Health Care Watch: May 3, 2026
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from April 27 – May 3 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
House
On April 28, the Ways & Means Committee held a hearing with health system CEOs. The hearing examined the underlying drivers of rising health care costs, including increased hospital pricing, consolidation, insurance practices, workforce shortages, administrative burden, and federal payment policies such as site neutral hospital payments in Medicare. Please reach out to FHP Strategies if you are interested in a summary of this hearing.
On April 29, the Appropriations Committee held a full committee markup of the Fiscal Year (FY) 2027 Agriculture, Rural Development, the Food & Drug Administration (FDA), and Related Agencies appropriations bill. The committee passed the bill by a 35-25 vote that would provide FDA with $7.1 billion in topline funding for FY 2027.
On April 29, the Energy & Commerce Health Subcommittee held a hearing on legislative proposals related to the regulation and oversight of food. The hearing examined multiple bills addressing food safety, labeling, dietary supplements, infant formula, and FDA authorities.
The House will return to session on May 12.
Senate
The Senate will return to session on May 11.
REGULATORY UPDATE
On April 24, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued updated guidance to grantees stating that federal grant funds may no longer be used to purchase drug test strip kits used to detect substances such as fentanyl and xylazine. The guidance aligns with Administration policy directing a shift away from harm reduction programs and reverses prior guidance that permitted funding for test strips as overdose prevention tools. The change affects grantees that had used federal funds to support distribution of test strips through state and local programs.
On April 27, FDA’s Center for Drug Evaluation and Research (CDER) proposed to withdraw approval of Amgen’s TAVNEOS (avacopan), citing new information indicating the drug has not been shown to be effective for its approved use and that the original application contained untrue statements of material fact. CDER reported that previously undisclosed analyses and issues with the pivotal clinical trial raise concerns about the drug’s efficacy and identified safety concerns including cases of drug-induced liver injury.
On April 27, FDA announced a public meeting of the Vaccines and Related Biological Products Advisory Committee to provide recommendations on regulatory issues related to vaccines. The meeting is scheduled for May 28 and will inform considerations for vaccine composition for the upcoming respiratory virus season. FDA established a public docket for the meeting and is accepting comments through May 27.
On April 28, FDA announced two steps to support implementation of real-time clinical trials (RTCT), including the initiation of two proof-of-concept trials and release of a Request for Information (RFI) on a proposed pilot program. The trials, conducted by AstraZeneca and Amgen, will transmit clinical endpoints and data signals to FDA in real time, including a Phase 2 trial in mantle cell lymphoma and a Phase 1b trial in small cell lung cancer. FDA stated the RFI will inform development of a pilot program expected to launch this summer and is accepting comments through May 29.
On April 28, the Department of Justice (DOJ) announced that Purdue Pharma L.P. was sentenced in federal court and ordered to pay more than $5 billion in criminal penalties for fraud and kickback conspiracies related to its opioid products.
On April 29, the Centers for Medicare & Medicaid Services (CMS) announced extensions to multiple application and participation deadlines for the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS) Model. CMS extended the application deadline for manufacturers to June 11 (from April 30), and the deadline to enter participation agreements to July 17, to allow additional time for engagement and application preparation. CMS also extended state application deadlines to September 10 and participation agreement deadlines to September 30.
On April 29, DOJ filed a notice of appeal in American Academy of Pediatrics (AAP) v. Robert F. Kennedy Jr., challenging a U.S. District Court for the District of Massachusetts order that blocked certain vaccine policy changes. The case involves claims by AAP and other health organizations regarding changes to a federal vaccine advisory panel’s membership and the childhood vaccine schedule.
On April 30, FDA announced a proposal to exclude semaglutide, tirzepatide, and liraglutide from the 503B bulks list, determining there is no clinical need for outsourcing facilities to compound these drugs from bulk substances. The 503B bulks list identifies substances that outsourcing facilities may use in compounding under section 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act), and FDA found insufficient evidence to support inclusion of these drugs. FDA is accepting public comments on the proposal through June 29.
On April 30, FDA confirmed that Katherine Szarama has been appointed as the acting director of the Center for Biologics Evaluation and Research (CBER), following the departure of Vinay Prasad. Szarama is a trained biophysicist with previous leadership and research experience at CMS, Arnold Ventures, and ARPA-H and joined the FDA late last year to serve as Prasad’s deputy.
On April 30, FDA approved an expanded indication for Axsome Therapeutics’ drug Auvelity to treat agitation associated with dementia due to Alzheimer’s disease in adults. The approval marks the first non-antipsychotic treatment authorized for this condition and was supported by randomized clinical trials demonstrating improvements in agitation symptoms and delayed relapse.
On April 30, FDA’s Oncology Drugs Advisory Committee (ODAC) voted against recommending AstraZeneca’s drug camizestrant to treat a type of metastatic breast cancer, citing uncertainty about its clinical benefit. Given the ODAC recommendation, FDA approval is unlikely.
On May 1, the Department of Education Office of Postsecondary Education issued a final rule titled Reimagining and Improving Student Education-Federal Student Loan Program Final Regulations. Among the rule’s many proposals, Master of Science in Nursing (MSN) and Doctor of Nursing Practice (DNP) degrees would no longer be classified as “professional degrees” causing a lowering of the borrowing limit from $50,000 to $20,500 annually, and from $200,000 to $100,000 in aggregate. The final rule will be effective on July 1.
WHITE HOUSE
On April 27, the White House announced the nomination of Sean Kaufman to serve as Assistant Secretary for Preparedness and Response at the U.S. Department of Health & Human Services (HHS).
On April 30, President Trump announced the withdrawal of Dr. Casey Means’ nomination for the role of U.S. Surgeon General. He will now nominate Dr. Nicole Saphier.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Amending the Indirect Hold Harmless Threshold of Health Care-Related Taxes (CMS-2452); Proposed Rule, 12/31/2025
Independent Dispute Resolution Operations (CMS-9897); Final Rule; 01/29/2026
Strengthening Oversight of Accrediting Organizations (AO), Burden Reduction, and Related Provisions (CMS-3367); Final Rule; 02/04/2026
Medicare Drug Price Negotiation Program (CMS-4215); Proposed Rule; 02/26/2026
Medicaid Managed Care State Directed Payments and Medicaid Fee-For-Service Targeted Medicaid Practitioner Payments (CMS-2449); Proposed Rule; 02/27/2026
Establishing State Community Engagement Requirements for Certain Individuals Under Section 1902(xx) of the Social Security Act (CMS-2454); Interim Final Rule; 03/31/2026
Patient Protection and Affordable Care Act, HHS Notice of Benefit and Payment Parameters for 2027; and Basic Health Program (CMS-9883); Final Rule; 4/01/2026
Alternative Payment Model Updates and the Increasing Organ Transplant Access (IOTA) Model (CMS-5544); Final Rule; 04/11/2026
CY 2027 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1850); Proposed Rule; 04/13/2026
CY 2027 Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1848); Proposed Rule; 04/14/2026
Exchange Pre-Enrollment Eligibility Verification (CMS-9873); Proposed Rule; 04/22/2026
CY 2027 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1846); Proposed Rule; 04/22/2026
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
Substances Generally Recognized as Safe; Proposed Rule; 12/01/25
Establishment Registration and Product Listing for Tobacco Products; Proposed Rule; 02/19/2026
Drug Establishment Registration and Drug Listing Requirements for Establishments Engaged in Distributed Manufacturing and Certain Foreign Establishments; Rule; 03/04/2026
Cannabidiol (CBD) Products Compliance and Enforcement Policy; Notice; 03/13/2026
Serotonin-2A Agonists and Related Products: Considerations for Clinical Investigations; Guidance for Industry; Availability; Notice; 04/17/2026
Use of Salt Substitutes to Reduce the Sodium Content in Standardized Foods; Final Rule; 04/20/2026
Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products; Revised Draft Guidance for Industry; Availability; Notice; 04/24/2026
Statistical Approaches to Establishing Bioequivalence; Guidance for Industry; Availability; Notice; 04/28/2026
HEARINGS
Senate
Health, Education, Labor, & Pensions Committee
Hearing on Making Health Care Affordable Again Part 2: Perspectives from Employers, Patients, and Providers
May 5, 2026; 10:00 AM ET, Baton Rouge, LA
Witnesses: Ronnell Nolan, President and CEO, Health Agents for America; Debbie Rowell, Owner, The Coffee Connection, Acadian Coffee Roasters; Kathy Oubre, CEO, Pontchartrain Cancer Center; Dave Deloach, former CEO, Deloach Marine Services; TJ Woodard, Co-Owner, Prescriptions to Geaux
Hearing on From Crisis to Care: Mental Health and Substance Use Treatment Across the Continuum of Care
May 6, 2026; 10:00 AM ET, Metairie, LA
Witnesses: Arthur Kleinschmidt, former Principal Deputy Assistant Secretary, SAMHSA; Lonnie Granier, Policy and Advocacy Manager; Odyssey House Louisiana Inc.; Nick Richard, Executive Director, National Alliance on Mental Illness Southeast Louisiana; Stuart Archer, CEO, Oceans Healthcare; Tonja Miles, CEO, Set Free Indeed Ministry.
REPORTS
Office of Inspector General (OIG)
On April 27, the HHS OIG posted a report titled Medicare Payments for Positive Airway Pressure Devices Used for the Treatment of Obstructive Sleep Apnea Generally Complied With Medicare Requirements. The report found that CMS generally ensured payments for positive airway pressure (PAP) devices complied with Medicare billing requirements, though 13 of 110 sampled claims lacked sufficient documentation. OIG estimated that Medicare paid approximately $15.2 million in improper claims and recommended that CMS strengthen internal controls and provide additional supplier education on documentation requirements.
On April 28, the HHS OIG posted a report titled CMS Could Strengthen Medicare Program Safeguards To Prevent and Detect Potentially Improper Payments for Virtual Check-in and E-visit Services. The report found that CMS made approximately $2.3 million in potential improper payments for virtual check-in and e-visit services that may not have complied with Medicare requirements, including services billed within restricted timeframes or with unnecessary modifiers. OIG recommended that CMS develop system edits, strengthen coding descriptions, and provide additional provider education. CMS concurred with the first and third recommendations.
On April 28, the HHS OIG posted a report titled Most Nursing Homes Throughout the United States Do Not Have Adequate or Reliable Emergency Power Systems. The report found that 72 of 100 sampled nursing homes in the U.S. had emergency power system deficiencies and estimated that 73% of nursing homes nationwide have inadequate or unreliable systems. OIG recommended that CMS share the findings with nursing homes and emphasize the importance of maintaining adequate and reliable emergency power systems. CMS concurred with the recommendation.
Government Accountability Office (GAO)
On April 29, GAO released a report titled Federal Employees Health Benefits Program: Additional Actions Needed to Address Significant Risks in Verifying Provider Eligibility. The report found that limitations in the Office of Personnel Management’s (OPM) control activities allowed potentially ineligible providers, including deceased or excluded individuals, to participate in the Federal Employees Health Benefits (FEHB) program and receive payments. GAO made 15 recommendations to OPM OIG to strengthen provider verification processes and reduce fraud risk, with both entities concurring with the recommendations.
Congressional Budget Office (CBO)
On April 29, CBO released a report outlining its transparency plans for 2026 and reviewing activities from 2025. The report highlighted CBO’s efforts to expand transparency in its health care analyses, including publishing modeling tools, data, and technical documentation related to Medicare, Medicaid, and health insurance spending. CBO also noted planned analyses on topics such as Medicare Part D rebates, federal health insurance subsidies, and Medicaid policy impacts, alongside continued outreach and engagement with Congress on health care projections and estimates.
ADDITIONAL POLICY NEWS
On April 27, an economic evaluation was published in JAMA Pediatrics examining the impact of delaying the hepatitis B vaccine birth dose among U.S. infants. The study found that delaying vaccination from birth to two months for infants born to mothers who test negative for the virus could result in additional infections, deaths, and approximately $16.4 million in increased lifetime health care costs for a single birth cohort. The analysis follows a 2025 recommendation by federal vaccine advisers to delay the birth dose for certain infants.
On April 28, the American Medical Association (AMA) and more than 100 physician groups sent a letter to the Departments of Treasury, HHS, and Labor urging increased enforcement of the No Surprises Act. The letter raised concerns about health plans’ practices, including cost-sharing increases after Independent Dispute Resolution outcomes, delayed or incomplete payments, and lack of transparency in payment calculations.
On April 29, the U.S. Supreme Court heard oral arguments in Hikma Pharmaceuticals USA Inc. v. Amarin Pharma, Inc., a case examining whether a generic drug manufacturer can be held liable for inducing patent infringement through marketing a drug for uses still protected by patent. The case follows a lower court ruling allowing Amarin Pharma to proceed with its patent infringement claim against Hikma Pharmaceuticals related to its generic version of the heart disease drug Vascepa.
On April 29, the U.S. Supreme Court ruled unanimously in First Choice Women’s Resource Centers, Inc. v. Matthew J. Platkin that faith-based crisis pregnancy centers may challenge a subpoena issued as part of a New Jersey investigation into their fundraising practices. The ruling allows the centers to argue in federal court that the State’s request for donor-related records violates the clinic’s First Amendment rights but does not halt the underlying investigation. The decision may have implications for oversight of crisis pregnancy centers and their operations related to patient counseling and health care services.
On April 30, the Medicare Payment Advisory Commission (MedPAC) published comment letters on the following CMS proposed Medicare payment rules:
On April 30, the Washington Post reported that a database used by CMS to support a Medicare provider directory exposed Social Security numbers and other identifying information of some health care providers. The report found that the data had been publicly accessible for several weeks as part of CMS transparency efforts.
On April 30, Cigna Healthcare announced it will exit the Affordable Care Act (ACA) exchanges after 2026 as part of a broader strategy to refocus on employer-sponsored plans and pharmacy services. The decision will affect approximately 369,000 enrollees across multiple states who will need to seek alternative coverage. Cigna also indicated it is exploring strategic options for its claims review subsidiary, EviCore, amid increased scrutiny of utilization management practices.
On April 30, the Kaiser Family Foundation (KFF) released a report examining various states' approaches to implementing the Medicaid work requirements made under the One Big Beautiful Bill Act. The report found that most states are adopting less restrictive policies and seven states reported plans to implement work requirements before the January 2027 deadline or to adopt more restrictive compliance verification policies than required by law. On May 1, Nebraska launched its Medicaid work requirements, becoming the first state to begin early implementation.