campus HOPDs in the future. Reimbursement for off-campus HOPDs is not currently changing. Advocates of this policy argued that having distinct NPIs could help reduce fraud and standardize outpatient billing. Details regarding how this policy is implemented will be done through future rulemaking. Because no additional site neutral payment policy was adopted, we don’t expect changes to the current PO and PN modifiers. We will await further guidance from CMS.

Beginning January 1, 2028, hospitals will be required to complete provider attestations for all off-campus HOPDs. The new law requires two attestations:

- An initial attestation submitted within the two-year period prior to January 1, 2028.

- A subsequent attestation submitted within a timeframe to be specified by the Secretary through future rulemaking.

An extension and increase of Advanced Alternative Payment Model (AAPM) bonus payments for 2028, raising the bonus from 1.88% to 3.1%.

Pharmacy benefit manager (PBM) transparency and pricing restrictions targeted at lowering drug costs for employer health plans. PBMs are now restricted to flat‑fee, fair‑market‑value service payments with full pass‑through of all manufacturer rebates and discounts to plan sponsors. They must also provide comprehensive drug‑level pricing and operational transparency, including detailed reporting on costs, reimbursements, retained revenue, affiliate pharmacy activity, and benefit design practices that may influence steering.

Medicare coverage of multi-cancer early detection screenings for Medicare beneficiaries beginning on January 1, 2029.

Medicare coverage of external pumps and non-self-administrable drugs/biologics in a patient’s home if they are administered or supervised by a health professional, even if the medication was previously deemed not “appropriate for home use.” The drug should be infused at least 12 times per year.