THIS WEEK’S DOSE
- Partial government shutdown seems likely. Senate Democrats, Republicans, and the White House are working to find a resolution to funding for the US Department of Homeland Security.
- Senate Aging Committee holds hearing on drug labeling. Senators examined whether drug labeling practices provide consumers with clear and accurate information about where their medications are manufactured.
- CMS releases CY 2027 MA and Part D Advance Notice. The Centers for Medicare & Medicaid Services (CMS) proposed a small payment increase for Medicare Advantage (MA) plans in calendar year (CY) 2027.
- CMS seeks information on PPE and essential medicine supply chains. A new advanced notice of proposed rulemaking asks for input on policy options to foster a more resilient supply chain for US-made personal protective equipment (PPE) and essential medicines.
- CMS proposes changes to OPO certification. The changes aim to increase competition among organ procurement organizations (OPOs).
- DOE releases proposed rule implementing OBBBA provisions. The Department of Education (DOE) proposal implements the student loan changes within the One Big Beautiful Bill Act (OBBBA).
- DOL proposes PBM changes. If finalized, the Department of Labor proposed rule would implement new pharmacy benefit manager (PBM) disclosure requirements.
- President Trump issues EO on SUD recovery. The executive order (EO) would coordinate the administration’s public health response to substance use disorder (SUD).
CONGRESS
Partial government shutdown seems likely. While six appropriations bills have been signed into law for fiscal year (FY) 2026 funding, the other six are pending in the Senate:
- Labor-US Department of Health and Human Services (HHS).
- Defense.
- US Department of Homeland Security (DHS).
- Financial Services.
- State-Foreign Operations.
- Transportation-Housing-Urban Development.
These six bills account for government funding for about 75% of all discretionary spending, which will run out at midnight on January 30, 2026, without congressional action. Several healthcare policies would expire at the same time, including Medicare telehealth flexibilities, Medicaid disproportionate share hospital payment protections, the Medicare-dependent hospital program, and the low-volume hospital payment adjustment.
Last week, Congress seemed set to complete action on the final six bills. The House advanced a four-bill “minibus” that also included a sizable healthcare package, combined it with a previously passed two-bill minibus, and sent the entire package to the Senate. Senate approval by January 30, 2026, would complete the FY 2026 appropriations process and avoid a shutdown.
After the weekend’s events in Minneapolis, however, momentum stalled. Senate Democrats are committed to blocking the appropriations package if it includes DHS funding. A key procedural vote to advance the minibus failed to get 60 votes in the Senate, with every Democrat and eight Republicans opposing it: Johnson (WI), Tuberville (AL), Lee (UT), Budd (NC), Paul (KY), Scott (FL), Moody (FL), and Thune (SD). Majority Leader Thune’s vote was procedural so he could bring the package up for consideration again later. Even if the Senate advances the final five bills and removes DHS from the package, the change would require the House (which is in recess this week) to vote again. The situation remains unresolved at the time of this writing and is unlikely to be resolved before January 30, meaning a partial shutdown is increasingly likely, even if it is only short-term.
Senate Aging Committee holds hearing on drug labeling. Democrats discussed the need to address drug shortages, quality, and supply chain resilience, not just drug labeling. They pushed to focus on evidence-driven solutions and transparency, so patients aren’t discouraged from taking necessary medicines. Republicans expressed national security concerns regarding generic drug manufacturing and advocated for passage of the CLEAR LABELS Act, which would require prescription drug labeling to disclose the original manufacturers of generic drugs and active pharmaceutical ingredients, including the country of origin.
ADMINISTRATION
CMS releases CY 2027 MA and Part D Advance Notice. CMS projects the payment policies and updates published in the Advance Notice will result in a net 0.09% increase in payments to MA plans in 2027. After accounting for expected trends in coding, CMS projects a net payment increase of 2.54%. Some key policy updates include:
- Sources of diagnoses for risk score calculation. CMS proposes excluding diagnoses from audio-only services and unlinked chart review records.
- Coding pattern adjustment. CMS proposes to reduce MA risk scores by 5.9% in 2027 to account for differences in coding between MA and fee-for-service.
- Inflation Reduction Act (IRA) updates. In response to ongoing changes to Part D benefit design mandated by the IRA, CMS proposes changes to the Part D RxHCC risk adjustment model to apply the updated benefit design to historical spending.
- Separate MA-PD and PDP model segments. CMS proposes to use separate continuing enrollee model segments for beneficiaries in plans that combine MA and Part D benefits (MA-PDs) and those in standalone Part D plans (PDPs).
Comments are due on February 25, 2026. CMS published a press release and fact sheet, and you can download data from CMS here. Read more in this week’s Regs & Eggs post.
CMS seeks information on PPE and essential medicine supply chains. CMS published an advance notice of proposed rulemaking that seeks public input on the following policy paths:
- The creation of a designation that could be earned by hospitals with a demonstrated commitment to procuring domestic PPE and domestic essential medicines.
- A structural measure requiring hospitals to attest to meeting the domestic procurement designation minimum percentages for PPE and essential medicines as part of the Hospital Inpatient Quality Reporting Program.
- Ideas on other policy paths within CMS’s statutory authority to help foster a more resilient supply chain for domestically manufactured PPE and essential medicines.
Comments are due on March 30, 2026. A press release is available here.
CMS proposes changes to OPO certification. The proposed rule includes several revisions to the conditions for coverage for OPOs, including:
- Allowing new OPOs to be certified. Currently, only OPOs that existed prior to 2002 are allowed to be certified.
- Allowing OPOs to be designated for more than one donation service area (DSA).
- Adding a competition process for the selection of OPOs to be designated to a given DSA.
Comments are due on March 31, 2026. A fact sheet is available here and press release here.
Senate Finance Committee Ranking Member Wyden (D-OR), a longtime advocate of Organ Procurement and Transplantation Network reform, released a statement on the proposed rule, signaling bipartisan interest in the issue.
DOE releases proposals implementing OBBBA provisions. OBBBA capped the amount of federal unsubsidized loans that medical and other health professional students may obtain and terminated Graduate PLUS loans for students beginning a graduate or professional program. To implement these provisions, the notice of proposed rulemaking includes the following:
- Setting the statutorily required borrowing limits.
- Narrowing the degree programs that will qualify as “professional,” notably excluding nursing, physical therapy, dental hygiene, occupational therapy, audiology, and social work degrees, among others. Those who do not pursue professional degrees will have a lower borrowing cap.
- Phasing out Graduate PLUS loans and creating a new Repayment Assistance Plan to replace all prior Income-Driven Repayment Plans.
Comments are due on March 2, 2026.
DOL proposes PBM changes. The proposed rule would require PBMs to report on a number of transparency measures to plan fiduciaries of self-insured group health plans subject to the Employee Retirement Income Security Act (ERISA). This policy was included in Executive Order 14273, the Lowering Drug Prices by Once Again Putting Americans First, issued on April 15, 2025. Specifically, PBMs would be required to report on:
- Rebates and other payments from drug manufacturers.
- Compensation received when the price paid by the plan for a prescription drug exceeds the amount reimbursed to the pharmacy.
- Payments recouped from pharmacies in connection with prescription drugs dispensed to the plan.
Comments are due on March 31, 2026.
President Trump issues EO on SUD recovery. The EO establishes the White House Great American Recovery Initiative, which will be co-chaired by the HHS Secretary and the Senior Advisor for Addiction Recovery. The order directs the initiative to recommend steps to coordinate the federal government’s response to the addiction crisis, noting that the framework for addiction treatment should be similar to treatment of other chronic diseases. The initiative will also advise agencies on how to implement programs addressing addiction and direct appropriate grants to support addiction recovery, with a focus on prevention, treatment, recovery support, and long-term resilience. A fact sheet is available here.
QUICK HITS
- Senate HELP Committee Republicans announce taskforce to eliminate fraud in federal spending. The taskforce will be led by Senate Health, Education, Labor, and Pensions (HELP) Committee Chair Cassidy (R-LA). Sens. Moody (R-FL) and Marshall (R-KS) will lead healthcare antifraud efforts. The taskforce launched an online portal for individuals to report fraud involving taxpayer dollars.
- CMS selects drugs for third cycle of Medicare Drug Price Negotiation Program. This is the first cycle that includes Part B drugs, and six out of the 15 drugs are covered under Part B.
- HHS OIG releases guidance and RFI on DTC programs. The HHS Office of Inspector General (OIG) released a special advisory bulletin and request for information (RFI) on the federal Anti-Kickback Statute and beneficiary inducements civil monetary penalty as they relate to direct-to-consumer (DTC) programs, including those that will be available through TrumpRx.
- HHS Secretary Kennedy appoints new members to Interagency Autism Coordinating Committee. The 19 new appointees include physicians, policy professionals, advocates, and patients. Secretary Kennedy has faced criticism over some of the chosen appointees.
- HHS, DOE refer Minnesota to DOJ over transgender girls competing in girls’ sports. HHS and DOE found that Minnesota is violating Title IX and sent the case to the US Department of Justice (DOJ) for enforcement.
- NIH, HHS take steps to reduce stem cell research. The National Institutes of Health (NIH) announced an RFI on emerging biotechnologies to reduce or potentially replace remaining research reliance on embryonic stem cells. HHS barred research using human fetal tissue from elective abortions.
- CMS releases marketplace open enrollment snapshot. The report shows that 23 million consumers have signed up for 2026 individual market health insurance coverage through the marketplace since the start of open enrollment. However, those individuals have not paid their premiums yet, and those who are eligible for advanced premium tax credits get a 90-day window to make payments before being terminated. This will need to be monitored for several months.
- ASTP/ONC releases RFI on diagnostic interoperability standards and certification. The HHS Assistance Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology (IT) (ASTP/ONC) seeks information on the transition from physical media to electronic access, exchange, and use, as well as standards and certified health IT functionality.
- Technology companies pledge assistance for states in implementing Medicaid work requirements. 28 companies voluntarily offered support, such as discounted professional services and free technology licenses, for the implementation of Medicaid work requirements.
- MACPAC holds January public meeting. The Medicaid and Children’s Health Insurance Program Payment and Access Commission (MACPAC) agenda included sessions on ensuring accountability of Medicaid managed care organizations, residential services for children and youth with behavioral health needs, Medicaid work requirements, children and youth with special healthcare needs, home- and community-based services, behavioral health in Medicaid, justice-involved youth, automated prior authorization, and the Program of All-Inclusive Care for the Elderly.
NEXT WEEK’S DIAGNOSIS
Both chambers of Congress will be in session next week, likely still working to finalize a path forward on government funding, which includes the larger healthcare package. The House Energy and Commerce Oversight and Investigations Subcommittee will hold a hearing on fraud in Medicare and Medicaid, and NIH Director Bhattacharya will appear before the Senate HELP Committee.
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