In this update:
- Federal Agencies
- CMS Releases 2026 Hospice Payment Rate Final Rule
- Secretary Kennedy Eliminates Expert Workgroup Input on Vaccine Policy
- HHS Cuts $500 Million in mRNA Vaccine Contracts
- HRSA Announces 340B Rebate Pilot
- HRSA Releases 2024 UDS Health Center Data
- GAO Report Asserts Trump Violated Law by Cancelling NIH Contracts
- New CBO Analysis Presents Additional Impacts of OBBBA Deficit Spending
- HHS ASTP and ONC Release Final Rule on Electronic Prior Auth and e-Rx
- Legislative Update
- Senate Appropriations Committee Approves Labor, HHS, Education Appropriations Bill
- New York State Updates
- DOH Adopts Final Regulations Updating CON Process
- New York Expands Criteria for Involuntary Psychiatric Transport and Admission
Federal Agencies
CMS Releases 2026 Hospice Payment Rate Update Final Rule
On August 1st, the Centers for Medicare & Medicaid Services (CMS) issued a final rule updating Medicare hospice payment rates and the aggregate cap amount for fiscal year (FY) 2026. The FY 2026 hospice payment update percentage is 2.6% (an estimated increase of $750 million in payments from FY 2025). The update is the result of a 3.3% inpatient hospital market basket increase, reduced by a 0.7 percentage point productivity adjustment. The rule also finalizes a policy allowing the physician member of an interdisciplinary group to recommend admission to hospice care, and clarifies that hospice face-to-face encounter attestations must include the date and signature of the physician or nurse practitioner.
The fact sheet is available here.
Secretary Kennedy Eliminates Expert Input on Vaccine Policy
On July 31st, Bloomberg News reported that the CDC sent an email to physician groups, public health professionals, and other experts informing them that they will no longer be invited to participate in building vaccine recommendations through the Advisory Committee on Immunization Practice’s working groups. ACIP workgroups typically include medical and scientific experts who evaluate data from both vaccine manufacturers and the CDC, and make recommendations to the full committee. The email follows Secretary Kennedy’s firing of the 17 current members of ACIP last month.
In response, major medical groups including the American Academy of Pediatrics, the American College of Physicians, and the American Medical Association issued a statement saying that they are “deeply disappointed and alarmed” by the move. “To remove our deep medical expertise from this vital and once transparent process is irresponsible, dangerous to our nation’s health, and will further undermine public and clinician trust in vaccines.”
Bloomberg’s original reporting is available here. The medical groups’ statement is available here.
HHS Cuts $500 Million in mRNA Vaccine Contracts
On August 5th, the Department of Health and Human Services announced it was cancelling all mRNA vaccine development activities under the Biomedical Advanced Research and Development Authority (BARDA). Twenty-two projects totalling nearly $500 million will be eliminated. According to a statement from HHS Secretary Kennedy, “the data show these vaccines fail to protect effectively against upper respiratory infections like COVID and flu.” The statement indicates that, moving forward, BARDA will focus its investment on vaccine platforms with “stronger safety records and transparent clinical and manufacturing data practices.”
The HHS announcement is available here.
HRSA Announces 340B Rebate Pilot
On July 31st, the Health Resources and Services Administration’s (HRSA) Office of Pharmacy Affairs announced that it had opened an application process for a voluntary 340B Rebate Model Pilot Program. Under the pilot, instead of the usual upfront discounts traditionally applied to 340B purchases, providers would pay for drugs at the wholesale acquisition cost. Providers would then submit reports to drugmakers within 45 days of drug dispensing, and receive retrospective rebates within 10 days. The pilot will be limited to the 10 drugs currently included on the CMS Medicare Drug Price Negotiation Selected Drug List, regardless of payer.
Comments on the pilot will be accepted for 30 days, through which HRSA is seeking particular feedback on additional flexibilities, safeguards, and data reporting elements. Applications are due by September 15th, with a projected program start of January 1, 2026.
The HRSA announcement is available here.
HRSA Releases 2024 UDS Health Center Data
On August 5th, the Health Resources and Services Administration (HRSA) released new Uniform Data System (UDS) data showing that HRSA-funded health centers served a record 32.4 million patients in 2024. Of these, 25.1 million patients were either uninsured, or covered by Medicaid or Medicare. One in eight patients were children, one in five patients were 65 or older, one in five patients lived in rural communities, and 408,000 patients were veterans. In recognition of health centers’ accomplishments, HRSA awarded nearly 1,000 sites with Community Health Quality Recognition badges for excellence in quality care.
HRSA also announced the award of over $53 million to 52 Health Center Controlled Networks (HCCNs). HCCNs support health centers to improve quality of care, support population health, and engage in value-based care delivery.
More information is available here.
GAO Report Says Trump Violated Law by Cancelling NIH Contracts
On August 5th, the Government Accountability Office released a report on HHS’ recent actions to cancel existing NIH grants and to cease publication of grant review meeting notices. The report concludes that these actions to withhold budget authority from obligation and expenditure violate the Impoundment Control Act of 1974, which require executive branch officials to obligate appropriations during their period of availability, with limited exceptions. In response to the report, HHS informed GAO that it had lifted the pause relating to the publication of review notices and resumed scheduled meetings. The Department did not respond regarding the distribution of NIH funds for FY 2025 nor did it provide justification for the pause.
More information is available here.
New CBO Analysis Projects OBBBA Will Increase Deficit by $4.1 Trillion
On August 4th, the Congressional Budget Office (CBO) delivered a report to Senate Budget Committee Ranking Member Jeff Merkley (D-OR) on the effects of the One Big Beautiful Bill Act on federal deficits and debt. CBO concludes that over the 2025-2034 period, deficits will increase by $3.4 trillion. In addition, debt-service costs over this period will total $718 billion, resulting in a cumulative increase to the deficit of $4.1 trillion. This represents a 9.5 percentage point increase in the debt held by the public over CBO’s January 2025 baseline budgetary projections. If the bill’s temporary tax provisions were made permanent, during the same 10-year period the debt held by the public would increase by $5.0 trillion, or 11.5 percentage points relative to the January 2025 baseline.
The full report is available here.
HHS ASTP/ONC Release Heath Data, Technology, Interoperability Final Rule
On July 31st, the HHS Assistant Secretary for Technology Policy (ASTP) and the Office of the National Coordinator (ONC) released the Health Data, Technology, and Interoperability: Electronic Prescribing, Real-Time Prescription Benefit and Electronic Prior Authorization (HTI-4) Final Rule. The rule has three major components:
- Adoption of new HL7 Fast Healthcare Interoperability Resources (FHIR) certification criteria to support standardized electronic prior authorization;
- Adoption of a new certification criterion to support real-time prescription benefit checks; and
- Updating of the baseline standard for electronic prescribing to incorporate an improved version of the NCPCP SCRIPT standard.
The final rule is available here. A blog post from ASTP/ONC on the rule is available here.
Legislative Update
Senate Appropriations Committee Approves FY 2026 Labor, HHS, Education Appropriations Bill
On July 31st, the Senate Appropriations Committee approved the Fiscal Year (FY) 2026 Labor, Health and Human Services, Education, and Related Agencies Appropriations Act by a bipartisan vote of 26-3. The bill largely rejects cuts in funding for the Department of Health and Human Services proposed by President Trump in the administration’s budget, instead increasing the department’s discretionary funding by $446 million compared to FY 2025. A substantial portion of that increase would go toward increasing funding for the National Institutes of Health (NIH) by $400 million over FY 2025. NIH was targeted for a 40% funding reduction under the President’s proposed budget. The bill now heads to the floor for consideration by the full Senate.
Text of the legislation approved by the Appropriations Committee is available here and highlights are available here.
New York State Updates
DOH Adopts Final Regulations Updating the CON Process
On August 6th, the New York State Department of Health adopted final regulations that update the Certificate of Need (CON) process, which governs construction, renovation, and other service changes within health care facilities. Governor Hochul’s 2024 State of the State directed DOH to make updates to the CON process, including increasing the financial thresholds that require projects to undergo more detailed reviews and streamlining the application and approval processes.
The adopted regulations replace the existing regulations at 10 NYCRR Section 710.1, making changes to thresholds and policies within each of the review tiers, as follows:
Full Review
- Increase the Full Review monetary threshold for projects by general hospitals from $30 million to the greater of:
- $60 million; or
- 10% of operating costs, capped at $150 million.
- Increase the Full Review monetary threshold for projects by other facilities (e.g., nursing homes, diagnostic and treatment centers) from $15 million to:
- $20 million; or
- 10% of operating costs, capped at $30 million.
- Require Full Review for projects that add or convert more than 10% of existing beds to a higher level of care, regardless of cost.
- Remove certain specific services from requiring Full Review, including Therapeutic Radiology, Cardiac Catheterization, Bone Marrow Transplantation, Burn Care, AIDS Centers, and Epilepsy Services.
- Add Lung Transplantation as requiring Full Review.
Administrative and Limited Review
- Increase Administrative and Limited Review thresholds from $15 million to $30 million for general hospitals.
- Increase Administrative and Limited Review thresholds from $6 million to $8 million for other facilities.
- Make any project funded primarily by state grants eligible for Administrative Review.
- Remove projects involving emergency room space from requiring Administrative Review to reduce approval times and support providers in meeting heightened demand for such services.
Notice Only
- Increase the threshold for non-clinical projects requiring notice only to DOH from $6 million to $12 million.
- Allow any project that is otherwise eligible for Limited Review, but is architecturally self-certified by the applicant, to be eligible for notice only as long as it does not involve a change in beds or services that would otherwise require an update to the operating certificate.
- Require notice only for the addition or renovation of exam rooms in facilities where such space already existing within or adjacent to previously certified space, regardless of project costs.
There were no significant changes made between the proposed and final regulations.
The regulations are available here. Public comments received on the proposed regulations are available in the State Register here.
New York Expands Criteria for Involuntary Psychiatric Transport and Admission
Effective August 7th, New York amended its Mental Hygiene Law (MHL) to expand the criteria for involuntary psychiatric transport and admission, as authorized by the 2025-26 NYS Enacted Budget. The new statutory language codifies long-standing case law and clarifies that an individual’s inability to meet basic needs (e.g., food, shelter, medical care) due to mental illness may constitute a “likelihood to result in serious harm.” This change expands the standard beyond imminent danger or recent acts of violence.
The NYS Office of Mental Health (OMH) issued revised guidance affirming the authority of law enforcement, clinicians, and other authorized parties to intervene under this expanded standard. When acting under the “basic needs” standard, law enforcement must request EMS transport when practicable, based on medical needs, EMS availability, and individual safety.
The revised guidance is available here. Clinicians are encouraged to contact the OMH Office of Hospital Care and Community Transitions Regional Team at HospitalCare@omh.ny.gov to discuss specific cases or with general questions regarding involuntary care.