CMS finalizes $60M FY2027 psychiatric hospital payment rule with new outlier cap

Plus: Houston lab pays $36.4M kickback settlement exposed by whistleblower. The day's rules, money, and enforcement, sourced and tiered below.

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Plus: Houston lab pays $36.4M kickback settlement exposed by whistleblower. The day's rules, money, and enforcement, sourced and tiered below.

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The Regulator Friday, July 31, 2026
CMS finalizes $60M FY2027 psychiatric hospital payment rule with new outlier cap
Plus: Houston lab pays $36.4M kickback settlement exposed by whistleblower. The day's rules, money, and enforcement, sourced and tiered below.
Rule  Confidence: High
CMS just finalized $60 million more in Medicare payments to psychiatric hospitals for 2027, the facilities that treat patients in mental health crisis, plus a new cap on their priciest cases.
The 2.3% rate hike, published today, comes with a catch: starting in 2028, no psychiatric hospital can collect outlier payments above 20% of its total Medicare revenue in a year.
Why it matters
This raises what Medicare pays psychiatric hospitals for patient care next year and adds a new limit on how much a hospital can collect for its most expensive psychiatric admissions starting in 2028. Watch whether the outlier cap changes how hospitals handle high-cost patients.
Sources: Federal Register · Aha
Enforcement  Confidence: Low
A Houston genetic-testing lab, its former CEO and a Florida businessman are paying 36.4 million dollars after a whistleblower exposed a scheme to fake doctors' orders for unneeded tests.
From 2018 to 2020 they paid kickbacks for referrals and unbundled billing codes. The whistleblower who exposed it, a Massachusetts marketing exec, collects 7.2 million dollars of the settlement.
Why it matters
A genetic-testing lab and two executives are paying $36.4 million after a whistleblower exposed a scheme that paid for referrals and unbundled billing codes for tests patients didn't need. It shows how one tipster can unwind a multi-year fraud scheme and trigger criminal pleas.
Also today
Orlando VA employee and clinic CEO plead guilty in $14M kickback scheme Read
Elevance exits DC Medicaid, 250K enrollees auto-switched starting tomorrow Read
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