THIS WEEK’S DOSE

• Senate Reconciliation Process Continues. Republicans are adjusting language to comply with Senate rules and appease various wings of the party.
• HHS Secretary Kennedy Testifies at House Energy and Commerce Health Subcommittee. Secretary Kennedy was there to address the US Department of Health and Human Services (HHS) fiscal year (FY) 2026 budget request, which contains a large restructuring effort.
• House Ways and Means Committee Holds Hearing on Digital Health Data. The conversation highlighted the role of wearable technology.
• Senate HELP Committee Considers CDC Director Nomination. Dr. Susan Monarez is nominated to be Centers for Disease Control and Prevention (CDC) director.
• House Appropriations Committee Advances FDA Spending Bill. The bill includes significant cuts to the US Food and Drug Administration (FDA), among other provisions.
• House Budget Committee Examines Waste and Fraud. The focus was on the dignity of work and the utility of work requirements.
• CMS Releases ACA Program Integrity Final Rule. The Centers for Medicare and Medicaid Services (CMS) rule related to Affordable Care Act (ACA) marketplaces was largely finalized as proposed, although it is only effective for plan year 2026.
• CMS Announces Industry Commitment to Fix Prior Authorization. Participating health insurers voluntarily pledged to implement six changes to their prior authorization practices.
• Office of Science and Technology Policy Issues Guidance on Science Standards. The guidance implements an executive order on the same subject.
• Major SCOTUS Rulings Released. The Supreme Court of the United States (SCOTUS) released opinions related to Planned Parenthood, the US Preventive Services Task Force (USPSTF), and nationwide injunctions.

CONGRESS

Senate Reconciliation Process Continues. Language from committees has been undergoing the “Byrd Bath,” which is when the majority and minority parties bring their disputes forward to the Senate parliamentarian over which provisions are “extraneous” and therefore not allowed to be included in the reconciliation bill. The parliamentarian is a non-partisan official who advises the Senate on rules and procedural issues. If she determines that a provision – large or small – does not meet the Byrd rule test, it can be struck from the bill. For more information on the Byrd rule, read our +Insight.

At the same time, Republican leadership has also been working to address other concerns that various Republican senators have with the bill. Senate Majority Leader Thune (R-SD) and House Speaker Johnson (R-LA) have received several letters about the Senate’s proposed changes to the House-passed bill, including a group of 16 moderate House Republicans expressing concern with the Senate’s Medicaid provisions related to the provider tax and state directed payments, and a group of 24 House Republicans asking to reinstate the health savings account provisions that were included in the House-passed bill. In an attempt to assuage worries about the coverage losses, House Budget Committee Chair Arrington (R-TX) and House Energy and Commerce Committee Chair Guthrie (R-KY) requested an additional analysis of the population that would become uninsured because of this bill. The Congressional Budget Office found that of the 7.8 million uninsured individuals in 2034:

• 4.8 million would be able-bodied adults, ages 19 – 64, who have no dependents and do not meet the proposed work requirements.
• 1.4 million would be individuals who would not meet proposed immigration status requirements.
• 2.2 million would become uninsured due to other provisions, including verification of eligibility proposals.

To understand the health provisions at risk from the Byrd Bath, view these press releases from the Budget Committee Democrats: Senate Finance Committee provisions and Senate HELP Committee provisions. Importantly, it is possible that the language can be modified to address the concerns of the parliamentarian in certain cases. That means the ultimate outcome of these provisions remains uncertain.

The changes include:

• Provider Taxes. The parliamentarian ruled that this provision is subject to the Byrd rule. The Senate text stated that provider taxes would be frozen at current rates, but starting in 2027, Medicaid expansion states would see their hold-harmless threshold incrementally decrease from 6% to 3.5% by 2031.
• Medicaid Spread Pricing. The parliamentarian ruled that this provision is subject to the Byrd rule. This section would have required Medicaid managed care contracts with pharmacy benefit managers to adopt state reimbursement methodologies for pharmacy reimbursement.
• Immigration Status and Eligibility. Several provisions related to immigrant utilization of benefits were ruled subject to the Byrd rule, including provisions that limited eligibility for Medicaid, advanced premium tax credits, and Medicare for certain legal non-citizens, required Medicaid eligibility checks for immigration status, and lowered Medicaid federal matching funds for states that use their own funds to provide Medicaid to undocumented immigrants.
• Cost-Sharing Reduction Payments. A provision prohibiting federal cost-sharing reduction payments to qualified health plans that cover abortion services was ruled subject to the Byrd rule.
• AI Moratorium. In the original Senate language, the 10-year moratorium on state enforcement of artificial intelligence (AI) laws and regulations was made a condition of receiving federal funds for the construction and deployment of broadband and AI infrastructure. To ensure Byrd rule compliance, the Senate Commerce Committee added language that sets aside $25 million of the federal funds for states to negotiate master services agreements and makes other conforming amendments. Though this appears to have satisfied the parliamentarian, there is still disagreement among Republican senators about this provision, so its fate remains uncertain.
• Public Service Loan Forgiveness (PSLF) for Doctors and Dentists. The parliamentarian ruled that a provision changing the PSLF Program so that payments made by doctors and dentists during their residency would no longer count toward loan forgiveness was subject to the Byrd rule.
• Gender-Affirming Care. A provision prohibiting Medicaid and CHIP coverage of gender-affirming care was ruled subject to the Byrd rule.

Not related to the Byrd rule, lawmakers have started discussion of a rural health fund to address concerns about the bill’s Medicaid impacts on rural hospitals. Whether such a fund will be included is still not known, but a version that provided $15 billion to states across five years has been circulating.

Though a deal seems far away, Republicans remain determined to meet the July 4th self-imposed deadline to send the bill to the president. That means that if the Senate passes the legislation this weekend, the House will need to reconvene (during the scheduled July 4th recess) to consider the bill.

HHS Secretary Kennedy Testifies at the House Energy and Commerce Health Subcommittee. The hearing focused on the administration’s FY 26 budget request. Republican members largely praised Kennedy’s efforts to restructure HHS, reduce bureaucratic inefficiencies, and return focus to patient-centered care. They strongly supported the expansion of digital health tools, telemedicine, AI, and regenerative medicine as means to modernize healthcare delivery. Democratic members expressed deep concern over the politicization of science and the restructuring of expert advisory committees, particularly tied to vaccine policy and public health guidance, and they criticized HHS for a lack of transparency and responsiveness, citing numerous unanswered letters and oversight requests. Kennedy emphasized the need to realign healthcare incentives toward outcome-based and value-based care, aiming to reduce chronic disease and improve overall health outcomes.

House Ways and Means Committee Holds Hearing on Digital Health Data. During the hearing, witnesses urged continued support and investment in healthcare technology and wearable products, while members of both parties expressed concerns regarding the privacy of health data. Democrats also used the opportunity to discuss the impact H.R. 1 would have on Americans’ access to healthcare and healthcare technology, while Republicans emphasized the low costs associated with them and noted the positive impact they could have on rural communities.

Senate HELP Committee Considers CDC Director Nomination. During the nomination hearing, the president’s nominee, Dr. Susan Monarez, emphasized CDC’s new focus on emerging threats and communicable disease. She expressed support for Secretary Kennedy’s mission to make America healthy again and reduce rising chronic disease rates, as well as for integrating new technologies, including AI, to improve healthcare, but noted the need for monitoring and safeguards. Democrats expressed concerns about agency restructuring, HHS Secretary Kennedy’s leadership, and the elimination of specific programs related to lead poisoning, smoking, and global health. They also focused on the impact of cuts to the Medicaid program and changes to the Advisory Committee on Immunization Practices (ACIP). Republicans primarily focused on chronic disease, AI, and health technology, and restoring public trust in the CDC, while a few members also expressed concerns about ACIP.

House Appropriations Committee Advances FDA Spending Bill. The final committee print, which included appropriations for agriculture, rural development, FDA, and related agencies, passed 35 – 27, along party lines, with all Republicans voting in favor. Six amendments were adopted and, of those, three were introduced by Democrats and passed with bipartisan support; these included amendments related to youth vaping and tobacco use education, maternal health services, and infant formula access. During the hearing, Democrats argued that the bill’s significant cuts to FDA, the Supplemental Nutrition Assistance Program, and the Special Supplemental Nutrition Program for Women, Infants, and Children would be detrimental to the health of Americans. They also stated that cuts to grants for telemedicine would harm rural communities and criticized the use of FDA resources to review mifepristone. Republicans supported the bill, arguing that it is fiscally responsible and will help reduce the federal deficit. To view the bill summary, report, amendments, and roll call votes, refer to the committee webpage.

House Budget Committee Examines Waste and Fraud. In the hearing, witnesses presented sharply contrasting views; some emphasized the need to curb fraud and prioritize the needy, while others warned that work requirements and administrative hurdles would harm working families, reduce access to care, and enrich private contractors at taxpayer expense. Members were similarly split. Democrats argued that H.R. 1 would strip healthcare and nutrition assistance from millions of working Americans, disproportionately harming low-income families, children, and older Americans, while delivering tax breaks to the wealthy and increasing bureaucratic burdens. Republicans contended that the current structure of Medicaid and SNAP is unsustainable, rife with fraud and abuse, and in need of reform through work requirements and eligibility verification.

ADMINISTRATION

CMS Releases ACA Program Integrity Final Rule. While the final rule was largely finalized as proposed, the rule modifies policies on a temporary basis to provide some flexibility to state-based marketplaces. Key policies include:

• Temporary provisions (effective through 2026):
  • Ending availability of the monthly special enrollment period (SEP) for individuals with household incomes below 150% of the federal poverty level.
  • Requiring all marketplaces to reinstitute pre-enrollment verifications of eligibility for SEPs and require further verifications of income when there is no tax data available for verification.
  • Eliminating the fixed-dollar and gross percentage-based premium payment thresholds, allowing issuers to only adopt the net percentage-based threshold.
• Permanent provisions:
  • Standardizing the annual open enrollment period starting with the 2027 plan year so that it ends by December 31 for all health insurance exchanges. (This has been shortened to December 15 in the proposed rule. The final rule clarifies that it will be December 15 for the federal marketplaces, but state-based marketplaces have the option to extend through December 31.)
  • Updating the methodology for calculating the premium adjustment percentage to establish a premium growth measure that captures premium changes, in both the individual and employer-sponsored insurance markets, for the 2026 plan year and beyond.
  • Requiring that when an enrollee does not proactively verify their ongoing eligibility for a fully subsidized plan, marketplaces must continue to re-enroll that individual into the same plan but must also reduce the amount of advance payment of the premium tax credit by $5.
  • Adding sex-trait modification to the list of items and services that may not be covered as essential health benefits beginning in plan year 2026.
  • Amending the definition of “lawfully present” to exclude Deferred Action for Childhood Arrivals recipients for purposes of enrolling in marketplace coverage.

Again, as noted above, many of these changes are only effective for plan year 2026. H.R. 1 (the House reconciliation bill) codifies all of the provisions permanently. The Senate version of reconciliation has no such provisions included at this time. We are watching to see if the Senate now chooses to codify the rule for 2027 and beyond in the budget reconciliation bill, which would produce additional savings that could help offset potential losses from the Byrd rulings.

The press release can be found here, and the fact sheet can be found here. See table 7 in the final rule (linked above) for a quick “cheat sheet” on the policy changes in the rule.

CMS Announces Industry Commitment to Fix Prior Authorization. To help streamline and speed up the prior authorization process, health insurance industry leaders committed to a voluntary pledge:

• Standardizing electronic prior authorization submissions using Fast Healthcare Interoperability Resources (FHIR®)-based application programming interfaces.
• Reducing the volume of medical services subject to prior authorization by January 1, 2026.
• Honoring existing authorizations during insurance transitions to ensure continuity of care.
• Enhancing transparency and communication around authorization decisions and appeals.
• Expanding real-time responses to minimize delays in care with real-time approvals for most requests by 2027.
• Ensuring medical professionals review all clinical denials.

Following this announcement, Secretary Kennedy and CMS Administrator Oz hosted a roundtable and held a press conference to highlight the pledge. While the commitments are voluntary, CMS noted that the reforms complement ongoing regulatory efforts and that the agency reserves the right to pursue additional regulatory actions if necessary.

OSTP Issues Guidance on Science Standards. In a memo, OSTP provided guidance on implementing executive order (EO) 14303, “Restoring Gold Standard Science,” to federal department and agency heads. The memo defines the key tenets of gold standard science outlined in the EO and specifies that agencies should work to implement these tenets while minimizing administrative burden through the use of AI and other technologies. It also requires that, by August 22, 2025, agencies submit to OSTP and post on their website a report outlining their implementation plans, which must include:

• Descriptions of how the agency is addressing each of the tenets.
• Development of standardized metrics and evaluation mechanisms to assess adherence to these tenets and their impact on scientific quality.
• Plans for providing training and resources to ensure agency personnel understand and adhere to the tenets.
• Discussion of how technology will be leveraged.
• Descriptions of any challenges encountered in implementation.

Annual agency reports will then be due to OSTP by September 1 of each year.

COURTS

Major SCOTUS Rulings Released. This week, SCOTUS issued rulings for the rest of the cases in the current term. Several had significant implications for healthcare, the Trump Administration, and power of federal judges:

Kennedy v. Braidwood Management. In a 6 – 3 ruling, the Court held that the appointment of USPSTF members is consistent with the Constitution. The ACA requires insurers to cover USPSTF recommended preventive services with no cost sharing, which includes screenings for lung, cervical and colorectal cancers, as well as diabetes and statin medications to reduce the risk of heart disease and stroke. The opinion also stated that the HHS Secretary can review USPSTF recommendations before they take effect and can remove USPSTF members at will.

Trump v. CASA. In a case about President Trump’s EO prohibiting birthright citizenship, the justices ruled 6 – 3 along ideological lines to limit national injunctions to apply only to states, groups and individuals that sued. This opinion will have broad ramifications for almost all litigation on EOs, including nationwide injunctions on EOs related to gender-affirming care, the National Institutes of Health, and more.

Medina v. Planned Parenthood South Atlantic. At issue in this case was whether Medicaid beneficiaries have an individual right to challenge state Medicaid actions in federal court for failing to comply with the Medicaid “free choice of provider” provision – a requirement that beneficiaries may choose any willing and qualified provider. In a 6 – 3 ruling along ideological lines, the Court ruled that a South Carolina woman and Planned Parenthood did not have their civil rights violated and therefore do not have standing. Instead, litigants will need to go through an administrative process and, if necessary, state courts. This case, however, could have broader implications for Medicaid patient rights and will likely prompt other states to pursue similar efforts to defund Planned Parenthood.

QUICK HITS

• GAO Publishes Reports on Medicaid. The US Government Accountability Office’s (GAO’s) first report, focused on Medicaid unwinding, found that of the 89 million completed redeterminations by states, about 27 million individuals were disenrolled during the first year and a half of unwinding. The second report evaluated the effectiveness of Medicaid managed care incentives for child screenings and treatment.
• HRSA Announces Action on Drug Prices. The Health Resources Services Administration (HRSA) issued updated award terms for HRSA-funded health centers that require the centers to provide insulin and injectable epinephrine to low-income patients at or below the price paid by the center through the 340B Drug Pricing Program.

NEXT WEEK’S DIAGNOSIS

The Check-Up will be on hiatus next week for the Fourth of July holiday. Congress is also scheduled to be in recess, though that could be delayed or cancelled if reconciliation consideration is ongoing. We also await the release of the calendar year 2026 proposed rules from CMS, including the Physician Fee Schedule and Outpatient Prospective Payment System proposed rules.