Health Policy Report – July 22, 2025

CMS Releases Proposed Rules on PFS & HOPPS

The Centers for Medicare and Medicaid Services (CMS) released the CY 2026 proposed rules for the Physician Fee Schedule (PFS) and the Hospital Outpatient Prospective Payment System (HOPPS). Both rules signaled that the Trump Administration has taken notice of declining physician pay and intends to address payment disparities between physicians and hospitals. 

In the PFS proposed rule, beginning in calendar year (CY) 2026, there will be two separate conversion factors with separate annual updates for qualifying and nonqualifying Alternative Payment Model (APM) participants (QPs) as required by statute. By statute, CMS defines QPs are those that meet certain thresholds for participation in an Advanced APM, which means generally that the payment model has features to ensure accountability for quality and cost of care.

CMS proposed a 3.6% increase to physician payment in 2026. The increase accounts for a 2.5% payment adjustment required by the One Big Beautiful Bill Act (OBBA) and a bump of 0.55% to account for changes to some RVUs. The agency also said it intends to set the conversion rate in qualifying APMs at $33.59, an increase of 3.83%. For providers in nonqualifying APMs, CMS is proposing a conversion factor increase of $33.42 (+3.62%). CMS proposed an increase in “practice expense relative value units” for nonfacility services such as scheduling and clinical coordination, while reducing high facility payments to hospitals.

“We are taking meaningful steps to modernize Medicare, cut waste, and improve patient care,” Oz said in a statement accompanying the PFS proposed rule. “We’re making it easier for seniors to access preventive services, incentivizing health care providers to deliver real results, and cracking down on abuse that drives up costs. This is how we protect Medicare for the next generation while helping Americans live longer, healthier lives.” 

In the HOPPS proposed rule, CMS took further steps toward site neutral payment policy. According to the proposed rule, Medicare “seeks to equalize payments for certain services delivered in hospitals and off-campus facilities, helping ensure beneficiaries aren’t penalized with additional copays simply based on where they receive care.” The 2026 proposed rule also gives physicians greater flexibility to determine the most clinically appropriate setting for care. CMS is expanding its site-neutral payment policy to include drug administration services provided in excepted off-campus hospital outpatient departments (PBDs), a major step towards site neutrality payment reform.

“We are building on our efforts to modernize Medicare payments by advancing site neutrality, simplifying hospital billing, and ensuring real prices — not estimates — are available to patients,” CMS Deputy Administrator and Medicare Director Chris Klomp said in a news release. “These changes help make hospital care more predictable, accountable, and affordable.”

The Network looks forward to providing further feedback in its forthcoming comments to CMS during the 60-day comment period. CMS will release the finalized rule later this fall.

To read the PFS proposed rule, CLICK HERE. 

To read more about the PFS proposed rule, CLICK HERE. 

To read the HOPPS proposed rule, CLICK HERE. 

Protecting Patient Access to Cancer and Complex Therapies Act Reintroduced

On July 9, Representatives Greg Murphy, MD (R-NC), Neal Dunn (R-FL), and Adam Gray (D-CA) reintroduced the Protecting Patient Access to Cancer and Complex Therapies Act in the House of Representatives.

If enacted, this bipartisan legislation would help protect patient access to care by shielding both patients and their providers from unintended consequences of the Inflation Reduction Act’s prescription drug negotiations—ensuring physicians aren’t caught in the middle of the process.

Under the IRA, provider reimbursement for select Medicare Part B drugs would be based on the Maximum Fair Price (MFP) rather than the Average Sales Price (ASP), which would significantly decrease reimbursement levels for complex cancer therapies, threaten practice viability, and negatively impact patients’ access to care.

If passed, the Protecting Patient Access to Cancer and Complex Therapies Act would maintain ASP-based reimbursement and require drug manufacturers to directly rebate Medicare for the lower negotiated rate, rather than forcing providers to negotiate between CMS and manufacturers.

The US Oncology Network urges Congress to pass this essential legislation to protect providers from financial strain, lower out-of-pocket costs, and safeguard patient access to vital oncology care.

To read more, CLICK HERE.

House Lawmakers Introduce New PBM Reform Package

On July 10, Representative Buddy Carter (R-GA), along with 11 other members of Congress, introduced the PBM Reform Act to protect patients and pharmacies from harmful PBM business practices. 

“It’s time to bust up the PBM monopoly, which has been stealing hope and health from patients for decades. As a pharmacist, I’ve seen how PBMs abuse patients firsthand, and believe that the cure to this infectious disease is transparency, competition, and accountability, which is exactly what our bipartisan package provides,” said Representative Carter in a statement. 

If passed, the bill would ban “spread pricing” in Medicaid, establish new requirements for PBMs under Medicare Part D, including a policy to delink PBM compensation from the cost of medications, promote transparency in prescription drug plans, and require the Centers for Medicare and Medicaid Services (CMS) to define and enforce “reasonable and relevant” contract terms in Medicare Part D pharmacy contracts and enforce oversight on reported violations.

The reform package comes after PBM transparency measures were ultimately stripped from the reconciliation package passed in July. 

To read a statement, CLICK HERE. 

To read more, CLICK HERE.

​​Trump Administration Threatens 200% Tariff on Pharmaceuticals

President Trump has signaled that his Administration may soon unveil long-anticipated pharmaceutical tariffs of up to 200%. The White House in April launched an investigation into the effects of importing pharmaceuticals on national security. The studies are expected to conclude at the end of July, meaning an announcement could come as soon as August 1, though the tariffs are not expected to take full effect for 12 to 18 months. 

If enacted, steep tariffs are expected to increase drug prices by raising production costs and disrupting already fragile supply chains. The result could be higher out-of-pocket costs for patients, or in some cases, reduced access to essential medications, threatening health outcomes across the country.

With industry-wide tariffs now looming, global pharmaceutical firms have committed to investing in U.S. pharmaceuticals and many firms plan to relocate their manufacturing stateside or engage in trade deals with international pharmaceuticals.

To read more, CLICK HERE.

National Cancer Institute Grapples with Funding Cuts

In the wake of research funding cuts, the National Cancer Institute (NCI) is grappling with major upheaval and limited resources. 

Since 1990, the institute has reduced cancer deaths by a third and there are now roughly 18 million cancer survivors in the US. After a mandate by the Department of Health and Human Services and the Department of Government Efficiency earlier this year to slash contract spending by more than a third, the cancer institute is cutting contracts and staff. 

In interviews with KFF Health News, remaining staff described delays in obtaining essential supplies and updating websites with information on cancer treatment and diagnoses. When asked about the cuts, a spokesperson for HHS said the administration is working on a “necessary transformation and refocusing resources on high-impact, evidence-based research” but that cancer and other health conditions continue to be a high priority for both NIH and HHS.

The White House is urging Congress to cut the National Cancer Institute’s budget by nearly 40%, reducing it to $4.53 billion, as part of a broader effort to significantly scale back NIH funding for fiscal year 2026. In response, the NCI laboratory chief warns that if this cut passes, it will “destroy clinical research at NCI.”

To read more, CLICK HERE.