Health Care Watch: August 22, 2026

• The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 16 – August 22.  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 August 19, the Oversight and Government Reform Committee Chairman James Comer (R-KY) requested information from former HHS Secretary Xavier Becerra regarding the Department of Health & Human Services’ (HHS) response to the Select Subcommittee on the Coronavirus Pandemic’s 2023 request for documents and communications from former National Institute of Allergy and Infectious Diseases (NIAID) Director Dr. Anthony Fauci.  Chairman Comer alleged that HHS did not provide Dr. Fauci’s diary or government-issued phone despite the Committee’s previous request for records containing terms including “COVID-19,” “gain-of-function,” and “Wuhan.”  Chairman Comer requested that Secretary Becerra respond to questions about the handling of the records within two weeks.

  • The House is scheduled to return from its summer recess on August 31.

  Senate 

  • On August 13, Sen. Elizabeth Warren (D-MA) requested that HHS Secretary Robert F. Kennedy, Jr., provide additional information on the Administration’s Most-Favored-Nation (MFN) prescription drug pricing agreements with manufacturers, including the agreements’ terms, duration, associated incentives, and estimated savings.  The letter also raised questions about the methodology underlying the Administration’s estimates of savings through TrumpRx, citing a July 28 response from HHS stating that the platform does not store patient, health, or prescription information.  Sen. Warren requested a response by August 27. 

  • On August 18, Democratic Leader Chuck Schumer (D-NY), Sen. Michael Bennet (D-CO), and Rep. Kim Schrier (D-WA) led 88 members in writing a letter to President Trump to rescind his Executive Order (EO) that directs federal health agencies to overhaul longstanding childhood vaccine recommendations.  Members raised concerns about provisions encouraging the separation of combination vaccines into single-disease doses and directing the Department of Justice to challenge school immunization requirements.  The letter also noted that separate single-disease options for some routine childhood vaccines, including the measles, mumps, and rubella (MMR) vaccine, are not currently available in the United States.  

  • The Senate is scheduled to return from its summer recess on September 14.

  REGULATORY UPDATE

  • On August 17, the Substance Abuse and Mental Health Services Administration (SAMHSA), announced $96.7 million in grants and cooperative agreements for mental health, suicide prevention, and substance use disorder services.  The awards include $63.4 million for services for individuals experiencing homelessness with serious mental illness, $16.8 million for youth suicide prevention and early intervention, and $7.1 million for interventions for youth and young adults at clinical high risk for psychosis, as well as funding for substance use disorder treatment training, disaster-related emotional support, eating disorder services, peer-run organizations, and treatment for substance use and co-occurring disorders. 

  • On August 17, the Centers for Disease Control and Prevention (CDC) released data showing that vaccination coverage among U.S. kindergartners decreased for all reported vaccines during the 2025-2026 school year compared with the previous school year.  Coverage ranged from 92.0% for the diphtheria, tetanus, and acellular pertussis (DTaP) vaccine to 92.4% for the MMR and polio vaccines, while the share of kindergartners with an exemption from one or more vaccines increased from 3.6% to 4.2%.  CDC estimated that approximately 280,000 kindergartners attended school without documentation of completing the MMR vaccine series and approximately 155,000 had an exemption from one or more vaccines. 

  • On August 17, the Food & Drug Administration (FDA) issued draft guidance updating its recommendations for determining whether a drug product should be submitted through an Abbreviated New Drug Application (ANDA) or a 505(b)(2) application.  The guidance, which would replace FDA’s May 2019 guidance when finalized, provides additional clarification on when a proposed product is a duplicate of a listed drug and therefore must be submitted under the ANDA pathway, including circumstances involving discontinued reference listed drugs and unavailable reference standards.  FDA also outlines considerations related to petitioned ANDAs, bundling multiple products in a single 505(b)(2) application, active ingredient sameness, formulation and bioavailability differences, conditions of use, and labeling.  Comments on the draft guidance are due on October 19.  

  • On August 18, FDA issued a discussion paper seeking public feedback on regulatory considerations for GenAI (generative artificial intelligence)-enabled medical devices, including risk assessment, premarket evaluation, postmarket monitoring, foundation models, and agentic AI systems.  The paper outlines a potential two-axis risk assessment framework and a premarket evaluation approach involving non-clinical device benchmarking and clinical confirmation, and seeks input from manufacturers, clinicians, researchers, consumers, and other interested parties.  Comments on the paper are due on October 19. 

  • On August 18, the Centers for Medicare & Medicaid Services (CMS) announced the launch of QualTech, an industry event designed to identify technology solutions aligned with CMS health care quality priorities.  CMS is seeking proposals in four areas: using AI to identify patient safety and quality risks, using AI to increase Medicare Annual Wellness Visits, developing a digital quality measure calculator, and developing a national hospital quality dashboard.  Up to eight finalists will be selected to present their proposals to CMS on November 9, and submissions are due September 4.  CMS stated that QualTech is not a Notice of Funding Opportunity and participation does not guarantee future procurement or implementation.  

  • On August 19, CMS announced a $90 million investment for South Dakota through the Rural Health Transformation Program (RHTP) to support health information technology modernization, cybersecurity, interoperability, and other rural health initiatives.  CMS stated that the funding will support projects related to care access and infrastructure, digital health, tribal and priority population health, workforce development, and value-based care. 

  • On August 19, CMS announced a $35 million investment for Pennsylvania through the RHTP to support rural health care infrastructure, equipment, technology, and transportation.  The funding will support projects including screening technology, additional operating room capacity, hospital and provider facility improvements, emergency and non-emergency medical transportation, behavioral and maternal health care, and workforce initiatives. 

  • On August 21, HHS issued a Request for Information (RFI) seeking input on federal vaccine-recommendation categories and the role and possible expansion of shared clinical decision-making.  The RFI seeks feedback on whether HHS should create additional vaccine-recommendation categories beyond universal, risk-based, and shared clinical decision-making recommendations.  It specifically seeks feedback on the following categories: vaccines recommended “with qualification,” vaccines recommended through “shared clinical decision-making with qualification,” or vaccines recommended “but not during infancy.”  The RFI also seeks input on how to clarify shared clinical decision-making, establish evidence standards, and assess U.S. recommendations relative to those of peer countries.  Comments are due by September 20.  

  WHITE HOUSE

  • On August 17, White House officials released data highlighting declines in prescription drug prices and attributed the changes to the Administration’s MFN drug pricing policies and TrumpRx platform.  The release stated that prescription drug prices have declined 3.9% since President Donald Trump took office, and that agreements with 17 drug manufacturers cover approximately 86% of the branded drug market.  The White House also stated that TrumpRx has generated $700 million in patient savings and that the Department of Veterans Affairs has secured more than $10 billion in pharmaceutical savings during the current fiscal year.  

  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

  • Request for Information: Medicare Part D Reasonable and Relevant Pharmacy Contracting Standards (CMS-4217); Notice; 08/19/2026

  • Amendments to Rules Governing Organ Procurement Organizations (CMS-3409); Final Rule; 08/20/2026

  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

  • Use of Formaldehyde and Formaldehyde-Releasing Chemicals as an Ingredient in Hair Smoothing Products or Hair Straightening Products; Proposed Rule; 08/06/2026

  • 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 18, the HHS OIG issued an audit finding that Health Share of Oregon, a Medicaid coordinated care organization, did not always comply with federal and state requirements when denying prior authorization requests.  Of 100 sampled denials, OIG found 21 did not comply with all requirements.  OIG estimated that roughly 5,677 denied prior authorization requests (21% of those covered) did not comply with all requirements in calendar year 2023.  OIG made four recommendations; Health Share concurred with three and partially concurred with the fourth. 

  • On August 20, the HHS OIG released a white paper on durable medical equipment (DME) fraud in Medicare, calling for stronger action against schemes that bill for equipment enrollees do not need or never receive.  The paper identified three elements bad actors need to bill Medicare and commit DME fraud: a Medicare-enrolled supplier, a physician order, and an enrollee identification number.  OIG recommended corresponding safeguards, including strengthening supplier enrollment; catching fraudulent physician orders; and stopping the use of stolen enrollee identification numbers.  OIG noted that CMS has recently created a Fraud Defense Operations Center to proactively identify suspect billing and suspend payments. 

  ADDITIONAL POLICY NEWS

  • On August 18, the U.S. Court of Appeals for the District of Columbia Circuit rejected Teva Pharmaceuticals’ challenges to CMS’ decision to treat Austedo and Austedo XR as a single drug under the Medicare Drug Price Negotiation Program (MDPNP).  The court also rejected Teva’s constitutional challenge to the program but remanded Teva’s challenge to the “bona fide marketing” requirement for generic drugs to the district court to consider in the first instance.  

  • On August 20, eHealth released survey findings indicating that many Medicare beneficiaries and adults approaching eligibility lack an accurate understanding of how the program works, despite high confidence.  Based on a survey of more than 1,000 adults, 88% of beneficiaries were unaware that Original Medicare has no annual out-of-pocket cap, and 42% did not know or underestimated the costs of its standard 20% coinsurance.  Among adults ages 55 to 64 not yet enrolled, 88% were unaware of the potential Part B late-enrollment penalty. 

  • On August 20, MedPAC announced its public meeting schedule for September 2026 through April 2027.   Agendas will be posted a few days ahead of each meeting.

  • On August 20, the Committee for a Responsible Federal Budget (CRFB) published an analysis of a recent Congressional Budget Office (CBO) report projecting that the federal government will spend 5% to 10% more for Medicare Advantage (MA) enrollees than traditional Medicare and that for a given beneficiary MA costs 15% more than traditional Medicare.  CRFB estimated the cost of MA higher payments over 10 years at $1 trillion, compared with its $1.3 trillion estimate extrapolated from MedPAC’s analysis of higher MA payments, driven largely by coding intensity and favorable selection.

  • On August 20, Aon, a leading global professional services firm, released projections that U.S. employer health care costs will rise 9.5% in 2027 (before mitigation efforts).  This would push average costs above $19,000 per employee and marks the fourth consecutive year of near-double-digit increases.  Aon attributed the trend to rising utilization, growing chronic disease prevalence, more high-cost claims, and prescription drug spending, particularly specialty medications and continued GLP-1 adoption as those therapies expand into new clinical areas. The firm also flagged provider adoption of AI-assisted clinical documentation and coding as an emerging driver of higher billed charges.  Aon reported employers now absorb about 82% of plan costs, with the average employee expected to spend nearly $5,300 on health care in 2026.