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On October 31, CMS finalized the CY 2026 Medicare Physician Fee Schedule (PFS) rule (CMS-1832-F), effective January 1, 2026. While primarily directed at Medicare providers, the rule’s changes have clear downstream effects for payors and private insurers that benchmark to Medicare or align commercial policies with federal payment logic. Key themes are higher baseline rates, a stronger push toward value-based care via dual conversion factors, permanent telehealth flexibilities (including virtual supervision), expanded behavioral health integration, and a cost-containment overhaul for skin substitutes.

On October 15, the California Hospital Association (CHA) filed a petition against the California Office of Health Care Affordability (OHCA) and related entities. The petition challenges the imposition of stringent cost targets on hospitals across California, arguing that these targets are arbitrary, capricious, and not based on comprehensive data analysis. CHA contends that the cost targets violate both state and federal laws, including the Takings and Due Process Clauses of the U.S. Constitution, by being confiscatory and lacking a clear methodology for compliance. Furthermore, the petition asserts that OHCA’s actions were prematurely implemented without adequate stakeholder engagement, potentially leading to significant operational disruptions and threatening the quality and accessibility of health care services.

On September 17, California Governor Gavin Newsom signed Assembly Bill 144 (AB 144) into law, a move in response to recent changes in immunization recommendations by the U.S. Food and Drug Administration (FDA). The bill, which took effect immediately, mandates that health plans cover a wide range of preventive care services, including immunizations, without cost-sharing or utilization management. This legislation is particularly noteworthy for its implications on vaccine coverage requirements.

There has been a flurry of recent activity in a case originally filed by six air ambulance companies claiming $20 million in unpaid emergency services invoices. On June 11, Aetna filed a counterclaim against REACH Air Medical Services LLC, CALSTAR Air Medical Services LLC, Guardian Flight LLC, Med-Trans Corporation, Air Evac EMS Inc., and AirMed International LLC based on alleged manipulation of the Independent Dispute Resolution (IDR) process established under the No Surprises Act (NSA). On July 2, the plaintiffs moved to dismiss the counterclaim.

Today, the U.S. Supreme Court, in a 6-3 decision, ruled that the Medicaid Act’s any-qualified-provider provision does not confer individual rights enforceable under 42 U.S.C. §1983. This decision reverses the Fourth Circuit’s judgment, which affirmed the right of Medicaid beneficiaries to sue state officials for excluding Planned Parenthood from South Carolina’s Medicaid program.

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