IHA Daily Briefing: November 5

CMS Finalizes CY 2027 Outpatient Prospective Payment System Rule

On Nov. 4, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2027 Medicare Outpatient Prospective Payment System (OPPS) final rule. In the rule, CMS finalized a 2.3% rate update for both OPPS hospitals and Ambulatory Surgical Centers.

CMS moved forward with its proposal to cut reimbursement for 340B-acquired drugs, finalizing a reimbursement rate of Average Sales Price (ASP) minus 28% (proposed at ASP minus 33.4%). This represents a 34% reduction from the current reimbursement for 340B-acquired drugs of ASP plus 6%.

CMS also increased the annual offset percentage for non-drug items and services from 0.5% to 2%. CMS instituted this offset to restore hospitals to their financial position prior to the original 340B reimbursement cut that was in effect from CY 2018 through CY 2022. CMS plans to maintain this 2% reduction to non-drug items and services until the estimated payment reduction reaches $7.8 billion, which it believes will occur in CY 2031.

CMS also finalized an expansion of its site-neutral payment policy for excepted off-campus provider-based departments (PBDs). The final rule applies this policy to imaging without contrast services, which include certain bone density scans, X-rays, ultrasounds, CT scans and MRIs being provided at excepted off-campus PBDs. CMS also continued its phase-out of the Inpatient Only List, finalizing its proposal to remove 637 services from a variety of clinical families including maternity care and delivery, respiratory, and urinary.

IHA will provide hospital-specific estimated financial impact reports in the coming weeks through the IHA C-Suite. A CMS fact sheet summarizing the CY 2027 OPPS final rule is available here.

Staff contact: Cassie Yarbrough

CMS Finalizes CY 2027 Home Health Prospective Payment System Rule

On Nov. 4, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2027 home health prospective payment system (HH PPS) final rule. CMS finalized an HH PPS rate update of 2.1% and an estimated 0.3% increase that reflects the updated fixed dollar loss amount ($50 million increase).

CMS also finalized several provider enrollment provisions, including making all revocation grounds retroactive; adding new grounds for revocation or denial of enrollment; CMS authority to deny or revoke enrollment of a provider; and requirements that hospices, home health agencies, and suppliers of durable medical equipment, prosthetics, orthotics, and supplies must re-enroll in Medicare as a new provider and undergo a survey/accreditation if they experience certain changes in majority ownership.

IHA will provide hospital-specific estimated financial impact reports in the coming weeks through the IHA C-Suite. A CMS fact sheet summarizing the CY 2027 HHPPS is available here.

Staff contact: Cassie Yarbrough

CMS Finalizes CY 2027 Medicare Physician Fee Schedule Rule

On Nov. 4, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2027 Medicare Physician Fee Schedule (PFS) final rule. CMS finalized most of its proposed changes, including physician payment cuts that reflect the expiration of the one-year 2.5% payment increase for 2026. They are implemented through two conversion factors: $32.95 for qualifying alternative payment model (APM) participants (-1.83%) and $32.63 for all other physicians and practitioners (-2.31%). CMS also finalized its proposal to make it mandatory, rather than voluntary, for 340B-covered entities to submit Part D claims data elements to the 340B claims data repository beginning Jan. 1, 2027.

At the same time, CMS modified several proposals to soften or delay their impact. The agency finalized its proposal to replace the office/outpatient evaluation and management (O/O E/M) visit complexity add-on code with a modifier. CMS states this will increase payment for all levels of the base E/M code by 16%, and by 32% for practitioners participating in accountable care organizations. CMS did narrow its proposed payment reduction for a separately identifiable O/O E/M visit furnished on the same day as a global procedure. The reduction now applies only to visits paired with 0-day global procedures, and the lower-valued service will be paid at 80% rather than the proposed 50%.

On remote monitoring, CMS finalized requirements that remote therapeutic monitoring (RTM) services be furnished only to established patients, and that practitioners billing RTM and remote physiologic monitoring (RPM) services furnish a separately reportable initiating visit. CMS delayed until Jan. 1, 2029 the requirement that clinical staff performing these services be employed by the billing practitioner rather than a third-party contractor. This partially addresses IHA comments on the proposed rule about the need for workforce flexibility and third-party contractors, although the restriction remains finalized for the future.

An IHA brief with additional details on the final rule is forthcoming. A CMS fact sheet summarizing the 2027 PFS final rule is available here.

Staff contact: Lia Daniels

RHTP Funding: IDPH Releases Notice of Funding Opportunity for EMS Initiative

The Illinois Dept. of Public Health (IDPH) has released a Notice of Funding Opportunity (NOFO) for the Rural Health Transformation Program's (RHTP) Emergency Medical Services (EMS) initiative. Of the $16.5 million allocated to IDPH in first-year funding, $13.5 million is available through a competitive grant opportunity for 15 Illinois-designated EMS Resource Hospitals, with each selected hospital to receive approximately $978,000.

Funding will support the expansion of mobile integrated health services, EMS workforce education and training, and improvements to EMS in rural communities. Eligible expenses include staffing, training, equipment, vehicles, IT infrastructure and innovative care delivery models. Approximately $207,000 of each award must be dedicated to training and education.

Eligible applicants are Illinois-designated EMS Resource Hospitals that are nonprofit or governmental entities. Funding is intended to support Health Resources and Services Administration rural-designated communities throughout Illinois. Applications must be submitted through IDPH's EGrAMS system by Dec. 3, 2026 at 5 p.m. CT. IDPH anticipates announcing awards by Dec. 15, 2026, with grant activities to be completed by June 30, 2027.

Click here to access the NOFO and grant listing, which provides additional information on eligibility, allowable expenses, application requirements, and evaluation criteria.

IDPH will host an optional informational meeting on Nov. 12, 2026 from 2-3 p.m. CT to answer questions about the funding opportunity. Interested hospitals can join the meeting here.

Staff contact: Jordan Powell

Funding Opportunity: Harm Reduction Education, Resources and Treatment Program

Funding is available for Harm Reduction Education and Access to Resources and Treatment (HEART) in Illinois. HEART funding will allow for the development, launch, and evaluation of evidence-informed statewide public education campaigns made up of hyperlocal, multi-channel components that feature real stories from people with lived or living experience and carry culturally responsive, inclusive messaging that balances statewide reach with messages tailored for different audiences. The goal of these campaigns is to increase awareness of the dangers of substance use, reduce stigma and encourage recovery, and increase engagement with local harm reduction and treatment resources.

A total of $9 million is available to be awarded over a period of three years to up to three organizations. The grants will be administered equitably across the state's seven public health regions. The source of this funding is the Illinois Remediation Fund, which is 55% of Illinois' share of the multistate opioid settlement agreements secured by the Office of Attorney General Kwame Raoul. Continued funding is subject to appropriations and release of funds by the Illinois Dept. of Human Services.

The Notice of Funding Opportunity (NOFO) is posted on the Illinois Opioid Settlements Initiative website on the Funding Opportunities page. Interested applicants are encouraged to begin the process as soon as possible to ensure sufficient time to complete pre-qualification and pre-award requirements. The deadline to apply for HEART funding is Dec. 28, 2026 at 5 p.m. CT.

A technical assistance webinar is scheduled for tomorrow, Nov. 6, at 2 p.m. CT. The session will be recorded and published to the FAQs webpage by Nov. 13. You can register here. You can ask questions about the NOFO during this session or submit questions through Dec. 18 using this form.

Illinois Respiratory Disease Surveillance Data

The Infectious Respiratory Disease Surveillance Dashboard from the Illinois Dept. of Public Health (IDPH) provides the latest data on hospital visits, seasonal trends, lab test positivity and demographic data. IDPH also tracks COVID-19, influenza and respiratory syncytial virus information through the Illinois Wastewater Surveillance System dashboard.

Briefly Noted

Macleods Pharma USA Inc. has issued a nationwide recall for over 3,500 bottles of its blood pressure medicine, citing "failed dissolution specifications" associated with its olmesartan medoxomil, amlodipine and hydrochlorothiazide tablets. The pills ranged from 40 mg, 10mg and 12.5mg, and were sold in either 30-count or 90-count bottles. This has been classified as a Class II recall, meaning the pills could cause temporary or medically reversible health problems, but the likelihood of serious health consequences is considered low.

Leading the News

Illinois hospitals drill for AI-driven cyber attack

KFVS

Hospitals in Illinois took part Wednesday in one of the state's largest drills to practice responding to a cyber attack led by artificial intelligence. The Illinois Health and Hospital Association organized the exercise.

On 1st day since winning 3rd term as governor, Pritzker releases 200-point national agenda

Capitol News Illinois

Gov. JB Pritzker isn't a presidential candidate yet, but he announced a 200-point national agenda he wants congressional Democrats to tackle after the party's enormous victory in Tuesday's midterm elections.

How did Illinois vote in governor's race compared to 2022? Map shows which counties flipped

NBC 5

JB Pritzker and Darren Bailey battled once again to become the governor of Illinois during the 2026 Midterm election - and the re-match ended the same way it did in 2022 - with Pritzker projected to win.