Healthcare News: April 2026

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Why 131 Hospitals Are Suing HHS Over Alleged Underpayment

The lawsuit
This week, 131 hospitals sued HHS Secretary Robert F. Kennedy Jr., arguing that CMS is wrongfully reducing billions in payments for hospitals serving vulnerable patient populations.

Medicare disproportionate share hospital (DSH) payments are intended to support hospitals that serve a high number of uninsured and low-income patients. These payments are meant to counterbalance safety net hospitals' uncompensated care costs so that they can be more financially stable, as well as protect people's access to care.

The argument
The complaint focuses on a CMS policy finalized in 2024 that treats patients covered by Medicare Advantage differently depending on which part of the DSH formula is being calculated. Under the rule, these patients are counted when calculating the Medicare portion of a hospital's DSH payments but ignored when calculating the Medicaid portion, which makes hospitals look like they serve fewer low-income patients than they actually do.

The plaintiffs argue that CMS' methodology violates federal law and unfairly hurts hospitals that care for large numbers of low-income patients. HHS did not respond to MedCity News' request for comment.

The ongoing saga
This lawsuit is just the latest chapter in a long-running legal conflict over CMS' calculation of DSH payments. For the past decade, hospitals have repeatedly challenged the agency's methodology, typically arguing that changes to how patient days are counted unfairly reduce payments for safety net providers.

For example, in 2024, a smaller group of hospitals sued over retroactive adjustments to DSH payments for prior years, claiming CMS undercounted Medicare Advantage days. And last year, more than 200 hospitals were involved in a case that reached the U.S. Supreme Court, which ultimately sided with HHS on the agency's interpretation of the DSH formula.

— By Katie Adams

The Hidden Administrative Tasks Draining Small Practices

Presented by Greenway Health

Small practices play a critical role in healthcare delivery, but they cannot continue to absorb ever-increasing administrative demands without consequences. Learn more.

Trump's Tariffs Arrive for Certain Drugs

The news
President Trump announced a 100% tariff rate for brand name drugs and their ingredients that are imported from overseas. Generic and biosimilar products are exempt, as are certain other categories, such as rare disease medicines and cell and gene therapies.

Same tariff strategy, new industry
Trump justified the new tariffs with findings from a Department of Commerce investigation that concluded reliance on drugs and pharmaceutical ingredients made overseas threatens national security. Those supplies are at risk if there is a global supply chain disruption, according to a presidential proclamation. Trump used such "Section 232" investigations as the basis for tariffs on aluminum and steel during his first term in office.

Why this matters
Branded and generic medicines are manufactured in what has become a sprawling global supply chain. Trump has been trying to reshore that manufacturing. In addition to an executive order focused on active pharmaceutical ingredients, he has threatened tariffs to get drugmakers to the negotiating table. The resulting deals have companies agreeing to price certain products at the same level as they are priced in other nations. They also require companies to invest in U.S. manufacturing. Tariffs take effect at the end of July for large companies and the end of September for small ones, setting a deadline for those that have yet to reach a deal with the administration.

Soundbite
"The Secretary found that patented pharmaceuticals and associated pharmaceutical ingredients are essential to the United States' military and civilian healthcare," Trump said in a presidential proclamation. "A self-sufficient domestic manufacturing and industrial base for pharmaceutical products is vital for the ability to support national defense requirements and maintain public health security during a national emergency or wartime."

—By Frank Vinluan

4 Notable Health Tech Funding Announcements in March

The skinny
Health tech companies made several major funding announcements in March, including eMed, Nitra, Grow Therapy and Qualified Health.

The details
eMed, which offers GLP-1 programs for employers, secured $200 million in funding led by AON Consulting. It will be used to advance eMed's agentic AI platform.

Nitra, an AI operating platform for healthcare practices, raised $187 million in funding. Its investors include Actions Capital, Comma Capital and Hyphen Capital.

Grow Therapy, a mental health company, snagged $150 million in Series D funding led by TCV and Growth Equity at Goldman Sachs Alternatives. This brings its total funding to $328 million.

Qualified Health, an AI company, raised $125 million in Series B funding led by New Enterprise Associates. It will help deepen existing partnerships and expand its infrastructure.

— By Marissa Plescia

To Bend the Curve on Heart Disease, Prevention Must Move Upstream

The problem
Most cardiovascular screening during routine annuals is limited to basic vitals obtained by a quick pulse check. Advanced imaging tools which can pinpoint several risk factors are typically reserved for specialty settings and are only recommended after abnormal readings or symptoms are flagged. This creates a structural blockage. Patients who may not fit the typical risk profile, or who live in areas with limited specialist access, may never receive deeper cardiac evaluation until disease has progressed.

Detection must become routine
If we are serious about reducing cardiovascular mortality, preventive detection must become as routine as treating symptoms — not a privilege reserved for those who already show signs of disease. That means deploying diagnostic tools that any clinician can use confidently, in the settings patients already frequent: primary care offices, community clinics, even retail health locations. The goal is to remove the barriers of specialist access and episodic care, and make early screening a standard part of how we see patients. We have the technology. We haven't yet built the infrastructure to put it where it matters most.

The tools exist
What's missing is alignment. Preventive cardiac care depends on better collaboration across the continuum - between diagnostics, primary care, and the follow-up pathways that turn early findings into early action. It also requires a fundamental shift in how we think about eligibility: moving from "who already qualifies based on symptoms" to "who could benefit before symptoms appear." Until prevention is operationalized, heart disease will continue to outpace our best intentions.

— By MedCity Influencer Bertrand Moal

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Why 131 hospitals are suing HHS