Vizient’s policy and advocacy updates

Legislative update

• Congress is adjourned, with lawmakers returning to their home states and districts to campaign ahead of next month’s midterms. With fewer than three weeks until polls close, we have officially entered the home stretch of election season. Congress is expected to return to Washington on Nov. 9 for a post-election “lame-duck” session with a lengthy year-end agenda. At the top of the list will be funding the federal government beyond Dec. 11, when the current continuing resolution signed into law on Sept. 2 expires. The outcome of the elections will heavily influence these negotiations, including whether lawmakers will seek to complete all FY 2027 appropriations before the new Congress convenes or temporarily extend current funding levels into calendar year 2027.
  • Healthcare “extenders” are expected to be a major component of any year-end discussions, as several health policies and flexibilities are set expire on Dec. 31. Among the significant issues are the temporary 2.5% Medicare Physician Fee Schedule payment increase, the advanced alternative payment model bonus, the Low-Volume Hospital payment adjustment, funding for the Medicare-Dependent Hospital program, and funding for Community Health Centers and the National Health Service Corps. Congress has historically addressed these provisions through year-end appropriations or other must-pass legislation, making the upcoming funding package the most likely vehicle for another extension of these policies and flexibilities. However, key questions remain, including the duration of any extensions, whether Congress renews the physician payment increase at all, and how lawmakers will offset the cost of any package.

Regulatory policy and executive action

• On Sept. 14, Vizient® submitted comments to the Centers for Medicare and Medicaid Services (CMS) on the CY 2027 Physician Fee Schedule (PFS) Proposed Rule (Press Release) (Fact Sheet) (Vizient Summary). In our comments, we raised concerns with several proposals that could reduce provider reimbursement, increase administrative burden, and disrupt patient access to care. Specifically, Vizient noted that the proposed conversion factors represent a decrease from CY 2026, largely due to the expiration of the temporary 2.5% statutory payment increase, and urged CMS to work with Congress to establish a stable physician payment update. We also encouraged CMS to reconsider proposed changes to the practice expense methodology, including the phase-out of the Indirect Practice Cost Index, and urged CMS to withdraw a proposal cutting payment for certain evaluation and management (E/M) visits, warning that adjusting the existing policy could increase patient burden by encouraging appointments on different days. In addition, Vizient expressed concern regarding the proposal to sunset the traditional Merit-based Incentive Payment System (MIPS), noting that the remaining reporting option may not provide adequate reporting pathways for providers. Finally, among other recommendations, Vizient urged CMS to withdraw the proposal to require reporting to the recently launched Medicare Part D 340B claims data repository.
• On Sept. 18, Vizient submitted comments to CMS on the Amending the Indirect Hold Harmless Threshold of Healthcare-Related Taxes Proposed Rule (Fact Sheet) (Vizient Summary). In our comments, we raised concerns that several provisions of the Proposed Rule could create unnecessary disruption for state Medicaid programs, Medicaid beneficiaries, and providers. While the Proposed Rule is meant to implement statutory changes enacted under the One Big Beautiful Bill Act, Vizient urged CMS to withdraw proposals that are not required by law, including the elimination of the longstanding “75/75 test” used to evaluate certain provider taxes and the creation of a new health insurer provider tax class. We also encouraged CMS to provide states with greater flexibility when demonstrating compliance with provider tax requirements and to modify proposed recoupment policies that could expose states to significant financial penalties and create additional uncertainty.
• On Sept. 18, Vizient also submitted comments to CMS on the Medicare Drug Price Negotiation Program: Manufacturer Effectuation of the Maximum Fair Price (MFP) in 2028 draft guidance (Fact Sheet). In our comments, we raised concerns that several aspects of the draft guidance could create new administrative and operational challenges for hospitals and other providers furnishing Medicare Part B drugs selected for negotiation. Specifically, Vizient urged CMS to require manufacturers to provide prospective access to the MFP rather than relying on retrospective refund models, noting that retrospective approaches would create cash flow challenges and lead to disputes regarding reimbursement amounts. Vizient also urged CMS to strengthen oversight of manufacturer cash flow support arrangements and adopt more standardized implementation requirements.
• On Sept. 30, CMS issued a Final Rule to implement the Global Benchmark for Efficient Drug Pricing Model (GLOBE Model) (Vizient Summary), which will launch on Jan. 1, 2027 and run through March 31, 2032. The model will test whether international drug pricing benchmarks can be used to reduce Medicare Part B drug spending and beneficiary cost sharing. Under the model, CMS will use international pricing information to calculate alternative inflation rebate amounts for certain single-source Part B drugs and biological products furnished to a randomly selected cohort of Original Medicare beneficiaries. CMS estimates that the model will generate approximately $440 million in Medicare Part B savings during the seven-year payment period, a significant reduction from the projected savings included in the Proposed Rule due largely to a narrower scope of medications and fewer participating manufacturers. While manufacturers of applicable drugs will be required to participate, providers and suppliers will continue to purchase and bill for drugs through existing Part B payment systems and are not considered model participants. CMS also clarified that the agency, rather than providers, will determine any beneficiary coinsurance adjustments through claims processing in response to stakeholder concerns regarding provider administrative burden.
  • On Oct. 7, the Pharmaceutical Research and Manufacturers of America (PhRMA) initiated litigation regarding the GLOBE Model, arguing that it is unlawful and exceeds the agency’s statutory authority.
• On Oct. 5, CMS and the Departments of Labor and Treasury issued a Final Rule (Fact Sheet) updating certain Transparency in Coverage (TiC) regulations for certain plans and issuers. The Final Rule, which builds on the TiC regulations finalized in 2020, updates requirements to reduce Machine-Readable File (MRF) size and duplication, adds context to pricing data, and requires new data elements. A key component of the rule and the related CMS press release relates to implementation of the Prescription Drug MRF, where CMS notes that plans and issuers will be expected to publish their Prescription Drug Files using a newly developed schema starting in December 2027 and monthly thereafter. Alongside the Final Rule, the Departments also issued FAQs, which include information about upcoming schemas for the MRFs. The rule also finalizes several policies intended to make pricing information easier to locate, analyze, and use by reducing unnecessary and duplicative data. Notably, the Departments declined to finalize the proposed 12-month implementation period and instead adopted a phased compliance schedule that provides additional time for new reporting requirements. The regulations go into effect on Dec. 5, 2026 with various data reporting requirements phasing in at separate dates in 2027.
• On Oct. 9, the American Hospital Association, the Maine Hospital Association and four safety-net hospitals filed a lawsuit challenging the recently announced 340B Rebate Model Pilot Program. The new 340B rebate model (Vizient Summary) would require providers to buy participating drugs at the wholesale acquisition cost (WAC) and submit claims data to receive rebates representing the difference between that amount and the 340B ceiling price. The lawsuit, which follows an earlier court challenge that led to the temporary blocking of the original 340B rebate pilot in December 2025 shortly before its planned launch on Jan. 1, seeks to block implementation of the new, expanded rebate model before its scheduled Jan. 1, 2027 effective date. In the complaint, hospital groups argue that HRSA’s approach would create substantial administrative and financial costs for 340B hospitals and that the government did not sufficiently address those concerns despite extensive stakeholder feedback, among other issues.

To learn more, contact the Vizient Public Policy and Government Relation team at (202) 354-2600.