Federal Healthcare Update for April 24, 2026

THIS WEEK’S DOSE

• Administration’s FY 2027 budget request hearings continue. US Department of Health and Human Services Secretary Kennedy wrapped up his budget tour on Capitol Hill with four more hearings this week.
• House Ways and Means Committee examines Medicare fraud. Members discussed the prevalence of fraud, waste, and abuse in Medicare and efforts to combat fraud.
• House Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions discusses PBMs. Members and witnesses discussed potential pharmacy benefit manager (PBM) reforms.
• President Trump issues EO on accelerating mental illness treatments. The executive order (EO) seeks to advance the use of psychedelics to treat serious mental illness.
• CMS, FDA announce RAPID pathway. The new coverage pathway for breakthrough devices will replace the Transitional Coverage for Emerging Technologies pathway.

CONGRESS

Administration’s FY 2027 budget request hearings continue. US Department of Health and Human Services (HHS) Secretary Kennedy’s testimony highlighted the department’s work on chronic diseases, most-favored nation (MFN) drug pricing, and nutrition. He testified before four congressional committees this week, for a total of seven HHS budget hearings since April 16, 2026.

House Energy and Commerce Subcommittee on Health. Democrats criticized Secretary Kennedy’s response to the measles outbreak, stance on vaccines, large-scale cuts to Medicaid, and proposed elimination of programs at HHS. Republicans highlighted the administration’s efforts to prevent fraud, make the United States healthier, and increase transparency. Both Democrats and Republicans spoke in support of continuing to robustly fund biomedical research at the National Institutes of Health (NIH).

Senate Appropriations Subcommittee on Labor, HHS, Education, and Related Agencies. Democrats expressed concerns over Secretary Kennedy’s comments on vaccines, abortion access, and cuts to research funding for specific populations. Republicans expressed support for Secretary Kennedy’s promotion of unprocessed foods. They also expressed concerns about the mental health impacts social media can have on youth and wanted to find ways to promote program integrity in the 340B program. Democrats and Republicans urged Secretary Kennedy to continue funding the NIH, emphasizing its critical role in researching and curing chronic diseases.

Senate Finance Committee. Democrats criticized Secretary Kennedy’s response to the measles outbreak and his previous statements on vaccines. They also called for transparency surrounding the deals made between the administration and pharmaceutical companies. Republicans spoke in support of the administration’s work to decrease fraud, increase transparency, and respond to emerging health threats. Of note, Senator Barrasso (R-WY) criticized Secretary Kennedy’s negative statements on the work of the US Preventative Services Task Force (USPSTF).

Senate Health, Education, Labor, and Pensions Committee. Democrats and Chair Cassidy (R-LA) criticized Secretary Kennedy’s stance on vaccines and emphasized the importance of continued NIH funding. Republicans expressed support for the Rural Health Transformation Program (RHTP), urged Secretary Kennedy to take a stronger stance on abortion, and emphasized the need for the US Food and Drug Administration (FDA) to have sufficient resources to efficiently bring innovative treatments to market.

House Ways and Means Committee examines Medicare fraud. During the hearing, Democrats emphasized the importance of strong program oversight, expressing concern that budget and staffing cuts to inspectors general have weakened Medicare fraud prevention. Republicans called for removing the outdated pay-and-chase model by modernizing the Centers for Medicare & Medicaid Services’ (CMS’s) fraud detection capabilities with advanced data analytics and artificial intelligence, and strengthening eligibility verification before payments are made. Witnesses offered solutions to improve program oversight at the state level, including leveraging technology, intensifying screening in high-risk geographies, and creating a federal pathway to better align fraud data.

On the same day, the US Government Accountability Office (GAO) published a report on CMS’s use of data analytics on claims in traditional Medicare to identify patterns indicative of fraud. The report noted that CMS began sharing information about Medicare provider payment suspensions with supplemental payers in December 2025. GAO stated that the previous lack of information sharing led some supplemental payers to pay beneficiary cost sharing on potentially fraudulent claims.

House Education and Workforce Subcommittee on Health, Employment, Labor, and Pensions discusses PBMs. There was bipartisan agreement on the need to further reform PBMs. Democrats raised concerns that PBMs may be exploiting consumers through hidden fees, spread pricing, and kickbacks that benefit drug manufacturers over patients. Republicans called for greater PBM transparency and emphasized that President Trump’s “Great Healthcare Plan” would be a step toward lowering drug prices. Witnesses provided recommendations for legislative action and emphasized that data is necessary to effectively regulate the market.

ADMINISTRATION

President Trump issues EO on accelerating mental illness treatments. The EO directs:

• The FDA commissioner to provide national priority vouchers to psychedelic drugs that meet the program’s criteria and have received a breakthrough therapy designation.
• FDA and the US Drug Enforcement Administration (DEA) to facilitate and establish a pathway for patients to access psychedelic drugs under the Right to Try Act.
• HHS to allocate $50 million through the Advanced Research Projects Agency for Health (ARPA-H) to support and partner with state governments that have enacted or are developing programs to advance psychedelic drugs for serious mental illness.
• HHS and FDA to collaborate with the US Department of Veterans Affairs and the private sector to increase clinical trial participation, data sharing, and real-world evidence generation regarding psychedelic drugs.
• The US attorney general to initiate and complete review of any product containing a Schedule I substance that has successfully completed Phase 3 clinical trials for a serious mental health disorder.

Implementation of the EO has already begun. ARPA-H announced the Evidence-Based Validation & Innovation for Rapid Therapeutics in Behavioral Health (EVIDENT) initiative, which will fund up to $139.4 million to help spur new, effective therapies for behavioral health. At least $50 million of those funds will match state government investments in psychedelic research for populations with serious mental illness, as directed by the EO.

CMS, FDA announce RAPID pathway. The Regulatory Alignment for Predictable and Immediate Device (RAPID) coverage pathway is designed to expedite access to certain FDA-designated Class II and Class III breakthrough devices for Medicare beneficiaries. Changes from the previous Transitional Coverage for Emerging Technologies pathway, which will be paused for new candidates, include the following:

• CMS will be more involved in conversations with device manufacturers early in development.
• CMS will issue a proposed national coverage determination the same day an eligible device participating in this pathway receives FDA market authorization.

QUICK HITS

• AHRQ seeks nominations for USPSTF. The Agency for Health Research and Quality (AHRQ) invited nominations from a broad range of medical specialties to serve on the USPSTF, whose recommendations determine preventive services. At the House Ways and Means Committee budget hearing last week, HHS Secretary Kennedy said he plans to overhaul USPSTF. Nominations are due by May 23, 2026, and appointments would begin in June 2026.
• CMS delays BALANCE model implementation. The voluntary BALANCE model aims to increase access to GLP-1 medications and healthy lifestyle interventions. The model will not be implemented in Medicare Part D in 2027 as planned. Instead, the Medicare GLP-1 Bridge Section 402 demonstration that begins on July 1, 2026, will extend through December 31, 2027.
• White House announces 17th MFN deal. The deal includes an agreed upon price for certain medicine when purchased through TrumpRx, provision of a newly approved rare disease treatment at no cost to U.S. patients, and new investments in domestic manufacturing.
• Senate Democrats release report, legislation related to MFN deal transparency. In the report, Senate Finance Committee Ranking Member Wyden (D-OR) and 17 Senate Democrats detailed their concerns about President Trump’s MFN deals. S. 4355, the Drug Deal Disclosure Act, seeks to address these concerns through transparency requirements.
• Justice Department reschedules certain marijuana products. The US Department of Justice announced that FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license are now placed in Schedule III. The DEA will also begin an expedited administrative hearing process to consider the broader rescheduling of marijuana from Schedule I to Schedule III. The first hearing is on June 29, 2026.
• House passes bipartisan rural health, cancer, telehealth bills. H.R. 2493, the Improving Care in Rural America Reauthorization Act of 2025, passed in a 406 – 4 vote. H.R. 3419, to amend the Public Health Service Act to reauthorize the telehealth network and telehealth resource centers grant programs, and H.R. 2319, the Women and Lung Cancer Research and Preventive Services Act of 2025, both passed by voice vote.
• House Energy and Commerce Committee, Financial Services Committee Republican leadership introduce privacy bills. Leader of the Data Privacy Working Group and Energy and Commerce Subcommittee on Oversight and Investigations Chair Joyce (R-PA) introduced H.R. 8413, the SECURE Data Act, which would establish a national privacy and data security standard. Financial Services Committee Chair Huizenga (R-MI) introduced H.R. 8398, the GUARD Financial Data Act, which would establish a complementary framework for the financial sector. The joint one-pager can be found here.
• Georgia, New Jersey see drops in ACA marketplace enrollment. The New Jersey Department of Banking & Insurance stated that its Affordable Care Act (ACA) marketplace enrollment has decreased by 68,830 enrollees since the end of open enrollment. A public records request by a local newspaper found that Georgia saw a 37% enrollment drop since January 2025, reflecting 190,000 fewer enrollees.
• HHS declares PHE in Hawaii, Guam, and the Commonwealth of the Northern Mariana Islands. The public health emergency (PHE) in Hawaii is due to severe storms, flooding, landslides, and mudslides, and the PHE in Guam and the Commonwealth of the Northern Mariana Islands is because of Super Typhoon Sinlaku. CMS announced similar flexibilities and resources for both PHEs, including blanket waivers, a disaster toolkit and support for state Medicaid and Children’s Health Insurance Program agencies, emergency dialysis care, and medical equipment and supplies replacements. Hawaii will also have a marketplace special enrollment period for hurricane victims.

NEXT WEEK’S DIAGNOSIS

Congress will be in session next week. Health system CEOs will testify at a House Ways and Means Committee hearing, the House Appropriations Committee will hold a markup of the fiscal year 2027 Agriculture, Rural Development, FDA, and Related Agencies bill, and the House Energy and Commerce Subcommittee on Health will hold a legislative hearing on food proposals.

On the regulatory front, we await the federal independent dispute resolution operations rule and the final Notice of Benefit and Payment Parameters for 2027.