CMS Finalizes Medicare Payment Rules
On July 31, the Centers for Medicare and Medicaid Services (CMS) finalized Medicare payment rules for the fiscal year (FY) 2026
Inpatient Prospective Payment System (IPPS) and the
Skilled Nursing Facility Prospective Payment System (SNF PPS). CMS finalized a 2.6% rate increase for IPPS payments and a 3.2% increase for SNF PPS payments compared to FY 2025. CMS also finalized a 2.7% increase to Long-Term Care Hospital (LTCH) PPS payments in the IPPS final rule.
IHA will provide facility-specific estimated financial impact reports in the IHA C-Suite in the coming weeks. A CMS fact sheet on the IPPS and LTCH final rule is
here. A CMS fact sheet on the SNF PPS final rule is
here.
HHS Announces 340B Rebate Pilot Program
Yesterday, the U.S. Dept. of Health and Human Services (HHS)
announced
a voluntary 340B Rebate Model Pilot Program, effective Jan. 1, 2026. Drug manufacturers are invited to apply to participate in the pilot program for a minimum of one year, and the program will be limited to ten drugs included on the Centers for Medicare & Medicaid Services’ Medicare Drug Price Negotiation Selected Drug List, regardless of payer.
Drug manufacturers must apply by Sept. 15, and approvals will be made by Oct. 15. HHS is also soliciting comments on the structure and application process of the 340B Rebate Model Pilot Program. Comments are due Aug. 31. IHA will submit comments and encourages member hospitals and health systems to submit comments as well, explaining the potential harms of the rebate model to their institutions. A member communication with more information on potential comments is forthcoming.
The announced pilot program does include significant guardrails, including limiting the program to the ten drugs selected for negotiation under the Medicare negotiation program in 2026, and disallowing denials based on diversion or Medicaid duplicate discount concerns. However, we are concerned about future expansion of the program, and the ability of manufacturers to deny rebates in certain situations. HHS specifically mentioned allowing denials in cases of duplication under the Medicare drug negotiation program, and when the 340B rebate is provided to another covered entity on the same claim.
IHA is participating in an amicus brief being filed in the consolidated case now on appeal in the D.C. Circuit. This case addresses the rebate models proposed by J&J, Eli Lilly, Novartis, BMS, and Kalderos, which HHS has denied stating prior approval is required before a manufacturer can implement a rebate model. IHA will update the membership on this case as it progresses.
Legislation Signed on Universal Mental Health Screening in Schools
Yesterday, Gov. JB Pritzker signed
Senate Bill 1560, which will make annual mental health screenings available for all Illinois students in grades three through 12 by the 2027 school year. The new law also establishes a partnership with psychiatric hospitals and schools to inform parents and caregivers about the BEACON (Behavioral Health Care and Ongoing Navigation) portal, which provides Illinois families with information about available behavioral health services for children and adolescents. IHA collaborated with the Governor’s office to successfully streamline multiple hospital administrative requirements for youth in inpatient psychiatric care into one requirement to enter a child into the BEACON portal prior to calling the Illinois Dept. of Children and Family Services.
Click here to access the Governor’s announcement and learn more about Senate Bill 1560.
IDFPR Completes Phase 2 of Updating Licensing System
The Illinois Dept. of Financial and Professional Regulation (IDFPR) announced yesterday that 25 more license types are now available for licensure via the Department’s new online licensing system, CORE (Comprehensive Online Regulatory Environment). According to an IDFPR
news release, this marks the successful completion of CORE’s Phase 2, during which IDFPR added 88 license types to CORE.
Phase 2 focused on adding license types to CORE that were only available as paper applications, which required a longer processing review time. Individuals seeking their first license and whose license types are now available on CORE should utilize
IDFPR’s new licensing system to apply for licensure. IDFPR will add all other license types and all other application methods (including renewals, reinstatements and restorations) to CORE across four additional phases, with full implementation set for August 2026.
In total, 95 license types are now available on CORE for professionals to apply for their first professional license in Illinois.
White House Outlines Requirements for Drug Manufacturers to Reduce Costs
Yesterday, the Trump Administration
announced it has sent letters to leading pharmaceutical manufacturers outlining the steps they must take to bring down the prices of prescription drugs in the United States to match the lowest price offered in other developed nations (known as the most-favored-nation, or MFN, price). The steps include providing MFN prices to all Medicaid patients; requiring manufacturers to stipulate that they will not offer other developed nations better prices for new drugs than prices offered in the U.S.; providing manufacturers an avenue to cut out middlemen and sell medicines directly to patients at a price no higher than the best price available in developed nations; and using trade policy to support manufacturers in raising prices internationally provided that increased revenues abroad are reinvested directly into lowering prices for Americans. The letters were sent to AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron and Sanofi.
FDA Requires Major Changes to Opioid Pain Medication Labeling
The Food and Drug Administration (FDA)
announced yesterday it is requiring safety labeling changes to all opioid pain medications with the goal of better emphasizing and explaining the risks associated with their long-term use. These changes follow a
public advisory committee meeting in May that reviewed data showing serious risks—such as misuse, addiction, and both fatal and non-fatal overdoses—for patients who use opioids over long periods. The updated labeling changes are intended to include clearer risk information, dosing warnings, clarified use limits, treatment guidance, discontinuation instructions, information on overdose reversal agents, warnings about drug interactions, overdose warnings and digestive health implications.
