/ en Fri, 25 Apr 2025 10:02:03 -0500 Wed, 16 Apr 25 15:34:42 -0500 <div class="container"><div class="row"><div class="col-md-8"><p>The White House April 15 released an <a href="https://www.whitehouse.gov/presidential-actions/2025/04/lowering-drug-prices-by-once-again-putting-americans-first/" target="_blank">executive order</a>, “Lowering Drug Prices by Once Again Putting Americans First,” directing federal agencies to undertake a broad range of tasks aimed at reducing the costs of prescription drugs.</p><p>Specifically, the order directs:</p><ul><li>The Secretary of Health and Human Services (HHS) to ensure within 90 days grants to federally funded health centers are conditioned upon offering insulin and injectable epinephrine at or below the discounted price paid by the health center grantee or sub-grantee under the 340B Prescription Drug Program to eligible patients.</li><li>HHS to evaluate and propose regulations, as appropriate, within 180 days to ensure payment within Medicare is not encouraging a shift in drug administration volume away from physician office settings to hospital outpatient departments.</li><li>HHS to carry out within 180 days an acquisition cost survey for covered outpatient drugs at hospital outpatient departments. HHS must then propose any appropriate adjustments consistent with budget neutrality provisions.</li><li>HHS to develop and implement rulemaking within 60 days for a new payment model for high-cost prescription drugs.</li><li>HHS to propose and issue guidance within 60 days to improve the transparency of the Medicare Drug Price Negotiation Program, prioritize the selection of prescription drugs that are high cost to Medicare, and minimize any negative impacts of the maximum fair price on pharmaceutical innovation to the U.S. Additionally, the order directs HHS to work with Congress to modify the Medicare Drug Price Negotiation Program to extend the protection of small molecule prescription drugs from price negotiation to align with that of biological products.</li><li>The Office of Management and Budget Director (OMB), Assistant to the President for Domestic Policy, and the Assistant to the President for Economic Policy, in coordination with HHS, to jointly provide recommendations to the president within 180 days on how best to ensure that manufacturers pay accurate Medicaid drug rebates and support states in managing drug spending.</li><li>The Assistant to the President for Domestic Policy to provide within 90 days recommendations to the president on how best to promote a more competitive, efficient, transparent and resilient pharmaceutical value chain.</li><li>HHS to issue a report within 180 days providing administrative and legislative recommendations to 1) accelerate the approval of generics, biosimilars, combination products and second-in-class brand name medications; and 2) improve the process through which prescription drugs can be reclassified as over-the-counter medications.</li><li>HHS to take steps within 180 days to streamline and improve the Importation Program under the Federal Food, Drug, and Cosmetic Act to make it easier for states to obtain approval without sacrificing safety or quality.</li><li>The Secretary of Labor to propose regulations within 180 days to improve employer health plan fiduciary transparency into the direct and indirect compensation received by pharmacy benefit managers.</li><li>HHS to host public listening sessions and issue a report within 180 days with recommendations to reduce anti-competitive behavior by pharmaceutical manufacturers.</li></ul><p>Additional information will be forthcoming as agencies issue related guidance or notices.</p><h2>AHA TAKE</h2><p>In a statement shared with media, Lisa Kidder Hrobsky, AHA senior vice president of federal relations, advocacy, and political affairs, said, "The AHA welcomes President Trump and his administration focusing on the high price of drugs. As major purchasers of drugs for patient care, hospitals and health systems have strained under their rising prices. However, we continue to strongly oppose site-neutral policies that do not account for the unique circumstances of providing care in the hospital outpatient setting, where patients are demonstrably sicker and require more complex care. In addition, hospitals and health systems are the providers of 24/7, 365 days a year care to their patients and provide a wide range of services that allow for healthy communities. Finally, 340B is an essential program that helps hospitals advance health in communities across the country. We will work closely with the administration to convey the critical role 340B plays for patients and communities, especially those in rural and other medically underserved areas."</p><h2>ADDITIONAL INFORMATION ON EXECUTIVE ACTIONS</h2><p>The Trump administration has issued many executive orders and taken other administrative actions. The AHA has compiled a <a href="/system/files/media/file/2025/01/2025-New-Executive-Orders-20250127.pdf">tracker</a> of the actions the administration has taken that may be of interest to hospitals and health systems. The tracker will be updated regularly as new actions are taken.</p><h2>FURTHER QUESTIONS</h2><p>If you have further questions, please contact the AHA at 800-424-4301.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2025/04/trump-administration-issues-order-on-drug-pricing-advisory-4-16-2025.pdf" target="_blank" title="Click here to download the Member Advisory: Trump Administration Issues Additional Deregulation Orders and Notices PDF."><img src="/sites/default/files/2025-04/cover-trump-administration-issues-order-on-drug-pricing-advisory-4-16-2025.png" data-entity-uuid data-entity-type="file" alt="Cover Image Member Advisory: Trump Administration Issues Order on Drug Pricing." width="695" height="906"></a></p></div></div></div> Wed, 16 Apr 2025 15:34:42 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) earlier this month released its <a href="https://www.cms.gov/newsroom/press-releases/cms-finalizes-2026-payment-policy-updates-medicare-advantage-and-part-d-programs" target="_blank">rate announcement</a> and <a href="https://www.federalregister.gov/public-inspection/2025-06008/medicare-and-medicaid-programs-contract-year-2026-policy-and-technical-changes-to-the-medicare" target="_blank">final rule</a> on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and Programs of All-Inclusive Care for the Elderly for contract year (CY) 2026. The rule confirms prior rulemaking regarding MA plan prior authorization determinations and strengthens provider and patient access to appeals processes related to concurrent medical reviews.</p><p>However, the agency did not finalize a number of proposals and deferred others. Specifically, the final rule declines to finalize proposals related to health equity analysis on plan utilization management programs, guardrails on plan use of artificial intelligence in coverage determinations, and coverage for anti-obesity medications. The agency deferred action until future rulemaking on the following proposals: </p><ul><li>Enhanced rules on internal coverage criteria<strong>.</strong></li><li>Additional Medicare Advantage Organizations (MAOs) marketing and communications controls.</li><li>Increased transparency requirements regarding MAO provider directories.</li><li>Behavioral health cost-sharing requirements.</li><li>Revised MAO medical loss ratio reporting and auditing processes.</li></ul><p>Overall, the agency increases payments to MAOs on average by 5.06% from 2025 to 2026. This is an increase of 2.83 percentage points since the CY 2026 Advance Notice, largely attributable to an increase in the effective growth rate, reflecting fee-for-service Medicare spending.</p><h2>AHA TAKE</h2><p>The AHA appreciates that CMS finalized changes to organizational determinations and appeal rights, which support greater transparency around health plan downgrades of the level of care, as well as reaffirmed its policies on prior authorizations. These important provisions will help safeguard Medicare Advantage (MA) enrollees’ ability to access medically necessary care. Simultaneously, the AHA looks forward to working with the administration to further advance policies that increase oversight of MA plans, and in particular, supports efforts to better ensure that all Medicare beneficiaries receive the same access to care, whether they are enrolled in an MAO or Traditional Medicare.</p><p>For additional detail, the CMS fact sheets on the <a href="https://www.cms.gov/newsroom/fact-sheets/2026-medicare-advantage-and-part-d-rate-announcement" target="_blank">rate announcement</a> and <a href="https://www.cms.gov/newsroom/fact-sheets/contract-year-2026-policy-and-technical-changes-medicare-advantage-program-medicare-prescription-final" target="_blank">policy and technical changes rule</a> summarize key provisions.</p><h2>HIGHLIGHTS OF THE FINAL RULE</h2><p><strong>Organization Determinations and Appeal Rights</strong></p><p>CMS finalizes proposals to strengthen existing regulations regarding MA coverage and responsibility to provide all reasonable and necessary Medicare Parts A and B benefits. These include:</p><ul><li>Clarifying that an enrollee’s further liability to pay for services cannot be determined until an MAO has made a determination on a request for payment.</li><li>Modifying the definition of an organization determination to clarify that a coverage decision made by an MAO contemporaneously to when an enrollee is receiving such services, including level of care decisions (such as inpatient or outpatient coverage), is an organization determination subject to appeal and other existing requirements.</li><li>Finalizing a proposal to strengthen the notice requirements to ensure that a provider who has made a standard organization determination request on an enrollee’s behalf, or when it was otherwise appropriate, receives notice of the MAO’s decision.</li></ul><p><strong>Honoring Prior Authorizations and Concurrent Medical Necessity Determinations</strong></p><p>The final rule reinforces existing CMS policy that requires plans to adhere to medical necessity decisions rendered during a prior authorization process. The rule establishes that plans may only reconsider a previously approved prior authorization determination for obvious error or fraud. Additionally, as noted above, the rule explicitly extends this protection to concurrent determinations made pursuant to inpatient admissions.</p><p><strong>Medicare Prescription Payment Plan</strong></p><p>In the final rule, CMS reiterates its requirement under the Inflation Reduction Act of 2022 (IRA) to establish a payment plan that would allow enrollees in Medicare Part D and MA plans with prescription drug coverage the ability to pay for their out-of-pocket drug costs monthly instead of requiring a single upfront payment. This option must be made available for Medicare Part D enrollees and those individuals enrolled in MA plans with prescription drug coverage beginning Jan. 1, 2025.</p><p><strong>Other Pharmacy-related Provisions</strong></p><p>The final rule includes several additional pharmacy-related provisions, such as:</p><ul><li>Requiring that Part D sponsors’ network contracts with pharmacies mandate such pharmacies to be enrolled in the Medicare Drug Price Negotiation Program’s Medicare Transaction Facilitator Data Module.</li><li>Codifying provisions of the IRA that stipulate there is no cost-sharing or applicable deductible for an adult vaccine recommended by the Advisory Committee on Immunization Practices covered under Part D.</li><li>Codifying provisions of the IRA that stipulate the Part D cost-sharing amount for a one-month supply of covered insulin products must not exceed the proposed “covered insulin product applicable cost-sharing amount” and must not be subject to the Part D deductible.</li></ul><h2>POLICIES THAT THE AGENCY DID NOT FINALIZE</h2><p><strong>Coverage of Anti-obesity Medications</strong></p><p>CMS does not move forward with a proposal to allow the coverage of anti-obesity medications that are indicated to reduce excess body weight and maintain long-term weight reduction in individuals who have been diagnosed with obesity. This regulation would have applied to such drugs covered under both Medicare Part D and Medicaid.</p><p><strong>Guardrails for Artificial Intelligence</strong></p><p>The agency does not adopt proposed guardrails for MAO utilization of artificial intelligence (AI) in coverage determinations. The proposal sought to ensure that MAOs continue to provide equitable access to services, irrespective of technological advances, by updating existing regulations to account for the use of AI and other automated systems. This includes clarifications that MAOs' use of AI or automated systems must comply with existing laws and regulations that prohibit discrimination against beneficiaries based on any factor related to health status or condition. Despite not finalizing the specific guardrails, the agency notes that AI usage remains important and will be the subject of future agency actions.</p><p><strong>Annual Health Equity Analysis of Utilization Management Policies</strong></p><p>The rule explicitly does not finalize proposed changes that would have required MAO utilization management committees to conduct an annual health equity analysis of plan prior authorization usage by examining more granular data on specified metrics, such as the percentage of requests that were approved and the median amount of time plans spent in issuing a determination on prior authorization requests. As a result, the 2025 policies remain unchanged, which require such analyses to be conducted on aggregate data.</p><h2>POLICIES DEFERRED FOR FUTURE RULEMAKING</h2><p><strong>MA Plan Utilization of Internal Coverage Criteria for Making Coverage Decisions</strong></p><p>CMS defers a proposal that sought to clarify that all criteria not found within the CMS coverage determination rules were considered “internal” and were subject to applicable regulations. Additionally, the proposal would have created specific limitations on when plans could utilize internal criteria and specifically prohibited criteria that failed to provide a clinical benefit to the patient.   </p><p><strong>Provider Directory Requirements and Inclusion in Medicare Plan Finder</strong></p><p>CMS defers a proposal to improve MAO provider directories for future rulemaking. The previous proposal would have required MA plans to report provider directory data to CMS for incorporation into the agency’s Medicare Plan Finder platform — an online resource designed to aid enrollees in selecting Medicare coverage. Furthermore, the rule would have required MAOs to attest to the accuracy of provider directory information. The agency also sought stakeholder input on the frequency with which plans should be required to attest to such accuracy, recognizing that provider directory and network information are subject to frequent updates and changes.</p><p><strong>Cost-sharing for Behavioral Health Services</strong></p><p>CMS defers for future rulemaking a proposal to improve access to behavioral health for enrollees by ensuring that in-network cost-sharing for behavioral health services is no greater than cost-sharing for those services in Traditional Medicare. When CMS proposed the changes to cost sharing for behavioral health services, the agency sought stakeholder comment on applying a possible transition period to implement the proposed cost-sharing standard for certain benefits.</p><p><strong>Marketing and Oversight of Agent and Broker Activity</strong></p><p>CMS defers a proposal to add new requirements and oversight for MA agents and brokers for future rulemaking. The proposal sought to protect consumers from inappropriate, confusing or misleading marketing or communication materials.</p><p><strong>Medical Loss Ratio Reporting Requirements</strong></p><p>The final rule did not address proposed revisions to MA and Part D plan medical loss ratio (MLR) calculations. The proposed rule included a provision that, if finalized, would have required plans to submit detailed information on how a plan calculated the MLR, established additional restrictions on plan reporting of “quality improvement activities,” and established an MA MLR auditing process.  </p><p><strong>Administration of Supplemental Benefits with Debit Cards</strong></p><p>CMS does not address the proposed new requirements governing the proper administration of supplemental benefits provided to enrollees through debit cards.</p><h2>HIGHLIGHTS OF THE RATE ANNOUNCEMENT</h2><p><strong>Payments to MAOs</strong></p><p>Payments to MAOs will increase on average by 5.06% from 2025 to 2026. A significant component of the rate increase was driven by the effective growth rate — or increase in spending in Traditional Medicare, which was calculated at 9.04%. CMS estimates that the rate increase will mean an additional $25 billion in MA payments to MAOs in CY 2026.   </p><p><strong>Removal of Medical Education Costs</strong></p><p>CMS finalizes, as proposed, the completion in CY 2026 of a three-year phase-in of a technical adjustment removing medical education costs from the historical and projected expenditures supporting the FFS costs included in the growth rate calculations. For CY 2026, CMS will apply 100% of the adjustment for MA-related medical education costs.</p><p><strong>Phase-in of Risk Adjustment Model Changes</strong></p><p>In 2026, CMS will complete a three-year phase-in of improvements to the MA risk adjustment model that was finalized in the CY 2024 Rate Announcement. The changes to the MA risk adjustment model include a reduction in the number of diagnosis codes included and changes in the weights of Hierarchical Condition Category demographic elements. CMS previously stated that the revised model will ensure risk adjustment payments better reflect the cost of care for beneficiaries and make the model less susceptible to discretionary coding on the part of corporate commercial plans.</p><h2>FURTHER QUESTIONS</h2><p>If you have further questions, please contact Noah Isserman, AHA’s director of health insurance and coverage policy, at <a href="mailto:nisserman@aha.org">nisserman@aha.org</a> or Terry Cunningham, AHA’s senior director of administrative simplification policy, at <a href="mailto:tcunningham@aha.org">tcunningham@aha.org</a>.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-issues-rate-announcement-and-final-rule-for-cy-2026-medicare-advantage-prescription-drug-plans-4-15-2025.pdf"><img src="/sites/default/files/2025-04/cover-cms-issues-rate-announcement-and-final-rule-for-cy-2026-medicare-advantage-prescription-drug-plans-advisory-4-15-2025-r.png" data-entity-uuid data-entity-type="file" alt="Cover Image of CMS Issues Rate Announcement and Final Rule for CY 2026 Medicare Advantage, Prescription Drug Plans Advisory" width="640" height="828"></a></div></div></div> Tue, 15 Apr 2025 12:17:47 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) April 11 issued the <a href="https://www.federalregister.gov/public-inspection/2025-06336/medicare-program-inpatient-rehabilitation-facility-prospective-payment-system-for-federal-fiscal" target="_blank">proposed rule</a> for the inpatient rehabilitation facility (IRF) prospective payment system (PPS) for fiscal year (FY) 2026. This rule would update IRF PPS payments relative to the current fiscal year, as required, along with several proposed routine updates to the payment system and quality reporting program (QRP</p><div class="panel module-typeC"><div class="panel-heading"><p><strong>Key highlights</strong></p><p>The proposal would:</p><ul><li>Update payment rates by a net 2.8%. This includes a proposed market basket update of 3.4%, less a productivity cut of 0.8 percentage points. There would also be a 0.2% increase related to outlier payments.</li><li>Remove four patient assessment data elements under the IRF QRP and remove the COVID-19 vaccination measures for both patients and health care personnel.</li></ul></div></div><h2>AHA Take</h2><p>This proposed rule would implement mostly routine payment updates and does not include any significant changes to the IRF PPS. However, similar to recent years, the AHA remains concerned that CMS’ market basket updates appear to continue to lag inflation and the increased costs facing hospitals.</p><p>Highlights from the rule follow.</p><h2>IRF PPS PAYMENT CHANGES</h2><p><strong>Proposed FY 2026 Payment Updates. </strong>CMS estimates that its proposed rule would increase net payments to IRFs in FY 2026 by 2.8% overall ($295 million) relative to FY 2025. This includes a 3.4% market basket update offset by a statutorily mandated productivity factor cut of 0.8%. This overall estimate also includes CMS’ estimates that its proposed reduction to the outlier threshold would increase payments by 0.2% in FY 2026.</p><p>The 3.4% market basket update is based on the latest available forecast for FY 2026. As it typically does, the agency will use any updated forecasts when finalizing payment changes in the final rule. Using these current forecasts, CMS proposes to update the standard payment conversion factor from $18,907 to $19,364 for FY 2026. This update to the standard payment conversion factor also includes a small budget neutrality adjustment for wage index adjustments and changes to the labor-related share of payments.</p><p>CMS also is proposing to use its latest available data to make its annual update to the weighting and average length of stay figures for case-mix group weights and tiers. These updated weights are available in Table 2 of the proposed rule. CMS estimates 99.2% of IRF discharges would be in case-mix groups and tiers that will experience a less than 5% change in their weight relative to FY 2025 weights.</p><p><strong>Proposed Labor-related Share.</strong> As a result of the use of updated data, CMS is proposing an update to the labor-related share to 74.5% from the current level of 74.4%.</p><p><strong>Wage Adjustment. </strong>CMS proposes to update the IRF PPS wage index using the most recent OMB statistical area delineations based on the 2020 Decennial Census, which revises the existing core-based statistical areas (CBSAs). The agency will implement its permanent 5% cap policy on negative wage index changes (regardless of the underlying reason for the decrease). In addition, CMS also is proposing to continue the phase-out of the rural adjustment for IRFs that have transitioned from rural to urban status under the new CBSAs. These IRFs would receive one-third of the rural adjustment in FY 2026, and no rural adjustment in FY 2027.</p><h2>IRF QUALITY REPORTING PROGRAM</h2><p>Beginning with the reporting period starting Oct. 1, 2025, CMS proposes to make optional the reporting of four standardized patient assessment data elements in the IRF Patient Assessment Instrument (PAI) focused on social determinants of health. This includes one item focused on living situation, two items focused on food insecurity and one item focused on utilities. The items would be removed from the IRF-PAI altogether by the FY 2028 IRF QRP.</p><p>In addition, CMS proposes to remove two COVID-19 vaccination measures from the IRF QRP for FY 2026 — one focused on patients and the other on health care personnel. CMS also asks for input on future IRF QRP measure concepts, reducing the burden of reporting patient assessment data and advancing digital quality measures in the IRF QRP.</p><h2>REQUEST FOR INFORMATION: UNLEASHING PROSPERITY THROUGH DEREGULATION OF THE MEDICARE PROGRAM (EXECUTIVE ORDER 14192)</h2><p>On Jan. 31, 2025, President Trump issued Executive Order (EO) 14192, "Unleashing Prosperity Through Deregulation," which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. CMS would like public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. The agency has made available an RFI at <a href="https://www.cms.gov/medicare-regulatory-relief-rfi" target="_blank">https://www.cms.gov/medicare-regulatory-relief-rfi</a> and requests stakeholders to submit all comments in response to this RFI through the provided web link.</p><h2>NEXT STEPS</h2><p>CMS will accept comments on the IRF proposed rule through June 10.</p><h2>FURTHER QUESTIONS</h2><p>Please contact Jonathan Gold, AHA’s senior associate director of policy, at <a href="mailto:jgold@aha.org">jgold@aha.org</a>, with any questions related to payment, and Akin Demehin, AHA’s vice president of quality and safety policy, at <a href="mailto:ademehin@aha.org">ademehin@aha.org</a>, regarding any quality-related questions.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-releases-fy-2026-inpatient-rehabilitation-facility-pps-proposed-rule-advisory-4-14-2025.pdf"><img src="/sites/default/files/inline-images/cover-cms-releases-fy-2026-inpatient-rehabilitation-facility-pps-proposed-rule-advisory-4-14-2025.png" data-entity-uuid="dc66ab11-27fe-4b6a-8910-6d53812ef70d" data-entity-type="file" alt="Cover Image 2026 Inpatient Rehabilitation Facility PPS Proposed Rule" width="640" height="834" class="align-right"></a></div></div></div> Mon, 14 Apr 2025 18:20:37 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) April 11 issued a <a href="https://www.federalregister.gov/public-inspection/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the">proposed rule</a> for the inpatient and long-term care hospital (LTCH) prospective payment systems (PPS) for fiscal year (FY) 2026. This Regulatory Advisory reviews highlights of the LTCH provisions in the rule, while the inpatient PPS provisions are covered in a separate advisory.</p><div class="panel module-typeC"><div class="panel-heading"><p><strong>KEY HIGHLIGHTS</strong></p><p>The rule proposes to:</p><ul><li>Increase net LTCH payments by 2.5%, or $61 million, in FY 2026, relative to FY 2025, including both standard rate payments and site-neutral payments.<ul><li>CMS proposes to increase standard LTCH PPS payments by 2.2%, or $52 million in FY 2026 relative to FY 2025.</li><li>CMS proposes to increase site-neutral LTCH PPS payments by 8.5%, or $9 million, in FY 2026 relative to FY 2025.</li></ul></li><li>Increase the standard rate fixed-loss amount for high-cost outlier (HCO) cases from $77,048 in FY 2025 to $91,247 for FY 2026.</li><li>Remove four patient assessment data elements from the LTCH quality reporting program (QRP) and modify the COVID-19 vaccine among patients and residents measure.</li></ul></div></div><h2>AHA Take</h2><p>As the AHA said in its <a href="/press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule">statement</a> to the media, we are concerned that the proposed payment updates for LTCHs would lead to continued strain on these providers as they care for some of Medicare’s sickest patients. Under the high-cost outlier proposal, LTCHs would be expected to absorb thousands of additional dollars in losses before Medicare would help cover some of the additional cost of caring for extremely ill beneficiaries. Coupled with the minimal proposed market basket update, it would become increasingly difficult for LTCHs to care for these patients and alleviate pressure on their acute-care hospital partners. The AHA looks forward to working with CMS to ensure continued access for these patients.</p><p>Highlights from the rule follow.</p><h2>LTCH PPS PAYMENT CHANGES</h2><p><strong>Overall Proposed FY 2026 Payment Update.</strong> When considering all proposed LTCH provisions in the rule, CMS estimates that aggregate payments for LTCH services would increase by 2.5%, or $61 million, in FY 2026 compared to FY 2025. This includes updates to both the standard rate and site-neutral rates. For purposes of its estimates, CMS assumes that standard-rate cases would account for 90% of LTCH cases, with site-neutral cases accounting for the remaining 10%. CMS says this is the split of cases that it found among LTCH discharges in FY 2024.</p><p><strong>Update for Standard LTCH PPS Rate Cases.</strong> CMS proposes to increase standard rate payments by 2.2%, or $52 million, in FY 2026 relative to FY 2025. This update includes a 3.4% market-basket update that would be offset by a statutorily mandated cut of 0.8 percentage points for productivity. In addition, as discussed further below, CMS proposes to decrease HCO payments as a percentage of total LTCH PPS standard federal payment rate payments by 0.3%.<a href="#_ftn1" title><sup>[1]</sup></a> As a result, the proposed FY 2026 standard rate is $50,728.77, an increase from the current $49,383.26.</p><p><strong>Standard Rate HCO Threshold.</strong> CMS proposes to increase the FY 2026 fixed-loss amount for standard-rate HCO cases to $91,247, an approximate 18% increase over the FY 2025 fixed-loss amount of $77,048. CMS states this increase is necessary to maintain the statutory 7.975% HCO pool. The agency acknowledges the significant proposed increase and requests comments on the proposal.</p><p><strong>Update for Site-neutral Rate Cases.</strong> CMS proposes to increase payments for site-neutral cases by 8.5% (or $9 million) in FY 2026 as compared to FY 2025. Site-neutral cases are paid the lower of the inpatient PPS-comparable per-diem amount, including any outlier payments, or 100% of the estimated cost of the case. Therefore, this update largely reflects CMS’ proposed updates under the inpatient PPS. CMS further estimates that site-neutral payments would make up approximately 4.5% of estimated aggregate FY 2026 LTCH PPS payments. For FY 2026, the proposed HCO threshold for site-neutral cases would continue to mirror that of the proposed inpatient PPS threshold of $44,305.</p><h2>LTCH QUALITY REPORTING PROGRAM</h2><p>Beginning with the FY 2028 LTCH QRP, CMS proposes to remove four standardized patient assessment data elements focused on social determinants of health. This includes one item focused on living situation, two items focused on food insecurity and one item focused on utilities. Additionally, CMS proposes to modify the COVID-19 vaccine among patients and residents measure by excluding patients who expire during the LTCH QRP.</p><p>CMS also asks for input on future LTCH QRP measure concepts, changing deadlines for reporting patient assessment data and advancing digital quality measures in the LTCH QRP.</p><h2>REQUEST FOR INFORMATION: UNLEASHING PROSPERITY THROUGH DEREGULATION OF THE MEDICARE PROGRAM (EXECUTIVE ORDER 14192)</h2><p>On Jan. 31, 2025, President Trump issued Executive Order (EO) 14192, "Unleashing Prosperity Through Deregulation," which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. CMS would like public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. The agency has made available an RFI at <a href="https://www.cms.gov/medicare-regulatory-relief-rfi" target="_blank" title="Original URL: https://www.cms.gov/medicare-regulatory-relief-rfi. Click or tap if you trust this link.">https://www.cms.gov/medicare-regulatory-relief-rfi</a> and requests stakeholders to submit all comments in response to this RFI through the provided web link.</p><h2>NEXT STEPS</h2><p>CMS will accept comments on the LTCH proposed rule through June 10.</p><p>Please contact Jonathan Gold, AHA’s senior associate director of policy, at <a href="mailto:jgold@aha.org">jgold@aha.org</a>, with any questions related to payment, and Akin Demehin, AHA’s vice president of quality and safety policy, at <a href="mailto:ademehin@aha.org">ademehin@aha.org</a>, regarding any quality-related questions.</p><div><hr><div id="ftn1"><p><small class="sm"><sup>1</sup>Due to rounding, the 2.6% net market basket update is described as a 2.2% overall update after accounting for the 0.3% reduction in outlier payments. </small></p></div></div></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-releases-fy-2026-long-term-care-hospital-pps-proposed-rule-advisory-4-14-2025.pdf"><img src="/sites/default/files/inline-images/cover-cms-releases-fy-2026-long-term-care-hospital-pps-proposed-rule-advisory-4-14-2025-f_1.png" data-entity-uuid data-entity-type="file" width="1275" height="1662"></a></div></div></div> Mon, 14 Apr 2025 17:30:46 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) April 11 issued its fiscal year (FY) 2026 <a href="https://www.federalregister.gov/public-inspection/2025-06348/medicare-program-prospective-payment-system-and-consolidated-billing-for-skilled-nursing-facilities">proposed rule</a> for the skilled nursing facility (SNF) prospective payment system (PPS).</p><div class="panel module-typeC"><div class="panel-heading"><p>Key highlights</p><p>The proposed rule would:</p><ul><li>Increase aggregate SNF payments by an estimated 2.8% ($997 million) in FY 2026 relative to FY 2025.</li><li>Make technical changes to its Patient-Driven Payment Model (PDPM) ICD-10 code mapping that assigns patients to clinical categories.</li><li>For the SNF quality reporting program (QRP), remove four patient assessment data elements.</li><li>For the SNF value-based purchasing program (VBP), remove the program’s health equity adjustment.</li></ul></div></div><h2>AHA Take</h2><p>The AHA appreciates the relatively straightforward rulemaking, including the request for information on burden reduction for providers. However, the AHA continues to be concerned about the lower-than-needed market basket updates and lagging forecast error adjustments.</p><p>Highlights from the rule follow.</p><h2>PROPOSED SNF PPS PAYMENT CHANGES</h2><p>The rule’s proposed annual update would increase net payments to SNFs by an estimated 2.8% ($997 million) in FY 2026 relative to FY 2025. This includes a 3.0% market-basket update offset by a statutorily mandated productivity cut of 0.8% and a 0.6% market-basket forecast error adjustment for FY 2024.</p><p>CMS also proposes technical changes to its PDPM ICD-10 code mapping that assigns patients to clinical categories. These proposed changes can be found on <a href="https://www.cms.gov/medicare/payment/prospective-payment-systems/skilled-nursing-facility-snf/list-federal-regulations/cms-1827-p">CMS’ site</a> for this rulemaking. </p><p><strong>SNF QUALITY REPORTING PROGRAM AND VALUE-BASED PURCHASING PROGRAM </strong></p><p><u>SNF QRP.</u> Beginning with the reporting period starting Oct. 1, 2025, CMS proposes to make optional the reporting of four standardized patient assessment data elements in the Minimum Data Set focused on social determinants of health. This includes one item focused on living situation, two items focused on food insecurity and one item focused on utilities.</p><p>CMS also asks for input on future SNF QRP measure concepts and advancing digital quality measures in the SNF QRP.</p><p><u>SNF VBP Program.</u> CMS proposes to remove the program’s health equity adjustment that otherwise would be in effect beginning FY 2027. The health equity adjustment would award bonus points to SNFs based on a combination of their quality performance and the proportion of patients dually eligible for Medicare and Medicaid.</p><p><strong>REQUEST FOR INFORMATION: UNLEASHING PROSPERITY THROUGH DEREGULATION OF THE MEDICARE PROGRAM (EXECUTIVE ORDER 14192)</strong></p><p>On Jan.31, 2025, President Trump issued Executive Order (EO) 14192, "Unleashing Prosperity Through Deregulation," which states the administration’s policy to significantly reduce the private expenditures required to comply with federal regulations. CMS would like public input on approaches and opportunities to streamline regulations and reduce administrative burdens on providers, suppliers, beneficiaries and other interested parties participating in the Medicare program. The agency has made available an RFI at <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.cms.gov%2Fmedicare-regulatory-relief-rfi&data=05%7C02%7Cjgold%40aha.org%7C4cd60274604142c4278308dd7b7460c2%7Cb9119340beb74e5e84b23cc18f7b36a6%7C0%7C0%7C638802461951091442%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=oVpGbZYA%2Bop4qTxZ4eXdtgj417%2BP2swWi8qUj%2FsAsYw%3D&reserved=0" target="_blank" title="Original URL: https://www.cms.gov/medicare-regulatory-relief-rfi. Click or tap if you trust this link.">https://www.cms.gov/medicare-regulatory-relief-rfi</a> and requests stakeholders to submit all comments in response to this RFI through the provided web link.</p><h2>NEXT STEPS</h2><p>CMS will accept comments on the SNF PPS proposed rule through June 10.</p><p>Please contact Jonathan Gold, AHA’s senior associate director of policy, at <a href="mailto:jgold@aha.org">jgold@aha.org</a>, with any questions related to payment, and Akin Demehin, AHA’s vice president of quality and safety policy, at <a href="mailto:ademehin@aha.org">ademehin@aha.org</a>, regarding any quality-related questions.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-releases-fy-2026-skilled-nursing-facility-pps-proposed-rule-advisory-4-14-2025.pdf"><img src="/sites/default/files/2025-04/cover-cms-releases-fy-2026-skilled-nursing-facility-pps-proposed-rule-advisory-4-14-2025-r.png" data-entity-uuid data-entity-type="file" alt="Cover Image of SNF Advisory" width="640" height="828"></a></div></div></div> Mon, 14 Apr 2025 17:13:38 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>The Centers for Medicare & Medicaid Services (CMS) April 11 issued its hospital inpatient prospective payment system (PPS) and long-term care hospital (LTCH) PPS <a href="https://www.federalregister.gov/public-inspection/2025-06271/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the">proposed rule</a> for fiscal year (FY) 2026. This Regulatory Advisory contains highlights of proposals related to the inpatient PPS as well as the Center for Medicare and Medicaid Innovation (CMMI) Transforming Episode Accountability Model (TEAM) alternative payment model. LTCH PPS provisions are covered in a separate advisory.</p><p>The rule proposes a net 2.4% increase for inpatient PPS payments in FY 2026. This update reflects a hospital market basket increase of 3.2% and a productivity cut of 0.8%. It would increase hospital payments by $4 billion, including a proposed $1.5 billion increase in disproportionate share hospital payments and a proposed $234 million increase in new technology add-on payments. Overall, it would increase hospital payments by $4 billion in FY 2026 as compared to FY 2025.</p><p>In addition, CMS has included in the rule its previously published request for information (RFI) seeking input on opportunities to streamline regulations and reduce burdens on providers. </p><div class="panel module-typeC"><div class="panel-heading"><p><strong>Key highlights</strong></p><p>CMS’ proposed policies would:</p><ul><li>Increase inpatient PPS payment rates by a net 2.4% in FY 2026.</li><li>Make minor changes to the mandatory TEAM, including adding a new quality measure and deferring participation for new hospitals.</li><li>Seek input on a low-volume threshold policy for TEAM.</li><li>Discontinue the low-wage index hospital policy for FY 2026.</li><li>Add seven new MS-DRGs and delete six MS-DRGs.</li><li>Remove four measures from the inpatient quality reporting program focused on health equity and COVID-19 vaccination for health care personnel.</li><li>Include Medicare Advantage patients in the calculation of multiple claims-based measures across several programs.</li><li>Shorten the Hospital Readmission Reduction Program’s performance period from three to two years.</li></ul></div></div><h2>AHA Take</h2><p>The AHA welcomes CMS’ interest in regulatory relief, including its focus on streamlining quality measurement efforts. However, we are disappointed by CMS’ proposed inpatient hospital payment update of 2.4%, including an extremely high proposed productivity cut of 0.8%. We are very concerned that this update will hurt our ability to care for our communities. Indeed, many hospitals across the country, especially those in rural and underserved communities, already operate under unsustainable financial situations, including negative margins. We urge CMS to reconsider its policy in the final rule to enable all hospitals to provide high-quality, around-the-clock, essential care for their patients and communities</p><p>Additionally, we appreciate that CMS continues to gather stakeholder feedback and make modifications to the TEAM. The AHA has long supported the adoption of value-based and alternative payment models to deliver high-quality care at lower costs; however, we are concerned that TEAM, even with the proposed changes, may force some hospitals to assume more risk than they can manage, threatening their ability to maintain access to quality care. Thus, we continue to urge the agency to make TEAM voluntary. We are also concerned that the lack of a low-volume threshold will put at particular risk many hospitals that are not of adequate size or in a position to support the investments necessary to succeed. </p><p><strong>See AHA’s </strong><a href="/press-releases/2025-04-14-aha-statement-fy-2026-proposed-ipps-ltch-payment-rule"><strong>full statement</strong></a><strong> that was shared with the media.</strong></p><p>Highlights of the rule follow.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/cms-releases-hospital-inpatient-pps-proposed-rule-for-fiscal-year-2026-advisory-4-14-2026-r2.pdf" target="_blank" title="CMS Releases Hospital Inpatient PPS Proposed Rule for Fiscal ear 2026"><img src="/sites/default/files/2025-04/cover-cms-releases-hospital-inpatient-pps-proposed-rule-for-fiscal-year-2026-advisory-4-14-2025-r2.png" data-entity-uuid data-entity-type="file" alt="Cover Image of Hospital Inpatient PPS Advisory" width="640" height="828"></a></div></div></div> Mon, 14 Apr 2025 16:17:14 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>This National Hospital Week (NHW), the AHA will follow the theme “We Are Health Care: Caring for patients; strengthening communities” to recognize the millions of people who work in America’s hospitals and health systems and the vital role they play in our society.</p><p>The AHA created a variety of resources to assist hospitals and health systems in celebrating NHW, May 11-17, and National Nurses Week (NNW), May 6-12. These weeks provide an extra opportunity to highlight America’s health care workers. Please join us in this effort to help celebrate their story.   </p><p>The AHA will observe this special time with digital advertisements targeting Washington’s lawmakers and policymakers, as well as ads in a few national print outlets. Download the full <a href="/system/files/media/file/2025/04/2025-National-Hospital-Week-Toolkit.pdf">social media engagement toolkit and social media assets</a> or use the samples below.</p><p><strong>Please use #WeAreHealthCare on all social media posts.</strong></p><ul><li>Mark your calendars! The 2025 National Hospital Week kicks off May 11, and we encourage everyone to participate in celebrating the hospitals and health care professionals in your community. <a href="/ahia/get-involved/national-hospital-week">Learn more</a>.</li><li>Hospitals and health systems continue to care for their communities despite any challenges thrown at them. <a href="/ahia/get-involved/national-hospital-week">Join us</a> in celebrating National Hospital Week to share thanks!   </li><li>Patients and communities rely on the wide range of critical health care services that only hospitals and health systems can provide, including 24/7 emergency and other higher-acuity care. Support National Hospital Week by <a href="/ahia/get-involved/national-hospital-week">showing your appreciation</a>! </li></ul><h2>WHAT YOU CAN DO</h2><ul><li><strong>Share</strong> this advisory with your communications and human resources teams. </li><li><strong>Engage </strong>with AHA on social media and incorporate new assets into your social and digital posts.<strong> </strong>Please use our graphics or adapt them for your organization.</li><li><strong>Download  </strong>our <a href="/system/files/media/file/2025/04/2025-National-Hospital-Week-Toolkit.pdf">digital tools and resources</a>. In addition, as you post your own content, please use the hashtag #WeAreHealthCare and consider tagging the AHA (@ahahospitals) to send a collective message about the work the field does on behalf of patients and communities.  </li><li><strong>Share  </strong>your stories with AHA.<strong> </strong>Please provide the AHA with news articles, photos, videos and other testimonials that spotlight the wide array of work your team members have been engaged in to provide care for patients and advance health in your community. You can share your examples through our <a href="/ahia/get-involved/national-hospital-week">webpage</a>.  </li><li><strong>Celebrate</strong> your teams by engaging in National Hospital Week activities.  </li></ul><p><strong>Visit AHA’s National Hospital Week </strong><a href="/ahia/get-involved/national-hospital-week"><strong>webpage</strong></a><strong> to access the logo, graphics, digital toolkits, videos and other resources. </strong></p><h2>FURTHER QUESTIONS</h2><p>For more information or questions, please contact Alicia Mitchell, AHA’s senior vice president of communications, at <a href="mailto:amitchell@aha.org" target="_blank">amitchell@aha.org</a>, or Emily Gustafson, AHA’s vice president of digital strategy and public education, at <a href="mailto:egustafson@aha.org" target="_blank">egustafson@aha.org</a>. </p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/new-resources-available-for-national-hospital-week-may-11-17-advisory-4-11-2025.pdf"><img src="/sites/default/files/inline-images/cover-new-resources-available-for-national-hospital-week-may-11-17-advisory-4-11-2025.png" data-entity-uuid data-entity-type="file" alt="Cover Image of the Member Advisory" width="665" height="860"></a></div></div></div> Fri, 11 Apr 2025 14:18:55 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>The Trump administration April 9 released a series of executive orders (EOs) and took other administrative actions aimed at reducing regulatory burden.</p><p>The Office of Management and Budget April 9 issued a <a href="https://www.federalregister.gov/public-inspection/2025-06316/request-for-information-deregulation" target="_blank" title="Federal Register: Request for Information: Deregulation">request for information (RFI)</a> seeking public comment on regulations that should be rescinded as unnecessary, unlawful, unduly burdensome or unsound. According to the RFI, recommendations should focus on regulations that are inconsistent with statutory text or the Constitution, entail costs that exceed benefits, are outdated or unnecessary, or are otherwise burdening businesses in unforeseen ways. Comments are due within 30 days of publication in the Federal Register.</p><p>Relatedly, the White House issued two EOs, <a href="https://www.whitehouse.gov/presidential-actions/2025/04/directing-the-repeal-of-unlawful-regulations/" target="_blank" title="The White House: Directing the Repeal of Unlawful Regulations">“Directing the Repeal of Unlawful Regulations”</a> and <a href="https://www.whitehouse.gov/presidential-actions/2025/04/reducing-anti-competitive-regulatory-barriers/" target="_blank" title="The White House: Reducing Anti-competitive Regulatory Barriers">“Reducing Anti-Competitive Regulatory Barriers.”</a></p><h2>Directing the Repeal of Unlawful Regulations</h2><p>This EO is linked to the Feb. 25 EO 14219, <a href="https://www.federalregister.gov/documents/2025/02/25/2025-03138/ensuring-lawful-governance-and-implementing-the-presidents-department-of-government-efficiency" target="_blank" title="Federal Register: Ensuring Lawful Governance and Implementing the President's " department of government deregulatory>“Ensuring Lawful Governance and Implementing the President’s ‘Department of Government Efficiency’ Deregulatory Initiative.”</a> EO 14219 directed agencies to identify, within 60 days (approximately April 20), categories of unlawful and potentially unlawful regulations to be repealed. The related April 9 EO tasks agencies with immediately taking steps to repeal regulations after the 60-day period has ended, prioritizing those regulations that implicate several Supreme Court rulings. Additionally, it requires agencies to provide justification within 30 days for any regulations that were identified as unlawful but have not been targeted for repeal, explaining the basis for the decision not to repeal.</p><h2>Reducing Anti-Competitive Regulatory Barriers</h2><p>This EO directs federal agencies to review all regulations subject to their rulemaking authority and identify those regulations that create de facto or de jure monopolies, create barriers to entry for new market participants, create or facilitate licensure or accreditation requirements that unduly limit competition, or otherwise impose anti-competitive restraints or distortions in the market. Agencies must submit recommendations to the Federal Trade Commission (FTC) and the Attorney General on whether anti-competitive regulations should be rescinded or modified within 70 days of the order (approximately June 18). Additionally, the EO directs the FTC to issue, within 10 days of the order, an RFI seeking public comment on anti-competitive regulations.</p><p>Additional information will be forthcoming as agencies provide supporting guidance or notices.</p><h2>Additional Information on Executive Actions</h2><p>The Trump administration has issued many executive orders and taken other administrative actions. The AHA has compiled a <a href="/system/files/media/file/2025/01/2025-New-Executive-Orders-20250127.pdf">tracker of the actions the administration has taken</a> that may be of interest to hospitals and health systems. The tracker will be updated regularly as new actions are taken.</p><h2>Further Questions</h2><p>If you have further questions, please contact the AHA at <a href="tel:1-800-424-4301">800-424-4301</a>.</p></div><div class="col-md-4"><p><a href="/system/files/media/file/2025/04/Member-Advisory-Trump-Administration-Issues-Additional-Deregulation-Orders-and-Notices.pdf" target="_blank" title="Click here to download the Member Advisory: Trump Administration Issues Additional Deregulation Orders and Notices PDF."><img src="/sites/default/files/inline-images/Page-1-Member-Advisory-Trump-Administration-Issues-Additional-Deregulation-Orders-and-Notices.png" data-entity-uuid="31a05d9f-f2f8-46cb-9473-74ff7873b661" data-entity-type="file" alt="Member Advisory: Trump Administration Issues Additional Deregulation Orders and Notices page 1." width="695" height="900"></a></p></div></div></div> Thu, 10 Apr 2025 14:32:06 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>U.S. hospitals go above and beyond to advance health, according to a <a href="/nonprofit-hospital-community-benefits-addressing-each-communities-unique-needs" target="_blank" title="AHA, CHA Community Benefit Report">new report</a> released today by the AHA and Catholic Health Association of the United States. The report shows how hospitals meet the unique needs of their communities, including by providing financial assistance, supporting groundbreaking research to discover future cures, training the health care workforce, running community health programs and absorbing below-cost reimbursement from means-tested government programs, such as Medicaid.</p><p>Nonprofit hospitals, which make up a majority of U.S. community hospitals, are required by law to identify the range of challenges faced by their communities through input from residents, support community programs and services aimed at addressing these issues, and publicly report data on these community investments. While nonprofit hospitals report these benefits to the IRS through Form 990 Schedule H, it is important to take a comprehensive view of community benefits and the myriad ways nonprofit hospitals impact their communities.</p><p>Key report findings:</p><ul><li>Nonprofit hospitals provide numerous community benefits in addition to financial assistance, adapting these services to meet the evolving needs of their communities.</li><li>Community benefits vary by hospital characteristics.</li><li>Providing care at a loss to low-income patients covered through Medicaid and those in need of financial assistance are important and related components of community benefit.</li></ul><h2>RESOURCES</h2><ul><li><strong>View</strong> the AHA and CHA report <a href="/system/files/media/file/2025/04/aha-cha-community-benefit-report-press-release-4-9-2025.pdf" target="_blank" title="Community Benefit Press Release">press release</a> on the report.</li><li><strong>Download</strong> the <a href="/system/files/media/file/2025/04/community-benefit-report-social-media-content-toolkit.pdf" target="_blank" title="Digital Toolkit">digital toolkit</a>. Use the AHA graphics and social media messages or adapt them for your organization.</li><li><strong>Use </strong>the hashtag #WeAreHealthCare when posting your social content and consider tagging the AHA (@ahahospitals).</li><li><strong>Share</strong> the AHA <a href="https://youtu.be/yTTy173QWmU?si=hWux_UhGk1nu9fy9" target="_blank" title="Benefits to Communities Video">video</a> to inform your community how hospitals’ commitment to their communities benefits everyone.</li></ul><h2>FURTHER QUESTIONS</h2><p>For more information on how AHA is working to tell the hospital story or for general questions, please contact Alicia Mitchell, AHA’s senior vice president of communications, at <a href="mailto:amitchell@aha.org">amitchell@aha.org</a>, or Emily Gustafson, AHA’s vice president of digital strategy and public education, at <a href="mailto:egustafson@aha.org">egustafson@aha.org</a>.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/aha-report-shows-how-hospitals-meet-their-communities-unique-needs-advisory-4-9-25.pdf" target="_blank" title="AHA Report Shows How Hospitals Meet Their Communities' Unique Needs"><img src="/sites/default/files/inline-images/cover-aha-report-shows-how-hospitals-meet-their-communities-unique-needs-advisory-4-9-25.png" data-entity-uuid data-entity-type="file" alt="Cover Image Member Advisory" width="679" height="878"></a></div></div></div> Wed, 09 Apr 2025 09:05:05 -0500 Advisory <div class="container"><div class="row"><div class="col-md-8"><p>The White House April 2 issued an <a href="https://www.whitehouse.gov/presidential-actions/2025/04/regulating-imports-with-a-reciprocal-tariff-to-rectify-trade-practices-that-contribute-to-large-and-persistent-annual-united-states-goods-trade-deficits/" target="_blank" title="April 2nd Executive Order">executive order</a> implementing a comprehensive new tariff plan. The plan imposes a 10% universal tariff on imported goods from all countries beginning April 5, and reciprocal tariffs on certain countries with which the U.S. has high trade deficits beginning April 9. Additional information can be found in the White House <a href="https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/" target="_blank" title="White House Taffif Fact sheet">fact sheet</a>.</p><p>With a stated purpose of addressing “large and persistent annual U.S. goods trade deficits” driven by “the absence of reciprocity in [U.S.] trade relationships,” the executive order declares a national emergency under the International Emergency Economic Powers Act of 1977. The tariff plan includes three key components:</p><ul><li><strong>Universal tariff.</strong> Beginning April 5, the administration will impose a 10% universal tariff on the value of goods imported from all countries.  </li><li><strong>Country-specific universal tariffs. </strong>Starting April 9, the administration will levy reciprocal tariffs on countries with which the U.S. has significant trade deficits. <a href="https://www.whitehouse.gov/wp-content/uploads/2025/04/Annex-I.pdf" target="_blank" title="List of country specific reciprocal tariff rtates">Annex I</a> of the executive order includes the list of country-specific reciprocal tariff rates; the rates in the table reflect the inclusion of the 10% universal tariff.</li><li><strong>Modification authority.</strong><em> </em>The executive order enables the administration to increase reciprocal tariff rates on those countries that implement retaliatory measures. The administration could also decrease the rates for countries that “take significant steps to remedy non-reciprocal trading arrangements and align with the United States on economic and national security matters.”</li></ul><p>The tariffs will remain in effect until the president “determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated.”</p><p>The executive order <a href="https://www.whitehouse.gov/wp-content/uploads/2025/04/Annex-II.pdf" target="_blank" title="Goods exempt from reciproca tariffs">exempts</a> some goods from reciprocal tariffs, including pharmaceuticals, semiconductors, copper, steel/aluminum articles, and energy and certain other minerals that are not available in the United States, but does not exempt them from the universal 10% tariff. In addition, the administration’s previously announced tariff <a href="https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/" target="_blank" title="tariff plans for Canada and Mexico">plans</a> for Canada and Mexico are not affected by this executive order.</p><p>In a <a href="/system/files/media/file/2025/02/AHA-Urges-Administration-to-Grant-Exceptions-for-Tariffs-for-Medications-and-Medical-Supplies.pdf" target="_blank" title="AHA letter to the Administration Feb. 4">letter to the administration</a> Feb. 4, the AHA expressed concern that the administration’s use of tariffs may “inadvertently put others’ lives at risk by jeopardizing the availability of vital medications and essential health care devices.” The AHA went on to request exceptions for medical devices, pharmaceuticals and products already in short supply.</p><p>The AHA continues to review the details of the tariff plan to assess its impacts on our members and will work with the administration on ensuring the availability of the drugs, devices and supplies that hospitals and health systems need to serve their communities.</p><h2>AHA Take</h2><p>AHA President and CEO Rick Pollack said in a statement, “In America’s hospitals and health systems, the dedication and skill of our care teams come together each day with a vast array of medicines, devices and other supplies to deliver the best care possible. The lives of our patients often depend on the ready availability of things ranging from blood pressure cuffs and surgical instruments to life-saving cancer drugs and antibiotics. The well-being and safety of our caregivers also depend on protective equipment like masks, gloves and respirators.</p><p>“Last night, the administration released an executive order implementing a comprehensive new tariff plan. We share the Trump administration’s goal of strengthening domestic supply chains for these essential medical products. At the same time, patient care often depends on the availability of internationally sourced devices and treatments. We appreciate that the administration has exempted pharmaceuticals from reciprocal tariffs. However, we strongly urge the administration to consider tariff exemptions for medical devices. It is especially critical to have exceptions for medical products already in shortage and for which production in countries subject to the increased tariffs supplies a significant part of the U.S. market.</p><p>“The AHA continues to review the details of the tariff plan to assess its impacts on hospitals and health systems. We stand ready to work with the administration and all stakeholders on ensuring the availability of the drugs, devices and supplies that hospitals and health systems need to serve their communities.”</p><h2>Additional Information on Executive Actions</h2><p>As the Trump administration continues to issue executive orders and administrative actions on many issues, the AHA is compiling them in its <a href="http://www.aha.org/eotracker" target="_blank" title="AHA tracker of executive actions.">tracker</a> of actions for hospitals and health systems. The tracker will be updated regularly as new actions are released.</p><h2>Further Questions</h2><p>If you have further questions, please contact the AHA at 800-424-4301.</p></div><div class="col-md-4"><a href="/system/files/media/file/2025/04/trump-administration-unveils-new-tariff-plan-advisory-4-3-2025.pdf"><img src="/sites/default/files/2025-04/cover-image-trump-administration-unveils-new-tariff-plan-advisory-4-3-2025.png" data-entity-uuid data-entity-type="file" alt="Member Advisory: Trump Administration Unveils New Tariff Plan PDF" width="NaN" height="NaN"></a></div></div></div> Thu, 03 Apr 2025 15:58:36 -0500 Advisory