Senate advances reconciliation 2.0 bill. The Senate passed the reconciliation 2.0 package, which funds ICE and CBP and includes no healthcare provisions. The bill now moves to the House, though Republican leadership cancelled Friday votes, postponing further action to next week. In the meantime, we continue to monitor whether there is any momentum behind some House Republicans’ desire to pursue a reconciliation 3.0 bill this year. Conservative Republicans would like to include defense spending in such a package and have talked about offsetting that spending through expanded efforts to fight healthcare fraud, waste, and abuse, and potentially additional healthcare provisions. Given the limited time Congress is in session before the midterm elections and the need for near unanimity among Republicans to pursue another reconciliation package, this proposal remains speculative, but bears watching.
Senate HELP Committee discusses gender-affirming care for minors. Democrats spoke about how gender-affirming care should be addressed by a parent and their child without additional regulation from the government. Republicans stated that the government has a responsibility to protect children and should ban minors’ access to such care. Democrats and Republicans discussed the potential for malpractice lawsuits, and Republican witnesses spoke about preventing children from making lifelong alterations to their bodies and having to detransition as adults.
House Oversight fraud task force examines Ohio Medicaid HCBS program. Republicans and witnesses discussed how weak oversight in Medicaid allows fraud to be widespread, particularly in HCBS programs. Democrats argued that while accountability and oversight are necessary, Medicaid cuts will cause harm to vulnerable populations. Republicans also discussed HCBS fraud in Minnesota and California, and raised concerns about fraud in services for children with autism.
House Judiciary Committee debates drug patents. Republicans emphasized that strong patent protections prevent manufacturers from moving business overseas. Democrats and Republicans agreed that patent protections are essential to incentivize pharmaceutical research and that the United States must maintain a balance of encouraging innovation and patient treatment access. There was bipartisan agreement that prescription drug affordability is a top priority for Americans. A few witnesses mentioned that generic drugs face delays in entering the market due to the amount of litigation generic drugmakers must complete after a drug’s patent period expires. Discussion also centered on this week’s Supreme Court decision on skinny labeling (more on that below).
House Appropriations Labor-HHS Subcommittee advances FY 2027 bill. The bill would provide $110.8 billion to HHS, a 4% or $4 billion cut from the FY 2026 enacted level. However, it would provide an increase to National Institutes of Health (NIH) funding, at $48.8 billion. The subcommittee advanced the bill by an 11 – 7 party line vote, as Democrats noted that cutting HHS programs would do nothing to address Americans’ healthcare affordability concerns. The bill now moves to the full committee, which will debate it on June 9, 2026.
CMS issues Medicaid work requirements interim final rule. The rule implements the Medicaid work requirements enacted as part of the One Big Beautiful Bill Act (OBBBA). It provides implementation information to states, defines key terms, and gives more clarity on good-faith-effort exemptions for states. States must implement work requirements for the expansion population by January 1, 2027. Some states have already begun implementing work requirements (Nebraska) or will implement them ahead of schedule in 2026 (Montana and Iowa).
Key takeaways from the interim final rule include the following:
The rule is effective July 31, 2026, and stakeholders have until that date to submit comments. Since it is an interim final rule, CMS is not required to issue another final rule but could decide to do so. Read more in this week’s Regs & Eggs and in the CMS press release and fact sheet.
President Trump signs new executive orders. President Trump signed an executive order directing the Centers for Disease Control and Prevention and its Advisory Committee on Immunization Practices (ACIP) to review an HHS scientific assessment of childhood immunization recommendations in the United States compared to peer nations. The order empowers ACIP to update the childhood vaccine schedule consistent with the assessment and provide flexibility to doctors and patients.
President Trump also signed an executive order to reschedule 8,000 career federal employees into a new category, “Schedule Policy/Career.” Most individuals affected are senior officials with significant influence over policy. Federal agencies can remove individuals in this schedule for poor performance or for not following presidential directives, without having to follow certain procedural rules.
Trump administration and Ohio take program integrity actions. Following the House Oversight Committee’s hearing on fraud in Ohio’s HCBS waiver, Trump administration officials visited Ohio and announced specific program integrity actions taken in the state. Ohio suspended 49 home care providers identified as high-risk and requested a six-month moratorium on new home care providers and hospices, which CMS approved. CMS and the state also announced an Ohio-based fraud war room to investigate providers and prevent fraud, and Acting Attorney General Blanche announced indictments against nine defendants for alleged fraud. Federal Trade Commission Chairman Ferguson also announced that the HHS Office of Inspector General decertified the Hawaii Medicaid Fraud Control Unit, noting that the unit did not produce any convictions or indictments from 2021 to 2025.
Supreme Court sides with generic drugmaker in skinny label case. The lawsuit, filed by a pharmaceutical company against a generic drugmaker, alleged that the generic drugmaker violated patent protections by carving out the patented use of a name brand drug from its label while seeking regulatory approval for non-patented uses (known as a skinny label). A lower court previously sided with the plaintiff company, but, in a unanimous decision, the US Supreme Court ultimately sided with the defendant generic drugmaker. This case is being heralded as a win by the generic drug industry.
Both chambers will be in session next week, and the House will focus on passing the reconciliation 2.0 package. The full House Appropriations Committee will mark up the FY 2027 Labor-HHS bill, and the House Energy and Commerce Health Subcommittee will hold a hearing to discuss legislation related to healthcare price transparency.
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