THIS WEEK’S DOSE
- House Republicans begin reconciliation 3.0 effort. The $95 billion draft budget resolution is not health-focused and instead narrowly focuses on defense spending, aid to farmers, and voting integrity efforts.
- Senate HELP Committee holds nomination hearings for CDC director, HHS assistant secretary of preparedness and response. Dr. Erica Schwartz, nominee for director of the Centers for Disease Control and Prevention (CDC), and Sean Kaufman, nominee for assistant secretary for preparedness and response for the US Department of Health and Human Services (HHS) testified before the committee.
- Senate Judiciary Committee examines patent eligibility. Members and witnesses shared opinions on how best to reform the patent eligibility framework.
- House Ways and Means Committee advances health legislation. Committee members advanced seven health-related bills with topics ranging from remote patient monitoring to price transparency.
- House Energy and Commerce Health Subcommittee discusses biomedical innovation, advances illicit drug legislation. After advancing three bills to curb illicit drugs, committee members discussed how to modernize US Food and Drug Administration regulatory requirements for early-stage clinical development to keep pace with other countries.
- House Education and Workforce Committee discusses DEI in medical schools. Members and witnesses evaluated the impacts of diversity, equity, and inclusion (DEI) in medical schools with a focus on admissions policies, hiring practices, and curricula content.
- CMS releases CY 2027 Medicare PFS proposed rule. The Centers for Medicare & Medicaid Services (CMS) proposed changes to Medicare physician payment and the quality payment program.
- DOJ posts clarification notice on Olmstead enforcement. The Department of Justice (DOJ) notice follows a recent memo and notes that the department will not rely on 2011 Olmstead guidance when enforcing the Americans with Disabilities Act.
CONGRESS
House Republicans begin reconciliation 3.0 effort. The draft budget resolution, released the morning of July 15, 2026, includes instructions for relevant House committees to produce legislative language that will provide approximately $12 billion for agriculture policies, $73 billion for defense and intelligence programs, and $10 billion for voter integrity efforts. As written, the package does not include offsets and does not include reconciliation instructions for health committees, meaning those committees would not be required to mark up reconciliation legislation under the current framework.
Of note to healthcare stakeholders, the resolution does include a provision that would allow for up to $658 million above the $311 million base for the Health Care Fraud and Abuse Control Program without violating House budget enforcement rules. The program, run by the HHS Office of Inspector General and the DOJ, coordinates federal, state, and local efforts to detect and investigate instances of healthcare fraud, waste, and abuse.
The House Budget Committee met to consider the budget resolution on July 16, 2026, and advanced the measure with a party-line vote of 20 – 14. It is expected to be on the House floor the week of July 20, 2026, which is the House’s final scheduled week of session before the August recess. It is not yet clear whether the full House will approve the budget resolution, given Republicans’ narrow majority, nor is it clear whether the Senate will advance the resolution as-is. Both chambers would need to approve the budget resolution before the authorizing committees could begin assembling their portions of the reconciliation 3.0 package.
Senate HELP Committee holds nomination hearings for CDC director, HHS assistant secretary of preparedness and response. On July 15, 2026, the Senate Committee on Health, Education, Labor, and Pensions (HELP) considered the nominations of Sean Kaufman to be the assistant secretary of preparedness and response for HHS and Dr. Erica Schwartz to be the CDC director. During the hearing, Democrats along with Chair Cassidy (R-LA) and Sen. Murkowski (R-AK) raised concerns related to vaccines, particularly regarding rhetoric linking the infant dose of the hepatitis B vaccine to autism. Schwartz stated that she would prioritize restoring trust in the CDC through transparency, scientific integrity, and evidence-based guidance, but Democrats and Chair Cassidy pressed her on whether she would resist political pressure from HHS Secretary Kennedy. Kaufman stated that he would prioritize accelerating the development of medical countermeasures and strengthening partnerships across the federal government with state, tribal, and local communities. He emphasized that he believes vaccines are safe and effective.
Senate Judiciary Committee examines patent eligibility. The hearing focused primarily on S 1546, the Patent Eligibility Restoration Act of 2025 (PERA), which received bipartisan support from the bill’s cosponsors, including Sens. Tillis (R-NC), Blackburn (R-TN), Coons (D-DE), and Hirono (D-HI), as well as support from some of the witnesses. The PERA cosponsors asked witnesses for suggestions on how to strengthen the legislation, specifically regarding unmodified human gene activity. Witnesses emphasized the importance of a strong patent system that spurs innovation in the United States but expressed various divided opinions on PERA, including concerns about the legislation’s impact on patient access and costs.
House Ways and Means Committee advances health legislation. The committee markup included discussion of seven health-focused bills, most of which passed unanimously:
- HR 9641, Essential Caregivers Act of 2026, as amended, passed 38 – 0.
- HR 9641 would require certain facilities to permit visits from two essential caregivers during a public emergency.
- HR 3108, Rural Patient Monitoring Access Act, as amended, passed 39 – 0.
- HR 3108 would set requirements for Medicare payment for remote patient monitoring (RPM) services. The bill would require a 1.00 floor for practice expense and malpractice geographic indices for RPM services. RPM providers would also be required to collect and report data to facilitate evaluation of cost savings.
- HR 9642, Medicare Access to Rural Anesthesiology Act, as amended, passed 41 – 0.
- HR 9642 would allow Medicare to pay on “a reasonable cost basis” for the anesthesia services furnished by an anesthesiologist in rural hospitals and critical access hospitals. Anesthesia costs would be excluded from operating costs of inpatient hospital services calculations.
- HR 9468, Saving Today’s Acute-Care Resources (STAR) Act, as amended, passed 40 – 0.
- HR 9468 would adjust site-neutral payments for long-term care hospitals by modifying criteria related to high-acuity patients.
- HR 3514, Improving Seniors’ Timely Access to Care Act of 2025, as amended, passed 42 – 0.
- HR 3514 would require electronic transmission of prior authorization requests and includes other health plan transparency provisions.
- HR 9644, Medicare Advantage (MA) MLR Transparency Act, as amended, passed 42 – 0.
- HR 9644 would require MA plans as of January 1, 2029, to report on all revenue, the amount and percentage used on incurred claims, and the amount and percentage that went to overhead costs.
- HR 9645, Health Care Price Certainty for All Americans Act, as amended, passed along party lines with a 25 – 15 vote, with all Republicans voting yes and all Democrats voting no.
- HR 9645 would require hospitals and health plans to disclose prices. The bill also includes provisions on vertical integration accountability and would require MA organizations to submit information on ownership of providers and pharmacies, and the Medicare Payment Advisory Commission to report on the status of vertical integration.
House Energy and Commerce Health Subcommittee discusses biomedical innovation, advances illicit drug legislation. Throughout the hearing, each witness emphasized that increased communication between the US Food and Drug Administration (FDA) and the pharmaceutical industry would boost US research capabilities. Democratic committee members expressed concerns about the impact of FDA layoffs and funding cuts, stating they were responsible for the growth of foreign leadership in research. Republicans showed interest in increasing access to clinical trial participation through local providers and telehealth.
When discussing the risks of foreign leadership in research, both Democrats and Republicans showed interest in finding ways to incentivize researchers to conduct preclinical and Phase 1 research domestically. Republican committee members also expressed concern that China’s research quality standards are lower than those in the United States, and said that the gap in data quality could influence US drug production if manufacturers continue to rely on Chinese studies.
Before turning to the hearing, the subcommittee advanced three bills related to combating illicit drug threats, all of which were approved with bipartisan support via voice vote:
- HR 7184, Preventing Rogue Equipment for Synthetic Substances (PRESS) Act.
- HR 8005, Stop Pills That Kill Act.
- HR 5880, Fight Illicit Pill Presses Act.
House Education and Workforce Committee discusses DEI in medical schools. During the hearing, Republicans raised concerns that DEI frameworks in medical schools may be linked to rising antisemitism, politically driven coursework, and medical training or practices related to gender-affirming care for minors. Republicans questioned whether the witnesses’ institutions were complying with President Trump’s executive orders addressing federally funded medical institutions that provide gender-affirming care for minors and DEI-related practices characterized as unlawful discrimination. Witnesses and Democrats agreed that DEI-related medical education helps future physicians understand social determinants of health, build a trust-based relationship with patients, and improve outcomes for diverse patient populations. Witnesses reported that their various institutions are complying with applicable state and federal requirements related to DEI and gender-affirming care.
ADMINISTRATION
CMS releases CY 2027 Medicare PFS proposed rule. Highlights from the calendar year (CY) 2027 Physician Fee Schedule (PFS) proposed rule include:
- Conversion factors (CFs). The proposed CY 2027 physician CFs represent a decrease of 1.19% and 1.68%, respectively, from the final CY 2026 CFs.
- Practice expense changes. CMS proposes a major change to how indirect practice expense is calculated, built around three interrelated changes to the current methodology.
- Global procedures. CMS proposes changes to same-day billing of out-of-office evaluation and management (E/M) visits and global period procedures so that Medicare pays the most expensive service at 100% and all other surgical procedures or E/M visits at 50%.
- RPM and remote therapeutic monitoring (RTM). CMS proposes significant policies that would establish additional criteria for, and set new valuation of, RPM and RTM services.
- Software as a medical service for laboratory services. CMS proposes to remove algorithm-only laboratory services from the Clinical Laboratory Fee Schedule and to pay for these services under the PFS, consistent with the approach detailed in the recently published CY 2027 Outpatient Prospective Payment System proposed rule.
- Merit-based Incentive Payment System (MIPS). CMS proposes to sunset traditional MIPS reporting in 2029 and transition clinicians toward MIPS Value Pathways. The proposed rule also introduces new MIPS core measures as part of its quality reporting requirements.
- Ambulatory Specialty Model. CMS proposes refinements to the model, including technical corrections and streamlining changes that respond to stakeholder feedback from the CY 2026 PFS rulemaking process.
- Medicare Shared Savings Program (MSSP). CMS proposes reforms to MSSP payment methodology that stakeholders have long advocated for (most notably guardrails on the accountable care prospective trend) while aligning with the administration’s broader deregulatory agenda and easing the path toward digital quality measures by reducing administrative burden.
Comments on the proposed rule are due September 14, 2026. For more information, see CMS’s press release and fact sheets, found here and here.
DOJ posts clarification notice on Olmstead enforcement. The DOJ posted a clarification notice stating that 2011 Olmstead guidance and similar guidance documents are not enforceable. DOJ plans to revisit the guidance in light of the Supreme Court’s 2024 Loper Bright decision and will not rely on the 2011 guidance when enforcing Title II of the Americans with Disabilities Act (ADA). The notice follows a June 2026 DOJ memo on Olmstead that argues that the ADA and Section 504 of the Rehabilitation Act do not require states to move people with mental illness or developmental disabilities out of institutions and into community-based settings whenever possible.
In response to the DOJ activity, Senate Democrats introduced a resolution (S.Res. 790) in late-June that recognizes the 27th anniversary of the Olmstead decision, condemns recent DOJ actions and Medicaid cuts, and calls on DOJ to rescind its June 2026 memo.
BIPARTISAN LEGISLATION SPOTLIGHT
Reps. Joyce (R-PA) and Murphy (R-NC), co-chairs of the GOP Doctors Caucus, and Rep. Schrier (D-WA), chair of the Democratic Doctors Caucus, introduced the Patients First Act, which would reform the Medicare physician payment rate-setting formula by tying physician reimbursement to an inflationary measure linked to the Medicare Economic Index. The legislation also would create several programs and initiatives:
- The Patient Outcome Improvement National Tabulation System (POINTS) to replace MIPS.
- A new primary care hybrid payment pilot program that would pay primary care providers a per-member-per-month payment.
- A physician-and-clinician-led Quality Care Reform Task Force at CMS to develop quality metrics for the POINTS program.
QUICK HITS
- White House selects nominee to lead SAMHSA. Timothy Westlake, current chief of staff for the Substance Abuse and Mental Health Services Administration (SAMHSA), was nominated for the position of SAMHSA assistant secretary. The position has been vacant for more than a year.
- CMS announces new risk-based nursing home survey process. CMS published a memo outlining a new risk-based survey process for qualifying nursing homes that builds on a pilot conducted in 22 states. Under the process, certain higher-performing facilities will receive a modified standard recertification survey, while state agencies may continue to use the traditional survey process based on complaints or other resident health and safety concerns.
- HHS, VA announce partnership on mental health treatments for veterans. HHS and the US Department of Veterans Affairs (VA) signed a five-year memorandum of understanding to coordinate research, workforce training, clinical protocols, and real-world evidence collection for potential future FDA-approved rapid-acting psychiatric drugs, including psychedelic therapies, for veterans with serious mental health conditions.
- GAO releases report on CMS oversight of marketplace agent and broker activity. The US Government Accountability Office (GAO) report, which builds upon a December 2025 preliminary report, found that CMS has weaker controls for confirming consumer consent and notifying consumers of agent or broker actions within the marketplace. GAO recommends that CMS design and implement stronger controls to verify consumer consent to agent and broker actions on consumer enrollments, and recommends that the CMS administrator periodically review fraud, waste, and abuse controls.
- Sen. Markey releases AI accountability agenda. Sen. Markey (D-MA) announced his artificial intelligence (AI) accountability agenda with six legislative priorities, including “Putting Humans First in Healthcare.” The agenda asks Congress to pass the Right to Override Act to require healthcare facilities and health plans to create a human override option for AI clinical decision support systems.
- FDA proposes rule to modernize drug manufacturing registration. The FDA released a proposed rule to streamline registration for distributed drug manufacturing establishments and clarify registration requirements for certain foreign drug manufacturers. Comments on the proposed rule are due September 11, 2026.
NEXT WEEK’S DIAGNOSIS
The House and Senate are both scheduled to be in session next week, which is the House’s final week of session before its August recess begins (the Senate is currently scheduled to be in session through the week of August 3, 2026). To start off the week, the House Energy and Commerce Committee will hold a full committee markup of 29 bills, 20 of which are health-related, including the Medicare Advantage Cost Transparency Act, Improving Seniors’ Timely Access to Care Act of 2025, and the Lower Costs, More Transparency Act of 2026. Additionally, the House Oversight Committee will hold a roundtable on Medicare fraud focused on skin substitute spending. The Senate HELP Committee will hold an executive session to review 13 health-related bills, including the Patients Deserve Price Tags Act, the INSULIN Act, the Rural Obstetrics Readiness Act, and the Health Information Privacy Reform Act. Later in the week, the HELP Committee will vote on the nominations of Sean Kaufman to be the assistant secretary of preparedness and response for HHS, Erica Schwartz to be the CDC director, and Keith Sonderling to be secretary of labor.
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