April 2026

     In this issue we feature:

• Advocacy Wins This Month 
• Overview
• Key Issues This Month
• Key Federal & National Developments
• State & Legislative Focus
• Share Your Story — Amplify the Voice of Urology

Advocacy Wins This Month

Landmark Federal PBM Reform Enacted

On February 3, 2026, President Trump signed the Consolidated Appropriations Act, 2026 (H.R. 7148) into law. In addition to a two-year extension of telehealth flexibilities, the legislation incorporates sweeping pharmacy benefit manager (PBM) reforms that directly advance long-standing LUGPA priorities. Key provisions include a mandate for 100% rebate pass-through to plans and patients, delinking PBM compensation from drug list prices and rebates in Medicare Part D, significantly enhanced transparency across the supply chain, restrictions on spread pricing, and strong “Any Willing Pharmacy” protections.

LUGPA provided strong support through coalition letters that emphasized full rebate pass-through, elimination of spread pricing, supply-chain transparency, and safeguards for physician-integrated dispensing models to ensure continued patient access. Implementation will occur through phased rulemaking, with many major provisions becoming effective between 2028 and 2029. LUGPA will continue to engage closely during the regulatory process to protect independent urology interests.

These changes address longstanding misaligned incentives and opaque practices that have disadvantaged independent providers and their patients.

Major Site-of-Care Victory with IPO List Phase-Out

In the CY 2026 Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) final rule, CMS announced a three-year phase-out of the Medicare Inpatient-Only (IPO) list. The process begins in 2026 with the removal of approximately 285 procedures—primarily musculoskeletal—and culminates in the full elimination of the IPO list by January 1, 2029. The rule also expands the list of ASC-eligible procedures.

This represents a significant policy victory for LUGPA’s years of advocacy to repeal the IPO list, promote physician-led outpatient care, reduce unnecessary hospital-based spending, and provide greater site-of-care flexibility for urology practices.

House Hearings on Insurance Companies Result in Bipartisan Grilling of Execs

The House Ways & Means and Energy & Commerce Committees recently held hearings examining insurance industry practices. Members of both parties questioned insurance executives about rising costs, the use of subsidies in ACA and Medicare Advantage plans, increasing vertical integration across the industry (including PBM ownership of specialty pharmacies), and the broader impact of these trends on patient care and affordability.

These themes were echoed by committee members from across the political spectrum. Representative Greg Murphy (R-NC) drew on his experience as both a physician and a patient to underscore concerns about increasing consolidation and the growing control insurers have over different parts of the health care delivery system. Representative Alexandria Ocasio-Cortez (D-NY) similarly highlighted the industry's vertical integration, noting it could be a potential area for bipartisan attention and common ground between the two parties.

Effective Coalition Advocacy

LUGPA actively participated in multiple coalition letters addressing PBM reform, insurer transparency, downcoding practices, and prior authorization burdens. These collaborative efforts have successfully amplified the perspective of independent urology practices in both federal and state policy conversations.

Overview     

Throughout March 2026, LUGPA maintained robust monitoring and proactive engagement in a complex, fast-moving federal and state policy environment. The month was marked by substantial federal progress on pharmacy benefit manager reform through the FY 2026 appropriations package, continued implementation of drug pricing provisions under the Inflation Reduction Act, important Medicare site-of-care expansions, and persistent state-level challenges involving payment caps, 340B program expansion, and insurer practices.

These developments are reshaping drug acquisition and reimbursement, care delivery models, and practice economics. While they create meaningful opportunities for integrated, physician-led urology practices—particularly through greater outpatient flexibility—they also introduce risks including margin compression, heightened administrative burdens, and continued consolidation pressures on independent groups.

Key Issues This Month

• Enactment of landmark federal PBM reforms in the Consolidated Appropriations Act, 2026
• Ongoing Medicare drug price negotiation and implementation under the Inflation Reduction Act
• Updates to the CMS Medicaid GENEROUS Model for drug pricing
• Medicare site-of-care reforms, including the phased elimination of the Inpatient-Only (IPO) list and ASC expansion
• Heightened federal and state oversight of PBM vertical integration and insurer practices
• State-level proposals for site-neutral payment caps and 340B program expansion
• Escalating challenges with downcoding, prior authorization, and utilization management
• Advancing federal legislation on healthcare cybersecurity

Why It Matters

These policy trends reflect increasing government intervention in healthcare markets, producing both opportunities and challenges for LUGPA members:

• Drug Access & Reimbursement: Greater transparency in PBM practices may improve predictability, but evolving drug pricing models could alter acquisition costs and margins for specialty therapies.
• Margin Pressure: Site-neutral policies, commercial payment caps, and changes to rebates risk compressing reimbursements for office-based and ASC services.
• Administrative Burden: Persistent downcoding, prior authorization requirements, and documentation demands continue to strain practice operations and divert resources from patient care.
• Practice Sustainability: Without adequate safeguards, these pressures accelerate hospital-driven consolidation, threatening the viability of independent urology groups, especially in rural and underserved areas.
• Care Delivery Opportunities: Expanded site-of-care flexibility, including the IPO phase-out, favors lower-cost, physician-led outpatient models but also increases market competition.

Key Federal & National Developments

Medicare Drug Price Negotiation (Inflation Reduction Act)

The first round of negotiated drug prices took effect on January 1, 2026, with additional drugs selected for future negotiation cycles. In January, CMS announced the list of drugs that will come into negotiation in 2028, including six Part B drugs. This represents a fundamental shift in how specialty drugs and provider-administered therapies are priced and reimbursed, with direct implications for urologic care involving advanced therapies.

 The challenge is that provider reimbursement is tied, in part, to the drug's price through the 4.3 percent ‘add-on’ payment.  When the price of a drug is cut substantially (CBO predicts a 50% cut), the provider reimbursement is cut commensurately.  That is why LUGPA is actively supporting the Protecting Patient Access to Cancer and Complex Therapies Act (HR 4299) sponsored by Reps. Greg Murphy (R-NC) and Adam Gray (D-CA), which would protect provider payment at current levels and replace the reimbursement cut with a rebate paid by the pharmaceutical manufacturer.

CMS Medicaid GENEROUS Model

The manufacturer application deadline for the GENEROUS Model has been extended to April 30, 2026. The model, scheduled to launch in 2027, incorporates elements of international reference pricing to help control Medicaid drug spending. While intended to reduce costs, questions remain about potential impacts on manufacturer participation, drug availability, and access for Medicaid patients.

340B Drug Pricing Program

After CMS lost litigation regarding its first proposed 340B Rebate Model Pilot, it withdrew that model and issued a Request for Information on the 340B Rebate Model Pilot Program and potential future rebate-based frameworks. This ongoing debate underscores the competitive risks the program poses to independent practices when lacking sufficient transparency and accountability.

PBM Integration & Insurer Oversight

Federal and state regulators continue to examine anti-competitive PBM behaviors, vertical integration, and insurer practices. LUGPA has supported coalition efforts calling for restrictions on harmful practices, greater transparency, and reduced administrative burdens on providers.

Department of Labor PBM Transparency Rule

LUGPA joined a broad coalition letter supporting the Department of Labor’s proposed rule that would impose new reporting requirements on PBMs serving employer-sponsored (ERISA) plans. The coalition advocated for comprehensive disclosure of fees and compensation structures, along with stronger fiduciary standards to better align incentives across the drug supply chain.

State & Legislative Focus

Payment Caps & Site-Neutral Policies

LUGPA released a detailed policy brief opposing model legislation developed by the National Academy for State Health Policy (NASHP). The model would cap commercial reimbursement for a wide range of outpatient services, including many urologic procedures, at 150% of Medicare’s non-hospital rates (Physician Fee Schedule or ASC rates). The proposal would override existing contracts and impose penalties for non-compliance. A closely related bill, New York Assembly Bill 2140-A, is currently advancing in the New York Assembly.

LUGPA maintains that while narrowly targeted reforms addressing genuine hospital outpatient overpayments may be warranted, broad statutory caps tied to Medicare benchmarks—which frequently fall below the actual cost of delivering specialty care—threaten the viability of independent practices, eliminate essential cross-subsidization of Medicare patients, and risk accelerating consolidation into hospital systems.

New York 340B Opposition Letter

LUGPA formally signed onto a multi-organization letter opposing New York State legislation S.1913/A.6222. The letter urges legislators to reject further expansion of the 340B Drug Pricing Program absent meaningful accountability and transparency requirements. It emphasizes how unchecked 340B growth has fueled healthcare consolidation, undermined independent physician practices, and often failed to direct program savings toward expanded patient access or charity care for underserved populations. Recent studies, including reports in the New England Journal of Medicine and the Wall Street Journal, highlight that 340B profits are often diverted to unrelated expenses rather than lowering drug costs for vulnerable patients. LUGPA’s participation reinforces its commitment to restoring fairness, transparency, and competition in the 340B program.

Maryland Downcoding Reform

LUGPA continues to support Maryland House Bill 1153 and Senate Bill 797, which would require clinical review of downcoding decisions, prohibit automated payment reductions, and improve transparency and appeal processes. Testimony and ongoing advocacy underscore the need for broader reforms to curb abusive insurer practices.

Member Engagement & Data-Driven Advocacy

LUGPA, in partnership with the Community Oncology Alliance (COA), conducted a downcoding survey that revealed high rates of increased downcoding activity and frequent requirements for medical record submissions during appeals. This data will be used in coalition letters and direct outreach to policymakers to illustrate the real-world administrative and financial burdens placed on independent practices.

Emerging Policy Area: Healthcare Cybersecurity

Senate Bill 3315 advanced from the Senate HELP Committee with strong bipartisan support. The legislation promotes HHS–CISA coordination, establishes baseline cybersecurity standards for healthcare entities, and includes grant funding for providers. As cyber threats to healthcare continue to rise, this emerging regulatory area will demand increasing attention and resources from urology practices.

Share Your Story —
Amplify the Voice of Urology 

Have reimbursement issues, administrative burden, patient access, workforce challenges, or sustainability affected your practice? 

LUGPA is renewing its call for member stories to strengthen our advocacy at the federal and state levels. Policymakers respond to real-world impact, and your experiences with the Medicare Physician Fee Schedule, MACRA, prior authorization, step therapy, telehealth, workforce shortages, genetic testing, and other coverage and reimbursement challenges bring urgency and credibility to our message.

Personal stories from physicians and patients help humanize the data, influence legislative conversations, and build support among local lawmakers. Whether you submit a brief written account or record a short video, your perspective can directly shape policy discussions affecting independent urology.

Members may also record stories at upcoming LUGPA meetings as part of our expanded advocacy outreach.

To participate, submit your story to Matthew Glans. Please ensure all shared patient information complies with HIPAA requirements and includes appropriate consent.

Your voice matters, and together, we can ensure independent urology is heard loud and clear.