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Calendar Year 2027 Medicare Physician Fee Schedule Proposed Rule

On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2027 Medicare Physician Fee Schedule (PFS) Proposed Rule. The CMS press release can be found here. A fact sheet from CMS is available here. A separate fact sheet on the Medicare Shared Savings Program (MSSP) proposals can be found here. The 60-day comment period under the Administrative Procedure Act (APA) for the CY27 PFS proposed rule ends on September 14, 2026.

CONVERSION FACTOR

As part of the rule, CMS proposes a CY27 conversion factor (CF) of $33.17 for Alternative Payment Model (APM) participants, known as Qualifying Participants (QPs), a -1.19% decrease ($0.40) from the CY26 QP CF of $33.57. For non-qualifying participants (non-QPs), the aggregate proposed CF is $32.84, reflecting a -1.68% decrease ($0.56) from the CY26 non-QP CF of $33.40. A summary of the components of those aggregate payment updates is below.

  • Under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, the statutory update for CY27 is 0.75% for QPs and 0.25% for non-QPs. These are the same bifurcated statutory updates that first took effect in CY26 and that are intended to incentivize clinician participation in Advanced APMs.
  • The one-year 2.50% CF increase provided by the One Big Beautiful Bill Act (OBBBA), which CMS refers to in the rule as the Working Families Tax Cut (WFTC) legislation, applies only to CY26 and expires at the end of this year. The expiration of that adjustment functionally imposes a 2.50% payment reduction under the PFS relative to CY26, absent further congressional action.
  • The proposed CFs also include an estimated positive 0.53% adjustment to account for proposed changes in the work relative value units (RVUs) for certain services. The combination of the statutory updates, the expiration of the WFTC increase, and the work RVU adjustment produces the net negative CF updates described above.

E/M VISITS FURNISHED DURING GLOBAL SURGICAL PERIODS

CMS proposes reducing payment when a separately identifiable office/outpatient evaluation and management (E/M) visit is furnished by the same physician (or a physician in the same group practice) on the same day as a procedure with a 0-, 10-, or 90-day global period. Under the proposal, the most expensive service (whether the surgical procedure or the E/M visit) would be paid at 100% of its rate, and all other surgical procedures or E/M visits furnished that day would be paid at 50%. CMS advanced a similar proposal in the CY19 PFS proposed rule but did not finalize it at that time. In the CY27 rule, the agency reiterates its view that efficiencies exist when the same physician or group furnishes an E/M service in conjunction with a global procedure and that the current methodology therefore duplicates payment.

E/M VISIT COMPLEXITY ADD-ON (G2211)

In the CY21 PFS final rule, CMS finalized separate payment for the office/outpatient E/M visit complexity add-on code, HCPCS code G2211. Implementation was delayed by statute and took effect for CY25. For CY27, CMS proposes two changes to this policy.

  • CMS proposes converting G2211 from a stand-alone add-on code into a modifier (placeholder modifier MOD1) appended to the associated E/M base code. The modifier would increase payment for the associated E/M code by 16% rather than providing a flat dollar amount, maintaining an equal percentage increase across all E/M levels.
  • CMS also proposes a second modifier (placeholder modifier MOD2) available only to practitioners participating in a Medicare Shared Savings Program (MSSP) Accountable Care Organization (ACO) or serving as Participant Providers in a Long-term Enhanced ACO Design (LEAD) Model ACO. The MOD2 modifier would increase payment for the associated E/M visit by 32% to recognize the additional costs of longitudinal care, including total cost of care accountability and aligned quality reporting. Use of MOD2 would be voluntary and billable for all beneficiaries served by the practitioner, not only ACO-assigned or ACO-aligned beneficiaries. Claims submitted with MOD2 would be included in MSSP beneficiary assignment calculations, historical benchmark expenditures, and performance year expenditures.

PRACTICE EXPENSE

CMS describes a multi-year effort to transition the practice expense (PE) methodology away from reliance on American Medical Association (AMA) survey data and toward more objective, routinely updated, and auditable cost data. The agency states that the surveys underlying current PE values suffer from low response rates and significant discrepancies with alternative empirical data sources. The CY27 rule contains several proposals in furtherance of that transition.

  • CMS proposes phasing out the portion of the PE methodology that anchors aggregate specialty-level PE RVUs to practice expense per hour (PE/HR) survey data from 2007 or earlier, known as the indirect practice cost index (IPCI). The phase-out would occur over a two-year transition, with half of the measured IPCI variation applied in the first year and none in the second year.

  • In place of the stabilizing effect of the old survey data, CMS proposes a new PE stabilization adjustment that would cap year-over-year increases or decreases in a code’s PE RVU at 5%. The cap would not apply to new, revised, or revalued codes, and it would be applied prior to the separate statutory phase-in that limits total RVU reductions to 19% per year.

  • CMS proposes allocating indirect PE using both work RVUs and clinical labor RVUs for all services, except codes with 010- and 090-day global periods. Under current policy, that combined allocation approach applies only to services billable with professional and technical components.

  • CMS proposes equalizing the facility and non-facility PE RVUs for nursing facility E/M visits (CPT codes 99304 through 99310, 99315, and 99316). This change addresses an unintended consequence of the site of service payment differential finalized in the CY26 final rule, under which payment for these visits varied based solely on whether the beneficiary was in a Part A skilled nursing facility stay.

  • CMS is seeking comment on the broader facility versus non-facility site of service differential, including how indirect costs vary for physicians employed by hospitals, health systems, or other entities. The agency specifically asks whether the current 50% indirect PE allocation for facility-based services is accurate for hospital-employed physicians or whether a lower allocation (potentially 0%) would be appropriate, and whether a new HCPCS modifier should be created to identify employed physicians.

REMOTE MONITORING

CMS proposes several changes to payment for remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services. The agency proposes requiring that RTM services be furnished only to established patients, requiring practitioners to furnish a separately reportable initiating visit in association with the onset of RPM or RTM services, and allowing payment only when the services are performed by clinical staff employed by the practice rather than by contractors. CMS also proposes updating the valuation of these services to reflect its understanding that monitoring devices may now be available at lower cost than initially estimated. Finally, CMS is seeking comment on bundling the RPM and RTM CPT codes into four new HCPCS G-codes, an approach the agency states would address recommendations from recent HHS Office of Inspector General (OIG) reports.

GLOBAL SURGERY DATA COLLECTION

CMS proposes pausing the global surgery data collection required by section 523 of MACRA. The agency states that several years of collected data show that post-operative visits assumed within 10- and 90- day global surgical packages are frequently not occurring, even though providers continue to be paid for those visits under the current bundled payment policy. CMS also states that the current data collection requirements may impose undue burden on practitioners. CMS is posting a public-use file that displays imputed RVUs for 10- and 90-day post-operative visits using an arithmetic approach. The agency is soliciting comments on expanded data collection, alternative data sources, and revaluation strategies for global surgical services in future rulemaking.

LIMITS ON MEDICARE ELIGIBILITY FOR CERTAIN INDIVIDUALS

CMS proposes regulations implementing section 71201 of the WFTC legislation (OBBBA), which amended the Social Security Act to limit Medicare eligibility to four groups. Those groups are U.S. citizens or nationals, lawful permanent residents, individuals granted Cuban and Haitian entrant status, and individuals lawfully residing in the U.S. under a Compact of Free Association. The proposed regulations would incorporate the newly specified eligibility groups, establish procedures for terminating coverage for individuals found ineligible, provide applicable appeal rights, and set out enrollment options for individuals who later gain or regain eligibility.

MEDICARE PRESCRIPTION DRUG INFLATION REBATE PROGRAM

The rule proposes updates to the Part B and Part D drug inflation rebate programs established under the Inflation Reduction Act of 2022 (IRA). Among other items, CMS proposes clarifying which Consumer Price Index for All Urban Consumers (CPI-U) data are used to determine benchmark values for subsequently approved drugs when CPI-U data for the relevant month are unavailable, clarifying the definition of “first marketed date,” and clarifying that certain skin substitutes would not be excluded from the definition of a Part B rebatable drug. Separately, CMS proposes requiring providers and suppliers that are 340B covered entities to submit specified claim-level data elements to the Medicare Part D Claims Data 340B Repository for covered Part D drugs dispensed with a 340B discount, beginning with claims with dates of service on or after January 1, 2027.

CLINICAL LABORATORY FEE SCHEDULE (CLFS)

CMS proposes conforming regulatory changes to implement CAA, 2026 amendments to the CLFS. The changes would update the data collection and reporting requirements for clinical diagnostic laboratory tests (CDLTs) as well as the phase-in of payment reductions based on private payor rate data. The next data reporting period for CDLTs that are not advanced diagnostic laboratory tests runs from May 1, 2026, through July 31, 2026, based on applicable information collected from January 1, 2025, through June 30, 2025. Beginning in CY27, payment reductions resulting from the private payor rate data would be subject to a phase-in cap of up to 15% per year through CY29.

AMBULATORY SPECIALTY MODEL (ASM)

The CY26 PFS final rule established the ASM, a mandatory alternative payment model administered through the CMS Innovation Center that focuses on specialists treating Medicare beneficiaries with heart failure and low back pain. The model runs from 2027 through 2031, with the first performance year beginning January 1, 2027, and payment adjustments applied two years after each performance year. Participating specialists are assessed individually (at the Taxpayer Identification Number/National Provider Identifier (TIN/NPI) level) across four performance categories, which are quality, cost, improvement activities, and Promoting Interoperability. Performance relative to peers treating the same condition determines two-sided adjustments to Medicare Part B payments ranging from -9% to +9% in the first two payment years (2029 and 2030) and gradually increasing to 12% by the final payment year (2033).

In the CY27 rule, CMS proposes a series of technical refinements to the model that would take effect at its start. Key proposals include adding an administrative claims-based imaging quality measure for low back pain, replacing the low back pain patient-reported outcome measure with a functional status outcome process measure, adjusting quality measure benchmarking and scoring policies, adding a quality scoring incentive for voluntary submission of patient-reported outcome data, incorporating a rural scoring adjustment, and aligning the model’s Promoting Interoperability requirements with proposed MIPS changes. CMS also proposes participant-level flexibilities, including exceptions for participants affected by TIN changes or specialty redesignations, an option to terminate participants under certain circumstances, an option to submit improvement activities data at the individual or group level, and revisions to collaborative care arrangement requirements.

QUALITY PAYMENT PROGRAM (QPP)

The proposed rule includes significant changes to the QPP. Most notably, CMS proposes sunsetting traditional Merit-based Incentive Payment System (MIPS) reporting beginning with the CY29 performance period (2031 payment year). At that point, MIPS Value Pathways (MVPs) would become the only MIPS reporting option for clinicians not reporting through the APM Performance Pathway. Additional QPP proposals include:

  • Adding three new MVPs focused on diabetic disease, hypertension, and hospitalist care, which would bring the MVP inventory to 30 pathways.
  • Establishing a CY27 quality measure inventory of 180 measures, reflecting 20 measure removals, 10 measure additions, and 43 substantive changes. CMS also proposes creating a new “MIPS core measure” designation and requiring clinicians to report at least one core measure in place of the current outcome or high priority measure requirement, with an exemption for small practices.
  • Updating the improvement activities inventory by adding six new activities (including a new Advancing Health and Wellness subcategory aligned with the Make America Healthy Again initiative), modifying five activities, and removing eleven activities.
  • Revising the Promoting Interoperability category, including removing the Security Risk Analysis measure and restructuring the Electronic Prior Authorization measure so that it is optional (and worth bonus points) for CY27 before becoming required in CY28 alongside a new required Electronic Prior Authorization for Prescription Drugs measure.
  • Applying Qualifying Participant (QP) status at the TIN/NPI level under which the clinician achieves that status and modifying the QP thresholds in accordance with the CAA, 2026.

MEDICARE SHARED SAVINGS PROGRAM (MSSP)

The CY27 PFS proposed rule includes numerous updates to the MSSP, including:

  • Rebalancing financial incentives across risk tracks, including raising the shared savings rate for Level E of the BASIC track from 50% to 60%, lowering the maximum weight of the positive regional benchmark adjustment for ENHANCED track ACOs from 50% to 35%, raising the prior savings adjustment scaling factor from 50% to 75%, risk adjusting the 5% cap on upward benchmark adjustments, and adding a new growth adjustment that rewards ACOs for bringing clinicians and beneficiaries new to value-based care into the program.
  • Adding a guardrail to the Accountable Care Prospective Trend (ACPT) component of the benchmark update factor so the ACPT is no more than 1 percentage point below (or 1.5 percentage points above) observed national expenditure growth. The lower guardrail would apply retroactively to ACOs with 2024 through 2026 start dates, and CMS is delaying performance year 2025 financial reconciliation until November 2026 to implement the change if finalized.
  • Allowing ACOs, upon CMS approval of an implementation plan, to reduce or eliminate Part B cost sharing for beneficiaries beginning April 1, 2027 (excluding durable medical equipment, prosthetics, orthotics, supplies, and prescription drugs), while removing the prepaid shared savings payment option due to low uptake.
  • Modifying the beneficiary assignment methodology for performance year 2028 and beyond, including excluding primary care charges billed through non-ACO taxpayer identification numbers from assignment calculations.
  • Streamlining quality and certified electronic health record technology (CEHRT) requirements, including extending the MIPS Clinical Quality Measures collection type and its reporting incentive, creating a new Medicare electronic Clinical Quality Measure (eCQM) collection type, reducing the APP Plus quality measure set to eight measures, and replacing the current Promoting Interoperability reporting requirement with a simplified three-option CEHRT use attestation.

REQUESTS FOR INFORMATION (RFIS) AND COMMENT SOLICITATIONS

As part of the proposed rule, CMS issued several RFIs and comment solicitations, seeking stakeholder feedback on issues including:

  • How CMS might redesign primary care valuation to support a shift toward preventive medicine, covering three topics, which are reconsidering relative primary care payment under the PFS, understanding the payment implications of incorporating technology into primary care, and establishing prospective primary care payment within the MSSP and potentially Original Medicare more broadly.
  • How to address duplicate laboratory testing and imaging resulting from siloed diagnostic results, including potential actions to improve result sharing and interoperability across care settings.
  • Whether and how the facility versus non-facility site of service differential should be refined, including the appropriate indirect PE allocation for hospital-employed physicians.
  • How to improve data collection and valuation accuracy for global surgical packages, including potential revaluation strategies for future rulemaking.
  • Whether the RPM and RTM code families should be restructured into bundled HCPCS G-codes.
  • The anticipated timeline, milestones, and implementation considerations for transitioning to FHIR-based digital quality reporting across the QPP and other CMS quality programs.
  • The influence of the American Medical Association’s (AMA) CPT coding system and RUC valuation process on physician payment policy, including questions about the AMA’s licensing monopoly, conflicts of interest in service valuation, and potential alternatives for data collection and payment recommendations.
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Crunch Time

There are only 8 more days left with both the House and the Senate in session before the August recess, and Congress has a lot on its plate. The top of the list includes fiscal year 2027 appropriations bills, Republican hopes for Reconciliation 3.0, and dealing with renewed conflict in Iran. Overshadowing it all is the unexpected death of Senate Budget Committee Chairman Lindsey Graham (R-SC). Let’s get into it. Welcome to the Week Ahead!

The Administration

The Department of Health and Human Services (HHS) postponed the U.S. Preventive Services Task Force’s meeting for the fourth time in the past year, citing an “unprecedented” volume of applications from prospective members. The delay follows a broader overhaul of the task force’s membership. In May, HHS removed chair John Wong and vice chair Esa Davis, and the agency has been soliciting nominations for a new slate of members. Given the pattern of repeated delays over the past year, it will be important to see if HHS names new task force members or sets a new meeting date in the coming weeks, and whether congressional Democrats and advocacy groups, who have previously pushed back on changes to the task force, respond to this latest postponement.

Meanwhile, the White House is once again focusing on the H-1B visa program with new a Department of Labor (DOL) investigation into visa fraud. Vice President Vance announced the new effort, following court challenges to the $100,000 H-1B fee imposed by the Trump administration in September 2025. The initiative will focus on checking underpayment of foreign workers, layoffs of qualified Americans, and labor trafficking. While much of the focus has been on the information technology industry, it will be important to pay attention to how the investigation impacts the health care workforce, which includes a significant number of H-1B visa holders.

The Senate

The passing of Sen. Graham has major implications for the Senate’s agenda, as he chaired the Senate Budget Committee, which would be responsible for drafting instructions for a third reconciliation bill. Sen. Ron Johnson (R-WI) is the most senior Republican on the Committee without an existing chairmanship, is next in line for the post and his office has said he is “prepared to serve.” Sen. Johnson is a staunch fiscal hawk who previously called for cuts during the debates over the first reconciliation package. This suggests he may demand cuts to offset the price tag of a third package. Sen. Graham’s passing also means that, until his temporary replacement is named and until Sen. Mitch McConnell (R-KY) returns, the Republican majority is down to 51 Senators.

The Senate Health, Education, Labor, and Pensions (HELP) Committee is looking to start filling in the gaps in federal health policy leadership with a nomination hearing on July 15. Up for review are Sean Kaufman to be Assistant Secretary for Preparedness and Response (ASPR) and Dr. Erica Schwartz to be Director of the Centers for Disease Control and Prevention (CDC). The nomination hearings indicate that HELP Committee Chairman Bill Cassidy (R-LA) is willing to work with the Trump administration to move forward with their picks despite losing his primary in May. Also, on his to-do list are nomination hearings for the US Surgeon General and the yet-to-be-announced Director for the Food and Drug Administration (FDA). And that’s assuming that Dr. Schwartz lasts longer than her predecessors’ 29 days!

We are also tracking a July 14 Senate Judiciary Committee hearing on how the debate over what products are eligible for patents impacts genetic medicine. Our conversations on the Hill indicate that the hearing will be focused on S. 1545, the Patent Eligibility Restoration Act of 2025 (PERA). If this bill were to eventually become law it would make it easier for diagnostic methods, genetic testing applications, and personalized-medicine inventions built around genetic material to be patented.

Other Health Care Hearings This Week

  • July 15: Senate Armed Services Personnel Subcommittee hearing on the Tricare pharmacy program
  • July 15: Senate Aging Committee hearing on foreign ownership and control in America’s drug supply chain

The House

House Republican leadership is returning to Washington after failing to advance appropriations bills before the July 4th recess. The House Rules Committee is scheduled to consider a rule on July 13 that would include the national security and Department of State appropriations legislation (along with a Veterans bill with a variety of health care provisions). However, it remains to be seen if House Republican leadership can overcome the efforts by some House Republicans to halt floor action unless progress is made on the SAVE America Act. At the same time, there continues to be interest in reconciliation 3.0 in the House, with some calling for provisions to enact health care priorities such as expanding access to health savings accounts and strengthening federal price transparency requirements. House Speaker Mike Johnson (R-LA-4) reportedly met with members of the House Budget Committee on July 12. Despite this movement, hurdles such as a thin Republican majority and dwindling days on the calendar make a third reconciliation package a tall order.

While the House as a whole deals with all these priorities and more, the House Energy and Commerce Health Subcommittee is set to examine America’s leadership in biomedical innovation and the FDA’s role in drug development on July 15. Based on our conversations on the Hill, we expect the hearing to include a focus on how the US can improve the drug research and approval process to be competitive with China, as well as drug user fee reauthorization.

Other Health Care Hearings This Week

  • July 14: House Education and Workforce Committee hearing on the impact of DEI on medical schools
  • July 15: House Select Committee on China hearing on the federal research security enterprise

There You Have It

Movies are a great way to take shelter from the summer heat, and July is setting up to have a lot of options between the new live-action Moana, The Odyssey, the next Spider-Man, and more. Is there one that you are looking forward to? Let us know. Make it a great week!

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Summary of Health Care Price Transparency and Medicare Advantage Legislation in House Energy and Commerce Health Subcommittee Markup

On June 25, 2026, the House Energy and Commerce Health Subcommittee held a markup to consider 15 bills to increase price transparency across the health care sector, including hospitals and insurers, to address concerns about prior authorization and other practices by Medicare Advantage plans, and to deal with the public health threat posed by illicit drugs. This memo covers the legislation related to price transparency and Medicare Advantage. All bills were advanced to the full committee on voice votes. Full Committee Ranking Member Frank Pallone (D-NJ-6) offered general support for the price transparency legislation but raised concerns about the Prices on the Wall Act, arguing that it could cause more confusion than it would help. Several amendments were offered during the markup but were ultimately withdrawn following a commitment from both Full Committee Chairman Bret Guthrie (R-KY-2) and Health Subcommittee Chair Morgan Griffith (R-VA-9) to work on the bill before it goes to full committee.

OPENING STATEMENTS

PRICE TRANSPARENCY AND MEDICARE ADVANTAGE LEGISLATION MARKED UP

H.R. 9393, the Lower Costs, More Transparency Act of 2026 (Reps. Guthrie (R-KY-2) and Pallone (DNJ-6)), to require hospitals, surgical centers, labs, and imaging providers to post prices and require health plans to disclose negotiated rates, cost-sharing estimates, and pharmacy benefit manager (PBM) spread pricing.

  • Full Committee Chair Guthrie and Ranking Member Pallone spoke in favor of this bill, highlighting the amount of bipartisan work that went into getting to this point.
  • Rep. John James (R-MI-10) stated he would support this bill but believes it does not go far enough in terms of making the prices easy to understand. He shared that he would be putting up his bill, H.R. 5582, the Patients Deserve Price Tags, as an amendment to strengthen the underlying bill.
  • Rep. Greg Landsman (R-OH-1) offered an amendment to tack on language to ensure that the data shared is transparent, accurate, and understandable. This amendment was withdrawn after Rep. Landsman acknowledged it did not have the support.
  • Rep. Buddy Carter (R-GA-1) offered an amendment to include language from the DOC Access Act, which would promote transparency of the vision and dental benefit industry. He argued that vision benefit managers (VBMs) cause harm to patients as they do not have a choice in their eye doctor or treatment. This amendment was withdrawn.
  • Health Subcommittee Ranking Member Diana DeGette (D-CO-1) offered an amendment to include language requiring certain entities to share their ownership structures. This amendment was withdrawn following assurances from Health Subcommittee Chairman Griffith that they could talk about implementing changes.
  • This bill was forwarded to the full committee following a voice vote.

H.R. 9397, the Premium Transparency Act (Reps. August Pfluger (R-TX-11) and Nathanial Moran (R-TX-1)), to ensure health insurer accountability through publishing of overhead costs and claim payments.

  • Health Subcommittee Ranking Member DeGette highlighted that this language was already put into law within the ACA, but would still support the legislation.
  • This bill was forwarded to the full committee following a voice vote.

H.R. 9396, the Prior Authorization Accountability Act (Rep. Craig Goldman (R-TX-12)), to require insurers to display which services were subject to prior authorization, the percentage of requests approved or denied, and the average amount of time between the request submission and determination.

  • Health Subcommittee Chair Griffith, Health Subcommittee Ranking Member DeGette, and Rep. Mariannette Miller-Meeks (R-IA-2) spoke in support of the bill.
  • This bill was forwarded to the full committee following a voice vote.

H.R. 9390, the Prices on the Wall Act (Rep. Mariannette Miller-Meeks (R-IA-2)), to require hospitals, ambulatory surgical centers, and labs to post the discounted cash price in dollar amount on the wall for each service they provide.

  • Rep. Miller-Meeks (R-IA-2) spoke in support of the bill, highlighting the importance of physically seeing the prices.
  • Full Committee Ranking Member Pallone expressed his concern that it will cause more confusion for consumers and could deter them from care. While he acknowledged the good intent behind the bill, he explicitly raised issues with the fact that the posted prices will not be what patients actually pay and that billing codes can be unclear.
  • This bill was forwarded to the full committee following a voice vote.

H.R. 3514, Improving Seniors’ Timely Access to Care Act of 2025 (Reps. Mike Kelly (R-PA-16) and Suzan DelBene (D-WA-1)), to require plans to establish, and evaluate the implementation of, an electronic prior authorization.

  • Reps. John Joyce (R-PA-13), Kim Schrier (D-WA-1), Miller-Meeks, Lizzie
  • Fletcher (D-TX-7), and Troy Carter (D-LA-2) spoke in support.
  • This bill was forwarded to the full committee following a voice vote.

H.R. 9392, the Medicare Advantage Cost Transparency Act (Reps. Diana DeGette (D-CO-1) and John Joyce (R-PA-13)), to require the inclusion of certain information in Medicare Advantage encounter data.

  • Rep. Joyce spoke in support of the bill and emphasized the importance of including value- based contracting in this list of information to capture the full picture. He also shared the need for a uniform reporting standard so the data is comparable across plan types.
  • This bill was forwarded to the full committee following a voice vote.

H.R. 5243, to require each Medicare Advantage plan to submit eligibility for supplemental benefits, types of benefit categories offered, and data on utilization of and payments for such benefits (Rep. Jennifer McClellan (D-VA-4)).

  • This bill as amended was forwarded to the full committee following a voice vote.

H.R. 9395, the Transparency in Medicare Advantage Steering Act (Rep. Alexandria Ocasio-Cortez (D-NY14)), to require Medicare Advantage organizations to share the amount and form of compensation paid to an agent or broker, along with the total amount of compensation paid to agents and brokers.

  • This bill was forwarded to the full committee following a voice vote.
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Week Ahead: 250 Years and Counting

Washington is looking forward to a three-day weekend, as the nation gears up to celebrate 250 years of independence. However, there’s still a lot going on in the health care space. Medicare payment rules are being reviewed, House conservatives are making a push for health care reform in Reconciliation 3.0, and a 340B reform discussion draft has been published. So, let’s get into it. Welcome to the Week Ahead!

The Administration

Minds may be focused on summer, but it’s also rules season for the Centers for Medicare and Medicaid Services (CMS) as the agency works with the Office of Management and Budget (OMB) to release both proposed and finalized versions of several of the payment rules for calendar (CY) and fiscal year (FY) 2027. The CY27 Physician Fee Schedule proposed rule and CY27 Hospital Outpatient Prospective Payment System (HOPPS) proposed rule are usually released in early to mid-July. We expect the CY27 PFS to acknowledge the statutory end of the 2.5% pay bump that Congress provided for physicians through the 2025 reconciliation bill, which is certain to prompt renewed calls from physician groups for both a short-term fix and longer-term reform of how the PFS rate is calculated. It will also be important to see if CMS responds to concerns about other controversial provisions of the CY26 PFS final rule, such as the -2.5% efficiency adjustment and the reductions to the practice expense portion of the reimbursement calculation for facility-based services. For the CY27 HOPPS proposed rule, we expect CMS to continue its multi-year phase-out of the inpatient-only list and propose a larger 340B conversion factor offset than CY26. CMS may also propose differentiated skin-substitute rates based on Food and Drug Administration (FDA) regulatory categories. These expectations are based on CMS comments included in the CY26 HOPPS final rule fact sheet. CMS and OMB are also still working on releasing the FY27 Hospital Inpatient Prospective Payment System (IPPS) final rule and the FY27 Inpatient Psychiatric Facility (IPF) Prospective Payment System (PPS) final rule, which we expect in late July-early August.

Meanwhile, speculation continues as to who will be President Trump’s next nominee for Food and Drug Administration (FDA) Commissioner. A few names have reportedly emerged as finalists, although the White House has not confirmed this report. Reported finalists include Dr. Heidi Overton, who currently serves as deputy director of the White House Domestic Policy Council, Dr. Jeffery Vacirca, who is the CEO of the board of New York Cancer & Blood Specialists, and Stephen Ferrara, who previously served as Chief Medical Officer for the Navy and the Central Intelligence Agency (CIA). A June 24 report from RBC Capital Markets also listed John Crowley, CEO of the Biotechnology Innovation Organization (BIO), and current acting commissioner Kyle Diamantas as top candidates. Crowley’s appointment would be a big win for pharmaceutical companies and could go a long way in repairing the administration’s relationship with the sector.

In other nomination news, President Trump has announced Chris Klomp will be nominated for Deputy Secretary of Health and Human Services. Klomp has been on the rise after becoming Chief Counselor of HHS in February. This role will require Senate confirmation, but he has already cleared one hurdle: approval from Senate HELP Committee Chair Bill Cassidy (R-LA), who has expressed his support on social media.

The Senate

The Senate has left town until July 13, but right before packing his bags, Senate HELP Committee Chair Cassidy dropped a discussion draft to reform the 340B Drug Pricing Program. The proposed changes aim to prevent duplication of drug discounts, create reporting requirements on how 340B revenue is being used, and impose a sliding fee scale for low-income patients. The discussion draft shows that Chair Cassidy is not taking it easy despite his lame duck status. However, it’s unclear how much progress he can make before his term ends.

The House

Whispers about Reconciliation 3.0 are getting louder again, this time focusing on potential health policy inclusions. House Freedom Caucus members authored a letter to Speaker of the House Mike Johnson (R-LA-4) calling for “health care freedom reforms”, such as expanding access to health savings accounts (HSAs) and strengthening federal price transparency requirements. However, like everything else in the House these days, passage of a third reconciliation bill is complicated by President Trump’s demands to pass his election bill, the SAVE America Act. Speaker Johnson has proposed including a grant program in a third reconciliation package to fund state efforts to implement portions of the SAVE America Act. While this could preemptively meet the Byrd Rule in the Senate, which requires measures passed through reconciliation to have a budgetary impact, it may leave both hardline conservatives (who want full passage of the SAVE America Act) and certain Senate Republicans (who have voiced concerns about the SAVE America Act) unsatisfied.

Additionally, the Ways and Means Committee is looking to take another run at a bill requiring additional transparency from nonprofit hospitals, after it was pulled from a previous Committee markup. The legislation, as previously proposed, would require nonprofit hospitals to meet new transparency requirements when filing their Form 990 with the Internal Revenue Service each year. Our conversations on the Hill indicate that Committee Republicans are still working through the process of incorporating stakeholder feedback and hope to move on it soon.

Also on our radar, the House Majority Leader’s schedule for the week of June 29 incudes H.R. 5347, the Health Care Efficiency Through Flexibility Act. This bill would preserve existing accountable care organization (ACO) quality reporting collection types through performance year (PY) 2029, bar CMS from deeming an ACO’s data “unrepresentative” solely because some participants couldn’t submit via the chosen collection type (subject to certain requirements) and establish an optional digital quality measure pilot (PY 2028–2032) with reporting relief for participants.

Looking ahead: House Democrats are gearing up for future possibilities if they retake the chamber in the midterm elections. Party leadership has established 5 Cost of Living working groups to discuss possible policies to address affordability, which will be the number 1 priority if Democrats win back control of the chamber, according to Minority Leader Hakeem Jeffries (D-NY-8). The Health working group will be headed by Reps. Alexandria Ocasio-Cortez (D-NY-14) and Terri Sewell (D-AL-7) and aims to develop policy recommendations to lower health care costs and expand access. The materials produced by the working group will likely form the backbone of Democratic health policy and signal the changes Democrats will try to enact if they regain control of the House.

House Health Care Hearings This Week

There You Have It

The 4th of July is almost here, and with it the United States is celebrating the 250th anniversary. About 45% of Americans were also alive for the 200th celebrations. If you were there, let us know what you remember about it. Make it a great week!

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Joint Economic Committee Hearing on Combating Health Care Fraud and Leakage

On June 24, 2026, the Joint Economic Committee held a hearing to examine ways to prevent health care fraud and instances where health care programs are not being used as intended. Chairman David Schweikert (R-AZ-1) encouraged Committee members and witnesses to focus on tangible solutions to the issue. Members discussed ways to reduce health sector consolidation, prevent fraudulent actions from health plan brokers, and leverage technology to reduce fraud in federal health programs.

OPENING STATEMENTS

WITNESS TESTIMONY

  • Dr. Brian Blase, Founder and President, Paragon Health Institute – Testimony
  • Dr. David Meyers, Associate Professor of Health Services, Policy, and Practice, Associate Director of the Center for Advancing Health Policy Through Research, Vice Department Chair, Brown University – Testimony
  • Dr. Chris Pope, Senior Fellow, Manhattan Institute – Testimony
  • Jessica Tillipman, J.D., Associate Dean for Governmental Procurement Law Studies, Government Contracts Advisory Council Distinguished Professorial Lecturer in Law, George Washington University Law School – Testimony

MEMBER DISCUSSION

Consolidation

Multiple members expressed concerns about the level of consolidation and vertical integration in the health system. Reps. Don Beyer (D-VA-8) and Victoria Spartz (R-IN-5) asked for solutions to prevent consolidation as well as to unwind some of the current consolidation. Dr. Meyers expressed that it would be extremely challenging to unwind current consolidation but gave recommendations to prevent further consolidation. These recommendations include structural separation, preventing health plans from acquiring more providers, and changing incentives, such as site neutral payment reforms, risk adjustment, and the medical loss ratio, to prevent encouraging more consolidation.

Brokers

Democrats on the Committee raised concerns about health insurance brokers. Ranking Member Maggie Hassan (D-NH) and Rep. Beyer wanted to understand how to prevent brokers from acting fraudulently. Dr. Meyers highlighted registering brokers, requiring stricter beneficiary understanding and consent for their plan of choice, and changing incentives for brokers to enroll a beneficiary in a specific plan by standardizing plan payments to brokers and making brokers a fiduciary of the beneficiary. Ms. Tillipman was supportive of reevaluating the specific incentives that create issues with brokers, but she cautioned the committee to not create broad disruptions.

Medicare and Medicaid

Chairman Schweikert suggested that a universal solution to fraud in Medicare Advantage would be to move to a capitated payment model, with a longer enrollment period. Dr. Meyers shared that a capitated model could be beneficial for improving plan incentives to support beneficiaries but cautioned that there would need to be a way for beneficiaries to leave the plan before their enrollment was over.

Rep. Spartz raised concerns about the high levels of automatic funding for federal health programs and questioned if Congress should provide more regular oversight. Dr. Blase agreed, sharing that the Medicare Part B trust fund will soon reach insolvency which will force Congress to address spending.

Sen. Amy Klobuchar (D-MN) asked each witness to share the top bipartisan reform Congress should focus on. Dr. Blase highlighted the need for the federal government to recoup funds states have spent on improper Medicaid payments. Dr. Pope shared that there needs to be increased documentation of services received by enrollees in Medicaid managed care plans.

Technology

Chairman Schweikert was curious if there was a universal data solution to reduce fraud. Dr. Blase shared that while artificial intelligence may play a role, he would recommend Congress focus on reducing the distortions that occur due to government payment policies. Dr. Meyer suggested that developing a better plan finder tool could be beneficial, as well as overlaying technology on top of other larger reforms to increase their impact. Sen. Klobuchar was interested in technological improvements but highlighted that many government computer systems need system wide upgrades to bring them into the modern age. Ms. Tillipman agreed, sharing that public systems need widespread upgrades to allow them to share information broadly, which can reduce duplicate work and decrease fraud.

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