This final rule requires that a State Medicaid plan must provide that the Medicaid agency will not make payment under the plan for sex-rejecting procedures for children under 18, and prohibits the use of Federal Medicaid dollars to fund sex-rejecting procedures for individuals under the age of 18. In addition, this final rule requires that a separate State Children's Health Insurance Program (CHIP) plan must provide that the CHIP agency will not make payment under the plan for sex-rejecting procedures for children under 19, and prohibits the use of Federal CHIP dollars to fund sex-rejecting procedures for individuals under the age of 19. For Medicaid and CHIP beneficiaries who are actively receiving cross-sex hormone therapy, State Medicaid and CHIP agencies may continue to claim Federal Financial Participation for those hormone therapy medications for a period of up to 6 months from the effective date of this final rule.

This final rule will revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals; make changes relating to Medicare graduate medical education (GME) for teaching hospitals; update the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs); update and make changes to requirements for certain quality programs; and make other policy- related changes. ONC also adopts certain health information technology (health IT) standards and specifications on behalf of HHS.

This proposed rule addresses: changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; codification of establishment of new policies for: the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act of 2022; the Ambulatory Specialty Model; updates to drugs and biological products paid under Part B; Medicare Shared Savings Program requirements; updates to the Quality Payment Program; updates to policies for Rural Health Clinics and Federally Qualified Health Centers; update to the Ambulance Fee Schedule regulations; codification of the Inflation Reduction Act and Consolidated Appropriations Act, 2026 provisions; updates to Clinical Laboratory Fee Schedule regulations; updates to the Medicare Promoting Interoperability Program.

This interim final rule with comment period (IFC) interprets and implements the community engagement requirement in Medicaid under section 1902(xx) of the Social Security Act. States are required to implement the new requirement no later than January 1, 2027. This IFC specifies the requirements and expectations for States, including the Medicaid applicants and beneficiaries who must demonstrate community engagement as a condition of their eligibility, the types of qualifying activities that satisfy the community engagement requirement, the criteria to meet an exception from the requirement (that is, be deemed compliant), and the criteria to meet a specified exclusion from the requirement. It also specifies requirements for verification of qualifying activities, outreach to affected populations, steps States must take if they determine individuals are noncompliant, and additional operational considerations for States. Finally, this IFC specifies implementation timing and establishes new State reporting requirements.