CMS requests public comments on strengthening medical supply chains
The Centers for Medicare & Medicaid Services (CMS) issued an Advance Notice of Proposed Rulemaking (ANPRM) titled Medicare Program; Ensuring Safety Through Domestic Security With Made in America Personal Protective Equipment (PPE) and Essential Medicine Procurement by Medicare Participating Hospitals to solicit public comments on possible policy options aimed at strengthening domestic supply chains for personal protective equipment (PPE) and essential medicines purchased by Medicare-participating hospitals. This initiative is part of broader efforts to enhance health care safety and national security by ensuring reliable access to critical medical supplies that are manufactured in the United States.
CMS recognizes that reliance on global supply chains — especially “just-in-time” procurement from overseas manufacturers — has contributed to shortages and vulnerabilities, particularly during public health emergencies. Shortages of items such as surgical N95 respirators and critical drugs have, at times, jeopardized patient care and hospital preparedness. CMS seeks input on ways to bolster domestic production and incentivize hospitals to procure American-made products, including potential changes to payment policies that reflect the additional costs of domestic sourcing.
CMS is considering the creation of a “Secure American Medical Supplies” friendly hospital designation. Hospitals could earn this designation by demonstrating a commitment to purchasing PPE and essential medicines that meet defined domestic content standards. The designation could be based on minimum percentages of American-made products purchased overall or within specific categories of PPE and medicines. CMS is seeking feedback on how these standards should be defined, including definitions of “made in America” for PPE and essential medicines, and how hospitals would report and verify compliance.
CMS also proposes to explore streamlined Medicare payment policies for hospitals that earn this designation. Because domestically manufactured PPE and medicines often cost more than their foreign-sourced equivalents, CMS is considering payment adjustments to help hospitals cover the additional resource costs associated with domestic procurement. One example discussed in the ANPRM illustrates how Medicare payments could be adjusted based on differences in unit costs between domestic and non-domestic products, using metrics such as patient days and typical use rates for specific PPE items.
In addition to payment adjustments, CMS is considering whether to incorporate a structural quality measure into the Hospital Inpatient Quality Reporting (IQR) Program that would require hospitals to attest that they meet domestic procurement thresholds for PPE and essential medicines. CMS seeks input on the practicality and design of such a measure, and whether it could effectively encourage hospitals to increase domestic sourcing.
A series of questions are asked in the ANPRM, and CMS also requests public input on economic impacts, implementation challenges, potential statutory authorities, and the trade-offs of various approaches. The comment period is open through March 30, 2026 at Regulations.gov.
