House Appropriations Committee advances Labor-HHS FY 2027 bill. On June 9, 2026, the full House Appropriations Committee met to consider and advance the FY 2027 Labor-HHS appropriations bill. The bill provides $110.8 billion to the US Department of Health and Human Services (HHS) for FY 2027, which would be a 4% decrease from the level of funding enacted for FY 2026. The lengthy markup included extensive amendment debate, and the committee ultimately approved the Labor-HHS bill by a party-line vote of 34 – 28. A bipartisan manager’s amendment adopted by voice vote included language that would block the US Department of Education from lowering student loan borrowing caps for nursing degrees, as was set forth in the department’s recent final rule. The committee also adopted language that would bar CMS from implementing the Wasteful and Inappropriate Service Reduction model designed to test prior authorization in fee-for-service Medicare. The bill report language can be found here, and the table of community project funding (aka, earmarks) can be found here. The Labor-HHS bill for FY 2027 now awaits consideration on the House floor.
In the Senate, where the annual appropriations process has traditionally been more bipartisan, the process has stalled. Republicans and Democrats have not yet reached an agreement on topline numbers for defense and non-defense spending, resulting in the cancellation of plans to advance any appropriations bills through committee at this time.
House Energy and Commerce Health Subcommittee reviews healthcare transparency bills. During the hearing, members and witnesses examined the following bills designed to enhance transparency for health plans’ rate and payment information, services furnished in hospitals and ambulatory surgical centers, and clinical laboratory tests and imaging services:
The subcommittee did not discuss all the bills listed above, but there was broad bipartisan consensus about the value of providing consumers with more transparency on pricing. Generally, Republicans endorsed these efforts as ways to address affordability, and Democrats noted that while pricing information can be helpful, Congress needs to take additional steps to address healthcare affordability. Some subset of these bills will likely be brought forward in a Health Subcommittee markup. It is unlikely that Congress will pass free-standing transparency legislation this year, but if consensus grows around some of these proposals, they could become part of the discussion around a potential healthcare package in the lame duck session.
House passes reconciliation 2.0 bill. On June 9, 2026, the House passed S 2, Republicans’ reconciliation 2.0 bill that the Senate approved last week and which the president signed into law. The bill funds US Immigration and Customs Enforcement and US Customs and Border Patrol for three years, and does not include any healthcare provisions. With reconciliation 2.0 in Congress’ rearview mirror, attention now turns to Republican efforts to pursue a reconciliation 3.0 package that could include defense and healthcare provisions. The 3.0 effort is largely being led by retiring Budget Committee Chairman Arrington (R-TX), who has indicated that the process will begin shortly. However, across the Capitol, Republican senators, including Sen. McConnell (R-KY) and Appropriations Chair Collins (R-ME), have expressed skepticism that another reconciliation package (which procedurally forces lawmakers to take tough amendment votes) can pass during an election year. Should reconciliation 3.0 gain momentum, we will closely monitor any health-related provisions that could be included as pay-fors in the package.
House Education and Workforce Subcommittee on Workforce Protections examines locum tenens providers. During the hearing, witnesses, Committee Chair Mackenzie (R-PA), Rep. Fine (R-FL), and bill sponsor Rep. Owens (R-UT) expressed support for HR 8347, which would codify locum tenens providers’ status as independent contractors. Locum tenens providers are clinicians who take on temporary assignments to fill in for other providers. While Republican committee members spoke about the benefits of locum tenens for facilities that have short-term or specialized staffing needs, especially rural facilities, Democratic committee members expressed concerns about the rise of the independent contractor employment model and its impact on worker protections such as workers’ compensation and unemployment insurance. They also noted concerns that the locum tenens staffing model can increase turnover, reduce stability, and potentially impact patient care.
Medicare trustees release 2026 report. The Medicare trustees report is an annual publication in which the trustees review Medicare enrollment and spending, project future spending, and evaluate the financial health of the trust funds that finance Medicare expenditures. A fact sheet summarizing the annual Medicare and Social Security trustees reports can be found here.
Key takeaways from the Medicare trustees report include the following:
HHS, CMS announce hospital pricing transparency enforcements. HHS Secretary Kennedy and CMS Administrator Oz took to social media to announce that hospitals must comply with federal price transparency requirements or face financial penalties. In a separate post, HHS said the compliance grace period for the updated requirements has ended, with no further extensions planned. Hospitals that remain out of compliance may face daily civil monetary penalties, which could reach up to $2 million for a full year of noncompliance. HHS also stated that more than 500 hospitals have already received warning letters for potential noncompliance following CMS reviews that began April 1, 2026.
CMS proposes changes to Medicaid section 1115 demonstrations. The OBBBA outlines requirements for the CMS Chief Actuary to certify that Medicaid section 1115 demonstrations are budget neutral. In response, on June 11, 2026, CMS announced that beginning January 1, 2027, they will not approve new demonstrations, demonstration renewals, or demonstration amendments unless the CMS Chief Actuary certifies that the demonstration project is not expected to increase federal spending compared to the state’s Medicaid program without the demonstration. Further, CMS reports plans for rulemaking, developing the following requirements around the process of 1115 demonstrations:
In a letter to state Medicaid directors, CMS states if a final rule on this topic is not effective before January 1, 2027, they expect to begin applying the new budget neutrality requirements on a provisional and temporary basis for new demonstrations.
Next Friday is the Juneteenth federal holiday, and the House will be in recess next week. The Senate is scheduled to be in session Monday through Thursday. Scheduled committee activity includes a Senate Health, Education, Labor, and Pensions Committee markup of eight health-related bills.
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