Health Care Watch: September 5, 2026
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 30 – September 5. 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 September 1, Reps. Greg Landsman (D-OH), Buddy Carter (R-GA), Kim Schrier (D-WA), and Tom Barrett (R-MI) introduced the Doctors Not AI Act of 2026. This legislation would require that adverse health insurance coverage determinations involving clinical judgment be made by a licensed health care professional rather than an artificial intelligence (AI) system. The bill would require independent clinical review of each patient's circumstances, disclosure when AI is used in a determination, and documentation of the AI system's role in the administrative record. The sponsors stated the bill responds to the use of AI in claims review that has contributed to denials affecting mental health coverage, cancer treatment, and hospital stays.
On September 3, Energy & Commerce Committee Ranking Member Frank Pallone (D-NJ) sent letters to six companies certified as independent dispute resolution entities (IDREs) under the No Surprises Act, requesting information on how each company conducts arbitration and complies with the law. Ranking Member Pallone stated that the independent dispute resolution (IDR) process is not functioning as Congress intended and is contributing to higher out-of-pocket costs and premiums, citing an escalation in case volume to 2.5 million disputes in 2025 and reports that IDREs awarded nearly $15 billion to providers that year. The letters requested that each company respond by September 24 with data on dispute volume, eligibility determinations, staff qualifications, use of automated or AI tools, and financial relationships including private equity ownership.
The Ways & Means Committee is considering legislative reforms to the No Surprises Act and the Senate Health, Education, Labor, & Pensions Committee will hold a member roundtable in September on this issue.
On September 3, Energy & Commerce Health Subcommittee Ranking Member Diana DeGette (D-CO) and Reps. Mariannette Miller-Meeks (R-IA), Kim Schrier (D-WA), Rob Bresnahan (R-PA), and Angie Craig (D-MN), introduced H.R. 10227, the INSULIN Act of 2026. The legislation would cap monthly out-of-pocket insulin costs at $35 for patients with private insurance. The measure would be the first nationwide out-of-pocket cost cap in private plans for a non-preventive drug, though its practical impact would be modest because most insurers already charge $35 or less per month for insulin.
The House is scheduled to return from its recess on September 14.
Senate
The Senate is scheduled to return from its recess on September 14.
REGULATORY UPDATE
On August 31, the Centers for Medicare & Medicaid Services (CMS) announced $149.3 million in funding for Arkansas through the Rural Health Transformation Program (RHTP) to support telehealth, specialty and preventive care, and health infrastructure in rural communities. CMS stated the funding would support upgrading ambulances, expanding telehealth and patient-monitoring capabilities, modernizing rural hospitals and clinics with imaging and emergency teleconsultation technology, and enhancing provider training.
On August 31, the Substance Abuse & Mental Health Services Administration (SAMHSA) announced $77 million in new grant funding for substance use prevention, treatment and recovery, community mental health, suicide prevention, and crisis services. SAMHSA stated the awards include $22.2 million for substance use prevention, $23.6 million for treatment and recovery, $21.8 million for community mental health, and $9.4 million for suicide prevention and crisis services.
On September 1, CMS announced $58 million for Hawaii through the RHTP, directed at the state's health workforce, infrastructure, and technology. CMS stated the funding includes $45 million to the University of Hawaiʻi John A. Burns School of Medicine for workforce development and $13 million to the Hawaii Department of Health for new ambulances and emergency communications upgrades.
On September 3, CMS announced $120 million for Indiana through the RHTP to support maternal and infant health, primary and behavioral health access, workforce development, and chronic disease management across eight regions. CMS stated the funding will support the state's Growing Rural Opportunities for Well-Being (GROW) Regional Grants, including prenatal and postpartum navigation, a rural Obstetrics residency, mobile medical and dental services, and food-and-nutrition pilots such as medically tailored meals and produce prescriptions.
On September 3, the Food & Drug Administration (FDA) announced a request for information (RFI) seeking public input on opportunities to advance the development of botanical drug products, which FDA defines as products derived from plant materials, algae, macroscopic fungi, or combinations of these. FDA stated it is seeking feedback on challenges in botanical research and development, approaches to accelerate development, potential updates to guidance, quality standards, study designs for complex botanical mixtures, and the use of real-world evidence. Comments are due by November 3. A press release can be found here.
On September 3, FDA approved Ionis Pharmaceuticals’ Zanvastro (zilganersen) for the treatment of Alexander disease in pediatric and adult patients. FDA stated it is the first approved treatment for Alexander disease, a rare progressive neurological disorder, and the first therapy to target the buildup of glial fibrillary acidic protein that drives it. Zanvastro received Orphan Drug, Fast Track, Breakthrough Therapy, and Rare Pediatric Disease designations along with a Priority Review Voucher.
On September 4, FDA granted accelerated approval to AstraZeneca’s Etcamah (camizestrant), in combination with a CDK4/6 inhibitor, for adults with hormone receptor-positive, HER2-negative, locally advanced or metastatic breast cancer whose tumors develop an ESR1 mutation during aromatase inhibitor and CDK4/6 inhibitor therapy, as detected by an FDA-authorized test. The approval is the first for a cancer therapy guided by detection of a resistance mutation in circulating tumor DNA before imaging demonstrates disease progression. FDA also authorized the Guardant360 CDx assay as a companion diagnostic to identify eligible patients.
On September 4, the Health Resources & Services Administration (HRSA) awarded $11.2 million to support the development of 15 new physician residency programs in rural communities across 14 states. The awards were made through the Rural Residency Planning and Development Program and will support new residency programs in family medicine, internal medicine, preventive medicine, psychiatry, and general surgery. Each recipient will receive up to $750,000 over three years for planning and development activities, including accreditation, curriculum development, and faculty and resident recruitment.
On September 4, CMS announced $25 million for Michigan through the RHTP to modernize rural health technology, expand telehealth and remote patient monitoring, and improve high-speed internet connectivity. CMS stated the funding includes more than $16 million for rural providers to upgrade technology and digital systems and more than $9 million to improve connectivity, building on $70 million previously announced for Michigan.
On September 4, CMS announced $5.48 million for Rhode Island through the RHTP to expand health care-focused Career and Technical Education in rural communities. CMS stated the funding will go to 14 local education agencies and schools to develop health care career pathways for students in fields including nursing, emergency medical services, and behavioral health.
On September 4, CMS announced $76 million for New York through the RHTP to strengthen regional care coordination and modernize health care technology for rural communities. CMS stated the funding, awarded through New York's Rural Community Health Integration Initiative, will help rural hospitals, Federally Qualified Health Centers, behavioral health providers, and community organizations build integrated regional care networks, and will support workforce needs through expanded clinical rotations and employer-based and remote-supported training. CMS stated the award is only part of New York's larger total fiscal year (FY) 2026 RHTP funding.
WHITE HOUSE
On August 31, President Donald Trump announced agreements with nine additional pharmaceutical manufacturers to provide most-favored-nation (MFN) pricing, bringing the total to 26 manufacturers. The companies include Alcon, Astellas Pharma, BeOne Medicines, BridgeBio, CSL, Kyowa Kirin, Sun Pharma, Teva Pharmaceuticals, and UCB. The White House stated that the nine companies agreed to provide MFN prices to state Medicaid programs and collectively committed to invest at least $19.6 billion in U.S. manufacturing. The White House stated several companies will also donate active pharmaceutical ingredients to the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR), and that the Council of Economic Advisers estimates total MFN savings of $600 billion over the next decade. Several manufacturers issued press releases indicating that the MFN agreements also included exemptions from “future pricing mandates” potentially referencing the proposed GLOBE and GUARD models.
On September 2, President Trump signed H.R. 6500, the Continuing Appropriations and Extensions Act, 2027, into law. This is a short-term continuing resolution (CR) providing FY 2027 appropriations to federal agencies through December 11, 2026. The law prohibits implementation of the government-wide grant regulation that reshapes federal funding decisions during the period of the CR.
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
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
Cheeses and Related Cheese Products; Proposal to Permit the Use of Ultrafiltered Milk and Microfiltered Milk; Final Rule; 08/28/2026
Temporary Policies for Compounding Certain Starter Parenteral Nutrition Drug Products for Neonates; Guidance for Industry; Availability; Notice; 09/01/2026
HEARINGS
House
Ways & Means Committee
Potential Markup
September 16
Bills to be considered: TBA; health care price transparency legislation is expected
REPORTS
Office of Inspector General (OIG)
On September 2, HHS OIG posted an audit report finding that Medicare Part D sponsors made an estimated $587.7 million in ineligible payments for five drugs sold under obsolete prescription-only labeling after their brand-name versions had switched to over-the-counter status, during calendar years (CY) 2021-2023. OIG stated the payments occurred because CMS updated its Part D Formulary Reference File using obsolete FDA data and did not set a timeframe for sponsors to reject such payments. OIG recommended that CMS issue guidance on rejection timeframes, and CMS concurred.
On September 3, HHS OIG posted an audit report finding that Medicare paid Certified Transplant Centers an estimated $380 million over 2017 through 2022 for the costs of acquiring organs that were not used in Medicare-covered transplants. OIG stated that federal statute limits Medicare reimbursement to organs used in Medicare-covered transplants but that current CMS guidance conflicts with that requirement by assuming acquired organs will be used for Medicare transplants when they are not always. OIG recommended that CMS recover $154,210 in unsupported payments and revise its guidance to align with the statute. CMS concurred with the first recommendation and stated that it would take the second recommendation into consideration as it determines next steps.
On September 4, HHS OIG posted an audit report finding that CMS did not provide adequate oversight of states' use of contract surveyors to conduct nursing home surveys. OIG stated that CMS issued a memo outlining contracting practices for state survey agencies but did not monitor whether states implemented them, and that all 14 states it surveyed could have improved their policies and procedures to meet CMS guidelines. OIG made two recommendations, including that CMS track surveyor worker classification in its evaluation system, and CMS concurred with both.
On September 4, HHS OIG posted an audit report finding that the National Institutes of Health (NIH) awarded $51 million through 13 other transaction agreements for its Autism Data Science Initiative (ADSI) in accordance with federal requirements. OIG stated that NIH reviewed 248 applications and used subject-matter experts and an executive committee to select proposals across four priority areas, and that it negotiated budgets, personnel, indirect cost rates, and award terms with each awardee.
ADDITIONAL POLICY NEWS
On August 30, U.S. District Judge Reed O'Connor ruled that Texas and Florida may proceed with a challenge to FDA’s approval of mifepristone, as well as to more recent agency policies that permitted the drug to be dispensed by telehealth and mail. The ruling rejected a request by drug manufacturers Danco Laboratories and GenBioPro to dismiss the case. The court stated the ruling has no immediate effect on access to the drug and put further proceedings on hold until the earlier of December 1, 2026, or FDA’s completion of its review of the challenged actions.
On September 1, UnitedHealthcare announced it will eliminate prior authorization (PA) requirements for a range of medical services across its commercial, Medicare Advantage (MA), Medicaid, and individual exchange plans, effective October 1. UnitedHealthcare stated the change removes approximately 30% of PA requirements across those plans, affecting services in specialties including cardiology, genetic and laboratory testing, chiropractic care, and home health.
On September 3, the Campaign for Sustainable Rx Pricing (CSRxP), an advocacy group whose members include insurers, physicians, and pharmacists, released an analysis reporting that the 10 largest brand-name pharmaceutical manufacturers spent $0.18 of every revenue dollar on research and development in CY 2025. CSRxP stated the analysis found that the same companies spent $0.19 on advertising and selling, general, and administrative costs; $0.09 on corporate overhead; $0.25 on production; $0.04 on taxes; and $0.25 on profits.
On September 3, the Better Medicare Alliance released a white paper, developed by ATI Advisory, arguing that the Medicare Payment Advisory Commission's (MedPAC) comparison of spending between MA and Fee-for-Service (FFS) Medicare overstates the relative cost of MA. The paper argued that four methodological decisions including: what counts as a program cost, which populations are compared, and the time horizon measured, make MA appear more costly to the federal government than it is.