January 2026

At-a-Glance Essentials 

DMEPOS Competitive Bidding Restart (2028)
CMS finalized the nationwide resumption of the DMEPOS Competitive Bidding Program no later than January 1, 2028. For the first time, urological supplies, including standard and hydrophilic catheters, will be included. Projected reimbursement reductions raise serious concerns about supplier consolidation, reduced product choice, and disruptions to patient access.

House passes limited healthcare package
On December 17, 2025, the House approved the Lower Health Care Premiums for All Americans Act (H.R. 6703) by a 216–211 vote. The bill expands association health plans, increases PBM transparency requirements, and funds cost-sharing reductions for certain Marketplace enrollees. The Senate did not act before adjournment.

Radiation Oncology Reimbursement Cuts (Effective January 1, 2026)
CMS finalized new bundled CPT codes (77402, 77407, 77412), eliminated separate technical reimbursement for IGRT, and recalibrated RVUs using hospital-based data, resulting in steep payment reductions for freestanding and physician-owned radiation oncology programs.

Physician Fee Schedule (CY 2026)
CMS finalized a net-neutral update for urology overall, with modest adjustments aligned with statutory baselines and no structural reforms to address long-term payment instability.

Telehealth Flexibilities
CMS confirmed retroactive reinstatement of Medicare telehealth waivers for services provided during the October–November 2025 funding lapse. Core flexibilities, including home-based care, geographic waivers, and audio-only services, are extended through January 30, 2026.

MedPAC 2027 Outlook
MedPAC recommends a modest 0.5 percent physician payment update above statutory levels for 2027, signaling continued fiscal restraint and renewed focus on MIPS reform and Medicare Advantage accountability.

MAHA ELEVATE Model
CMMI launched the MAHA ELEVATE model, committing $100 million over three years for up to 30 pilots testing evidence-based lifestyle and functional medicine interventions. A NOFO is expected in early 2026, with model launch planned for September 2026.

Most Favored Nation Agreements Reached
President Trump announced a significant expansion of voluntary Most-Favored-Nation (MFN) drug pricing agreements, bringing participation to 14 pharmaceutical manufacturers and aiming to align U.S. drug prices with those in the lowest-priced comparable developed countries. While the agreements do not affect Medicare Part B reimbursement, they may improve affordability for cash-pay and underinsured patients through new direct-to-consumer discounts.

CMS Finalizes DMEPOS Reforms and Confirms Competitive Bidding Restart

CMS’s CY 2026 Home Health Final Rule represents the most consequential restructuring of the DMEPOS program in over a decade. Beginning January 1, 2026, suppliers will face annual, unannounced accreditation surveys, heightened oversight by accrediting bodies, and accelerated NPI deactivations for compliance failures, which will substantially increase operational and financial pressure, particularly for smaller and rural suppliers.

More significantly, CMS confirmed that the DMEPOS Competitive Bidding Program will resume nationwide on January 1, 2028, under a Remote Item Delivery framework. Urological supplies, including standard and hydrophilic catheters, will be included for the first time, with hydrophilic catheters placed in a standalone bidding category that may further constrain product availability.

Competitive bidding is expected to reduce reimbursement by 20–30 percent relative to current fee-schedule rates. Prior bidding rounds show that such reductions often lead to supplier consolidation, reduced product choice, and disruptions in continuity of care—especially for patients requiring specialized intermittent catheterization supplies. LUGPA continues to advocate for safeguards that protect patient access to clinically appropriate urological products.

The House Energy and Commerce Committee is scheduled to mark up policy on durable medical equipment this Thursday, January 8, 2026. A key item under consideration is H.R. 2005, the DMEPOS Relief Act of 2025, which would extend the higher Medicare payment rate, known as the 75/25 blended rate, for certain items furnished in non-rural and non-contiguous areas. This extension aims to preserve beneficiary access to essential DME by addressing reimbursement challenges stemming from prior fee schedule adjustments. The markup outcome could position this provision as a strong candidate for inclusion in the broader health extenders package expected before the January 30 appropriations deadline.

Appropriations and Health Extenders

Bipartisan conversations continue among committee leaders to reach an agreement on fiscal year 2026 appropriations and a package of expiring health provisions before government funding expires on January 30, 2026. Securing a deal remains Congress's primary focus this month.

While another government shutdown appears unlikely, the path forward, whether through comprehensive bipartisan legislation or a partisan continuing resolution, will influence prospects for renewed cross-aisle cooperation on healthcare priorities. 

Key expiring provisions include Medicare telehealth flexibilities (currently extended through January 30, 2026), delays to Medicaid disproportionate share hospital (DSH) payment reductions, and funding for community health centers, the National Health Service Corps, and other critical programs. The central question is whether Congress can expand beyond short-term extensions to incorporate new or longer-term policies, such as pharmacy benefit manager (PBM) reforms, generic drug and patent reforms, multiyear Medicare telehealth authorities, enhanced primary care funding, and more.

LUGPA actively advocates for inclusion of its in-office dispensing (IOD) policy in this package to support independent urology practices in delivering convenient, high-quality oral oncolytic and supportive care therapies to patients.

Limited House-Passed Healthcare Reforms Amid Expiring ACA Subsidies

In December 2025, the House of Representatives passed the Lower Health Care Premiums for All Americans Act (H.R. 6703) on December 17 by a narrow 216–211 party-line vote. The legislation expands association health plans to allow small businesses and self-employed individuals greater flexibility in pooling for coverage, imposes new transparency requirements on pharmacy benefit managers to curb costs, and funds cost-sharing reductions for certain Health Insurance Marketplace enrollees. The bill advanced to the Senate but received no further action before Congress adjourned for the year.

Notably absent from the package is any extension of the enhanced premium tax credits (EPTCs) under the Affordable Care Act, which are set to expire on December 31, 2025. Without renewal, millions of Marketplace enrollees face sharp premium increases—potentially more than doubling on average—in 2026. Bipartisan efforts, including a discharge petition signed by several House Republicans, have set the stage for a forced vote on a clean three-year EPTC extension when the new Congress convenes in January 2026. LUGPA continues to monitor these developments for potential impacts on patient access and the viability of independent practice.

CMS Confirms Retroactive Telehealth Coverage Following Funding Lapse

Following uncertainty created by the October–November federal funding lapse, CMS issued guidance on November 20 confirming retroactive reinstatement of Medicare telehealth waivers for services furnished between October 1 and November 12, 2025. CMS also extended core flexibilities—including home-based care, geographic waivers, and audio-only services—through January 30, 2026.

This clarification ensures that independent urology practices may bill covered telehealth services during the lapse period without risk of denial or recoupment. Telehealth remains essential for PSA surveillance, BPH and OAB management, post-operative follow-ups, and access for rural and mobility-limited patients.

Despite this short-term fix, the telehealth authority remains temporary. LUGPA continues urging Congress to enact permanent statutory reforms in early 2026 to prevent recurring disruptions.

ASP + 6% Drug Reimbursement Maintained 

CMS finalized no changes to the ASP + 6% Part B payment methodology for CY 2026. This decision preserves the financial viability of in-office oncology and injectable therapies and prevents further shifts in care to higher-cost hospital outpatient departments. Maintaining ASP + 6% remains a critical priority for independent practices delivering community-based cancer care.

CMMI’s GLOBE and GUARD Drug Pricing Models   

CMS emphasized that the GLOBE and GUARD models are designed to target manufacturer inflation rebates—not provider reimbursement.

• GLOBE (Part B): Applies to select single-source drugs, including oncology therapies, using alternative rebate benchmarks tied in part to international pricing.
• GUARD (Part D): Extends similar concepts to Part D drugs, complementing the Inflation Reduction Act’s negotiation authorities.

Rebates under both models are excluded from ASP and Medicaid Best Price calculations. CMS acknowledges, however, that indirect effects on manufacturer pricing behavior, drug availability, and launch strategies are possible. Voluntary pricing agreements may allow some manufacturers to opt out. LUGPA is closely monitoring these models for downstream impacts on access and practice operations.

Trump Administration Expands MFN Drug Pricing Agreements

President Trump announced a major expansion of voluntary Most-Favored-Nation (MFN) drug pricing agreements, adding nine manufacturers—Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech (Roche), Gilead, GSK, Merck, Novartis, and Sanofi. Participation now totals 14 of 17 targeted companies (with AbbVie, Johnson & Johnson, and Regeneron still negotiating).

What’s Changing

• MFN agreements aim to align U.S. prices with the lowest net prices in comparable developed countries.
• Broad commitments across Medicaid access, new drug launches, and direct-to-consumer (DTC) discounts.

Key Provisions

• Medicaid: MFN pricing for most products across state Medicaid programs.
• New Launches: U.S. launch prices at or below MFN levels.
• DTC Discounts: Cash-price reductions via manufacturer platforms, linked through TrumpRx.gov (full launch Jan. 2026).
• Additional Commitments: 3-year tariff exemptions; $150B+ in U.S. manufacturing/R&D investments; API donations to the Strategic API Reserve.

Implications for Independent Urology Practices

• No Part B Impact: Medicare Part B reimbursement (ASP + 6%) remains unchanged.
• Potential Benefits: Improved affordability for cash-pay/underinsured patients; possible adherence gains for select oral/supportive therapies.
• Practice Tip: DTC cash purchases typically do not count toward deductibles or OOP maximums.
• Watch Ahead: Limited spillover to Medicare/commercial markets without further reforms; monitor launch pricing effects.

LUGPA is tracking MFN implementation and related proposals (including potential CMMI activity) to protect physician reimbursement and preserve patient access in independent practices.

MedPAC Signals Continued Payment Restraint

At its December meeting, MedPAC recommended only a 0.5 percent payment update above statutory baselines for physician services in 2027. Commissioners cited stable beneficiary access and high physician participation, while noting that Medicare spending increased 4.1 percent in 2024, partly due to broader use of the G2211 complexity add-on code.

For independent urology practices, MedPAC’s position reinforces a persistent challenge: Medicare payment updates continue to lag far behind practice cost inflation. MedPAC discussions also preview likely 2026 policy debates, including MIPS reform, team-based care models, oversight of concierge medicine, and Medicare Advantage accountability.

Steep 2026 Cuts Threaten Independent Radiation Oncology

Independent radiation oncology programs—including those integrated within large urology groups—face significant disruption beginning January 1, 2026. CMS finalized new bundled CPT codes (77402, 77407, 77412), eliminated global technical reimbursement for IGRT, and recalibrated RVUs using hospital-based cost data. Collectively, these changes sharply reduce reimbursement for freestanding radiation oncology services.

These Medicare cuts are compounded by increasingly restrictive commercial payer policies, including expanded prior authorization and medical necessity requirements for IMRT, IGRT, and SBRT. For physician-owned and joint-venture programs, rising administrative burden and margin compression threaten sustainability and may drive referrals to higher-cost hospital settings—undermining community-based cancer care.

What Members Should Do Now:
Practices should model the financial impact of the 2026 changes, engage payers early, strengthen documentation for higher-complexity services, prepare for increased peer-to-peer reviews, and evaluate the long-term viability of the radiation service line.

LUGPA continues advocating for site-neutral payment reform, improved coding accuracy, and policies that preserve access to advanced cancer care in independent settings.

CMS Launches MAHA ELEVATE Lifestyle and Preventive Care Model

CMMI announced the MAHA ELEVATE model, committing $100 million over three years to support up to 30 pilots testing evidence-based lifestyle and functional medicine interventions, including nutrition, physical activity, sleep, and stress management. A Notice of Funding Opportunity is expected in early 2026, with model launch anticipated in September 2026.

For urology practices participating in ACOs or other value-based arrangements, MAHA ELEVATE may offer opportunities to integrate preventive strategies addressing cardiometabolic conditions linked to BPH, OAB, erectile dysfunction, and cancer survivorship, while informing future Medicare payment and coverage policies.

LUGPA Advances Advocacy on Part D Access and Site-Neutral Payments

In December, LUGPA urged Congress to restore Medicare Part D home-delivery options following CMS actions that limited patient access. The House also advanced legislation supporting in-office dispensing, with Senate consideration expected in 2026. Concurrently, renewed scrutiny of PBMs and the 340B program has increased transparency and momentum for reform.

These efforts align with bipartisan interest in site-neutral payment policies to curb consolidation and high hospital-based costs. LUGPA continues working with lawmakers to advance reforms that protect patient access, improve adherence, and ensure fair reimbursement across care settings.

Political Action Update: Member Spotlight

LUGPA thanks the physicians at Urology Specialists of the Carolinas for their leadership and a combined $22,000 in individual contributions to Congressman Greg Murphy, MD (R-NC)—a leading advocate for Medicare reform, prior authorization relief, site-neutral payments, and physician-led care.

As one of LUGPA’s fastest-growing member groups, now approaching 80–85 providers, their support sets a strong example heading into 2026. To join in supporting Rep. Murphy’s re-election, please consider an individual contribution here.

For information on LUGPA fly-ins or other advocacy opportunities, please get in touch with Matthew Glans at [email protected].

Conclusion   

Federal agencies are implementing sweeping reforms that will shape the Medicare reimbursement and regulatory landscape through 2028. Competitive bidding for urological supplies, temporary telehealth authority, expanding AI governance, radiation oncology payment cuts, and continued fiscal restraint all pose serious challenges for independent practices.

LUGPA remains fully engaged with CMS, MedPAC, and Congress to defend independent urology, safeguard patient access, and advance fair and sustainable Medicare payment policy. Members are encouraged to share practice- and patient-level impacts to support LUGPA’s advocacy.