Consolidated Appropriations Act 2026: Key Health Policy Updates for Hospitals and Providers

Healthcare Policy Update
Article Background

What’s happening

On February 3, 2026, President Trump signed into law a bill funding most government functions through fiscal year (FY) 2026. This bill, the Consolidated Appropriations Act, 2026, also includes a substantial package of health policy changes that restore and extend expiring healthcare policies and make other notable health policy changes of interest to hospitals and other healthcare providers.

Of interest

The package reauthorizes the following programs, among others:

The Medicare-dependent hospital program, low-volume hospital payment adjustments, and community health center funding through calendar year (CY) 2026
Medicaid disproportionate share hospital (DSH) cuts suspended through FY 2027
Medicare telehealth flexibilities and the Medicare add-on payment for rural ambulance services through CY 2027
Teaching health center funding provided for 4 years, through FY 2029
The Acute Hospital Care at Home Waiver through FY 2030

The package also contains other policy priorities, including:

Changes to the Medicaid shortfall definition, which impacts how Medicaid DSH cuts are determined
Updates to Medicare coverage of cardiac and pulmonary rehabilitation in outpatient settings
Requirements regarding Medicare Advantage provider directory accuracy
Provisions affecting Medicare coverage for multi-cancer early detection screening tests
Changes to the Organ Procurement and Transplantation Network Modernization Initiative and living donor reimbursement, as well as funding to implement these changes
Reauthorizations of and funding for state-based maternal mortality review committees, sickle cell disease prevention and treatment programs, the Lifespan Respite Care Program, and all programs under the PREEMIE Reauthorization Act of 2018 and the Dr. Lorna Breen Health Care Provider Protection Act

Notably, the package also includes a new requirement that hospitals report national provider identification (NPI) numbers for services furnished at off-campus hospital outpatient clinics. Hospitals will be required to submit an initial and subsequent attestation to prove compliance, and HHS Office of Inspector General will conduct a compliance review. This policy is effective on January 1, 2026. Our partners at McDermott, Will, & Schulte (MWS), one of healthcare’s most trusted and respected healthcare law firms, wrote an analysis of what this provision will mean for hospitals.

Why you should care

These policies will impact hospital coverage and payment for a variety of services. Leaders of hospitals and health systems should be informed about policy changes and how they could impact your organization.

Looking to learn more?

MWS offers valuable insights into how hospitals and health systems should prepare for the new NPI reporting requirement. Read more to see what they are saying about how your organization could be impacted.

Click here to read the MWS insight.