McDermott+ Check-Up: May 22, 2026 - McDermott+
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McDermott+ Check-Up: May 22, 2026

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THIS WEEK’S DOSE

  • House Energy and Commerce Committee discusses Medicare physician payment. The hearing occurred as both the Republican and Democratic Doctors Caucuses work behind the scenes to introduce legislation to reform physician payment.
  • House Ways and Means Committee advances healthcare legislation. The markup included debate on legislation related to pharmacy billing, Medicare physician payment, dialysis, and Medicare fraud, but notably did not include a controversial hospital reporting bill.
  • Senate Appropriations Committee holds hearing with NIH leaders. National Institutes of Health (NIH) Director Bhattacharya testified about the fiscal year 2027 NIH budget request, with NIH institute directors in attendance.
  • House Energy and Commerce Committee advances public health legislation. The committee reported the bills unanimously.
  • CMS finalizes 2027 NBPP. The Centers for Medicare & Medicaid Services (CMS) issued the final Notice of Benefit and Payment Parameters (NBPP) later than usual; the filing process for plans on the marketplace opened in mid-April.
  • CMS issues Medicaid SDP proposed rule. CMS proposes to implement the Medicaid state-directed payment (SDP) provisions of the One Big Beautiful Bill Act plus additional policies.
  • White House expands TrumpRx to include generics. The administration announced the addition of more than 600 generics to the direct-to-consumer platform.
  • Trump administration announces additional program integrity actions. The developments include a new audit initiative and the filing of criminal charges against individuals in Minnesota for alleged Medicaid and child care fraud.
  • Supreme Court declines to hear Medicare drug negotiation cases. The Court did not give its reasoning for the denial, but the decision upholds CMS’s ability to negotiate Medicare prescription drug costs.
  • 20+ states file case against student loan final rule. The Democratic-led case requests that the judge vacate the US Department of Education’s definition of “professional” degrees.

CONGRESS

House Energy and Commerce Committee discusses Medicare physician payment. Democrats and Republicans agreed that Medicare physician payment is inadequate, unpredictable, and misaligned with rising costs, thereby contributing to workforce strain and access issues. Witnesses shared their experiences with how payment instability and administrative burden are accelerating physician consolidation. All of the witnesses expressed the need for structural fixes, including HR 6160, the Strengthening Medicare for Patients and Providers Act, and the need to tie updates to the Medicare Economic Index (MEI). Witnesses and committee members from both parties agreed that the Merit-based Incentive Payment System has not meaningfully improved patient care and instead creates more administrative burden.

House Ways and Means Committee advances healthcare legislation. Democrats introduced multiple amendments to the healthcare bills debated during the markup. Ultimately, the bills advanced to the House floor with the below vote outcomes:

  • H.R. 3164, the Ensuring Community Access to Pharmacist Services Act, which would establish Medicare Part B coverage and reimbursement for certain pharmacist-provided respiratory illness testing and treatment services.
    • Reported favorably by voice vote
  • HR 8163, the Provider Reimbursement Stability Act of 2026, which would raise the Medicare budget neutrality threshold from $20 million to $54.3 million, with future adjustments tied to inflation through the MEI.
    • Advanced unanimously
  • HR 8875, the Improving Home Dialysis Act of 2026, which would provide Medicare coverage for staff-assisted home dialysis and renal mental health support services as a part of the home dialysis support services benefit.
    • Advanced by a 28 – 13 vote, with Democratic Reps. Sewell (AL), Byer (VA), and Horsford (NV) voting yes with Republicans
  • HR 8883, the Protecting Seniors and Stopping Fraudsters Act, which aims to enhance oversight of hospice and home health agencies by increasing survey frequency for hospice and home health providers, increasing noncompliance penalties, and requiring enhanced enrollment screening of hospice and home health agencies at risk of fraud.
    • Advanced by a 27 – 16 vote, with Democratic Reps. Panetta (CA), Horsford, and Plaskett (VI) voting yes with Republicans.
  • HR 8871, the DME Scammer Prevention Act of 2026, which would require electronic and expedited submission of Medicare claims for certain durable medical equipment (DME) items identified for risk of fraud.
    • Advanced by a 25 – 19 party line vote.

Senate Appropriations Committee holds hearing with NIH leaders. During the hearing, Democrats expressed concerns about the fiscal year 2027 NIH budget proposal and pressed the NIH leaders on proposed funding cuts, terminated research contracts, reduced preparedness for emerging infectious diseases, and the potential loss of critical research capacity. Democrats and Senate Appropriations Chair Collins (R-ME) raised concerns about capping indirect costs, noting that an arbitrary cap could undermine the facilities and administrative support necessary to conduct NIH-funded research. Republicans highlighted specific NIH-supported research initiatives and disease areas of interest, including colorectal cancer, substance use, gambling disorders, and rural clinical trials, while asking about the value, direction, and practical impact of those research efforts.

House Energy and Commerce Committee advances public health legislation. The committee discussed legislation related to public health reauthorizations, NIH programs, and quality reporting. The bills all advanced unanimously:

ADMINISTRATION

CMS finalizes 2027 NBPP. CMS finalized most policies as proposed, including the novel policies related to non-network plans and catastrophic coverage. Acknowledging the later release of this final rule, CMS opted not to finalize some policies and to delay the effective dates of others.

Key takeaways include:

  • Non-network plans. The final rule will allow plans that do not use a network to receive qualified health plan (QHP) certification through the federal exchange by demonstrating sufficient provider access in a different way than network-based plans. CMS originally proposed for this policy to be effective in 2027, but the final rule delayed it until 2028. CMS noted that state exchanges can choose to allow non-network plans to receive QHP certification in 2027.
  • Catastrophic coverage. CMS finalized the proposal to allow catastrophic plan issuers to enroll individuals for multiple plan years, up to a period of 10 years. Catastrophic plans with a term of at least two years will be allowed to offer expanded coverage for preventive services prior to the deductible and cost-sharing limits. In a change from the proposed rule, CMS will not allow multi-year catastrophic plans to make plan-level adjustments to the index rate to account for design features such as additional preventive services covered prior to satisfying the deductible. Multi-year catastrophic plans also will not be permitted to apply the annual cost-sharing limit on an annual basis or averaged over the life of the contract, which CMS originally proposed.
  • Enhanced direct enrollment option. CMS proposed to allow state-based exchanges to rely entirely on web-brokers to operate their consumer-facing websites. A similar policy was enacted in the first Trump administration but reversed by the Biden administration. Citing a high volume of comments and a lack of time to give them consideration, CMS did not finalize this proposal but will address it in the 2028 NBPP.
  • Agents and brokers. CMS finalized proposals aimed at cracking down on certain agent, broker, and web-broker practices. Agents and brokers on the federal exchanges will be required to use a CMS-developed consumer consent form to ensure that consumer documentation is complete and that a consumer confirms their eligibility application information is accurate. CMS also finalized new marketing standards for agents and brokers on the federal exchanges to mitigate misleading marketing practices and protect consumers.
  • OBBBA implementation. CMS finalized policies to implement provisions of the One Big Beautiful Bill Act (OBBBA), including prohibiting certain immigrants from receiving advanced premium tax credits and ending auto re-enrollment.

Read more on the final rule in this week’s Regs & Eggs post and in the CMS press release and fact sheet.

CMS issues Medicaid SDP proposed rule. The proposed rule would implement Section 71116 of OBBBA, which capped SDPs for four services at 100% of the total published Medicare payment rate in expansion states and at 110% of the total published Medicare payment rate in non-expansion states. Those four services include inpatient hospital services, outpatient hospital services, nursing facility services, and qualified practitioner services at an academic medical center. The proposed rule also would go further than OBBBA and extend the payment limit to all SDPs for all other services. It proposes to enact a limit on targeted Medicaid practitioner payments in fee-for-service and to eliminate uniform increase SDPs as a permissible type of SDP. Comments are due July 21, 2026. Read more in the CMS press release and fact sheet.

White House expands TrumpRx to include generics. The White House launched TrumpRx last year as a direct-to-consumer platform to allow consumers to purchase medications at negotiated prices. This week the administration announced the addition of more than 600 generic medications, including those used to treat high blood pressure and diabetes, to the website. Consumers will be able to compare generic prices to discounts offered through Amazon Pharmacy, Cost Plus Drugs, and GoodRx, which will be posted on TrumpRx. The generics will be listed separately from the discounts on high-cost medications negotiated under President Trump’s most-favored nation drug price agreements.

Trump administration announces additional program integrity actions. HHS announced the new Audit Enforcement and Risk Oversight (AERO) initiative, which aims to address audit noncompliance from states. AERO will include an AI analysis of at least five years of state audit history for all 50 states. HHS sent letters to states notifying them of this initiative and noting they should expect further communication from HHS if they have delinquent audit submissions or unresolved findings. HHS notes it will work collaboratively with states and grantees to resolve audit findings, but will also seek remedies, such as temporarily withholding payments until the recipient takes corrective action, if a state or grantee does not address their findings.

In related news, HHS Secretary Kennedy, CMS Administrator Oz, and Department of Justice officials traveled to Minnesota this week to announce the filing of criminal charges against 15 defendants for child care and Medicaid fraud totaling $90 million. The Medicaid fraud allegations focus on fraud within applied behavioral analysis services for children with autism, housing support services, and home-and community-based services. Notably, officials from Minnesota were not present at the press conference.

COURTS

Supreme Court declines to hear Medicare drug negotiation cases. Pharmaceutical companies filed six cases against the Inflation Reduction Act (IRA) of 2022, which gave CMS the ability to negotiate Medicare drug prices for consumers, alleging the legislation was unconstitutional. This week, the US Supreme Court denied the request to hear arguments in these cases but did not provide its reasoning behind the denial. Two cases with similar claims from pharmaceutical companies remain in the lower courts. In response to the Supreme Court’s decision, the US Department of Justice requested that the judges for the two remaining cases side with the administration to uphold the IRA.

20+ states file case against student loan final rule. The April 2026 Department of Education final rule implemented the OBBBA provision to cap aggregate graduate student loans at $100,000 and professional student loans at $200,000. The rule narrowed the definition of “professional” programs to exclude degrees in disciplines such as nursing, physical therapy, occupational therapy, and social work, thereby capping student loans for those degrees at $100,000. Twenty five Democratic state attorneys general or governors filed a lawsuit against the final rule’s definition of “professional,” alleging it is contrary to how OBBBA defined graduate and professional degrees. The plaintiffs requested that the court vacate that portion of the final rule. Lawmakers have also expressed concern about this provision, and a bipartisan group of House members introduced HR 6718, the Professional Student Degree Act, to expand what qualifies as a “professional degree.”

QUICK HITS

  • Senate Democrats introduce resolution to repeal WISeR model. The resolution, led by Senate Finance Committee Ranking Member Wyden (D-OR), would invoke the Congressional Review Act to repeal the Wasteful and Inappropriate Service Reduction (WISeR) model, which has been subject to previous Democratic scrutiny. The WISeR model began in January 2026 and tests enacting prior authorization for specific services in traditional Medicare using artificial intelligence.
  • Senate Democrats release plan to improve long-term care. The dear colleague letter from 17 Democrats, including Finance Committee Ranking Member Wyden, outlines three goals for long-term care: making home care affordable and accessible, improving the quality of care in nursing homes, and strengthening the long-term care workforce. The letter follows previous releases from Senate Democrats on drug prices and private health insurance affordability. The Finance Committee’s Democratic staff will host office hours from June 2, 2026, through July 29, 2026, to receive initial feedback from stakeholders.
  • HHS restructures OCR. The US Department of Health and Human Services (HHS) will reorganize the Office for Civil Rights (OCR) into three divisions: conscience and religious freedom; civil rights; and health information privacy, data, and cybersecurity. This undoes a Biden-era reorganization that combined the conscience and religious freedom and civil rights divisions into the policy division.
  • HHS appoints acting surgeon general. Stephanie Haridopolos, MD, will serve as acting surgeon general while the Senate considers the nomination of Nicole Saphier, MD. Haridopolos will also continue her current roles as principal deputy assistant secretary for health and chief of staff to the Office of the Surgeon General.
  • HHS OIG releases report on the impacts of vertical integration on Medicare Part D sponsors. The Office of Inspector General (OIG) found that Part D sponsors that are vertically integrated with pharmacy benefit managers paid pharmacies more upfront but received higher rebates. Enrollees in vertically integrated plans paid lower monthly premiums but higher out-of-pocket drug costs.
  • Senate HELP Chair Cassidy loses primary election. Multiple incumbent Republicans lost their primaries this week to Trump-backed candidates, including Senate HELP Chair Cassidy (R-LA). It remains to be seen if the loss will impact Sen. Cassidy’s approach to legislating for the remainder of his term through early January 2027, and who will take over as the top Republican for the HELP Committee in the new Congress.

NEXT WEEK’S DIAGNOSIS

The House and Senate will be on Memorial Day recess next week and will return the week of June 1, 2026. Still pending is the reconciliation 2.0 effort focused on immigration and security funding that Republican lawmakers were hoping to finalize before the recess. Intra-party sticking points remain, and lawmakers will likely continue debate after returning from recess.

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