Health Care Watch: August 7, 2026
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 2 – August 7. 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
The House will return to session on August 31.
Senate
On July 30, Finance Committee Ranking Member Ron Wyden (D-OR) and House Energy & Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) sent a letter urging the Centers for Medicare & Medicaid Services (CMS) to withdraw the interim final rule (IFR) implementing the Medicaid work reporting requirements enacted in the One Big Beautiful Bill Act (OBBBA) or, absent congressional action, to delay implementation. The letter argued that work reporting requirements will not increase employment and will instead cause eligible enrollees to lose coverage, citing a Congressional Budget Office estimate that 5.3 million enrollees would lose Medicaid coverage by 2034. The letter also argued that the IFR's definition of the medical frailty exemption adds extra-statutory restrictions that narrow the exemption beyond what OBBBA permits, characterizing it as regulatory overreach. On August 4, Finance Committee Ranking Member Wyden and Sen. Raphael Warnock (D-GA) led all 47 members of Senate Democratic caucus, to send a similar letter to CMS. The second letter broadly reinforced the July 30 letter’s request to withdraw or delay the IFR before the work reporting requirements take effect in 2027, while emphasizing the projected administrative burden on states. CMS estimates state system upgrades will cost approximately $700 million, nearly four times the $200 million provided in OBBBA.
On August 4, the Finance Health Care Subcommittee held a hearing titled Building a Resilient Health Care Future with Biotechnology. Members discussed U.S.-China biotechnology competition, antimicrobial resistance and antibiotic market failure, and supply chain security and protecting biotech as critical infrastructure.
On August 4, the Budget Committee held a hearing titled Medicaid: The Reality. Members discussed themes such as federal Medicaid match rates and state incentives, eligibility and improper enrollment, provider taxes and state financing arrangements, coverage losses and rural provider closures, work requirements and their effect on low-income families, the tradeoffs between OBBBA’s Medicaid cuts and its tax provisions, and Medicaid eligibility for non-citizens.
On August 5, the Senate voted 51-44 to confirm Dr. Erica Schwartz to lead the Centers for Disease Control and Prevention (CDC), with Sen. Tim Kaine (D-VA) voting in favor alongside Republicans. The confirmation gives the agency a Senate-confirmed director for the first time in nearly one year.
On August 5, Sens. Jerry Moran (R-KS), Tammy Baldwin (D-WI), Shelley Moore Capito (R-WV), Kaine, John Boozman (R-AR), and John Hickenlooper (D-CO), introduced the Supporting Underserved and Strengthening Transparency, Accountability, and Integrity Now (SUSTAIN) 340B Act. This bill would add accountability and transparency to the 340B drug discount program, codify covered entities' use of contract pharmacies, establish a patient definition, create an independent third-party data clearinghouse to prevent duplicate discounts, and end any 340B rebate model program within one year while directing HHS to transition to the clearinghouse. The bill text can be found here.
On August 7, Sens. Catherine Cortez Masto (D-NV), Chuck Grassley (R-IA), Wyden, and Sen. Mike Crapo (R-ID) introduced the Health Care Fraud Prevention and Enforcement Act, legislation to increase funding for the Health Care Fraud and Abuse Control (HCFAC) Program. The bill supports anti-fraud efforts across federal health programs including Medicare and Medicaid. The bill would allow HCFAC partners to use mandatory funding to combat fraud in the Affordable Care Act (ACA) Health Insurance Marketplace, give CMS new tools to protect the integrity of the Children's Health Insurance Program (CHIP), and require reporting to Congress and the Government Accountability Office (GAO) on the program’s performance.
The Senate Judiciary Committee hearing, scheduled for August 4, titled Prescribing Sunshine: How Competition and Transparency Lowers Prescription Drug Costs was postponed to a later date.
The Senate is attempting to clear significant legislation, including funding the federal government until December 11, before adjourning for its August recess.
REGULATORY UPDATE
On August 3, HHS announced that HRSA-funded health centers served more than 32.7 million patients in 2025, an increase of more than 350,000 patients from 2024 and the highest total in the Health Center Program's 61-year history. HHS stated that rural communities accounted for the largest share of that growth, with health centers serving an additional 308,000 rural patients. HRSA also announced more than $125 million through its Expanded Nutrition Services initiative to fund food-based interventions and nutrition services at HRSA-funded health centers.
On August 3, CMS released a readout of a recent event marking the first year of its Health Technology Ecosystem initiative, which CMS stated is aimed at advancing interoperability, health data sharing, and patient access to digital health tools. CMS stated that first-year work included the National Provider Directory, the Medicare App Library, expanded Blue Button Individual Access Services scopes, and the CMS ACCESS Model. CMS stated that future areas of focus include real-time benefits, price transparency, advanced appointment scheduling, clinical trial matching, and bulk HL7 FHIR capabilities.
On August 4, Politico reported that Steven Quay, a pharmaceutical executive and founder of Atossa Therapeutics, is undergoing final vetting to lead the National Institute of Allergy and Infectious Diseases (NIAID) at HHS.
On August 5, the Food & Drug Administration (FDA) approved Takeda Pharmaceuticals’ Orzeyful (oveporexton) tablets for the treatment of narcolepsy type 1 in adults. FDA stated it is the first drug to treat narcolepsy type 1 as a complete disorder and the first to act by targeting the loss of orexin signaling that causes the disease. FDA stated the drug has been recommended for scheduling under the Controlled Substances Act and will be lawful to market following the Drug Enforcement Administration's scheduling decision.
On August 5, FDA held a public meeting on the draft commitment letter for the sixth reauthorization of the Medical Device User Fee Amendments (MDUFA VI), the negotiated agreement that would set device-review user fees and performance goals if Congress reauthorizes the program. Comments on the draft are accepted through August 7.
On August 5, Moderna announced that FDA approved mFLUSIVA (mRNA-1010), a seasonal influenza vaccine, for adults 50 years and older. Moderna stated the approval for adults 50 through 64 was based on a Phase 3 trial enrolling 40,805 adults across 11 countries, and that use in adults 65 and older was granted accelerated approval based on immunogenicity, with clinical benefit in that group to be confirmed in a postmarketing trial.
On August 6, FDA granted accelerated approval to Tudriqev (vusolimogene oderparepvec‑wtpg), a genetically modified oncolytic viral therapy used in combination with nivolumab for adult patients with unresectable advanced cutaneous melanoma that has progressed on a PD‑1-blocking antibody-based regimen. FDA stated that the approval was supported by an open‑label, single‑arm trial in which 24% of 91 evaluable patients achieved an objective response, with a median response duration of 14.1 months, and emphasized that clinicians and patient advocates highlighted the urgent need for new options in this refractory population. FDA previously rejected the drug twice before granting approval.
On August 7, FDA issued an Emergency Use Authorization (EUA) for CLiK Extra (dicyclanil topical suspension) wound spray to prevent New World screwworm infestations in sheep, cattle, goats, swine, camelids, and certain captive and captured wildlife species. FDA stated the product is not otherwise approved or conditionally approved by the agency, and that the EUA remains effective until it is revoked or the HHS Secretary terminates the underlying emergency declaration.
On August 7, CMS issued a proposed procedural notice proposing to establish the Regulatory Alignment for Predictable and Immediate Device (RAPID) coverage pathway to expedite Medicare coverage for eligible FDA Breakthrough Devices. The pathway would apply to certain Class II and Class III devices in the investigational device exemption (IDE) pre-submission stage that demonstrate improved clinical outcomes in Medicare beneficiaries. CMS would issue a proposed national coverage determination (NCD) on the same day as FDA market authorization, with final NCDs targeted approximately 60 days later for Class II devices and 90 days later for Class III devices. CMS also will pause TCET for new candidates while implementing RAPID. Comments are due 60 days after publication. 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
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
White Paper: Proposed Definition of Ultra-Processed Food; Notice; 08/03/2026
Evaluation of Therapeutic Equivalence; Guidance for Industry; Availability; Notice; 08/06/2026
Use of Formaldehyde and Formaldehyde-Releasing Chemicals as an Ingredient in Hair Smoothing Products or Hair Straightening Products; Proposed Rule; 08/06/2026
REPORTS
Office of Inspector General (OIG)
On August 5, HHS OIG posted an audit report finding that Medicare improperly paid an estimated $15.2 million for sacroiliac joint injections during fiscal year 2024. OIG stated that 72 of 100 sampled sessions did not comply with Medicare requirements, and that it estimated physicians incorrectly billed 46,711 sessions as therapeutic injections when they should have been billed as diagnostic. OIG recommended that CMS work with the Medicare Administrative Contractors (MACs) to improve education on sacroiliac joint injection coverage and billing requirements, prevent diagnostic injections from being billed as therapeutic injections, and promote more consistent coverage policies by adopting a National Coverage Determination or expanding MAC local coverage policies. CMS concurred with the first two recommendations but not the third.
On August 5, HHS OIG posted an audit report finding that HHS met many requirements but did not fully comply with the Payment Integrity Information Act of 2019 for FY 2025. OIG stated the audit evaluated improper payment reporting across programs deemed susceptible to significant improper payments, including Medicare Fee-for-Service, Medicare Advantage (MA), Medicare Part D, Medicaid, and the Childrens’ Health Insurance Program.
Government Accountability Office (GAO)
On August 6, GAO published a technology assessment examining the potential benefits and challenges of using wearable devices, such as glucose monitors and smartwatches, in clinical decision-making, including the role of artificial intelligence in expanding their capabilities. GAO found that wearables could support quicker diagnoses, more personalized care, and expanded remote monitoring for underserved populations, but stated that devices vary in accuracy and reliability and are difficult to integrate into clinical workflows. GAO presented three policy options: maintaining the status quo, refining clinical workflows and infrastructure to integrate wearables, and incentivizing manufacturers to improve device performance through an independent certification database.
ADDITIONAL POLICY NEWS
On August 3, the California Supreme Court ruled 6-1 in favor of Gilead Sciences in Gilead Tenofovir Cases, holding that a drug manufacturer owes no duty of care to users of a non-defective drug when deciding whether and when to develop an allegedly safer alternative. The decision reversed a 2024 Court of Appeal ruling and ordered dismissal of negligence claims brought by an estimated 24,000 patients who took Gilead's tenofovir disoproxil fumarate HIV medications and alleged the company delayed commercializing a lower-side-effect alternative, tenofovir alafenamide fumarate, to maximize profit.
On August 3, California Attorney General Rob Bonta and a coalition of 43 states and territories announced a $400 million settlement in principle with Sandoz, Inc., to resolve allegations that the generic drug manufacturer engaged in conspiracies to inflate and manipulate prices, reduce competition, and restrain trade across numerous generic prescription drugs. The coalition stated that, if approved, Sandoz would pay approximately $469 million in total to state enforcers, including amounts from prior settlements, and would agree to injunctive terms and internal compliance reforms.
On August 4, the Justice Department's National Fraud Enforcement Division (Fraud Division), the U.S. Attorney's Office for the Eastern District of Pennsylvania, and the Pennsylvania Attorney General announced criminal charges against 19 defendants, including owners and employees of home care companies, for alleged fraud schemes involving more than $4 million in claims to Medicare and Medicaid. The Fraud Division stated the charges accompanied an expansion of its Northeast Health Care Fraud Strike Force to Philadelphia, joining the Fraud Division's Health Care Fraud Section with the U.S. Attorney's Office for the Eastern District of Pennsylvania.
On August 6, AARP sent a letter to CMS Administrator Dr. Mehmet Oz urging the agency to use available options to limit standalone Medicare Part D premium increases following its decision to end the three-year Part D Premium Stabilization Demonstration a year early. In the letter, AARP requested that CMS release its full preliminary analysis of 2027 Part D premiums and plan offerings and argued that standalone prescription drug plans (PDPs) are disadvantaged relative to subsidized MA prescription drug plans (MA-PDs). The letter stated that the Medicare Drug Price Negotiation Program is producing savings, citing negotiated prices for the first 10 selected drugs at approximately 22% below average net prices, and argued for building on that program to further lower prices.
On August 6, a federal judge in the U.S. District Court for the Western District of Texas dismissed an antitrust lawsuit brought by compounding pharmacy Strive Specialties against Lilly and Novo Nordisk. Strive had alleged that the manufacturers entered into exclusive agreements with major telehealth providers that restricted physicians’ ability to prescribe compounded GLP‑1 medicines, thereby limiting patient and clinician choice and suppressing competition. The court held that Strive did not plausibly allege a relevant product market because compounded GLP‑1 products are not reasonably interchangeable with the branded medicines.