The AHA filing suit to block 340B Rebate Pilot Program.
CMS proposing changes to Medicare Advantage and Part D programs.
CMS finalizing the CY 2026 OPPS rule.
AHA files suit to block 340B Rebate Pilot Program; AzHHA to file amicus brief in support
On Monday, the American Hospital Association (AHA), the Maine Hospital Association and four safety-net hospitals filed a lawsuit against the U.S. Department of Health and Human Services seeking a temporary restraining order to prevent the rebate program from going into effect on Jan. 1, 2026.
The program will allow nine participating drug manufacturers to provide 340B discounts through retrospective rebates rather than upfront discounts for 15 specified drugs including Eliquis, Jardiance and Xarelto.
AzHHA will be filing an amicus brief in support of the AHA’s request to halt the program.
The Aug. 1, 2025 announcement of the pilot program sparked widespread concern across the healthcare community.
The AHA, AzHHA and many other stakeholders submitted comment letters opposing the rebate pilot program.
A bipartisan group of 163 lawmakers sent a letter to Secretary Robert F. Kennedy Jr. urging him to halt or heavily restrict the program. This coalition of lawmakers cautioned that an unchecked rebate model would dismantle the program Congress designed to stretch scarce federal resources for vulnerable patients.
A complex legal landscape surrounds the issue of 340B rebates.
Multiple drug manufacturers and related parties have filed lawsuits challenging decisions by the Health Resources and Services Administration (HRSA) that drug companies may not unilaterally replace up-front 340B discounts with back-end rebate arrangements without HRSA’s prior approval.
In the U.S. District Court for the District of Columbia, two judges have issued substantially similar rulings affirming HRSA’s authority and appeals are now pending before the D.C. Circuit Court of Appeals.
AzHHA has been actively engaged in this litigation, filing amicus briefs in both the District Court and the Court of Appeals.
CMS proposes changes to Medicare Advantage and Part D programs
Last week, the Centers for Medicare and Medicaid Services (CMS) proposed updates to Medicare Advantage (MA) and Medicare Part D programs, set to take effect in 2027.
Key proposals include:
Remove 12 measures to reduce administrative burden, sharpen focus on clinical care and outcomes and add a depression screening metric starting in 2029.
Create a new special enrollment period (SEP) for provider terminations and codify existing SEP policies.
End cost-sharing for the Medicare Part D catastrophic coverage phase.
Eliminate the Health Equity Index reward scheduled for 2027.
CMS is also seeking input through three RFIs:
Modernizing MA: Explore ways to boost competition, refine risk adjustment and encourage innovation.
Special needs plans: Address growth in chronic condition special needs plans enrollment and ensure integrated benefits for dually eligible individuals.
Well-being and nutrition: Gather ideas to improve emotional health, social connection, preventive care and incentivize better nutrition in MA.
What’s next: Feedback on the proposed rule should be submitted to Amy Upston, director of financial policy and reimbursement.
CMS finalizes CY 2026 OPPS rule
Last month, the Centers for Medicare and Medicaid Services (CMS) finalized the Medicare Outpatient Prospective Payment System (OPPS) rule for calendar year (CY) 2026.
While the final rule was somewhat disappointing overall, it did include modest improvements compared to the initial proposal — some of which reflect concerns raised in our comment letter.
Key provisions in the final rule include:
Outpatient payments will increase by 2.6%, slightly higher than the 2.4% increase initially proposed.
CMS will hold off on implementing a larger clawback of 340B payments. For now, the reduction will be limited to 0.5%, but CMS signaled that a more significant clawback is anticipated in future years.
Hospitals will be required to post the median allowed amount for services, as well as the 10th and 90th percentiles. While this requirement takes effect Jan. 1, enforcement will be delayed until April 1.
CMS will expand site-neutral payment policies by reimbursing drug administration services furnished in grandfathered off-campus hospital outpatient departments at 40% of the OPPS rate.
Conduct a comprehensive survey of OPPS hospitals to collect acquisition cost data for covered outpatient drugs to be used in CY 2027 and beyond.
Our comment letter, submitted after the proposed rule was released, emphasized concerns about the impact of site-neutral payment expansion and the operational challenges of new transparency requirements.
While CMS did not fully adopt our recommendations, the delayed enforcement of transparency provisions and the smaller-than-expected 340B clawback reflect some responsiveness to stakeholder feedback.
Odds decline of extending ACA subsidies, threatening premium spikes for millions
The odds of Congress extending the Affordable Care Act (ACA) enhanced premium tax credits before they expire are declining fast with only nine to 12 working days left for legislators this year.
Senate Majority Leader John Thune has signaled doubts that bipartisan talks will be far enough along before a vote is expected to be held next week, which Democrats secured as part of the deal to end last month’s government shutdown.
Democrats continue to push for a straight extension, which is unlikely to garner much GOP support.
Some Republicans are open to a temporary continuation with conditions, while others prefer a broader health package with concepts like health savings accounts and new eligibility limits.
The White House indicated on Sunday, Nov. 23, 2025 that it planned to release a framework, but it has apparently been shelved.
Lawmakers in both parties have indicated that resolving the issue is unlikely without clear direction from President Trump.
With bipartisan talks stalled, Democrats are ramping up pressure by spotlighting the real-world cost impact.
On Tuesday, House Education and the Workforce Democrats held a “shadow hearing” featuring health policy experts and patient advocates to highlight that failing to extend the credits would drive unaffordable premium spikes and coverage losses for millions.
Care Improvement is now Workforce and Clinical Excellence
AzHHA’s Care Improvement team has changed its name to Workforce and Clinical Excellence.
Why it matters: This change was made to provide clearer alignment with the scope of the team’s work.
The new name reflects three anchor areas - workforce, patient safety and quality - which together defines AzHHA’s commitment to clinical excellence.
It also acknowledges key initiatives such as the Arizona Transition to Practice Program, maternal health improvement, and statewide patient safety and health equity collaboratives.
Additionally, the Clinical Excellence Committee (formerly the Care Improvement Committee) will continue to drive evidence-based quality and safety initiatives while also guiding workforce and maternal health programs.
RFP deadline for OB emergency simulation training is Friday, Dec. 12
AzHHA announced the release of a Request for Proposals (RFP) for a consultant to conduct obstetric emergency simulation training in emergency departments statewide.
Why it matters: The selected partner will provide comprehensive, on-site simulation sessions, including equipment, curriculum and trained facilitators, with a focus on rural, tribal and critical access hospitals.
These simulations will assess team readiness, protocols and equipment availability while delivering actionable data to enhance patient safety.
What’s next: Proposals are due by Friday, Dec. 12, 2025, with work beginning in January 2026.
Duffy Group named a 2025 Inc. Power Partner for B2B Excellence
Congratulations to AzHHA’s affiliated partner Duffy Group for earning a place on Inc. magazine’s 2025 Power Partners list for the fourth consecutive year.
Why it matters: Recognized in the human resources category, Duffy Group was among a select group to rise to the top out of hundreds of applicants after multiple rounds of evaluation and client feedback.
The recognition underscores Duffy Group’s reputation as a leader in executive recruitment, consistently praised by clients for elevating hiring practices and enabling leaders to focus on scaling their organizations with confidence.
In relationship with DataGen, AzHHA distributes reports to hospitals based on information submitted to the Centers for Medicare and Medicaid Services. DataGen generates hospital-specific reports which are sent to AzHHA hospital members as part of their membership.
Why it matters: This data helps hospitals understand the financial impact of proposed changes and annual updates.
The reports can also assist in preparing budgets or benchmarking results with other similar organizations.
The below reports were recently sent to members:
FFY2026 Readmissions Reduction Program Analysis (sent Wednesday, Nov. 5, 2025)
Post Acute Transfer Policy Analysis (sent Friday, Nov. 14, 2025)
