President Trumps signs OBBBA into law. Last week, congressional action on Republicans’ budget reconciliation package came to a close as the Senate and House passed the OBBBA. The Senate modified the bill and passed it on July 1, 2025, by a 51 – 50 vote, with Sens. Collins (R-ME), Paul (R-KY), and Tillis (R-NC) joining Democrats in voting no. Vice President JD Vance broke the 50 – 50 tie. The House passed the modified bill on July 3, 2025, by a 218 – 214 vote, with Reps. Fitzpatrick (R-PA) and Massie (R-KY) joining Democrats in voting no. The vote took place when the House was supposed to be in recess for the July Fourth holiday, and Republican leadership announced the House would be in recess the week of July 7 instead. President Trump signed the bill on July 4, 2025.
A comprehensive summary of the bill’s health-related provisions can be found here. Focus now turns to implementation, and a federal judge has already temporarily blocked OBBBA Section 71113, which prohibits federal Medicaid funding to entities that provide abortions.
Senate HELP Committee examines how to improve healthcare cybersecurity. The Senate Health, Education, Labor, and Pensions (HELP) Committee hearing focused on how the federal government can ensure patients’ healthcare data is kept secure. Witnesses noted that rural hospitals are under-resourced and struggle to defend against cyberthreats. They urged federal support for workforce development, standardized vendor vetting, and streamlined regulations. Democrats criticized the recent passage of OBBBA, noting that it will lead to loss of coverage, rural hospital closures, and increased mortality. Republicans and Democrats alike called for stronger privacy protections. Democrats focused on the need for federal standards for wearable health technologies, while Republicans focused on industry-led solutions such as vendor certification frameworks.
Senate Appropriations Committee discusses type 1 diabetes research. At the hearing, patients with type 1 diabetes discussed their experiences, and the director of the National Institute of Diabetes and Digestive and Kidney Disease discussed medical breakthroughs funded by the National Institutes of Health (NIH). Both Democrats and Republicans highlighted the important role of the NIH Special Diabetes Program and urged that it be reauthorized beyond its current September 2025 expiration. Democrats expressed concern about how proposed cuts to NIH funding would impact diabetes research.
Senate Appropriations Committee advances FY 2026 FDA bill. The Agriculture, Rural Development, and FDA FY 2026 bill passed with a 27 – 0 vote. The bill includes $7 billion for the FDA, including $3.4 from user fee revenues. It includes a new pilot grant program to help schools transition to safer and healthier foods. In late June, the House Appropriations Committee advanced its version of the Agriculture, Rural Development, and FDA FY 2026 bill by a party line 35 – 27 vote. That version of the bill included $6.79 billion for the FDA and aligned with the Trump Administration’s FY 2026 budget request.
HHS limits immigrant federal benefit eligibility. HHS revised its interpretation of “federal public benefit,” as used in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) and as defined in a previous notice from 1998, to expand the list of programs that qualify as such. PRWORA requires that providers of a “federal public benefit” must verify that a person applying for the benefit is a “qualified alien” and is eligible to receive that benefit. The 1998 notice identified 31 programs as providing “federal public benefits.” This new notice states that, based on its revised interpretation of PRWORA and based on intervening developments since the 1998 notice, HHS now identifies an additional 13 programs as providing “federal public benefits,” including but not limited to the Health Center Program, Head Start, and Certified Community Behavioral Health Clinics.
The notice takes effect immediately upon publication in the Federal Register, which is scheduled for July 14, 2025, and has a 30-day comment period. A press release can be found here.
CMS releases CY 2026 Medicare ESRD, home health proposed rules. Policies in the ESRD proposed rule would increase payments to all ESRD facilities, both freestanding and hospital-based, by about 1.9%. CMS also proposes a new facility-level payment adjustment for ESRD facilities in Alaska, Hawaii, and the US Pacific Territories that would be implemented on a budget-neutral basis. Comments on the proposed rule are due August 29, 2025, and a fact sheet can be found here.
The home health proposed rule would decrease payments for home health services by an estimated 6.4% and includes proposals related to the durable medical equipment, prosthetics, orthotics, and supplies competitive bidding program. Comments on the home health rule are due September 2, 2025, and a fact sheet can be found here.
CMS Innovation Center announces prior authorization model for traditional Medicare. WISeR will test the use of technology-enabled prior authorization and pre-payment review to ensure that selected services are medically necessary and clinically appropriate. The model will begin in January 2026 and run for six years. The announcement states that the model targets services vulnerable to fraud, waste, and abuse in traditional Medicare, such as stimulator services, cervical fusion, and skin and tissue substitutes. The Innovation Center may add services during model implementation. Participants will be companies that have experience managing prior authorization processes for other payers and demonstrated use of advanced technologies such as artificial intelligence and machine learning. Participant applications close July 25, 2025, and the Innovation Center is hosting office hours on July 17, 2025.
SCOTUS allows federal RIFs to proceed. In an 8 – 1 decision, SCOTUS ruled that the Trump administration may implement a February 2025 executive order (EO) directing agencies to plan RIFs. A California district court previously had placed a preliminary injunction on the EO in the case, Trump v. American Federation of Government Employees, and barred the administration from implementing the RIFs. The administration appealed. SCOTUS ruled that the administration may proceed while the appeal is pending and stated that the administration is likely to win on its argument that the EO is legal. The ruling enables federal agencies to resume implementing President Trump’s directive, although SCOTUS left the door open for plaintiffs to challenge agencies’ specific plans in the future.
The House will return from its recess, and both chambers will be in session next week. The House Energy and Commerce Committee will hold a legislative hearing focused on public health bills that aim to improve the health workforce, rural health, and over-the-counter medicine. Congress has until July 18, 2025, to act on the $9.4 billion rescissions package that the House approved in June. If the Senate chooses not to act on the package, the previously appropriated funds will not be rescinded. If the Senate modifies the bill, it will need to pass the House again before July 18. On the administration front, we await the release of the CY 2026 Physician Fee Schedule and hospital outpatient prospective payment system proposed rules.
