Health Care Watch: August 1, 2026
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from July 26 – August 1. 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 July 29, the Congressional Budget Office (CBO) responded to a May 2026 letter from Budget Committee Chairman Jodey Arrington (R-TX), Ways & Means Committee Chairman Jason Smith (R-MO), and Energy & Commerce Committee Chairman Brett Guthrie (R-KY) explaining that its latest baseline now projects that the Inflation Reduction Act’s Medicare Part D drug price negotiation, inflation rebate, and benefit redesign provisions will, in combination, increase federal deficits over the 2022-2031 period, compared with an estimated $129 billion in deficit reduction in CBO’s original 2022 score. CBO reports that savings from negotiation and inflation rebates have been smaller than initially expected, while the Part D redesign has produced significantly higher costs due to greater-than-anticipated growth in prescription drug use, contributing to an increase of about $700 billion in projected Part D outlays over 2026-2035. CBO also revised its assumptions about the magnitude of net price reductions under negotiation now expecting average net price cuts of 25% to 50% (instead of 50%).
The House will return to session on August 31.
Senate
On July 29, the Homeland Security & Governmental Affairs Committee held a hearing with Dr. Anthony Fauci, former Director of the National Institute of Allergy and Infectious Diseases, to discuss his role during the COVID-19 pandemic. Committee Republicans criticized Dr. Fauci and accused him of obstructing investigations, while Democratic members defended him, stating the hearing was intended to get him to make incriminating statements.
On July 29, the Permanent Subcommittee on Investigations Chairman Ron Johnson (R-WI) sentletters requesting transcribed interviews with Dr. Fauci and four former Food & Drug Administration (FDA) officials regarding their roles in the COVID-19 pandemic response and the safety and efficacy of COVID-19 vaccines. The request follows a Permanent Subcommittee on Investigations interim report released in April 2026 examining FDA vaccine safety monitoring.
On July 30, Finance Committee Ranking Member Ron Wyden (D-OR), joined by 16 Democratic senators, released a request for information (RFI) seeking feedback on policy proposals related to private health insurance coverage. The RFI requests feedback on proposals to improve affordability of coverage for consumers, expand coverage options, simplify enrollment, and reform practices that can delay or deny care. Written feedback is requested by October 2, and the RFI follows similar solicitations related to drug pricing and long-term care. A press release can be found here.
On July 30, Health, Education, Labor, & Pensions (HELP) Committee voted to favorably report the nominations of Erica Schwartz to be Director of the Centers for Disease Control and Prevention (CDC) and Sean Kaufman to be Assistant Secretary for Preparedness and Response (ASPR) at the U.S. Department of Health & Human Services (HHS). The committee also unanimously passed a data privacy bill that would require health technologies that fall outside the scope of Health Insurance Portability and Accountability Act (HIPAA) to disclose how consumer information is collected and shared.
On August 4, the Senate is expected to hold a vote to invoke cloture to proceed on a bill to fund the federal government beyond the October 1 funding expiration date. If it passes, the plan is for the Senate to consider and pass a government funding bill later in the week and then adjourn for its August recess.
REGULATORY UPDATE
On July 24, National Institutes of Health (NIH) Director Dr. Jay Bhattacharya announced the selection of Dr. Courtney Aklin, as permanent Director of the National Institute of Nursing Research (NINR). Dr. Aklin, a licensed clinical psychologist with more than 21 years at NIH, has served as NINR's Acting Director and Acting Scientific Director since April 2025.
On July 27, FDA’s Oncology Center of Excellence issued three final guidance documents intended to increase patient participation in oncology drug clinical trials by addressing restrictive eligibility criteria. The documents address performance status, washout periods and concomitant medications, and laboratory values used to determine trial eligibility. FDA stated that the documents advance HHS’ “Operation Trialblazer” Initiative and were developed through workshops with Friends of Cancer Research and the American Society of Clinical Oncology.
On July 27, FDA published six case studies illustrating approaches used in rare disease drug development programs, released through its Learning and Education to Advance and Empower Rare Disease Drug Developers (LEADER 3D) resource under the Accelerating Rare Disease Cures (ARC) Program. The case studies examine methods used in the development of chenodiol (Ctexli) for cerebrotendinous xanthomatosis, belimumab (Benlysta) for systemic lupus erythematosus, omaveloxolone (Skyclarys) for Friedreich's ataxia, inebilizumab-cdon (Uplizna) for IgG4-related disease, lumasiran (Oxlumo) for primary hyperoxaluria type 1, and mavorixafor (Xolremdi) for WHIM syndrome.
On July 28, the Centers for Medicare & Medicaid Services (CMS) announced that Xeljanz and Xeljanz XR will cease to be a selected drug under the Medicare Drug Price Negotiation Program effective January 1, 2029, and that no maximum fair price will apply as of that date. CMS stated that it had determined that at least one approved generic drug that identifies Xeljanz as its listed drug is being “bona fide” marketed.
On July 28, HHS announced the release of the U.S. Government Policy for Stopping High-Risk Life Sciences Research, a government-wide framework that prohibits federal support for dangerous gain-of-function research conducted in the U.S. and abroad. The policy establishes independent review for certain high-risk life sciences research, restricts federal funding for research conducted in countries or institutions that lack appropriate biosafety and biosecurity standards, and replaces prior oversight frameworks with a risk-based approach focused on the potential consequences of research rather than a defined list of pathogens. The policy states that it preserves biomedical research including the development of vaccines, therapeutics, diagnostics, and other medical countermeasures under safety and security safeguards. An HHS press release can be found here and a joint press release can be found here.
On July 28, CMS announced that enforcement efforts through its Medicaid Fraud War Room (MFWR) had stopped more than $203 million in potentially improper Medicaid payments since the initiative's launch on April 23. CMS stated that the MFWR, which coordinates CMS, the HHS Office of Inspector General (OIG), state Medicaid agencies, and federal law enforcement, had identified 50 high-risk providers through data analytics, resulting in 42 federal Notices of Intent to Exclude (approximately $160.7 million) and 15 state enforcement actions (approximately $46.2 million). CMS stated that the MFWR was established in coordination with the White House Task Force to Eliminate Fraud. A fact sheet can be found here.
On July 28, CMS released preliminary Medicare Part D bid information for contract year (CY) 2027, including a national average monthly bid amount (NAMBA) of $296.05 and a national base beneficiary premium of $41.33. CMS also announced that it will discontinue the Part D Premium Stabilization Demonstration at the end of CY 2026, stating that Part D plan sponsors had sufficient experience under the redesigned benefit to support their bid assumptions for CY 2027. CMS stated that it will release the final 2027 MA and Part D landscape and premiums in September. CMS also set the CY 2027 de minimis amount at $2. A letter can be found here.
On July 28, FDA published 17 revised draft product-specific guidances (PSGs) for peptide drug products, covering drugs including semaglutide (Ozempic, Wegovy), tirzepatide (Mounjaro, Zepbound), liraglutide (Victoza, Saxenda), glucagon products, calcitonin salmon, teriparatide, pegcetacoplan, and vosoritide, with updated recommendations in five areas: ANDA submission of recombinantly, synthetically, or semi-synthetically produced peptides; innate immune response testing; impurity thresholds; higher order structure assessment; and biological activity assessment. FDA also withdrew its May 2021 guidance on ANDAs for Certain Highly Purified Synthetic Peptide Drug Products, noting it no longer reflects current scientific thinking, and plans to issue revised guidance later this year.
On July 29, HHS held a roundtable with health care leaders, medical societies, providers, and behavioral health experts who pledged to advance best practices for the nation's behavioral health system. HHS stated that the participants committed to principles including timely access to mental health and addiction treatment, evidence-based assessment and treatment, measurement of quality and outcomes, patient-centered and recovery-focused care, and whole-person care addressing co-occurring conditions such as HIV and hepatitis C (HCV). HHS stated that the event supports the administration's Great American Recovery initiative.
On July 29, HHS and the State Department announced that the U.S. would release $600 million in congressionally appropriated funds to Gavi, the Vaccine Alliance for fiscal years 2025 and 2026, citing reform commitments secured from the organization. The statement said Gavi had committed to work toward transitioning several mercury-containing vaccines to mercury-free alternatives and had implemented other reforms, including ending the promotion and procurement of COVID-19 vaccines for routine immunization programs and reducing its engagement with the World Health Organization (WHO). It further noted that the United States expects to resume its seat on the Gavi Board and will evaluate future support based on demonstrated performance.
On July 29, CMS issued a final rule updating Medicare payment policies and rates for skilled nursing facilities (SNFs) under the SNF Prospective Payment System (PPS) for fiscal year (FY) 2027. The rule provides a 2.4% update to SNF payment rates, an estimated increase of $883 million, and removes two COVID-19 vaccination measures from the SNF Quality Reporting Program (QRP) beginning with FY 2028. The rule also shortens the QRP data submission timeframe and requires SNFs to submit Minimum Data Set information for all residents regardless of payer. A fact sheet can be found here.
On July 29, CMS issued a final rule updating Medicare payment policies and rates for inpatient psychiatric facilities (IPFs) under the IPF PPS for FY 2027. The rule provides a 2.3% update to IPF payment rates, an estimated increase of $60 million, and a policy effective FY 2028 capping outlier payments at 20% of an IPF’s total PPS payment for facilities with at least 50 stays per year. The rule also removes two measures from the IPF QRP and implements a standardized IPF patient assessment instrument. A fact sheet can be found here.
On July 29, FDA licensed Ezplaz Freeze Dried Plasma, the first freeze-dried plasma product licensed for use in the U.S., indicated for transfusion in adults who require plasma and for whom other plasma products are not available, to Vascular Solutions, LLC. FDA stated that, unlike conventional plasma products that must be stored frozen and thawed before use, Ezplaz can be stored at room temperature and rapidly reconstituted.
On July 30, FDA issued a notice announcing prescription drug user fee rates for FY 2027 under the Prescription Drug User Fee Amendments of 2022 (PDUFA VII). The notice sets the application fee at $4,600,753 for applications requiring covered clinical data and $2,300,376 for applications not requiring such data and sets the prescription drug program fee at $416,857. The fees apply from October 1, 2026, through September 30, 2027.
On July 30, CMS released a final rule updating Medicare payment policies and rates for Inpatient Rehabilitation Facilities (IRFs) for FY 2027. The rule provides a 2.3% payment update to IRF payment rates, an estimated increase of $340 million for FY 2027. Key policy changes finalized include a requirement that all ordered therapies be initiated within 36 hours of admission (effective October 1, 2026), a revised Interdisciplinary Team meeting requirement specifying the first meeting must occur "within 4 days" of admission and shortening the Quality Reporting Program data submission timeframe from 4.5 months to 45 days beginning in FY 2029. CMS addresses some comments from its request for information on changing the IRF payment methodology and indicated it will continue to analyze the issue. A fact sheet can be found here.
On July 30, CMS released a final rule updating Medicare payment policies and rates for hospice providers for FY 2027. The rule provides a 2.3% payment update to hospice rates, an estimated $755 million increase over FY 2026, with a FY 2027 aggregate cap of $36,174.75, and makes the hospice election statement addendum mandatory for all beneficiaries electing hospice rather than available only upon request. The rule also updates the Service and Spending Variation Index with FY 2024-2025 data to flag potentially inappropriate non-hospice spending, allows physician designees and interdisciplinary group physician members to discharge patients from hospice care, and finalizes an icon on Care Compare to identify hospices that fail to meet quality data reporting requirements, effective no earlier than FY 2028. A fact sheet can be found here.
On July 31, the FDA’s Cellular, Tissue, and Gene Therapies Advisory Committee voted 10-3 that efficacy results from Replimune's clinical trial for RP1, a proposed immunotherapy for advanced melanoma seeking accelerated approval, are "evaluable and clinically meaningful," though FDA reviewers noted the overall survival analysis was "not interpretable" and several advisers acknowledged limitations in the data.
On July 31, the Health Resources and Services Administration (HRSA) issued a notice announcing a revised, voluntary 340B rebate model pilot available to qualifying manufacturers with drugs selected for Initial Price Applicability Years (IPAYs) 2026 and 2027 under the Medicare Drug Price Negotiation Program. The notice is effective immediately and invites manufacturers to submit rebate plans by August 24 for HRSA review and potential approval by September 24, 2026, with an effective date of January 1, 2027. A press release can be found here.
On July 31, CMS issued a final rule updating Medicare payment policies and rates for inpatient hospitals under the Inpatient Prospective Payment System (IPPS) and long-term care hospitals under the Long-Term Care Hospital Prospective Payment System (LTCH PPS) for FY 2027. The rule provides a 2.3% update to IPPS payment rates and a 2.3% update to LTCH PPS standard payment rates, increasing aggregate IPPS payments by an estimated $2.1 billion and LTCH payments by $54 million. The rule expands the joint replacement bundled payment model through a new nationwide CJR‑X model beginning January 1, 2028, strengthens non‑discrimination requirements for graduate medical education programs, and finalizes changes to organ acquisition cost reconciliation and quality reporting programs for inpatient and LTCH providers. The rule also finalizes the repeal of the inpatient NTAP and outpatient pass-through “alternative pathway” with certain grandfathering provisions for technologies already in the pipeline. A fact sheet can be found here.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Exchange Pre-Enrollment Eligibility Verification (CMS-9873); Proposed Rule; 04/22/2026
Strengthening the Integrity of Medicaid and CHIP Managed Care, Financing, and Access to Care (CMS-2450); Proposed Rule; 05/12/2026
Short-Term, Limited-Duration Insurance (CMS-9881); Proposed Rule; 05/30/2026
Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model (CMS-5546); Final Rule; 06/15/2026
Prohibition on Federal Medicaid and Children's Health Insurance Program Funding for Specified Sex-Rejecting Procedures Furnished to Children and Youth (CMS-2451); Final Rule; 06/16/2026
Global Benchmark for Efficient Drug Pricing (GLOBE) Model (CMS-5545); Final Rule; 06/26/2026
Cutting Administrative Requirements for Excellence in Patient Care (CMS-3484); Proposed Rule; 07/02/2026
Patient Protection and Affordable Care Act; State Innovation Waivers and Health Care Choice Compacts (CMS-9877); Proposed Rule; 07/13/2026
Contract Year 2028 Policy and Technical Changes to the Medicare Advantage Program, Medicare Prescription Drug Benefit Program, Medicare Cost Plan Program, and PACE (CMS-4214); Proposed Rule; 07/20/2026
Clinical Laboratory Improvement Amendments of 1988 (CLIA) Virtual Access, Gynecologic Cytology Proficiency Testing (PT), Personnel Qualification Requirements, and Other Changes (CMS-3478); Proposed Rule; 07/20/2026
Regulatory Alignment for Predictable and Immediate Device (RAPID) Coverage Pathway (CMS-3487); Notice; 07/23/2026
Transparency in Coverage (CMS-9882); Final Rule; 07/27/2026
FDA
Substances Generally Recognized as Safe; Proposed Rule; 12/01/25
Cannabidiol (CBD) Products Compliance and Enforcement Policy; Notice; 03/13/2026
Action Levels for Cadmium in Processed Food Intended for Babies and Young Children; Draft Guidance for Industry; Notice; 05/22/2026
Requirements for Additional Traceability Records for Certain Foods: Enforcement Policy for Certain Retail Food Establishments and Restaurants; Notice; 06/01/2026
New Dietary Ingredient (NDI) Notifications and Related Issues; Identity and Safety Information About the NDI: Guidance for Industry; Notice; 06/02/2026
Requirements For Additional Traceability Records For Certain Foods: Compliance Date Extension; Final Rule; 06/03/2026
Rulemaking to Provide by Regulation that an Ingredient Is Not Excluded From the Dietary Supplement Definition; Proposed Rule; 06/05/2026
Administrative Detention of Tobacco Products; Proposed Rule; 07/09/2026
U.S.-Origin Statements on Seafood; Draft Guidance for Industry; Notice; 07/10/2026
Nonclinical Testing Terminology; Final Rule; 07/28/2026
HEARINGS
Senate
Finance Committee
Building a Resilient Health Care Future with Biotechnology
August 4; 10:00 AM EST; 215 Dirksen
Witnesses: Alan Palkowitz, President and CEO, Indiana Biosciences Research Institute; Kevin Outterson, Austin B. Fletcher Professor of Law, and Executive Director and Principal Investigator of Combating Antibiotic-Resistant Bacteria Biopharmaceutical Accelerator (CARB-X), Boston University; Vera Luther, MD, Section Chief of Infectious Disease and International Health, Dartmouth Hitchcock Medical Center, Dartmouth Health; Michelle Rozo, Vice Chair, National Security Commission on Emerging Biotechnology
Budget Committee
August 4; 10:00 AM EST; 608 Dirksen
Witnesses: Brian Blase, President, Paragon Health Institute; Jonathan Ingram, Vice President of Policy and Research, Foundation for Government Accountability; Andy Schneider, Research Professor of the Practice, Center for Children and Families McCourt School of Public Policy, Georgetown University
Judiciary Committee
Prescribing Sunshine: How Competition and Transparency Lowers Prescription Drug Costs
August 4; 10:15 AM EST; 216 Hart
Witnesses: TBA
REPORTS
Office of Inspector General (OIG)
On July 28, HHS OIG released an audit report finding that Georgia overclaimed federal Medicaid reimbursement for clinical diagnostic laboratory services during CY 2019-2023, with confirmed overpayments of $26.1 million ($18.5 million federal share) across 648,412 services and potentially $4.4 million more ($3.1 million federal share) across an additional 2.5 million lines of service. OIG made five recommendations, including that Georgia refund $18.5 million to the federal government, conduct a self-review of the 2,528,874 potentially noncompliant lines of service, and review post-audit-period payments for additional overpayments. Georgia officials concurred with all five recommendations.
On July 30, HHS OIG released an audit report finding that Connecticut generally claimed federal Medicaid reimbursement for clinical diagnostic laboratory services in accordance with federal and state requirements during CY 2019-2023, with more than 99% of audited payments in compliance. OIG identified confirmed overpayments of $273,485 ($152,728 federal share) and potential additional overpayments of $1,069,983 ($582,301 federal share) and recommended that Connecticut refund $152,728 to the federal government and work with CMS to assess compliance for the potential overpayments and refund any federal share owed. Connecticut officials concurred with the first recommendation but did not indicate concurrence for the latter and stated it would discuss further with CMS.
On July 31, HHS OIG released an audit report finding that 15 of 100 reviewed Medicare hospice claims submitted by Hospice of the Valley - West (HOV) during July 2020 through June 2022 did not comply with Medicare requirements, primarily because HOV did not consistently follow its own billing policies and procedures. Based on sample results, OIG estimated HOV received at least $8.6 million in unallowable reimbursement out of $86 million total paid during the audit period, and recommended HOV refund $8.6 million to the federal government. HOV did not concur with any of OIG's three recommendations.
Government Accountability Office (GAO)
On July 30, GAO released a report summarizing actions that a roundtable of 18 experts suggested the federal government take to improve U.S. emerging infectious disease surveillance, organized across four areas: collaboration, data quality and infrastructure, surveillance methods, and communication. A key theme was unifying human and animal health surveillance efforts including through a proposed multisectoral, multidisciplinary leadership group spanning relevant federal agencies. The suggested actions are framed as an opportunity for HHS to strengthen its leadership and coordination of public health emergencies, an area on GAO's High Risk List since January 2022. The report contained no formal recommendations.
ADDITIONAL POLICY NEWS
On July 28, the Planned Parenthood Federation of America filed a lawsuit against HHS challenging changes the administration made to the Title X Family Planning Program. The complaint alleges that HHS guidance issued earlier this year misused the program for a political and ideological agenda and that Planned Parenthood is at risk of being unlawfully targeted for defunding, citing statements by administration officials that the organization would not receive future Title X funding. The Title X program provides reproductive health services, including contraception and cancer screenings, to low-income and uninsured individuals.
On July 29, in Commonwealth of Massachusetts v. Oz, a U.S. District Court judge in Massachusetts denied the plaintiff states' motion for a preliminary injunction that would have blocked the Trump administration's Medicaid work requirement rules from taking effect. The ruling allows the requirements to proceed as scheduled on January 1, 2027, while the underlying case continues.
On July 30, New York State Medicaid Director Amir Bassiri announced a minimum six-month moratorium on new Medicaid provider enrollments by licensed home care agencies, adult day care programs, durable medical equipment (DME) suppliers, and providers of applied behavioral analysis, laboratory, and pharmacy services. The announcement follows CMS' April directive encouraging states to accelerate revalidation of high-risk Medicaid providers and comes as CMS has enacted similar moratoria on Medicare enrollments for DME suppliers, hospice programs, and home health agencies.