- AMA expresses strong concern over proposed rulemaking on Medicaid provider tax reforms
- DoD to review credentialing policies to eliminate stigmatizing mental health language
- NIH funding cuts would have serious negative consequences
- Wasteful and Inappropriate Service Reduction (WISeR) Model raises potential issues
- Proposed 2026 hospital outpatient and ASC payment rule expands site neutrality
- AMA provides feedback on draft burnout report
- ASTP/ONC reaffirms TEFCA’s role as a conduit for nationwide connectivity
- More articles in this issue
AMA expresses strong concern over proposed rulemaking on Medicaid provider tax reforms
On July 11, the AMA submitted comments (PDF) to the Centers for Medicare & Medicaid Services (CMS) expressing strong concerns with a proposed rule that would establish new criteria to limit certain forms of Medicaid provider taxes impacting seven states, as well as preventing future states from adopting similar taxes. According to the agency’s estimates, the changes proposed in this rule would amount to an estimated $33.2 billion reduction in federal Medicaid spending from 2026 through 2030.
The AMA reiterated its support of provider taxes and pointed out that allowing such reforms to be enacted will create significant gaps in state budgets, forcing states to raise taxes or reduce benefits, coverage, or provider payments, or a combination thereof, which will likely lead to practice and hospital closures and jeopardize access in vulnerable communities.
In the letter, the AMA pointed out the rule’s overlap with several provisions in the One Big Beautiful Act (OBBA), which was signed into law on July 4, and called on the administration to reconsider the rule altogether on these grounds. Should the rule be finalized, the AMA pushed for more clarity over key definitional components, asked the agency to consider guardrails rather than restricting provider taxes outright, and called for a more generous transition period of three years to align with the OBBA and allow states and impacted practices adequate time to prepare.
DoD to review credentialing policies to eliminate stigmatizing mental health language
After more than a year working with Senator Tim Kaine's (D-VA) office, recently released language in the annual National Defense Authorization Act (NDAA) legislation will require the Department of Defense (DoD) to review its policies for credentialing health care workers to remove barriers to accessing mental health care. The combined efforts of the AMA and the Dr. Lorna Breen Heroes' Foundation identified areas where the DoD can take action to align with national best practices supporting physicians’ and other health care professionals’ ability to seek care for a mental or behavioral health concern. The specific language is contained in Section 717 of S. 2296. Working together, the AMA provided technical analysis, language for the NDAA, and will continue to work with Sen. Kaine and the U.S. Senate to ensure that the language will stay in the final must-pass bill. AMA will also continue to work with Sen. Kaine and DoD to provide ongoing technical support.
The Senate intends to vote on and pass the NDAA before the upcoming August recess. Following Senate passage, the two chambers will then work to pass a final must-pass bill to be signed into law.
NIH funding cuts would have serious negative consequences
On July 16, the AMA sent a letter (PDF) to the House and Senate Appropriations Committees advocating against proposed cuts to the National Institutes of Health (NIH). In the letter, the AMA stressed the concern surrounding the proposed cuts to the NIH. While the AMA shares the administration’s goals of reducing chronic disease and is strongly committed to prioritizing actions to ensure a healthier America, these proposed cuts would have serious negative consequences for the development of new treatments and cures, and the overall health of the American people. The AMA will continue to work with the chair and ranking members of both the House and Senate Appropriation Committees to ensure that the NIH does not see a 40% reduction in funding.
Wasteful and Inappropriate Service Reduction (WISeR) Model raises potential issues
As referenced in a previous Advocacy Update, CMS recently announced the Wasteful and Inappropriate Service Reduction (WISeR) Model, a new Innovation Center demonstration aimed at reducing Medicare spending on services deemed “low-value” or unnecessary. Beginning in 2026, in selected regions, CMS will use artificial intelligence and machine learning, as well as clinical reviewers to perform pre-payment prior authorization reviews for targeted services, such as electrical nerve stimulator implants, skin and tissue substitutes, and knee arthroscopy procedures. Providers in the selected regions will have the choice to either submit a prior authorization request for these services or instead have claims undergo a pre-payment review. The demonstration will run for six performance years, with participating technology vendors being incentivized to help identify and deny wasteful claims before payment is made. While CMS anticipates savings and more efficient uses of Medicare dollars, the model represents a significant shift in how care is reviewed in traditional Medicare.
In response to the model’s announcement, the AMA submitted a formal letter (PDF) to the Center for Medicare & Medicaid Innovation (CMMI) on July 16, expressing deep concern about the model's design, timeline and operational implications. The AMA's letter emphasizes that WISeR introduces significant burdens, risks care delays and patient harm, lacks transparency around AI and vendor practices, and fails to comply with statutory notice and comment requirements. Amongst our recommendations, the AMA urged CMS to pause the model's planned Jan. 1, 2026, implementation, ensure voluntary participation, reform vendor incentives, enforce strong data protections and publish clear operational guidance. The AMA is scheduled to meet directly with CMMI leadership in the coming weeks to discuss these concerns and advocate for meaningful revisions to the model. The AMA encourages you to submit any pertinent feedback that may aid its advocacy efforts to Jamal Bowleg ([email protected]).
Proposed 2026 hospital outpatient and ASC payment rule expands site neutrality
CMS proposes updating hospital outpatient department (HOPD) and ambulatory surgery center (ASC) payment rates by 2.4% in 2026. The agency would also expand its site neutrality payment reduction to include drug administration services furnished in “grandfathered” off-campus HOPDs and seeks comment on expanding the site neutrality payment reduction to clinic visits provided in on-campus HOPDs. CMS would phase out the Inpatient Only (IPO) List over three years, which would allow for these services to be paid by Medicare in the HOPD setting when physicians determine it is appropriate. CMS would also expand the ASC Covered Procedure List, allowing many more services to be paid by Medicare when performed in the ASC setting. Notably, CMS is proposing to collect from hospitals their median Medicare Advantage charges and use that information to determine Medicare payment rates for inpatient hospital services. The agency also seeks comment about how similar approaches could be utilized in other Medicare payment systems.
AMA provides feedback on draft burnout report
After being invited to review and provide feedback on a draft report from the Agency for Healthcare Research and Quality (AHRQ) on health care worker burnout, part of AHRQ’s Evidence-Based Practice Center Program, the AMA sent a letter (PDF) noting that the draft report provides a comprehensive summary of the burnout research. The letter noted that the AMA appreciates that the focus of the draft report is on identifying the organizational factors and structural determinants of burnout, which is also the focus of the AMA’s work in this area. The latest research supported by the AMA, published in Mayo Clinic Proceedings, highlights that 45.2% of physicians reported burnout in 2023 compared with 62.8% in 2021. The letter recommends that the AHRQ continue its work on burnout and support further research because the draft report highlights numerous gaps, particularly in the lack of rigorous evidence-based solutions to health care worker burnout.
ASTP/ONC reaffirms TEFCA’s role as a conduit for nationwide connectivity
In a recent blog post, the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT (ASTP/ONC) announced the plans and priorities for the remainder of 2025 for the Trusted Exchange Framework and Common Agreement (TEFCA). Created by ASTP/ONC, TEFCA offers a nationwide framework for health information sharing that provides an additional means of exchange to complement the work of state and regional health information exchanges as well as vendor networks. Nearly 15 million documents have been shared via the TEFCA Framework since its go-live date in December 2023.
ASTP/ONC’s emphasis on TEFCA will hopefully bolster for physicians data exchange for treatment-related purposes and help patients access, inspect, obtain, or transmit their health information. ASTP/ONC also expressed support for expanding its work to facilitate: payment, health care operations, government benefits determination and public health. Both document-based queries as well as Fast Healthcare Interoperability Resources (FHIR®)-based queries via TEFCA-trusted FHIR application programming interfaces (APIs) will be featured moving forward.
In addition, ASTP/ONC wants to provide support for federal agencies to participate in the exchange offered through the TEFCA Network. The Social Security Administration, Department of Veterans Affairs, Department of Defense, Centers for Disease Control and Prevention, Centers for Medicare & Medicaid Services, National Institutes of Health and Indian Health Service are each exploring how they can utilize TEFCA to meet their missions.
Moreover, ASTP/ONC is also looking to increase TEFCA’s transparency and will look for more opportunities for non-TEFCA participants to engage and is seeking to provide more visibility into TEFCA participation and governance.
