The Centers for Medicare & Medicaid Services (CMS) on Monday released its Calendar Year 2026 Physician Fee Schedule (PFS) proposed rule along with an accompanying fact sheet. 

CMS has proposed several significant changes to how Medicare reimbursement for practitioner services is generally calculated, such as a higher conversion factor for practitioners participating in a qualifying alternative payment model (+3.83%) compared with those who are not (+3.62%), and modifications to the practice expense methodology to capture increased indirect costs for office-based practitioners. 
 
NABH is pleased to see the proposed rule aims to improve access to behavioral healthcare services in various ways, such as creating three optional add-on codes to advanced primary care management that would better enable the provision of behavioral health integration and collaborative care model services, and by expanding coverage of digital therapeutics to include those to treat attention-deficit/hyperactivity disorder.
 
NABH is reviewing the proposed rule and will send more information to members soon. Please contact NABH Vice President of Public Policy Dan Schwartz if you have questions.

The House on Thursday, July 3 passed H.R. 1, the One Big Beautiful Bill, adopting Senate language that cuts Medicaid by nearly $1 trillion – a deeper cut than the original House bill’s $800 billion cut. 

The vote was 218 to 214. Republicans concerned about Medicaid cuts and who were originally opposed to the bill were persuaded by the bill’s inclusion of a Rural Health Transformation Program and assurances from the Trump administration about working with Congress to implement this bill— and the Rural Health Program in particular.
 
The Senate bill added the $50 billion rural program— distributed over five years — to offset some of the losses rural hospitals will face because of the provider tax phase down. A complicated and burdensome package, the rural provider fund provides just a tiny fraction of nearly $1 trillion in cuts the bill makes to Medicaid.

There are numerous unanswered questions about the Rural Health Program regarding language and implementation, access for rural mental health and SUD treatment providers, and the communities they serve. NABH will work with Congress, the administration and CMS to help ensure the program is implemented effectively.

Other opportunities to effect change include the congressional appropriations process and a potential second budget reconciliation bill in late 2025/early 2026.  
 
Thanks to all of the NABH members who contacted their representatives and senators. More than 1,500 members responded to our action alerts. Working with allied healthcare and patient organizations, we will continue this effort to educate Congress and the administration about the Medicaid cuts’ drastic effects on patients, communities, and providers as we seek solutions. 

The legislation now moves to President Trump’s desk for his signature.
 
NABH will release additional analysis and details as we learn more. Please contact NABH Vice President of Government Relations Andy Dodson at andy@nabh.org if you have questions. 

The Senate on Tuesday narrowly passed H.R. 1, the One Big Beautiful Bill Act, which would cut Medicaid by nearly $1 trillion – a deeper cut than the House bill’s already controversial $800 billion cut to the federal healthcare program.
 
The Senate passed the measure in a 51-50 vote, with Vice President Vance breaking a tie. Republican Sens. Susan Collins (Maine), Rand Paul (Ky.) and Thom Tillis (N.C.) joined Democrats in voting no.
 
The House must now accept the Senate changes to the bill or amend the legislation, which would force a Conference Committee between the two chambers — a move that congressional leaders are trying to avoid.
 
The bill did not change the provisions establishing a national Medicaid work requirement; however, exclusions for individuals with substance use disorder (SUD), a disabling mental disorder, or a serious or complex medical condition remain. The bill also includes more frequent Medicaid eligibility checks, and cost-sharing requirements for certain expansion populations, although exclusions for mental healthcare services and SUD services are included.
 
The Senate changed several other important provisions from the original House bill, including:

• Reducing the current 6% provider tax limit to 3.5% for states that expanded Medicaid under the Affordable Care Act (40 states and Washington, D.C.). This change would be phased in by lowering the limit by 0.5% each year between 2027 and 2031. And it makes a technical correction that ensures eligible tax programs include local “units of government.” 
• Beginning a phase down of state-directed payments to Medicare rates (110% in non-expansion states) in 2028. The bill expands “grandfathered” SDP programs to include those that have not been approved to date but where a “pre-print” has been submitted to the Secretary by date of enactment. It also gives the HHS secretary discretion in defining equivalent “Medicare” rates based on current or future regulations.  
• Creating a Rural Health Transformation Program (FY 2028–32) to support rural providers. The fund would allocate $10 billion annually from 2028 to 2032. The rural health facility definitions include community mental health centers and opioid treatment programs located in a rural census tract of a metropolitan statistical area. The bill’s use of funds includes definitions supporting access to opioid use disorder treatment services, other SUD treatment services, and mental health services.
• Permanently allowing high-deductible health plan members to get telehealth visits for free, even if they haven’t hit their minimum out of pocket spend and still qualify for tax-advantaged health savings plans.
• Updating the Physician Fee Schedule with a 2.5% bump for 2026 only.

NABH will continue to apprise members about the status of this legislation.

Please email NABH Vice President of Government Relations Andy Dodson if you have questions.