Health Care Watch: August 14, 2026
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 9 – August 14. 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 from its summer recess on August 31.
Senate
On August 8, the Senate passed a stopgap funding bill in a 90-6 vote that would fund federal agencies through December 11 at current levels, with some exceptions. The bill would bar the Trump administration from finalizing a rule that would place political appointees in charge of approving federal grants, including at the National Institutes of Health (NIH), for the duration of the stopgap. The House previously passed a different funding bill, meaning the House will either have to adopt the Senate-passed bill or reconcile the differences between the two bills before it goes to President Trump’s desk. Funding for the federal government expires on October 1.
On August 12, Health, Education, Labor, & Pensions (HELP) Committee Chairman Bill Cassidy (R-LA) and Ranking Member Bernie Sanders (I-VT) sent a letter to Attorney General Todd Blanche requesting an update on the status of the criminal contempt referral for Dr. Ralph de la Torre, former Chairman and CEO of Steward Health Care. The letter noted that the Senate unanimously adopted the contempt resolution on September 25, 2024, after de la Torre failed to appear under subpoena, and that the U.S. Attorney for the District of Columbia has not yet acted on it. The senators requested a response by August 20.
On August 13, Sen. Elizabeth Warren (D-MA) sent a letter to U.S. Department of Health & Human Services (HHS) Secretary Robert F. Kennedy, Jr., regarding the department’s response to the recent cyclosporiasis infection. The letter requested records and information on FDA’s testing and communications with other government agencies and Taylor Farms; the outbreak’s scope, costs, and federal response; and whether Taylor Farms’ political contributions and lobbying influenced food safety policy. The letter requested a response by August 27.
On August 13, Sen. Warren sent a letter to Secretary Kennedy seeking information on the Administration’s most favored nation agreements with drug manufacturers. The letter seeks copies of the agreements and explanations of why any information is redacted, explanations of what will happen to prices at the end of President Trump’s term in office, details on efforts to negotiate agreements that result in higher prices in foreign countries, and evidence supporting claims about usage and savings via TrumpRx. The letter requests a response by August 27.
The Senate will return from its summer recess on September 14.
REGULATORY UPDATE
On August 10, the Centers for Medicare & Medicaid Services (CMS) announced resources and regulatory flexibilities for health care providers and beneficiaries affected by wildfires in Washington state, following the Public Health Emergency (PHE) that the Department of Health & Human Services (HHS) declared for the state on August 7. The flexibilities, retroactive to August 1, include Section 1135 blanket waivers for affected providers, replacement of lost or damaged durable medical equipment, prosthetics, orthotics, and supplies for people with Medicare, out-of-network access to Part D drugs for displaced beneficiaries, and activation of the Kidney Community Emergency Response (KCER) program for dialysis patients. CMS stated that Medicaid and Children's Health Insurance Program (CHIP) disaster flexibilities are also available to the state. LINK
On August 11, CMS issued a final rule ending the use of federal Medicaid and CHIP funds to pay for puberty blockers, cross-sex hormones, and related surgical procedures for minors, which the rule terms “sex-rejecting procedures.” CMS stated that the rule follows an HHS review of national and international research that it said identified evidence gaps and safety concerns. The rule applies only to federal funding, and states may continue to cover the services using state-only funds; it provides a tapering-off period of up to six months for children currently receiving hormone therapy and does not affect coverage of mental health services. The rule is scheduled to take effect October 13. A press release can be found here. LINK
On August 11, the Health Resources & Services Administration (HRSA) posted a notice announcing a new framework for reviewing conditions for the Recommended Uniform Screening Panel (RUSP), the national guideline states use to determine which conditions newborns are screened for. HRSA is providing supplemental funding to the Association of Public Health Laboratories to convene a national stakeholder workgroup that will develop findings and recommendations for HRSA's review. A press release can be found here. LINK
On August 12, HHS announced a $4 million initiative to expand access to rapid, point-of-care syphilis testing and treatment for pregnant women, directing the funding to the Division of STD Prevention at the Centers for Disease Control and Prevention (CDC). Approximately $3.25 million will go to supplemental awards for recipients of a CDC cooperative agreement in jurisdictions identified as having a high burden of syphilis and congenital syphilis, running from August 2026 through February 2027, with the remainder supporting national partners providing technical assistance. HHS stated that the initiative aims to expand testing and link patients to care in emergency departments and other nontraditional settings, citing CDC data showing congenital syphilis cases have risen for a twelfth consecutive year to nearly 4,000 in 2024.
On August 12, HHS, the White House Office of National Drug Control Policy (ONDCP), and the U.S. Department of Housing and Urban Development (HUD) released a best-practices toolkit outlining a model the agencies termed "Treatment First" for addressing homelessness and substance use disorder. The agencies described the model as prioritizing engagement in evidence-based treatment and recovery support services, and said the toolkit was developed with input from experts nationwide. The toolkit is a guidance resource and does not establish regulatory requirements.
On August 12, HHS, through the Office of the Assistant Secretary for Health, published a notice soliciting nominations for membership on the National Vaccine Advisory Committee (NVAC), the federal advisory committee that advises the Director of the National Vaccine Program. Nominations are due 30 days from publication.
On August 12, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) releaseda report estimating that the Medicaid provider tax and state-directed payment (SDP) provisions of the One Big Beautiful Bill Act (OBBBA) would reduce prices paid by non-Medicaid payers by up to 3.5% in markets with provider taxes. The report estimated that the changes would benefit non-Medicaid payers by $502 billion to $875 billion over 2025-2034, and that for each $100 billion of reduced federal Medicaid spending, the federal government would save an additional $29 billion on Medicare and commercial coverage. It stated that OBBBA lowers the SDP payment ceiling to a Medicare-based limit, freezes provider tax rates at July 2025 levels, and phases the safe-harbor threshold down to 3.5% by FY2032 in expansion states.
On August 13, HRSA announced $102 million in New Access Points awards to expand the Health Center Program. HRSA stated that the awards will support 158 new and existing health centers to establish 415 new sites and expand access to primary care for nearly 1 million people, and that this is the first major expansion of the program since 2019.
WHITE HOUSE
On August 10, President Trump signed an executive order (EO) establishing “Gold Standard Childhood Vaccine Recommendations.”. The recommendations identify immunizations against 11 diseases as recommended for all children, compared with protection against 18 diseases under the 2024 CDC schedule. Other immunizations are categorized either for certain high-risk groups or for shared clinical decision-making. The order states that the changes align U.S. recommendations with best practices from peer developed countries. It directs that the combined measles, mumps, and rubella (MMR) vaccine be given as three separate shots once domestically available, and that immunizations be spaced across separate visits where feasible. It also directs HHS Task Force on Safer Childhood Vaccines to present implementation plans within 90 days. Finally, it directs the Attorney General to take appropriate measures to further legal actions challenging state laws that conflict with constitutional and federal statutory obligations, including obligations to provide religious and medical exemptions from immunization requirements. 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
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
Transparency in Coverage (CMS-9882); Final Rule; 07/27/2026
Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) (CMS-6098); Proposed Rule; 08/07/2026
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
Frequently Asked Questions--Developing Potential Cellular and Gene Therapy Products; Final Guidance for Industry; Availability; Notice; 08/11/2026
Hazard Analysis and Risk-Based Preventive Controls for Human Food; Draft Guidance for Industry; Notice; 08/11/2026
REPORTS
Office of Inspector General (OIG)
On August 10, HHS OIG posted an audit finding that Deistic Home Health Care, Inc. complied with Medicare billing requirements for 63 of 100 sampled home health claims and estimating that the agency received at least $43,074 in net overpayments during the January 2021 through December 2022 audit period. OIG recommended that Deistic, which voluntarily terminated its Medicare provider agreement in August 2025, refund the estimated amount. The audit is one in a nationwide series; OIG noted that CMS’ Comprehensive Error Rate Testing program found a 7.7% improper payment rate for 2023 home health claims, or about $1.2 billion.
On August 13, HHS OIG posted an audit finding that Kansas did not ensure its three Medicaid managed care organizations (MCOs) complied with mental health and substance use disorder (MH/SUD) parity requirements related to prior authorization during calendar year 2023. The audit found that none of the three MCOs performed a complete parity analysis and that Kansas did not request one, and that one MCO denied prior authorization for out-of-network MH/SUD services at a higher rate than for comparable medical and surgical services. OIG made three recommendations to strengthen state oversight of the MCOs, all of which Kansas accepted.
On August 13, HHS OIG posted its quarterly comparison of average sales prices (ASPs) and average manufacturer prices (AMPs) for Medicare Part B drugs, finding that nine drug codes met CMS' price-substitution criteria in the first quarter of 2026 by exceeding the 5% threshold for two consecutive quarters or three of the previous four quarters. OIG provided the nine codes to CMS for review to determine whether to substitute lower payment amounts.
Government Accountability Office (GAO)
On August 13, GAO published a report finding that contact volume for the 988 Suicide and Crisis Lifeline, the National Maternal Mental Health Hotline, and the Veterans Crisis Line generally increased in fiscal year 2025. The report stated that 988’s call volume was up 23% over FY2024. The report found that HHS and the Department of Veterans Affairs (VA) reduced some staff who oversee or operate the hotlines during the year, following the President's February 2025 EO to reduce the federal workforce, but that services remained mostly consistent according to agency data and stakeholders.
Congressional Research Service (CRS)
On August 10, CRS published a report summarizing the 2026 Medicare Trustees Report's projection that the Hospital Insurance (HI) trust fund, which finances Medicare Part A, will become insolvent in the second quarter of 2033, the same year the trustees projected in their 2025 report. The report noted that the trust fund is projected to transition from a surplus in 2026 to a deficit in 2027, and that at insolvency incoming revenue would only cover an estimated 89% of Part A costs. It stated that the Trustees estimated that making the fund solvent for 75 years would require an immediate 0.56%-point payroll tax increase or a 12% reduction in benefits, a larger shortfall than in 2025 that the trustees attributed in part to reduced taxation of Social Security benefits under OBBBA.
ADDITIONAL POLICY NEWS
On August 10, JAMA Internal Medicine published a study by researchers at the University of North Carolina at Chapel Hill finding that Medicare Advantage (MA) was not associated with better type 2 diabetes outcomes than original Medicare. Examining nearly 35,000 adults before and after Medicare enrollment, the study found that at 12 months after enrollment, MA was not associated with better hemoglobin A1C control or with a lower risk of food insecurity, housing instability, or transportation barriers. The authors noted that the study population was drawn from community-based health centers serving predominantly low-income patients, so the findings may not be generalizable to all Medicare beneficiaries.
On August 11, the National Alliance of Healthcare Purchaser Coalitions released a survey finding that roughly half of employers now use a pharmacy benefit manager (PBM) other than CVS Caremark, Optum Rx, and Express Scripts, a 37% increase from the previous year. The survey of 408 employers, conducted in May and June, found that 56% of employers using one of the three largest PBMs were considering a change, compared with 31% of those using alternative PBMs, and that employers projected a 7.7% increase in health costs next year.
On August 12, Lilly announced that it filed six lawsuits against U.S. entities, including compounding pharmacies, medical spas, and online sellers, alleging that they are selling illegal, unapproved products represented as containing retatrutide, Lilly’s investigational medicine in Phase 3 clinical trials. Lilly also said it has referred more than 200 individuals and entities to FDA, the Department of Justice, state attorneys general, law enforcement, and professional licensing boards, and has reported more than 14,000 websites, advertisements, social-media posts, and product listings that unlawfully market retatrutide.
On August 13, the Kaiser Family Foundation (KFF) published an analysis of the first year of prior authorization metrics that insurers were required to report under CMS' 2024 final rule covering MA, Medicaid managed care, and Affordable Care Act (ACA) federally facilitated Marketplace plans for the 2025 calendar year. The analysis found that insurers denied 12% of standard prior authorization requests in MA, 14% in Medicaid managed care, and 18% in the ACA Marketplace, and that when denials were appealed, they were overturned 67% of the time in MA, 47% in Medicaid managed care, and 43% in the Marketplace.
On August 13, PatientRightsAdvocate.org, Inc., filed a lawsuit against the American Medical Association (AMA) seeking the right to publish the Current Procedural Terminology (CPT) coding system online at no charge. The organization argued that CPT cannot be copyrighted because federal and state law require its use in medical billing, and that free publication would constitute fair use. The complaint also alleges the AMA has misused its asserted copyright.
On August 13, the Pharmaceutical Care Management Association (PCMA) and 10 PBMs announced a commitment to present patients with the cash prices listed on TrumpRx for comparison with the prices available through their pharmacy benefits. The commitment provides that participating PBMs will use real-time benefit tools, when consistent with plan coverage and permitted by law, or other patient cost-transparency platforms to display TrumpRx prices. Participating PBMs include CarelonRx, CVS Health, Express Scripts, Humana, MedImpact Healthcare Systems, Navitus Health Solutions, OptumRx, Prime Therapeutics, VytlOne, and WellDyne.