Policy Update August 2026

Key Developments

• CMS finalized FY 2027 Medicare payment and quality-reporting policies for inpatient psychiatric facilities.
• CMS restricted federal Medicaid and CHIP funding for specified gender-affirming interventions for children and youth, effective October 13, 2026.
• APNA endorsed federal legislation that would restrict mandatory nurse overtime at covered Medicare providers, including psychiatric hospitals.
• CMS activated health care and prescription-access flexibilities for the Washington wildfire public health emergency.
• Georgia opened its APRN and nurse faculty loan-repayment cycle.

Federal Policy Update

CMS Finalizes FY 2027 Inpatient Psychiatric Facility Policies

• July 29, CMS finalized a 2.3% Medicare payment-rate increase for inpatient psychiatric facilities, which the agency estimates will increase payments by approximately $60 million in FY 2027. CMS also deferred its facility-level outlier cap, which is additional payments for high-cost cases, until FY 2028 and exempted facilities with fewer than 50 stays annually.

Medicaid community engagement requirements take effect amid mental health access concerns

• August 4, National Alliance on Mental Illness issued a statement that the federal Medicaid community engagement rule that took effect July 31 could cause eligible people with mental illness to lose coverage because of administrative barriers and a narrow interpretation of the medically frail exclusion.

Federal Nurse Overtime Protections Introduced

• August 12, ANA issued a policy statement on the Nurse Overtime and Patient Safety Act, which is also endorsed by APNA, that restricts mandatory overtime at covered Medicare providers, protects nurses from retaliation, requires overtime policies and scheduling disclosures, and retains limited emergency exceptions. ANA also issued the RNAction Alert urging nurses to contact their legislators in support of this bill.

Practice Policy Update

CMS Finalizes Medicaid and CHIP Funding Restriction

• August 11, CMS announced a restriction to prohibit federal Medicaid and CHIP financial participation for specified gender-affirming medical interventions for children and youth. States could use state-only funding, so the rule does not establish a universal prohibition on care. Effective: October 13, 2026.

CMS Releases Medicaid Toolkit for Applied Behavior Analysis Services

• August 4, CMS released a Medicaid toolkit to give states guidance on provider qualifications, service authorization, documentation, billing oversight, program integrity, and quality safeguards for Medicaid- and CHIP-funded applied behavior analysis services for children with autism. Applied behavior analysis is the practice of utilizing the psychological principles of learning theory to enact change on the behaviors seen commonly in individuals diagnosed with Autism Spectrum Disorders.

State Policy Update

Georgia Opens APRN and Nurse Faculty Loan Repayment Cycle

• August 15, Georgia opened a loan repayment cycle. Eligible APRNs may receive funding up to $10,000 annually for as many as four years in exchange for qualifying rural service. The nurse faculty program offers up to $25,000 over two years for eligible faculty.

Ohio updates certification, policy, and telehealth requirements for mental health providers

• August 3, Ohio’s revised Chapter 5122-26 rules define certification obligations for mental health and substance use providers and specify when FQHC services fall within the framework.

CMS Announces Resources, Flexibilities to Assist with Public Health Emergency in the State of Washington

• August 10, CMS announced Medicare provider flexibilities, Medicaid and CHIP continuity measures, and Medicare Part D protections that include access to out-of-network pharmacies and removal of refill-too-soon restrictions in affected areas.

APNA Advocacy

Nurse Overtime and Patient Safety Act

• APNA endorsed the Nurse Overtime and Patient Safety Act, which limits work hours in high-risk occupational settings where long work hours can adversely affect safety, performance, job satisfaction, and quality of life.

Improved Access to Workers’ Compensation for Injured Federal Workers

• APNA signed the Nursing Community Coalition letter that urges the Senate Homeland Security and Government Affairs Committee to advance legislation that improves access to workers’ compensation for injured federal workers

Published August 2026.

This summary was informed by human-guided AI tools. Readers are encouraged to review the supporting links for full information.