President Donald Trump signed the Consolidated Appropriations Act, 2026 on February 3, 2026. This law funds several key departments, including Defense, Labor, and Health & Human Services, for the fiscal year 2026. Along with these departments, the act brings significant changes to healthcare.
Key Healthcare Changes
Medicaid DSH Cuts
The new law halts cuts to Medicaid Disproportionate Share Hospital (DSH) funding through 2027. This eases the worry for safety-net hospitals that have dealt with uncertain funding for years. Initially projected at a $24 billion cut over three years, this is now reduced to $8 billion in one year.
Uncompensated Care for Medicaid DSH
Changes to the DSH program broaden the definition of uncompensated care. Hospitals can now include costs for Medicaid patients even if part of those costs is covered by Medicare. States can also reallocate unused DSH funds from past years, boosting financial support for hospitals that care for underinsured patients.
Support for Rural Hospitals
Programs like the Medicare Dependent Hospital and Low-Volume Adjustment are extended through 2026. This support is vital for rural hospitals that struggle with low patient numbers and high operational costs.
Telehealth Flexibility
The bill extends telehealth options, allowing patients to receive care remotely through 2027. This includes audio-only appointments, making it easier for patients to access mental health services.
Hospital at Home Model
The Acute Hospital Care at Home program is extended through 2030, promoting care that patients can receive at home. This model is crucial as it aligns with the growing trend in healthcare that emphasizes patient comfort and convenience.
Rural Ambulance Services
Financial support for rural ambulance services is extended through 2028. This is essential for maintaining emergency services in rural areas, where access can often be challenging.
Pharmacy Benefit Manager (PBM) Reforms
New rules reshape how PBMs operate, aiming to increase transparency and fairness. For instance, they cannot keep any part of manufacturer rebates for employer plans. This is expected to bring pressure on PBM profits, which may affect the larger health plans associated with them.
Impact on Health Organizations
Healthcare analysts predict these changes will influence various sectors. For example, as hospitals adapt to new billing requirements and funding structures, they may face challenges in negotiating rates with insurers, especially for off-campus facilities that will need individual billing identifiers by 2028.
Regarding PBMs, experts are closely watching the changes. Analyst insights suggest that Cigna’s decision to eliminate drug rebates could lead to significant earnings impacts, resulting in increased tensions between insurers and providers.
Conclusion
This act marks a significant shift in healthcare funding and policy, particularly for rural and under-resourced hospitals. As the healthcare landscape continues to evolve, organizations will need to stay informed and adapt to these changes to provide the best care possible.
For further insights into the implications of this legislation on your healthcare organization, check trusted sources like Medicare.gov or the Centers for Medicare & Medicaid Services.
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healthcare, Consolidated Appropriations Act
