CMS Proposed Rule Would Cap Certain State Medicaid Payments
The Centers for Medicare & Medicaid Services (“CMS”) released a proposed rule that seeks to modify payment rate limits for certain Medicaid managed care state directed payments (“SDP”) and Medicaid fee-for-service targeted practitioner payments so that those payments better align with Medicare standards.  The proposed rule would cap certain SDP payment rates at 100% and 110% of the total published Medicare payment rates for expansion and non-expansion states, respectively.  If a Medicare payment rate is not available, the payment limit would be 100% of the applicable Medicaid state plan approved rate.  Affected SDPs may qualify for a temporary grandfathering period, but the rule proposes that the payment limits go into effect for all SDPs for all services in all states starting with rating periods on or after January 1, 2029.  Similar caps of 100% and 110% of the total published Medicare payment rates for expansion and non-expansion states would apply to the targeted Medicaid fee-for-service payments.  Comments to CMS must be received by July 21, 2026.  More information can be found here.

HHS OIG Publishes Two Advisory Opinions
The Department of Health and Human Services Office of Inspector General (“OIG”) published two advisory opinions:

  • Advisory Opinion 26-10 looks at a proposed arrangement in which the requestor, an orthopedic medical technology company that develops, manufactures, and distributes a range of implant and replacement products, would enter into agreements with individuals who would advise and consult on product lines. These contracted individuals are often physicians who could purchase and utilize the requestor’s products to provide patient services.  If the individual met certain product line requirements in each quarter, that individual would receive a product line royalty payment.  The OIG raised several concerns with this proposed arrangement, including “skewed clinical decision making,” patient steering, unfair competition, inappropriate utilization, and increased costs.  The OIG also determined that the safe harbor for personal services and management contracts and outcomes-based payment arrangements was inapplicable.  The OIG concluded that this proposed arrangement would generate prohibited remuneration under the federal anti-kickback statute if the requisite intent were present, which would constitute grounds for the imposition of sanctions under that statute.
  • Advisory Opinion 26-11 looks at an arrangement where the requestor, a company that offers a proprietary blood-based colorectal cancer biomarker test, would provide consenting patients with a free supplemental report in connection with a colorectal cancer screening test. This supplemental report would include additional test results for different cancer types in addition to the primary colorectal cancer screening results.  After considering various elements of this arrangement, including any potential safe harbors, as well as the sufficiently low risk of fraud and abuse, the OIG concluded that while this arrangement would generate prohibited remuneration under both the anti-kickback and the prohibition on beneficiary inducements statutes, the OIG would not impose administrative sanctions under either statute.