CMS’ June 25, 2026 MLN Connects update is packed with billing, coding, compliance, and reimbursement changes that healthcare providers should not ignore. The update touches multiple provider types, including ESRD facilities, hospitals, skilled nursing facilities, clinical laboratories, DME suppliers, telehealth providers, and Medicare Part B drug billers. CMS highlighted the CY 2027 ESRD proposed payment rule, the upcoming PEPPER relaunch, CLFS data reporting deadlines, telehealth enrollment guidance, DME compliance risks, July Part B drug pricing revisions, OPPS updates, and a revised Skilled Nursing Facility 3-Day Rule billing fact sheet.
For billing teams, this update is more than regulatory news. It is a reminder to review claims workflows, update coding systems, validate documentation, and prepare for audit visibility before denials or recoupments occur.
1. ESRD Proposed Payment Rule: CY 2027 Rate and Policy Changes
CMS issued the CY 2027 End-Stage Renal Disease Prospective Payment System proposed rule for renal dialysis services furnished on or after January 1, 2027. CMS is proposing to increase the ESRD PPS base rate to $299.55, with an estimated 1.1% increase in total payments to all ESRD facilities. The proposed base rate includes a $15.96 increase to account for phosphate binders being incorporated into the ESRD PPS base rate.
The proposed rule also includes changes to the low-volume payment adjustment, pediatric patient payment adjustments, the home and self-dialysis training add-on amount, technical modifications to TDAPA, and a proposed post-TDAPA add-on payment adjustment. CMS is also proposing ESRD Quality Incentive Program changes beginning in CY 2029, including replacement of the Hypercalcemia reporting measure with a chronic hyperphosphatemia clinical measure.
Billing action step: ESRD facilities should start modeling the proposed 2027 payment impact now, especially around phosphate binders, home dialysis training, pediatric patient adjustments, and drugs or products affected by TDAPA or post-TDAPA treatment. Comments on the ESRD proposed rule are due by August 24, 2026.
2. PEPPER Is Relaunching for Medicare Facility Types
CMS announced that the Program for Evaluating Payment Patterns Electronic Report, known as PEPPER, is relaunching in the coming months for Medicare facility types, including hospitals, post-acute care providers, and specialty facilities. PEPPER helps facilities review Medicare billing data, identify billing patterns that may need improvement, monitor under-coding or over-coding, and track trends such as longer patient stays.
The PEPPER resource page describes PEPPER as a Microsoft Excel report that summarizes provider-specific Medicare data statistics for target areas associated with improper payments due to billing, DRG coding, and admission necessity issues. It also compares provider performance with national, state, and Medicare Administrative Contractor jurisdiction data.
Billing action step: Authorized officials, access managers, and staff end users should verify access through the PEPPER Portal. Staff end users need to sign in through the CMS Identity & Access system, request the PEPPER business function, and receive approval from their organization’s authorized official or access manager.
3. Clinical Diagnostic Laboratories: CLFS Reporting Deadline Is July 31, 2026
Applicable independent laboratories, physician office laboratories, and hospital outreach laboratories must report Clinical Laboratory Fee Schedule data by July 31, 2026. CMS states that the reporting period runs from May 1 through July 31, 2026, and is based on the updated data collection period of January 1 through June 30, 2025. Required reporting includes applicable HCPCS codes, private payor rates, and test volume data.
CMS also notes that there is no CLFS phase-in reduction in 2026, while beginning January 1, 2027 through 2029, payment may not be reduced by more than 15% per year compared with the payment amount established for the test in the preceding year.
Billing action step: Labs should confirm whether they meet the definition of an applicable laboratory, validate TIN/NPI relationships, reconcile final paid private payor claims, and ensure submitter and certifier roles are ready before the deadline.
4. Telehealth Enrollment: CMS Clarifies Home Address and Reassignment Rules
CMS’ telehealth enrollment guide clarifies that providers who furnish telehealth services from home but also have a physical practice location do not need to report their home address on the Medicare enrollment application. Providers who operate virtual-only telehealth services and have no other physical practice location must report the home address as the practice location. CMS also states that providers are not required to enroll in the state where the beneficiary resides, but CMS defers to state law for telehealth licensure requirements.
Billing action step: Telehealth providers should audit PECOS enrollment records, reassignment arrangements, practice location settings, and state licensure rules. A clean enrollment record reduces avoidable claim delays and supports accurate MAC jurisdiction handling.
5. DME Compliance: Catheter and Tracheostomy Supplies Remain High-Risk
CMS highlighted an OIG report finding improper Medicare payments for intermittent urinary catheters and kits. OIG reviewed catheter claims from July 2021 through June 2022 and found that 15 of 105 sampled items did not meet Medicare requirements. OIG estimated that approximately $35.1 million of the $303.3 million Medicare paid for catheters and kits during the audit period was improperly paid, with an estimated $8.8 million in related beneficiary coinsurance. Common issues included unsupported eligibility for curved-tip catheters or sterile catheter kits, refill problems, proof of delivery issues, and standard written order deficiencies.
CMS’ urological supplies compliance tip reports a 45.2% improper payment rate for urological supplies in the 2024 reporting period, with a projected improper payment amount of $257.8 million. CMS states that no documentation accounted for 80.2% of improper payments, while insufficient documentation accounted for another 16%.
CMS also flagged tracheostomy supplies. For 2024, CMS reports a 25.6% improper payment rate and a projected improper payment amount of $6.5 million. Insufficient documentation accounted for 55.9% of improper payments for tracheostomy supplies. CMS also notes that tracheostomy care or cleaning starter kit code A4625 is no longer considered medically necessary starting two weeks after the operation.
Billing action step: DME suppliers should tighten documentation workflows for medical necessity, refill requests, proof of delivery, standard written orders, quantity limits, and patient-specific justification for supplies beyond usual maximums.
6. July 2026 Medicare Part B Drug Pricing and OPPS Updates
CMS issued July 2026 quarterly Average Sales Price and Not Otherwise Classified pricing updates, including revisions to July 2026, April 2026, January 2026, October 2025, and July 2025 pricing files. CMS Transmittal R13670CP lists an implementation date of July 6, 2026 for the July 2026 quarterly ASP Medicare Part B drug pricing files and prior-quarter revisions.
CMS’ ASP Pricing Files page shows the July 2026 Medicare Part B Payment Limit Files and July 2026 NDC-HCPCS Crosswalk as final files dated June 17, 2026, and also lists revised prior-quarter files. CMS cautions that the absence or presence of a HCPCS code, NDC code, or payment limit in ASP pricing files does not determine Medicare coverage for a product.
The July 2026 Hospital Outpatient Prospective Payment System update is effective July 1, 2026 and includes new COVID-19 monoclonal antibody products and administration codes, proprietary laboratory analyses coding changes, new and reassigned Category III CPT codes, device pass-through information, APC assignment and status indicator changes, drug and biological updates, non-opioid treatments for pain relief, and skin substitute product changes.
CMS also states that, starting July 1, 2026, payment rates for many drugs and biologicals are changing from the rates published in the CY 2026 OPPS and ASC final rule because of new ASP calculations. CMS notes that providers may resubmit claims affected by adjustments to previous quarter payment files.
Billing action step: Hospitals and Part B drug billers should update chargemasters, claim scrubbers, HCPCS files, drug crosswalks, and payment validation tools. Claims affected by prior-quarter corrections should be reviewed for potential resubmission where appropriate.
7. Skilled Nursing Facility 3-Day Rule Billing: Revised Guidance
CMS revised its Skilled Nursing Facility 3-Day Rule Billing fact sheet to include information on the Transforming Episode Accountability Model SNF 3-Day Rule Waiver. CMS explains that Medicare SNF coverage generally requires a medically necessary inpatient hospital stay of three consecutive calendar days before SNF admission, excluding the discharge day and excluding time spent in the emergency department or outpatient observation before admission.
CMS also clarifies that certain Medicare Shared Savings Program ACO participation options and CMS Innovation Center models, including ACO REACH and TEAM, may allow SNF services without a prior three-day inpatient hospitalization when waiver requirements are met.
Billing action step: Hospitals and SNFs should confirm inpatient status dates before discharge, communicate qualifying stay information clearly, verify waiver eligibility when applicable, and make sure claim coding aligns with Medicare processing rules.
What Providers Should Do Next
CMS’ June 25 update points to one clear message: billing accuracy, documentation readiness, and system updates must happen before claims are submitted. Providers should prioritize:
- ESRD payment impact modeling for CY 2027
- PEPPER portal access and audit planning
- CLFS reporting completion before July 31, 2026
- Telehealth enrollment record review
- DME documentation audits for urological and tracheostomy supplies
- Part B drug pricing and OPPS system updates
- SNF 3-Day Rule verification and waiver workflow review
How Greenhive Billing Solutions Can Help
Greenhive Billing Solutions helps healthcare organizations translate CMS updates into clean claims, stronger documentation, and fewer avoidable denials. Whether your organization needs Medicare billing support, coding updates, DME documentation review, laboratory reporting preparation, PEPPER analysis, provider enrollment support, or denial prevention, our team can help you stay ahead of regulatory changes and protect revenue.
Need help preparing for these CMS updates? Contact Greenhive Billing Solutions for a Medicare billing and compliance readiness review.
Disclaimer: This article is for informational purposes only and should not be treated as legal, clinical, or regulatory advice. Providers should review CMS guidance, payer instructions, and applicable MAC rules for their specific circumstances.
References
- Centers for Medicare & Medicaid Services. MLN Connects Newsletter for June 25, 2026. This is the main CMS update covering ESRD, PEPPER, CLFS reporting, telehealth enrollment, compliance tips, Part B drug pricing, OPPS updates, and SNF billing guidance.
- Centers for Medicare & Medicaid Services. Calendar Year 2027 End-Stage Renal Disease Prospective Payment System Proposed Rule Fact Sheet. Use this source for the ESRD PPS base rate, payment increase, phosphate binder update, TDAPA changes, and ESRD Quality Incentive Program updates.
- Centers for Medicare & Medicaid Services. End-Stage Renal Disease Prospective Payment System page. Use this for the CY 2027 ESRD proposed rule comment deadline and related ESRD payment rule materials.
