Welcome to another round of PYA Washington Updates from the Washington Update Task Force. Like the federal government, we’ve been on hiatus since the beginning of October. And, like the federal government, we’re ready to get back to work!
The End of the Government Shutdown
Late Wednesday evening, President Trump signed HR 5371, the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026, into law, re-opening the federal government after a record-setting 43-day shutdown. The “minibus” (as opposed to omnibus) bill includes full federal fiscal year funding for those agencies and programs identified in its rather lengthy title. For all other federal agencies and programs, the bill continues FY 2025 funding levels through January 30, 2026. That means Congress has 76 days to figure out how to fund the federal government through September 30, 2026 (the end of FY 2026). Here’s a closer look at key healthcare-related provisions in the 161-page bill:
- Sequestration. Let’s start with the bill’s last word: zero. Section 8001(d) states the PAYGO scorecard will be set at zero as of the date of adjournment of the first session of the 119th Congress. That means none of the legislation passed by Congress this year that increased the federal budget deficit (including OBBBA, to the tune of $3.4 trillion, according to the Congressional Budget Office) will be subject to PAYGO (i.e., automatic cuts to offset spending in excess of revenues) and thus sequestration will not be triggered. Thus, Medicare payments to providers will not be reduced by an additional 2% beginning in 2026. The existing 2% sequestration reduction, however, remains in effect. In fact, Congress extended the end date to offset the spending authorized by the minibus bill, along with a $400 million cut to the Medicare Improvement Fund.
- Retroactive Renewals. Authorization for several Medicare special payment provisions expired on September 30, leaving providers in limbo. This included the COVID-19 era telehealth waivers, the Medicare Dependent Hospital and Low Volume Hospital Programs, the Community Health Center Fund, the GPCI floor, ambulance add-on payments, and the acute hospital care at home waivers. Also, the latest delay in significant cuts to Medicaid Disproportionate Share Hospital payments expired on September 30. Congress has now retroactively reinstated these payment provisions and waivers back to October 1. However, it’s a brief reprieve, as all are now set to expire on January 30. For services furnished between October 1 and November 14, CMS will instruct Medicare Administrative Contractors to now process the claims the MACs had been holding per CMS’ prior instructions, as well as claims with dates of service during the shutdown subsequently submitted by providers. Medicare Advantage plans should do the same, as they are required to pay for services covered under traditional Medicare. (More on that subject below.)
ACA Subsidies
For about six weeks, Senate Democrats held firm that they would not support legislation to end the government shutdown unless it extended the Affordable Care Act’s enhanced premium tax credits (PTCs) now set to expire on December 31. On Sunday, eight Senate Democrats broke rank, agreeing to support the minibus bill despite the lack of such extension. One concession they extracted was a promise by Majority Leader Thune to hold a vote in December on extending the enhanced PCTs. The Commonwealth Fund estimates 4.8 million will lose coverage and millions more will pay significantly higher premiums in 2026 if the enhanced PTCs are not renewed. It appears the issue of healthcare affordability will be front and center through the end of this year, with President Trump and the Republicans working on alternatives to Obamacare.
2026 Medicare Physician Fee Schedule Final Rule
As the kids were getting ready to head out trick-or-treating, CMS released the 2026 Medicare Physician Fee Schedule Final Rule. The “treats” include a 3.77% increase in the conversion factor for clinicians who are qualifying participants in an advanced alternative payment model and a 3.25% increase for everyone else billing under the MPFS. The “tricks” include a new efficiency adjustment, a revised practice expense methodology, and a mandatory alternative payment model for specialists who treat heart failure and lower back pain. PYA will present a two-part webinar series on December 3 and December 10 to discuss the Final Rule’s impact in detail. You can register here.
Rural Health Transformation Program
After six weeks of intense work developing their rural health transformation plans, every state submitted an application for its share of the $50 billion available through the Rural Health Transformation Program by the November 5 deadline. CMS will announce the amount to be awarded to each state by December 31, and work will begin in earnest in January.
United HealthCare Remote Physiologic Monitoring Policy
Effective January 1, 2026, UHC will not cover RPM services except for monitoring heart failure and hypertensive disorders of pregnancy. In its recently released medical policy, UHC asserts RPM “is unproven and not medically necessary due to insufficient evidence of efficacy for all other indications….” The new policy will apply to nearly all UHC products, including its Medicare Advantage plans. Providers are challenging UHC’s action on the basis that MA plans are required to provide the same coverage as traditional Medicare. Specifically, federal regulations direct plans to provide coverage of “all items and services that are covered by Part B of Medicare,” and mandate that MA plans cover Part B benefits “on the same conditions that items and services are furnished in Traditional Medicare.” RPM is covered for both acute and chronic conditions under the Medicare Physician Fee Schedule, with no limitation to specific conditions. Providers claim UHS is disregarding this mandate as part of its expanded efforts to improve its financial performance by restricting utilization. They also claim UHC ignored numerous studies demonstrating RPM’s value in managing a broad range of conditions. It’s one thing to require prior authorization for a specific service, but quite another to refuse coverage across the board based on lack of medical necessity.
PYA OPPS Webinar
On Wednesday, November 19, PYA will present a webinar on the 2026 Hospital Outpatient Prospective Payment System Final Rule, which is expected to be released today. Register here.
Please do not hesitate to contact us if you have any questions regarding these latest developments. You can also continue to check PYA’s website for updates.
