Weekly Health Care Policy Update – August 7, 2026

August 12, 2026

In this update:  

  • Federal Agencies
    • FDA Approves First mRNA Flu Vaccine
    • CMS Finalizes FY 2027 IPPS and LTCH Payment Rule
    • HRSA Announces Revised 340B Rebate Pilot Model
    • GAO Reports Government Could Approve Infectious Disease Surveillance
    • CMS Updates, Clarifies Marketplace Regulations Following Court Ruling
    • CMS Launches Applied Behavior Analysis Toolkit for Autism Care
    • CMS Releases Implementation Guide on Immigrant Medicaid Eligibility Redeterminations
  • Legislative
    • Senate Confirms Dr. Erica Schwartz to Lead CDC
    • Senate Committee Holds Fauci in Contempt of Congress
  • Other
    • US News Publishes 2026-2027 Best Hospitals List
    • States Sue CMS Over ACA Marketplace Payment and Policy Final Rule
    • KFF Publishes Report on Work Requirements and SSI Applicants
    • Federal Judge Vacates 2023 Rule Limiting Medicare DSH Payments to Hospitals
  • New York State
    • DOH Launches Medicaid Provider Revalidation Initiative
    • DOH Revises Proposed Regulation for Special Needs Assisted Living Residence Voucher Program

Federal Agencies

FDA Approves First mRNA Flu Vaccine
On August 5th, the FDA approved the first-ever mRNA flu vaccine, Moderna’s mFLUSIVA. The approval follows a series of actions by HHS that slowed mRNA research, including the cancellation of 22 mRNA projects at the Biomedical Advanced Research and Development Authority (BARDA), and a refusal to initially consider Moderna’s application. mRNA vaccines typically allow for much faster development, allowing for rapid adjustments based on emerging viral strains. Moderna’s study results showed higher efficacy than a traditional flu vaccine comparator, but also more side effects like injection site pain, fatigue, and headache. mFLUSIVA is approved for adults ages 50 to 64; the FDA also granted an accelerated approval for adults 65 and older, which will allow for use before results of a follow-up study. mFLUSIVA is expected to be available for consumers for the upcoming flu season.
 
Moderna’s press release is available here.

CMS Finalizes FY 2027 IPPS and LTCH Payment Rule
On July 31st, CMS issued the Fiscal Year (FY) 2027 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment Systems (LTCH PPS) Final Rule. Overall, CMS finalizes a 2.3% increase in operating payment rates for general acute care hospitals that participate in the Hospital Inpatient Quality Reporting (IQR) program and are meaningful electronic health record (EHR) users. This increase is the result of a 3.2% market basket update, reduced by a 0.9% productivity adjustment. The finalized update is 0.1% lower than the proposed rule. CMS also estimates that additional payments for inpatient cases involving new medical technologies will increase by approximately $779 million, primarily driven by new approvals for new technology add-on payments. For LTCHs, CMS finalizes a 2.3% annual update to the standard payment rate.

Comprehensive Care for Joint Replacement (CJR) Expansion
The final rule renews and expands the CMS Innovation Center’s Comprehensive Care for Joint Replacement (CJR) Model into a mandatory nationwide program, called CJR-X, beginning January 1, 2028 (a later start date than the October 1, 2027 date originally proposed). Under the model, hospitals are assessed against a target price that assumes all costs associated with an episode of care, beginning with the procedure and ending 90 days following discharge. The payment generally includes all items and services paid under Medicare Parts A and B for eligible patients: the procedure, hospital stay, post-discharge physical therapy, and follow-up visits. Based on performance, providers might receive an additional payment or be required to repay a portion of spending.

The predecessor CJR Model, tested from April 2016 through December 2024, saved Medicare more than $100 million while maintaining quality of care for beneficiaries. The expanded model, CJR-X, will be required for most hospitals paid under the IPPS, except those participating in the Transforming Episode Accountability Model (TEAM), hospitals located in Maryland, and those not paid under both the IPPS and OPPS. Notably, CJR-X will also cover ankle replacements performed in hospital outpatient settings, in addition to hip and knee replacements performed in inpatient and outpatient settings.

Additional finalized policies include: 

  • Graduate Medical Education: CMS finalizes the proposal to require that an approved medical residency training program “must not discriminate, or promote or encourage discrimination, on the basis of race, color, national origin, sex, age, disability, or religion, including the use of those characteristics or intentional proxies for those characteristics as a selection criterion for employment, program participation, resource allocation, or similar activities, opportunities, or benefits.” Similar requirements will also apply to approved nursing and allied health education programs and accreditors.
  • Organ Acquisition: CMS finalizes the reconciliation of organ acquisition costs for non-renal organs for Independent Organ Procurement Organizations and Histocompatibility Laboratories, with a modification delaying implementation by two years to cost reporting periods beginning on or after October 1, 2028. CMS also finalizes the codification of allowable costs under Medicare’s reasonable cost principles for all provider types, and rules for allocating overhead costs across all provider types, along with codifying the Administrator’s discretionary review of reimbursement appeals for IOPOs and HCLs.
  • Hospital Inpatient Quality Reporting (IQR) Program: CMS finalizes the adoption of three new measures: (1) Excess Days in Acute Care After Hospitalization for Diabetes, beginning with the FY 2029 payment determination; (2) Hospital Harm-Postoperative Venous Thromboembolism eCQM; and (3) Advance Care Planning eCQM, both beginning with the FY 2030 payment determination. CMS finalizes modifications to three Excess Days in Acute Care measures (Acute Myocardial Infarction, Heart Failure, and Pneumonia) beginning with the FY 2028 payment determination, and finalizes five modified Hospital 30-day All-Cause Mortality measures also beginning with the FY 2028 payment determination (adding MA patients and shortening the performance period from three to two years) before the mortality measures move to the Hospital VBP Program. CMS finalizes removal of three measures related to venous thromboembolism and antithrombotic therapy beginning with the FY 2030 payment determination. CMS also finalizes mandatory reporting for the Malnutrition Care Score eCQM and a mandatory reporting policy for hospital harm eCQMs, both beginning with the FY 2030 payment determination.
  • Medicare Promoting Interoperability Program: CMS finalizes a number of policies related to the definition of certified electronic health record technology (CEHRT) and reporting requirements.
  • Hospital Readmissions Reduction Program: CMS finalizes adoption of the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate Following Sepsis Hospitalization measure, with two years of confidential early look reports for FY 2028 and FY 2029 before it is used in payment reduction calculations beginning with the FY 2030 program year.
  • Hospital Value-Based Purchasing (VBP) Program: As noted above, CMS finalizes five modified Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate measures beginning with the FY 2032 program year, including adding MA patients and shortening the performance period from three to two years.
  • Long-Term Care Hospital Quality Reporting Program (LTCH QRP): CMS finalizes removal of two measures related to Covid-19 vaccination beginning with the FY 2028 LTCH QRP, along with a revision to the data submission deadline, and summarizes comments received on a future measure related to advance care planning.

The rule is available here. A fact sheet is available here. More information on CJR-X is available here.

HRSA Announces Revised 340B Rebate Pilot Model 
On July 31st, HRSA announced revisions to the 340B Rebate Model Pilot Program. Under the original pilot, 340B providers would purchase drugs through their wholesaler account and request rebates on approved drugs when they were dispensed to eligible patients, instead of receiving the discount when buying the drug. Following negative stakeholder feedback, HRSA issued an RFI in February, posing more than 40 specific questions on topics including costs to covered entities, payment timing and potential cash flow impacts for covered entities, rebate denials, data collected by covered entities, manufacturers’ efforts to avoid duplicate discounts, required reporting, and program integrity and other potential benefits of a rebate program. The revisions also follow a federal district court ruling in favor of the AHA and hospitals, which blocked HRSA’s original pilot days before its scheduled implementation.
 
Under the revised proposal, HRSA now includes 25 products from 13 companies rather than the 10 drugs previously included. In addition, covered entities will have up to 45 days from dispensation to submit data necessary for a rebate. Manufacturers will have to validate claims before paying rebates, and must pay the rebate within 10 days of a completed data submission. Covered entities will also have the opportunity to submit concerns about inappropriate rebate denials to the administration. Overall, HRSA was not responsive to comments related to the pilot’s potential additional burdens on covered entities, and hospital groups remain critical of the revised model.
 
The revised pilot is scheduled to begin on January 1, 2027; drug manufacturers must submit their plans by August 24th. The HRSA announcement is available here.
 
GAO Reports Government Could Improve Infectious Disease Surveillance
On July 30th, the GAO issued a report, Experts Identified Actions to Improve Surveillance for Emerging Disease Threats, which concludes that poor communication between federal agencies is hurting the government’s response to emerging diseases. The report was written in response to a provision in the CARES Act, which asked GAO to describe (1) how HHS has conducted surveillance of emerging infectious disease threats, and (2) actions experts suggested for the federal government to improve surveillance of emerging infectious diseases. To develop the report, GAO convened a roundtable of 18 experts including former federal officials and experts in both animal and human health.
 
GAO categorized the recommendations in four ways: 

  1. Collaboration: Increase collaboration by creating a multisectoral, multidisciplinary leadership group;
  2. Data Quality and Infrastructure: Strengthen data quality by identifying, developing, and using standards for surveillance data;
  3. Surveillance Methods: Optimize surveillance by evaluating cost-effectiveness of surveillance systems and methods;
  4. Communication: Improve awareness and perception of public health and surveillance by developing a communication strategy.

 The full report is available here.
 
CMS Updates, Clarifies Marketplace Regulations Following Court Ruling
On July 27th, CMS issued guidance implementing a federal court decision that vacated portions of the 2025 Marketplace Integrity and Affordability rule related to the Affordable Care Act’s Failure-to-File-and-Reconcile (FTR) policy. Under the guidance, all Federally-facilitated Exchanges (FFEs) and State-based Exchanges (SBEs) will continue to use the longstanding two-year FTR policy for plan years 2026 and 2027. As a result, consumers will remain eligible for advance premium tax credits (APTCs) unless they fail to file a federal tax return and reconcile APTCs for two consecutive tax years. CMS also confirmed that individuals who lost APTC eligibility under the vacated one-year FTR policy for plan year 2026 will have their eligibility restored, provided they remain otherwise eligible. Although Congress subsequently required a one-year FTR policy beginning with plan year 2028, as part of OBBBA, CMS confirmed that the statutory change does not apply to plan years 2026 or 2027, providing Exchanges with operational certainty before consumers begin selecting 2027 coverage.
 
In addition, CMS clarified that the automatic 60-day extension of time to resolve household income data inconsistencies remains in effect and that 2027 Open Enrollment dates and related flexibilities available to state-based Marketplaces remain unchanged. This would allow New York’s Marketplace to maintain its previous open enrollment of November 1st through January 31st, should it choose to do so.
 
The guidance is available here.
 
CMS Launches Applied Behavior Analysis Toolkit for Autism Care
On August 4th, CMS released a toolkit to help state Medicaid and CHIP agencies strengthen oversight of applied behavior analysis (ABA) services for children with autism spectrum disorder (ASD). CMS cited rapid growth in ABA spending, inconsistent clinical practices, and recent fraud cases as reasons for the guidance. For example, CMS data show that Medicaid and CHIP spending on ABA increased 421% between 2021 and 2025, while the number of children with an ASD diagnosis receiving ABA increased 189%.
 
The toolkit recommends that states: 

  • set clear clinical, provider qualification, and supervision standards;
  • use individualized treatment plans, regular reassessments, and measurable outcomes;
  • strengthen prior authorization, documentation, billing, and audit requirements;
  • monitor provider ownership, utilization patterns, and potential fraud; and
  • define managed care plan responsibilities for oversight and overpayment recovery.

 The toolkit is available here and the CMS press release is available here.
 
CMS Releases Implementation Guide on Immigrant Medicaid Eligibility Redeterminations 
On July 31st, CMS released an implementation tool to help states carry out new limits on federal Medicaid and CHIP funding for certain noncitizens under OBBBA. Beginning October 1, 2026, federal funding for full benefits will generally be limited to U.S. citizens and nationals, lawful permanent residents, Cuban/Haitian entrants, and COFA migrants. Exceptions include emergency Medicaid and, in states that elected the CHIPRA 214 option, coverage for lawfully residing children and pregnant women. The tool builds on CMS guidance issued in April 2026 by providing a more detailed operational checklist and does not change the eligibility policy outlined in that guidance.
 
The tool directs states to identify affected beneficiaries, complete redeterminations by October 1, 2026, update eligibility and claims systems, revise notices and appeals processes, train staff, and coordinate outreach. States must also ensure that they do not claim federal funding for beneficiaries who no longer qualify for federally matched coverage. If states are unable to confirm eligibility and claim compliance by the deadline, they must stop submitting federal claims for potentially affected beneficiaries until they complete the required work.
 
The implementation tool is available here. The April 2026 guidance is available here.

Legislative

Senate Confirms Dr. Erica Schwartz to Lead CDC
On August 5th, the Senate voted 51-44 to confirm the nomination of Dr. Erica Schwartz as the director of the Centers for Disease Control and Prevention (CDC). The vote fell mostly along party lines, with Senator Tim Kaine (D-VA) as the only Democrat to vote for the nominee. Schwartz becomes the second Senate-confirmed director of the agency, and third nominee, during the second Trump administration. She now leads an agency that has been without a confirmed director for all but one month since January 2025.

Schwartz holds degrees in law and medicine, is a retired rear admiral in the U.S. Public Health Service Commissioned Corps, and previously served as deputy surgeon general during the first Trump administration.

Senate Committee Holds Fauci in Contempt of Congress 
On August 6th, the Senate Homeland Security and Governmental Affairs Committee voted along party lines to hold Dr. Anthony Fauci in contempt of Congress, based on his refusal to answer questions about his role in the pandemic at a hearing last week. Typically, the vote would now move to the full Senate, where it would require 60 votes, and necessarily Democratic support. It would then be sent to the U.S. attorney in Washington, D.C. to present to a grand jury. Committee Chair Rand Paul (R-KY) is seeking to skip that vote in favor of turning the case directly to the Justice Department to prosecute Dr. Fauci, an unprecedented action in the Senate. Former President Joe Biden granted Fauci a preemptive pardon before he left office, covering his actions from 2014 through January 19, 2025.

Other

U.S. News Publishes 2026-2027 Best Hospitals List
On August 4th, U.S. News & World Report released the 2026-2027 edition of Best Hospitals. This edition includes the regional evaluation of hospitals at both a state and metro level and recognizes 505 best regional hospitals across 49 states and Washington, D.C. Hackensack University Medical Center at Hackensack Meridian Health, Mount Sinai Hospital, New York-Presbyterian Hospital-Columbia and Cornell, and NYU Langone Hospitals tied for #1 out of 28 best regional hospitals near New York. These four institutions also made the Best Hospitals Honor Roll, a list of the 20 best health centers in the country. U.S. News evaluated hospitals using data from over 800 million records of patient care on measures including risk-adjusted mortality rates, preventable complications, and patient experience. This year’s edition also introduced new regional specialty rankings in cancer; cardiology, heart and vascular surgery; orthopedics; and rehabilitation, to help patients identify high-performing local options for complex care.
The announcement is available here, and the rankings by region are available here.

States Sue CMS Over ACA Marketplace Payment and Policy Final Rule
On July 31st, 22 states, including New York, filed suit against HHS and CMS challenging the 2027 Notice of Benefit and Payment Parameters (NBPP), arguing that several provisions unlawfully restrict access to Affordable Care Act (ACA) coverage and exceed the agencies’ statutory authority. The complaint challenges requirements that increase enrollment verification, shorten the premium tax credit reconciliation period, expand eligibility for catastrophic plans, and permit higher out-of-pocket limits than allowed under the ACA. The states argue these changes will reduce marketplace enrollment by as many as five million people between 2026 and 2030, increase premiums by weakening the ACA risk pool, raise uncompensated care costs, and impose significant implementation costs on state-based exchanges. The lawsuit seeks to vacate the challenged provisions under the Administrative Procedure Act.

The lawsuit closely parallels the pending City of Columbus litigation, in which a federal district court temporarily blocked many of the same NBPP provisions from taking effect. While the City of Columbus case was brought by local governments and other organizations seeking emergency relief before the rule’s effective date, this new lawsuit expands the legal challenge by adding 22 states as plaintiffs and challenges the rule’s expansion of catastrophic plan eligibility and higher out-of-pocket limits, emphasizing the resulting fiscal and operational impacts on states and state-based exchanges.

The complaint is available here.

KFF Publishes Report on Work Requirements and SSI Applicants 
On July 29th, KFF published an analysis finding that OBBBA’s Medicaid work requirements could create coverage gaps for people with disabilities while they await Supplemental Security Income (SSI) decisions. People approved for SSI will be excluded, but SSI decisions often take months or years. Medicaid can help fill gaps in coverage while people are applying for SSI. In 2023, 223,000 new SSI enrollees had Medicaid while awaiting an SSI determination, including more than 106,000 covered through Medicaid expansion. In expansion states, 76% of new SSI enrollees had Medicaid before SSI approval, compared with 33% in non-expansion states.

KFF describes how SSI applicants may need to complete separate state and federal reviews of their ability to work, which may extend the application timeline. In addition, states may not be able to confirm medical frailty through claims data alone and will need to determine what documentation they will accept and how to rely on provider findings. Requiring applicants to provide additional documentation while managing serious health conditions imposes barriers that could cause eligible people to lose or be denied Medicaid coverage before SSA completes its disability review.

The full analysis is available here.

Federal Judge Vacates 2023 Rule Limiting Medicare DSH Payments to Hospitals
On July 27th, the U.S. District Court for the Northern District of Texas vacated an HHS regulation that excluded certain patient days associated with uncompensated-care funding pools from calculations used to determine Medicare disproportionate share hospital payments. The so-called “Exclusion Rule” provided that patients whose costs were claimed for payment from uncompensated care pools authorized under Section 1115 were not Medicaid eligible for purposes of the Medicaid fraction, meaning their days could not be included in the calculation. The same court first vacated the Exclusion Rule in 2023, but the Fifth Circuit subsequently vacated that ruling, remanding the case to the Northern District of Texas. As a result of the most recent decision, hospitals could amend their cost reports to add Medicaid patients to their DSH payment calculations, potentially receiving higher DSH payments from fiscal 2024 onward. CMS can still appeal the decision.

New York State

DOH Launches Medicaid Provider Revalidation Initiative
On August 4th, the New York State (NYS) Department of Health (DOH) announced a time-limited accelerated plan to revalidate all providers enrolled in the NYS Medicaid program. Federal regulations require state Medicaid programs to revalidate all enrolled providers at least once every five years. As part of the Trump Administration’s efforts to address fraud, waste, and abuse, CMS directed states to develop a “comprehensive two-year provider revalidation strategy.” In response, NYS is launching a phased process to revalidate all Medicaid-enrolled providers by June 2028, even if providers are not scheduled for revalidation under their regular schedule. The accelerated revalidation will be implemented as follows: 

  • Phase 1 (began July 2026) – current “high-risk” providers, Durable Medical Equipment (DME) providers, and any providers that have not revalidated since the beginning of the Covid-19 Public Health Emergency.
  • Phase 2 (Winter 2026) – newly designated high-risk providers, including Applied Behavior Analysis (ABA), 1915(c) Home and Community-Based Services (HCBS), and Licensed Home Care Services Agencies (LHCSAs).
  • Phase 3 (Early 2027) – atypical providers, specifically those without a National Provider Identifier (NPI).
  • Ongoing (through June 2028) – all remaining moderate- and limited-risk providers.

Providers will receive a notification via email and physical mail when it is time for them to revalidate. All providers serving NYS Medicaid members must now use the Provider Services Portal (PSP) for enrollment and revalidation (available here). Even if they were exempt before, all Medicaid providers will now need to have an NPI to revalidate in the PSP.

Following this accelerated revalidation process, high-risk providers will be revalidated every 3 years, moderate-risk providers will be revalidated every 4 years, and limited-risk providers will be revalidated every 5 years. Determination of risk level in the PSP will be provider-specific, not just based on provider type, and may change based on new inclusion requirements.
 
The DOH press release is available here. Additional details are available here.
 
DOH Issues Revised Proposed Regulation for Special Needs Assisted Living Residence (SNALR) Voucher Program
On August 5th, DOH issued revised proposed regulations that develop a framework for the Special Needs Assisted Living Residence (SNALR) Voucher Program for Persons with Dementia. The program provides financial assistance to help residents with Alzheimer’s disease or other dementias remain in appropriate care settings and avoid discharge or transfer due to an inability to pay privately. The program is designed to reduce unnecessary transitions to skilled nursing facilities and delay or avoid Medicaid enrollment.
 
Compared to the initial proposed regulations published in July 2025, the revised proposal includes several substantive changes in addition to clarified compliance language. Most notably, it extends the lookback period for certain asset transfers from one year to five years; limits voucher participation to no more than 10% of a facility’s SNALR census at the beginning of each quarter; and requires participating facilities to provide semi-annual dementia care education to staff. No changes were made to the established standards for facility participation. In response to comments regarding continuity of care, DOH clarified that current voucher recipients would not lose their vouchers solely because their facility becomes ineligible to participate. However, a recipient who moves to a facility that is ineligible to participate may have their continued program eligibility affected.
 
The revised regulations, including an assessment of public comment, are available here. Public comment on the revised regulations may continue to be submitted to regsqna@health.ny.govthrough September 21st.