Health Care Watch: January 2, 2026
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from January 2 – January 11 Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
Enhanced ACA Subsidies
On January 6, a bipartisan group of bipartisan senators discussed a potential compromise to extend the expired subsidies and extend the Affordable Care Act (ACA) open enrollment deadline from January 15 to March 1. While legislative text is not expected until next week, the bill is expected to contain a two-year extension of the subsidies with an income cap, require a minimum monthly premium, and some inclusion of health savings accounts (HSAs). Senate Majority Leader John Thune (R-SD) has also indicted that any path forward must include provisions to ensure federal funds are not used for abortion procedures. It is unclear if this compromise policy will be considered in either chamber.
On January 8, the House voted on legislation to extend the enhanced ACA premium tax credits for three years passed by a vote of 230-196, with 17 Republicans joining Democrats in voting for passage. However, this policy has already been rejected in the Senate.
On January 8, Sens. Bernie Moreno (R-OH) and Susan Collins (R-ME) introduced the Consumer Affordability and Responsibility Enhancement (CARE) Act to extend the expired enhanced ACA premium tax credits. The bill includes a two-year extension of the tax credits, an $200,000 household income eligibility limit, and a $25 minimum monthly premium.
House
On January 8, the Energy & Commerce Health Subcommittee held a hearing titled “Legislative Proposals to Support Patient Access to Medicare Services,” which examined ten bipartisan Medicare bills focused on Medicare payment policies and access to care.
On January 8, leaders of the Energy & Commerce and Ways & Means Committees released details for back-to-back hearings on January 22, inviting chief executive officers (CEOs) from five major commercial insurers to discuss affordability in the commercial health insurance market. These hearings will be the first in what is expected to be a series of hearings on insurance affordability and it anticipated that the role of providers, suppliers, and manufacturers will explored.
Senate
On January 8, Finance Committee Ranking Member Ron Wyden (D-OR) and Sen. Elizabeth Warren (D-MA) sent a letter to UnitedHealth Group (UHG) CEO Stephen Hemsley requesting additional information about reported practices of company incentive programs with nursing homes contracted to its Optum service group to limit hospitalizations of nursing home residents enrolled in UHG Institutional Special Needs Plans (I-SNPs). The letter sought information regarding hospitalization policies, advance directives, marketing practices, and federal oversight.
REGULATORY UPDATE
On January 2, HHS, in coordination with the Drug Enforcement Administration (DEA), announced an extension of temporary telemedicine flexibilities that allow certain controlled substances to be prescribed without an initial in-person visit through December 31, 2026.
On January 5, the Centers for Disease Control and Prevention (CDC) announced revisions to the U.S. childhood immunization schedule. The overhaul, which bypasses the Advisory Committee on Immunization Practices (ACIP) in favor of a “scientific assessment” by HHS appointees, reduces the number of universally recommended vaccines from 18 to 11 to align with “international consensus.” Under the new guidelines, vaccines for hepatitis A, hepatitis B, dengue, respiratory syncytial virus (RSV), and two types of bacterial meningitis are now recommended only for high-risk patients or through individual-based decision-making. Additionally, the agency shifted to a single-dose recommendation for HPV and removed the universal recommendation for seasonal influenza, though CMS confirmed that all vaccines recommended prior to the change will remain covered by insurance without cost-sharing.
On January 5, the Food & Drug Administration’s (FDA’s) Center for Drug Evaluation and Research (CDER) announced several “notable” drug approvals, including:
Cablivi (caplacizumab-yhdp), manufactured by Sanofi, and indicated to treat pediatric patients aged 12 years and older with acquired thrombotic thrombocytopenic purpura (aTTP), in combination with plasma exchange and immunosuppressive therapy;
Aqvesme (mitapivat), manufactured by Agios Pharmaceuticals, and indicated to treat anemia in adults with alpha- or beta-thalassemia; and
Yartemlea (narsoplimab-wuug), manufactured by Omeros Corporation, indicated to treat adults and children aged 2 years and older with hematopoietic stem cell transplant-associated thrombotic microangiopathy (TA-TMA).
On January 6, a federal appeals court blocked the National Institutes of Health (NIH) from implementing reductions to indirect cost reimbursement rates for research institutions. The appeals court affirmed a district court’s preliminary injunction that prevented the NIH from enforcing a proposed policy to cap indirect cost payments at 15 percent while litigation continues.
On January 6, Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz announced a pause on Minnesota’s Medicaid payments and a withholding of quarterly funding, citing alleged "widespread fraud, waste, and abuse" and a "deeply insufficient" corrective action plan submitted by the state. While Dr. Oz suggested the State use rainy-day funds to cover any shortfalls, Minnesota officials separately announced a deferral on new licensing for home and community-based service providers.
On January 6, FDA Commissioner Dr. Marty Makary announced at the Consumer Electronics Show that the agency is relaxing regulations for digital health products to promote “Silicon Valley speed” innovation. Specifically, Makary indicated that the agency will soften its regulation of clinical decision support software, allowing AI-enabled products that deliver a single recommendation to enter the market without FDA review provided they meet other criteria. FDA will also relax its stance on consumer devices to exempt those measuring blood pressure, oxygen saturation, and blood glucose from regulation when intended solely for wellness uses.
On January 7, the 1st U.S. Circuit Court of Appeals upheld a preliminary injunction blocking the Health Resources and Services Administration (HRSA) from implementing its 340B Rebate Model Pilot Program. The appellate panel affirmed the lower court’s December 29 decision, agreeing that the government failed to adequately consider the financial burden the rebate model would impose on safety-net hospitals.
On January 9, CMS sent an email to stakeholders interested in the Medicare Drug Price Negotiation Program encouraging them to share their experience with selected drugs or their therapeutic alternatives by participating in upcoming public engagement events or by completing the Drug Price Negotiation Information Collection Request (ICR). CMS indicated that additional information will be released on public engagement activities information collection activities taking place in early 2026.
WHITE HOUSE
On January 7, the Trump administration released the 2025-2030 Dietary Guidelines for Americans, jointly issued by the U.S. Department of Health & Human Services (HHS) and the U.S. Department of Agriculture (USDA). The guidelines include updated recommendations related to dietary fats, protein intake, alcohol consumption, and ultra-processed foods.
On January 8, Johnson & Johnson announced a Most Favored Nation (MFN) agreement with the White House. The agreement largely mirrors earlier MFN agreements the White House made with 14 other major manufacturers, whereby J&J will provide medications directly to patients at discounted rates via the Trump Rx platform and offer Medicaid pricing comparable to other developed nations. In exchange for a tariff exemption, the company also committed to a $55 billion investment that includes building new manufacturing facilities in Pennsylvania and North Carolina.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Amendments to Rules Governing Organ Procurement Organizations (CMS-3409); Proposed Rule; 8/21/25
Ensuring Safety through Domestic Security with Made in America PPE and Essential Medicine Procurement by Medicare Providers and Suppliers (CMS-1516); Pre-rule; 9/12/25
HHS Notice of Benefit and Payment Parameters for 2027 (CMS-9883); Proposed Rule, 11/14/25
Preserving Medicaid Funding for Vulnerable Populations – Closing a Health Care-Related Tax Loophole (CMS-2448); Final Rule, 11/17/25
Advance Notice of Methodological Changes for Calendar Year (CY) 2027 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies; Notice; 12/04/25
Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes (CMS-2452); Proposed Rule, 12/31/2025
FDA
Evaluating the Safety of Antimicrobial New Animal Drugs with Regard to their Microbiological Effects on Bacteria of Human Health Concern; Guidance for Industry; Notice; 7/10/25
Postapproval Pregnancy Safety Studies; Guidance for Industry; Availability; Notice; 8/21/25
New and Revised Draft Q&As on Biosimilar Development and the Biologics Price Competition and Innovation Act; Draft Guidance for Industry; Availability; Notice; 11/26/25
New Clinical Investigation Exclusivity (3-Year Exclusivity) for Drug Products: Questions and Answers; Draft Guidance for Industry; Availability; Notice; 12/01/25
Substances Generally Recognized as Safe; Proposed Rule; 12/01/25
Minimal Residual Disease and Complete Response in Multiple Myeloma: Use as Endpoints to Support Accelerated Approval; Notice; 12/05/25
Medical Devices with Indications Associated with Weight Loss--Premarket Considerations; Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 12/18/25
HEARINGS
House
Energy & Commerce Committee
Hearing on health insurance affordability
January 22 (morning)
Witnesses: Stephen Hemsley, CEO, UnitedHealth Group; David Joyner, President and CEO, CVS Health Group; David Cordani, President, CEO, and Chairman of the Board, Cigna Health Group; Gail Boudreaux, President and CEO, Elevance Health; Paul Markovich, President and CEO, Ascendiun
· Ways & Means Committee
Hearing on health insurance affordability
January 22 (afternoon)
Witnesses: Stephen Hemsley, CEO, UnitedHealth Group; David Joyner, President and CEO, CVS Health Group; David Cordani, President, CEO, and Chairman of the Board, Cigna Health Group; Gail Boudreaux, President and CEO, Elevance Health; Paul Markovich, President and CEO, Ascendiun
Senate
Health, Education, Labor, and Pensions (HELP) Committee
Protecting Women: Exposing the Dangers of Chemical Abortion Drugs
January 14; 10:00 AM; 430 Dirksen
Witnesses: TBD
January 15; 10:00 AM; 430 Dirksen
Bills to be considered:
· S. 1157, the Women and Lung Cancer Research and Preventive Services Act of 2025, which seeks to expand access to and awareness of lung cancer and prevention;
· S. 921, Tyler’s Law, which would examine hospital testing of fentanyl overdoses;
· S. 2169, the Rural Hospital Cybersecurity Enhancement Act, which would require HHS to development a cybersecurity plan for rural hospitals.
· S. 272, the Protect Infant Formula from Contamination Act, which would, among other things, update manufacturer reporting requirements for contaminated infant formula.
REPORTS
Office of Inspector General (OIG)
On January 6, HHS OIG published a report titled Essence Healthcare, Inc., Did Not Comply With Federal Requirement for Reporting Direct and Indirect Remunerations for Contract Years 2017 Through 2020. OIG found that Essence incorrectly reported certain payments as direct and indirect remuneration (DIR) that were not attributable to Part D drug costs, which may have affected CMS payment amounts;. The report recommended that Essence request CMS reopen and resubmit certain DIR reports with corrected amounts and refile its 2020 DIR report.
Government Accountability Office (GAO)
On January 7, the GAO released a report titled, Food Safety: Further Action Needed to Implement Foodborne Illness Prevention Law and Assess Its Results, and recommended that FDA establish time frames to complete outstanding Food Safety Modernization Act (FSMA) requirements and develop and implement a performance management process to assess whether FDA’s rules are contributing to prevention outcomes.
ADDITIONAL POLICY NEWS
On January 6, Novo Nordisk announced nationwide availability of its oral formulation of Wegovy.
On January 6, Utah state officials announced the launch of a pilot program allowing artificial intelligence systems to renew certain routine prescriptions under physician oversight.
On January 8, the American Psychiatric Association filed a complaint against Emblem Health alleging inaccurate behavioral health provider directory listings (commonly referred to as “ghost networks”).
On January 8, attorneys general in five states filed a lawsuit challenging the Administration’s withholding of certain public benefit program funds.
On January 9, California ended Medicaid coverage of GLP-1 drugs prescribed for weight loss, while maintaining coverage for certain other indications, citing cost pressures.
On January 9, the Medicare Payment Advisory Commission (MedPAC) announced the agenda for its January public meeting, scheduled for January 15-16.