RISE summarizes recent regulatory-related headlines and reports.
Trump administration to appeal court decision that vacated MA RADV rule
The federal government will appeal a September court decision that vacated the 2023 RADV rule. The controversial rule eliminated the fee-for-service adjuster and added extrapolation processes beginning with payment year 2018 RADV audits.
The court sided with Humana, which claimed the final rule’s new policy for calculating payment recoveries in Medicare Advantage audits was “arbitrary and capricious” because it reversed the agency’s prior policy on the FFS Adjuster without an adequate explanation. The agency had used the FFS adjuster to compare error rates in original Medicare and Medicare Advantage.
In the November 21 filing, the administration said it will appeal the case to the U.S. Court of Appeals for the Fifth Circuit but did not state the grounds for the appeal.
CMS to end ESRD treatment choices model by year’s end
The Centers for Medicare & Medicaid Services (CMS) announced in the 2026 End-Stage Renal Disease (ESRD) Prospective Payment System Final Rule that it will terminate the ESRD Treatment Choices Model as of December 31.
The mandatory model, which began on January 1, 2021, aimed to encourage greater use of home dialysis and kidney transplants for Medicare beneficiaries with ESRD. But CMS said in the final rule that the model didn’t show the quality results for home dialysis and transplant waitlist or the savings that the agency initially projected. The early termination of the model, CMS said, aligns with the CMS Innovation Center’s statutory mandate and to protect taxpayer’s money.
HHS repeals provisions of LTC minimum staffing standards
The Department of Health and Human Services (HHS) this week repealed provisions of the minimum staffing standards for long-term care facilities and Medicaid Institutional Payment Transparency Reporting Final Rule, which was originally finalized by CMS in 2024 under the Biden administration.
The rule required nursing homes that participate in Medicare and Medicaid to provide residents with a minimum total of 3.48 hours of nursing care per day, including at least 0.55 hours from a registered nurse per resident per day, and 2.45 hours from a nurse aide per resident per day, along with requirements that each facility have a registered nurse onsite 24/7.
HHS said that the requirements disproportionately burdened rural and underserved communities already grappling with critical health care workforce shortages.
AHA files suit to block 340B changes
The American Hospital Association (AHA) and four safety-net health systems from across the country filed a lawsuit this week in the U.S. District Court for the District of Maine to block the340B Rebate Model Pilot Program from taking effect on January 1, 2026.
The AHA claims that if implemented, the program would impose financial and administrative burdens on 340B hospitals, many of which already operate on thin margins while playing a vital role in their communities, often serving as the only source of care. In addition, the trade group said that HHS’ decision was a rushed process that violated the principles of administrative law, including ignoring the convers of 1,000 340B hospitals, many of which highlighted the costs and community impact of administering the rebate model.
“When the government announced its new rebate program just a few months ago, it recognized that it would fundamentally shift how the 340B program has operated for more than three decades,” Rick Pollack, president and CEO of the AHA said in an announcement. “When making such a major change, with such far reaching consequences for patients and hospitals, it is important that the government follow the basic administrative rules of the road. Unfortunately, it did not do so here. And giving hospitals only a few months to comply with these burdensome new requirements or risk losing millions of dollars in discounts they are entitled to under the law will harm patients and communities across the country. We are asking the court to act quickly to protect access to vital care services.”
CMS OPPS final rule to phase out Medicare inpatient-only list
CMS published the Hospital Outpatient Prospective Payment System (OPPS) and ASC Payment System Final Rule for 2026 on November 21. Among the major provisions in the final rule: the phase out of the inpatient-only list over a three-year period, beginning with the removal of 285 mostly musculoskeletal procedures for 2026. CMS said in a fact sheet that the phase out allows more procedures to be performed on an outpatient basis with a shorter recovery time. Medicare will pay for these services in the hospital outpatient setting when they are determined to be clinically appropriate.
Humana once again appeals 2025 MA Star ratings decision
Humana is appealing a federal court judge’s decision to uphold its 2025 Medicare Advantage Star rating. In October, Judge Reed O’Connor of the Texas Northern District Court ruled in favor of CMS and dismissed Humana’s case that the agency acted illegally when it downgraded its Star ratings based on customer service calls. It was the second time that Humana failed in its pursuit to recalculate its 2025 Star ratings. The latest filing indicates that Humana will appeal the case to the United States Court of Appeals for the Fifth Circuit but does not state the grounds for the appeal.