The pending Consolidated Appropriations Act, 2026 (CAA or “Bill”), which recently passed the Senate with amendments, portends potentially significant policy changes for providers as it relates to increased federal oversight and program‑integrity activity, investments in telehealth programs, and targeted initiatives to increase access to care.
Expanded Telehealth Funding and Access Initiatives
The CAA supports continued extension of key telehealth waivers, such as the DEA and HHS extensions of telemedicine prescribing flexibilities through December 31, 2026, as Frier Levitt recently addressed in this prior update. The Bill directs $45.55 million to the Health Resources and Services Administration’s Office for the Advancement of Telehealth (OAT) to support grants, contracts, and cooperative agreements that facilitate access to care via telehealth programs. OAT offers various grant programs, policy and research regarding telehealth and technical assistance for stakeholders. Telehealth grants are also available via the Rural Health appropriation to support the purchase and implementation of telehealth services and to improve care coordination for rural veterans between rural providers and the Department of Veterans Affairs.
In parallel with these funding opportunities, the CAA funds the Office of the National Coordinator for Health Information Technology, which will facilitate interoperable systems that enable secure telehealth workflows across settings. Taken together, these provisions increase access to telehealth and close gaps in care while providing dedicated resources to strengthen and modernize the infrastructure needed to deliver it at scale.
Targeted Initiatives to Level the Playing Field for Independent Providers
Other appropriations support competition within the healthcare sector, potentially benefiting independent provider groups seeking to recruit and retain physician employees. For example, CAA appropriations for the Centers for Medicare & Medicaid Services (CMS) Program Management and Survey and Certification Program, in amounts up to approximately $455 million and $397 million respectively, support the agency’s capacity for data operations and quality controls in furtherance of site neutral Medicare payment methodologies. As most recently articulated in the CY 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center Final Rule, the Physician Fee Schedule should be applied for certain services to control “unnecessary increases in the volume of the clinic visit service furnished in excepted off-campus provider-based departments (PBDs).” For CY 2026, CMS has expanded this policy to include drug administration services furnished in excepted off-campus PBDs, with an anticipated total savings of $290 million.
In addition, the Bill supports targeted provider programs such as the Pediatric Loan Repayment Program, in which eligible clinicians are eligible for loan repayment awards for working three (3) years in a HRSA Pediatric Specialty LRP-approved facility, including private practices. Similarly, the CAA directs continued funding for the National Health Service Corps (NHSC) Loan Repayment Program for certain health professionals providing primary care, dental care, behavioral health, maternity care, and substance use disorder (SUD) treatment in health professional shortage areas. These programs allow approved private practices and other eligible facilities to offer loan repayment to clinician candidates.
Increased Enforcement, Audits, and Program Integrity Activity
Critically, all providers must be aware of the likelihood of increased audits, investigations and enforcement actions through criminal, civil and administrative proceedings. Under the Bill, the Health Care Fraud and Abuse Control (HCFAC) account will receive $941 million in funding across CMS, the Department of Health and Human Services Office of Inspector General and the Department of Justice. These funds are allocated for program integrity and fraud and abuse activities.
In conjunction with these increased enforcement activities, the funding appropriations for CMS Program Management and the Survey and Certification Program support increased site surveys, certifications and assessment of overpayments for noncompliant providers. Indeed, in the newly enacted Final Rule for provider enrollment, CMS estimated “average annual transfers from providers and suppliers to the Federal Government of approximately $2.2 billion” in connection with collection of overpayment to nonqualified providers under retroactive revocation dates and additional bases for revocation. While funding to the Office of Medicare Hearings and Appeals in the Bill suggests a commitment by CMS to reduce backlogs for appeals and administrative hearings, the detrimental impact of termination to a provider appealing a revocation cannot be overstated.
In sum, the CAA presents several opportunities to create a more equitable environment for rural patient access, independent medical practices, and certain clinicians burdened by medical education debt. It is noteworthy that regardless of whether the CAA is enacted in whole or in part, compliance with Federal Healthcare Program rules and regulations will be a focal point for CMS, HHS and OIG to combat fraud, waste, and abuse. Now, more than ever, it is imperative for providers to review their internal policies and procedures to ensure compliance with the conditions of participation in the Medicare Program.
How Frier Levitt Can Help
Our attorneys regularly counsel healthcare providers on a variety of issues pertaining to telehealth, compliance, payor terminations, and/or audits in connection with state and Federal health care programs. If you have questions about compliance, terminations, or audits, or you have received a Medicare or Medicaid revocation notice, contact Frier Levitt to speak with an attorney.
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