The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from October 25 – October 31. 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 October 22, Energy & Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ), Health Subcommittee Ranking Member Diana DeGette (D-CO), and Oversight & Investigations Subcommittee Ranking Member Yvette Clarke (D-NY) sent a letter to Centers for Disease Control and Prevention (CDC) Director Dr. Erica Schwartz regarding CDC funding for a study in Guinea-Bissau that would withhold the hepatitis B vaccine birth dose from newborns. The letter stated that CDC announced funding for the study in December 2025 and cited reporting that CDC continued to pursue the funding after Guinea-Bissau’s government said the study had been terminated. The lawmakers characterized the study as unethical and requested a briefing by November 5, along with preservation of all related records. A press release can be found here.
On October 27, Energy & Commerce Committee Ranking Member Pallone sent a letter to the Government Accountability Office (GAO) requesting it review the TrumpRx platform. He asked GAO to examine how the platform tracks usage, how many transactions and consumers it has served, how its prices compare with generics or biosimilars, manufacturer discount programs, and options available through insurance, and what methodology supports the Administration’s claim of $700 million in patient savings. The letter also asks GAO to describe the Administration’s oversight of patient safety issues associated with the platform and argued that a lack of disclosure about the platform and related drug pricing agreements with manufacturers has prevented Congress from evaluating its impact. A press release can be found here.
On October 29, Reps. Doris Matsui (D-CA) and Tracey Mann (R-KS) introduced the Preserving Rules Ordered for The Entities Covered Through (PROTECT) 340B Act. The bill would prohibit pharmacy benefit managers (PBMs) and health insurers from imposing lower reimbursement rates, additional fees, restrictive pharmacy network requirements, or other discriminatory conditions based solely on participation in the 340B Drug Pricing Program, with protections extending to Medicare Part D and Medicare Advantage. It would authorize civil monetary penalties of up to $5,000 per violation per day for PBM violations and establish an independent clearinghouse to identify and resolve Medicaid duplicate discounts. The legislation would also require HHS to terminate the 340B Rebate Model Pilot Program and prohibit a similar program. A press release can be found here.
The House is in recess and is scheduled to return on November 9.
Senate
On October 26, Finance Committee Ranking Member Ron Wyden (D-OR), Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bernie Sanders (I-VT), and 11 other Senate Democrats sent letters to the chief executives of 10 of the largest insurers in the federal marketplace (Cigna, UnitedHealthcare, AmeriHealth Caritas, Centene, Elevance, Florida Blue, Health Care Service Corporation, Imperial Insurance Companies, Oscar Health, and Molina Healthcare) regarding their cooperation with the Administration in terminating Affordable Care Act (ACA) coverage for enrollees the Administration deemed unauthorized. The letters stated that the Centers for Medicare & Medicaid Services (CMS), working with the insurers, terminated coverage for 760,000 enrollees retroactive to August 31, based on metrics such as zero-dollar net premiums and whether enrollees had generated claims. The letters argued that the terminations bypassed the established mid-year eligibility determination process and preceded CMS’ modification of the relevant guidance. The senators asked the insurers when CMS first contacted them and whether it provided a legal basis for the request, whether they view zero-dollar premiums or missed communications as reliable proxies for fraud, how many terminated enrollees have since made a claim or sought reinstatement, and whether they are participating in a second phase of terminations now underway and requested responses by November 6. A press release can be found here.
The Senate is in recess and is scheduled to return on November 9.
REGULATORY UPDATE
On October 23, CMS announced $205 million in FY 2026 Rural Health Transformation Program (RHTP) funding for Wyoming. The funding includes $91.8 million for emergency medical care, including labor and delivery, emergency medical services (EMS), and trauma services; $56.3 million for workforce education and training; $38.6 million for primary care, behavioral health, and diet and exercise programs; and $16.9 million for health technology.
On October 23, CMS issued the Patient Protection and Affordable Care Act, Exchange Pre-Eligibility Verification proposed rule, which would implement provisions of the One Big Beautiful Bill Act (OBBBA) by requiring Exchanges to verify certain eligibility criteria, including household income and family size, before consumers receive advance payments of the premium tax credit (APTC) or cost-sharing reductions (CSRs), beginning with plan year 2028. Under the proposed rule, current enrollees would be automatically re-enrolled with financial assistance only if they confirm certain eligibility criteria each year, subject to re-verification. Enrollees would be re-enrolled without financial assistance otherwise. The proposed rule would also create a pre-open enrollment verification period beginning August 1 each year, starting in 2027. Comments are due November 27. A fact sheet can be found here. A press release can be found here.
On October 23, CMS announced $193.7 million in FY 2026 RHTP funding to 45 organizations in Florida. CMS stated that the awards will support telemedicine, remote patient monitoring, pharmacy-based services, diagnostic kiosks, and community paramedicine. CMS noted that the awards represent one part of Florida’s overall FY 2026 RHTP funding.
On October 26, the Department of Health & Human Services’ (HHS’) Office of the National Coordinator for Health Information Technology (ONC) released the Health Data, Technology, and Interoperability: ONC Deregulatory Actions to Unleash Prosperity (HTI-5) final rule. The final rule removes 14 and revises seven of the 60 certification criteria in the ONC Health IT Certification Program. HHS projected the rule will reduce regulatory costs by more than $1.5 billion. Information blocking proposals in the HTI-5 proposed rule were not finalized and remain under consideration. Most provisions take effect December 28, 2026.
On October 26, CDC Deputy Director and Chief Medical Officer Dr. Jennifer Shuford confirmed that she will leave the agency, with her last day scheduled for November 12. Dr. Shuford, who previously served as Texas health commissioner, joined CDC in April as part of a new agency leadership team. According to an Administration official, Satish Pillai, a career official, will serve as Acting Deputy Director and Chief Medical Officer.
On October 27, HHS’ Office on Women’s Health (OWH) announced efforts with the Agency for Healthcare Research & Quality (AHRQ) and DenseBreast-info.org (DBI) on breast cancer screening, breast density education, and diagnostic follow-up, particularly for midlife women. Under the initiative, the agencies will analyze national screening and follow-up patterns, and a collaborative of more than 40 health systems will expand evidence-based practices and address delays in care. OWH and DBI also signed a memorandum of understanding (MOU) to expand educational resources on breast density and screening options.
On October 27, HHS released an Office of the Assistant Secretary for Planning and Evaluation (ASPE) report examining CDC’s provisional finding that the U.S. age-adjusted death rate reached a record low of 689.2 deaths per 100,000 people in 2025. An accompanying analysis published in Health Affairs Forefront found that, from March 2015 through March 2026, population-adjusted opioid prescriptions dispensed fell to 45.3% of their March 2015 level, while the number of patients filling retail prescriptions for buprenorphine or naltrexone rose to 218% of that baseline. HHS stated that opioid-related deaths have fallen to their lowest level since 2017 and attributed the decline to Administration actions on opioid prescribing, illicit fentanyl, and treatment and recovery.
On October 27, the Food & Drug Administration (FDA) issued draft guidance, Individualized Human Genome Editing Products: Considerations for BLA Submission and Postapproval Management, on submitting and managing Biologics License Applications (BLAs) for individualized genome editing (GE) products for rare genetic diseases. The draft guidance introduces an Individualized Feature Space (IFS), a set of predefined boundaries within which patient-specific variants of a GE product may differ under a single BLA, and describes how sponsors may add new variants after approval using in vitro data without additional clinical trials. It also addresses manufacturing, safety testing, and product naming and labeling. Comments are due November 27.
On October 27, the CMS Innovation Center announced plans to expand the Cell and Gene Therapy (CGT) Access Model, under which CMS negotiates outcomes-based agreements with manufacturers on behalf of state Medicaid programs, to therapies beyond sickle cell disease. CMS stated that it will release a Request for Applications (RFA) for manufacturers in the coming months, enabling negotiations to begin sooner after FDA approval or licensure of a therapy and welcoming applications for therapies already approved or licensed.
On October 28, HHS issued a notice announcing a draft enforcement discretion policy under which it does not intend to take enforcement action against state-licensed pharmacies, federal facilities, or licensed physicians compounding drug products with six peptide bulk drug substances (BPC-157, epitalon, KPV, MOTS-c, semax, and TB-500) while FDA develops the list of bulk drug substances permitted under section 503A of the Federal Food, Drug, and Cosmetic Act through rulemaking. The policy applies only when specified conditions are met, including sourcing from FDA-registered manufacturers with valid certificates of analysis, single-ingredient products, limits on route of administration, and reporting of serious adverse events to FDA’s MedWatch program. Comments are due November 13.
On October 28, HHS’ Administration for Community Living (ACL) announced $35,763,912 in FY 2026 funding for 68 new grants from the National Institute on Disability, Independent Living, and Rehabilitation Research (NIDILRR). The grants support research, technology development, training, and technical assistance related to health, employment, and independent living for people with disabilities. The largest awards include $11.1 million for 10 regional centers supporting implementation of the Americans with Disabilities Act (ADA) and $8.4 million for 14 Spinal Cord Injury Model Systems centers.
On October 28, CMS announced nearly $186 million in FY 2026 RHTP funding for Idaho, which the state has committed in full to five initiatives. The funding will support telehealth, cybersecurity, and electronic health record modernization; community health workers and EMS professionals; workforce training, recruitment, and retention; programs addressing chronic disease, behavioral health, and maternal and child health; and rural health care facility and equipment improvements.
On October 28, CMS issued the calendar year (CY) 2027 End-Stage Renal Disease (ESRD) Prospective Payment System (PPS) final rule, which increases the ESRD PPS base rate to $297.52, including $12.85 to account for incorporating phosphate binders into the bundled payment. CMS projected that the rule will increase total payments to ESRD facilities by approximately 2.7% compared with CY 2026. The final rule also modifies the transitional drug add-on payment adjustment (TDAPA) and post-TDAPA policies, including using older average sales price (ASP) data when current ASP data are unavailable and updating the post-TDAPA adjustment quarterly. The rule also updates the ESRD Quality Incentive Program (QIP), including removing three reporting measures beginning with payment year 2029. A fact sheet can be found here.
On October 29, the Department of Labor (DOL) issued the Improving Transparency into Pharmacy Benefit Manager Fee Disclosure final rule, requiring PBMs and their affiliated brokers and consultants to disclose compensation and arrangements to fiduciaries of large, self-insured group health plans subject to the Employee Retirement Income Security Act (ERISA). Required initial disclosures address direct and indirect compensation including manufacturer payments, spread compensation, pharmacy recoupments, and price protection agreements as well as formulary placement incentives and net drug prices or pricing methodologies. Covered providers must also report compensation semiannually, or quarterly upon a plan’s request, and allow plans to audit disclosures at least annually. The rule generally covers specified self-insured plans averaging at least 100 participants or plans offered by employers averaging at least 100 employees but excludes plans whose sponsors are specified drug supply chain entities or their affiliates. The rule’s requirements apply to plan years beginning on or after July 1, 2027.
On October 29, CMS announced more than $233 million in RHTP funding for California, reflecting the state’s full FY 2026 award. CMS stated that the funding will support primary, maternal, specialty, and behavioral health care in rural areas through regional care networks, telehealth, partnerships with midwives, doulas, and community health workers. Funding will also go towards workforce training, and technology and infrastructure upgrades.
On October 29, CMS announced $87 million in RHTP funding for 129 rural health care providers through Rural Texas Strong, a portion of Texas’s FY 2026 award. CMS stated that the funding will support chronic disease prevention and management, including for diabetes, cardiovascular disease, and chronic respiratory disease; recruitment and retention of physicians, emergency medical personnel, and other health care professionals; and medical equipment replacement and facility improvements.
On October 30, CMS announced more than $19 million in RHTP funding through 11 awards in West Virginia, a portion of the state’s FY 2026 award. CMS stated that the funding will support mobile health units, drone delivery of time-critical medical supplies, remote eye care and patient monitoring, nursing education and apprenticeship programs, health information sharing systems, and mental health and substance use disorder recovery services.
On October 30, CMS announced $39.7 million in RHTP funding for 26 rural health care providers in Missouri to renovate, reconfigure, equip, or repurpose existing facilities, a portion of the state’s FY 2026 award. CMS stated that the funding will support new labor, delivery, and triage rooms; behavioral health services for older adults and people with substance use disorders; upgraded diagnostic equipment, including MRI, mammography, and ultrasound; and expanded primary care and rural health clinic capacity.
On October 30, CMS released a fact sheet on plan year 2027 HealthCare.gov plans and prices ahead of open enrollment, which runs from November 1 through January 15. CMS stated that more than 75% of HealthCare.govenrollees will have access to premiums at or below $50, and that tax credit-eligible enrollees will have access to a plan with nearly 90% of the lowest-cost premium paid by the federal government, compared with 85% in 2020. CMS also stated that enrollees will have access to an average of 100 plans from five to six insurers, and that eligible enrollees will have access to an average of 35 health savings account (HSA)-eligible plans following HSA eligibility changes in OBBBA.
On October 30, FDA approved updated labeling for three estradiol transdermal patch menopausal hormone therapy (MHT) products from two applicants, removing statements regarding cardiovascular disease, breast cancer, and probable dementia from the products’ boxed warnings. FDA stated that it is not aware of an imminent risk of a nationwide MHT shortage, that market output of estradiol patches has doubled over the past 12 months, and that estradiol and estradiol-containing combinations are listed as Category 1 bulk drug substances under its interim policy on compounding by 503B outsourcing facilities.
On October 30, HHS’ Office for Civil Rights (OCR) published a final rule amending HHS’s regulations implementing Section 504 of the Rehabilitation Act of 1973 to codify conditions the statute excludes from the definition of disability, specifying that gender dysphoria not resulting from physical impairments falls within the statutory exclusion for gender identity disorders not resulting from physical impairments. HHS stated that the rule resolves an ambiguity in the preamble to its 2024 Section 504 final rule, which had suggested that gender dysphoria could qualify as a disability. A press release can be found here.
On October 30, CMS finalized a rule revising requirements for organ procurement organizations (OPOs), including allowing high-performing OPOs to compete for multiple donation service areas and clarifying recertification, decertification, and appeals procedures. The rule defines “unsound medical practices” to clarify when CMS may immediately decertify a noncompliant OPO, strengthens adverse event and quality improvement requirements, and requires documentation of organs sent for research. It also excludes pancreata used solely for islet cell research from transplantation-rate calculations, while continuing to count those donors toward donation rates. A fact sheet can be found here.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
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
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
Comprehensive Regulations to Uncover Suspicious Healthcare (CRUSH) (CMS-6098); Proposed Rule; 08/07/2026
Medicare Drug Price Negotiation Program (CMS-4215); Final Rule; 09/09/2026
CY 2027 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1850); Final Rule; 09/17/2026
CY 2027 Home Health Prospective Payment System Rate Update and Home Infusion Therapy Services Payment Update (CMS-1844); Final Rule; 09/21/2026
CY 2027 Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1848); Final Rule; 09/29/2026
Expanding Access to Individual Coverage Health Reimbursement Arrangements (CMS-9876); Proposed Rule; 10/05/2026
HHS Notice of Benefit and Payment Parameters for 2028 (CMS-9875); Proposed Rule; 10/19/2026
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; 10/26/2026
Medicare Drug Price Negotiation Program: Final Guidance, Manufacturer Effectuation of the Maximum Fair Price in 2028; Notice; 10/29/2026
FDA
Cannabidiol (CBD) Products Compliance and Enforcement Policy; Notice; 03/13/2026
Administrative Detention of Tobacco Products; Proposed Rule; 07/09/2026
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
Sunlamp Products; Amendment to the Performance Standard; Final Rule; 09/09/2026
Validation of Certain In Vitro Diagnostic Devices for Emerging Pathogens During a Section 564 Declared Emergency; Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 09/10/2026
Clinical Trial Enrollment Action Plans to Improve Representation of the U.S. Intended Use Population in Clinical Studies; Notice; 10/06/2026
Patient-level data for drugs and biological products submissions containing real-world data and real-world evidence; Request for Information; Notice; 10/15/2026
REPORTS
Office of Inspector General (OIG)
On October 28, HHS OIG released an audit examining how four states (Massachusetts, New Jersey, New York, and Pennsylvania) implemented nursing home minimum spending requirements related to resident care. OIG found that each state required nursing homes to spend at least a set percentage of revenues, expenses, or costs on resident care, using different financial figures to calculate the spending percentage. OIG also found that three of the four states reported implementation challenges, such as difficulties collecting data from nursing homes and a lack of audited data, and that some selected nursing homes in each state reported compliance challenges, including staffing shortages and time constraints in gathering and reporting data. OIG recommended that CMS consider the findings as it implements federal Medicaid payment transparency reporting requirements for nursing homes, which begin in 2028, and in any future minimum spending rulemaking, and CMS concurred.
On October 28, HHS OIG released a data brief examining Medicare Part B outpatient drug claims billed with procedure codes that did not match those associated with the drug codes in CMS crosswalk files. OIG found 160,918 such claim lines with dates of service from April 1, 2024, through March 31, 2025, involving 577 unique procedure codes, with six procedure codes accounting for 62% of the drugs and critical access hospitals and short-term acute-care hospitals billing 99%. OIG identified two potential vulnerabilities in oversight by CMS and Medicare Administrative Contractors (MACs): a lack of system edits to ensure providers use the correct procedure code, and provider education activities that did not address billing with procedure codes matching the crosswalk files. The data brief did not include recommendations, though OIG stated that its findings may help CMS and MACs strengthen future oversight of outpatient drug billing.
On October 29, HHS OIG released an audit finding that Louisiana’s Medicaid agency made unallowable managed care capitation payments on behalf of incarcerated Medicaid enrollees. OIG found unallowable payments for 46 of 100 sampled enrollees, totaling $143,459 ($102,822 federal share), and estimated that the state made at least $3.7 million in such payments during the audit period. OIG recommended that Louisiana refund $2,690,745 in federal share payments and implement processes to consistently and promptly suspend managed care enrollments upon receiving incarceration notifications, and Louisiana agreed with the recommendations.
ADDITIONAL POLICY NEWS
On October 15, NEJM AI published a study comparing the cost of care recommended by 24 artificial intelligence (AI) systems with care documented by treating physicians across 200 deidentified outpatient and emergency department notes. The study found that general-purpose AI systems recommended care costing a mean of $314 per visit, compared with $97 for physicians, driven by additional diagnostic testing and specialist referrals, and that the systems also recommended more new medications (1.14 vs. 0.59 per visit). The study found that prompting the systems to be cost-aware or parsimonious reduced but did not eliminate the difference.
On October 29, the U.S. District Court for the District of Massachusetts, in Commonwealth of Massachusetts v. Oz, granted in part cross-motions for summary judgment in a challenge by 25 states and the District of Columbia to the CMS interim final rule Medicaid Program; Community Engagement Requirement for Certain Individuals. The court held that the rule’s definition of “medically frail,” which limited the exemption to individuals whose condition “significantly impairs the individual’s ability to comply with the community engagement requirement,” exceeded CMS’s statutory authority, and it vacated that language and permanently enjoined its enforcement. The court upheld the rule’s 12-month lookback period for claims and encounter data used to verify medical frailty and its limit of one self-attestation per enrollment period, finding that neither was arbitrary or capricious. The court also granted the plaintiffs a six-month stay of enforcement for medical frailty determinations, stating that the stay does not affect the January 1, 2027, statutory implementation deadline.
On October 30, the Medicare Payment Advisory Commission (MedPAC) released the agenda for its November 5-6 meeting. Topics of discussion include: recent changes in the Medicare physician fee schedule that affect primary care; charge-based coinsurance at rural health clinics; patterns of care among hospice and home health providers; findings from MedPAC’s focus groups with Medicare beneficiaries and physicians, nurse practitioners, and pharmacists; Medicare eligibility notification and the State Health Insurance Assistance Program operations and funding.