Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program
Highlights
GAO reviewed the Department of Health and Human Services, Centers for Medicare & Medicaid Services' (CMS) new rule entitled "Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program." GAO found that the final rule addresses changes to the physician fee schedule; other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; codification of establishment of new policies for the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act of 2022, Public Law 117-169 (Aug. 16, 2022); the Ambulatory Specialty Model; updates to the Medicare Diabetes Prevention Program expanded model; Page 2 B-337904 updates to drugs and biological products paid under Part B; Medicare Shared Savings Program requirements; updates to the Quality Payment Program; updates to policies for Rural Health Clinics and Federally Qualified Health Centers; update to the Ambulance Fee Schedule regulations; codification of the Inflation Reduction Act and Consolidated Appropriations Act, 2023, Public Law 117-328 (Sept. 29, 2022), provisions; and updates to the Medicare Promoting Interoperability Program.
Enclosed is our assessment of CMS's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the subject matter of the rule, please contact Will Shakely, Acting Assistant General Counsel, at (202) 512-3363.
B-337904
December 4, 2025
The Honorable Mike Crapo
Chairman
The Honorable Ron Wyden
Ranking Member
Committee on Finance
United States Senate
The Honorable Brett Guthrie
Chairman
The Honorable Frank Pallone, Jr.
Ranking Member
Committee on Energy and Commerce
House of Representatives
The Honorable Jason Smith
Chairman
The Honorable Richard Neal
Ranking Member
Committee on Ways and Means
House of Representatives
Subject: Department of Health and Human Services, Centers for Medicare & Medicaid Services: Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program
Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) entitled “Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program” (RIN: 0938-AV50). We received the rule on November 17, 2025. It was published in the Federal Register on November 5, 2025. 90 Fed. Reg. 49266. The stated effective date of the rule is January 1, 2026.
According to CMS, this rule addresses changes to the physician fee schedule; other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; codification of establishment of new policies for the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act of 2022, Public Law 117-169 (Aug. 16, 2022); the Ambulatory Specialty Model; updates to the Medicare Diabetes Prevention Program expanded model; updates to drugs and biological products paid under Part B; Medicare Shared Savings Program requirements; updates to the Quality Payment Program; updates to policies for Rural Health Clinics and Federally Qualified Health Centers; update to the Ambulance Fee Schedule regulations; codification of the Inflation Reduction Act and Consolidated Appropriations Act, 2023, Public Law 117-328 (Sept. 29, 2022), provisions; and updates to the Medicare Promoting Interoperability Program.
The Congressional Review Act (CRA) requires a 60-day delay in the effective date of a major rule from the date of publication in the Federal Register or receipt of the rule by Congress, whichever is later. 5 U.S.C. § 801(a)(3)(A). The rule was published in the Federal Register on November 5, 2025. 90 Fed. Reg. 49266. The House of Representatives received the rule on November 17, 2025. 171 Cong. Rec. H4768 (daily ed. Nov. 18, 2025). The Senate received the rule on November 19, 2025. 171 Cong. Rec. S8270 (daily ed. Nov. 20, 2025). The rule has a stated effective date of January 1, 2026. Therefore, the stated effective date is less than 60 days from the date of receipt by Congress.[1]
Enclosed is our assessment of CMS's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to the subject matter of the rule, please contact Will Shakely, Acting Assistant General Counsel, at (202) 512-3363.
Shirley A. Jones
Managing Associate General Counsel
Enclosure
cc: Calvin E. Dukes II
Regulations Coordinator
Department of Health and Human Services
ENCLOSURE
REPORT UNDER 5 U.S.C. § 801(a)(2)(A) ON A MAJOR RULE
ISSUED BY THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
CENTERS FOR MEDICARE & MEDICAID SERVICES
ENTITLED
“MEDICARE AND MEDICAID PROGRAMS; CY 2026 PAYMENT POLICIES UNDER THE PHYSICIAN FEE SCHEDULE AND OTHER CHANGES TO PART B PAYMENT
AND COVERAGE POLICIES; MEDICARE SHARED SAVINGS PROGRAM REQUIREMENTS; AND MEDICARE PRESCRIPTION DRUG INFLATION REBATE PROGRAM”
(RIN: 0938-AV50)
(i) Cost-benefit analysis
The Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) prepared an analysis of the costs and benefits for this rule. See 90 Fed. Reg. 49266, 49267, 49953–05 (Nov. 5, 2025).
(ii) Agency actions relevant to the Regulatory Flexibility Act (RFA), 5 U.S.C. §§ 603–605, 607, and 609
In its submission to us, CMS indicated that it certified that this rule would not have a significant economic impact on a substantial number of small entities and did not prepare a final regulatory flexibility analysis. However, the rule itself stated that because many of the affected entities are small entities, its analysis and discussion are intended to comply with the Act's requirements regarding significant impact on a substantial number of small entities. 90 Fed. Reg. at 49960, 49971. The rule later stated that its analysis in previous sections, together with the remainder of the rule, provided an initial regulatory flexibility analysis. Id. at 50005.
Additionally, CMS determined that the finalized provisions of the Ambulatory Specialty Model will not have a greater than 5 percent impact on total revenues on a substantial number of small entities. Id. at 49971. CMS further stated that it determined, and the Secretary of HHS certified, that the rule will not have a significant impact on the operations of a substantial number of small rural hospitals. Id. at 49960.
(iii) Agency actions relevant to sections 202–205 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. §§ 1532–1535
CMS stated that this rule will impose no mandates on state, local, or tribal governments or on the private sector. See 90 Fed. Reg. at 49960.
(iv) Other relevant information or requirements under acts and executive orders
Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
On July 16, 2025, CMS published a proposed rule. 90 Fed. Reg. 32352. CMS stated that it received public comments on the proposals. See 90 Fed. Reg. at 49629. CMS responded to comments in the rule. See id. at 49842–43.
Paperwork Reduction Act (PRA), 44 U.S.C. §§ 3501–3520
CMS determined that this rule contains information collection requirements under the Act. See 90 Fed. Reg. at 49930–53.
Statutory authorization for the rule
CMS promulgated this rule pursuant to various sections of title 42 of the United States Code.
Executive Order No. 12866 (Regulatory Planning and Review)
CMS stated that this rule is significant under the Order and the Office of Management and Budget reviewed it. See 90 Fed. Reg. at 49267, 49959–60, 50005.
Executive Order No. 13132 (Federalism)
CMS determined that the Order's requirements are not applicable because this rule does not impose any costs on state or local governments. 90 Fed. Reg. at 49960.
[1] CMS stated in the rule that there was good cause to waive the 60-day delay in the effective date, as it would be contrary to the public interest to delay the effective date of the rule's Medicare Physician Fee Schedule portions beyond January 1, the first day of the calendar year to which the policies are intended to apply. 90 Fed. Reg. 50005–06. CRA includes two exceptions to its 60-day delayed effective date requirement for major rules. 5 U.S.C. § 808. The rule clearly does not meet the first exception, which applies to rules related to “hunting, fishing, or camping.” 5 U.S.C. § 808(1). The second exception only applies when the agency has found good cause to waive notice and public procedure requirements when promulgating the rule and incorporates the finding and a brief statement therefor in the rule. 5 U.S.C. § 808(2). Here, CMS's good cause finding relates to waiving the delay in effective date, not to waiving the notice and public procedure requirements, and CMS published a notice of proposed rulemaking on July 16, 2025, and provided a comment period. 90 Fed. Reg. 32352. Therefore, the second exception also does not apply.