This Week’s Dose of Health and Insurance Regulation News

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This Week’s Dose

  • Reconciliation watch. Republican lawmakers are revisiting the possibility of a partisan “reconciliation 2.0” bill to potentially include funds for the Iran war and the US Department of Homeland Security, with healthcare provisions as a source of savings.
  • House Energy and Commerce Health Subcommittee reviews legislation targeting illicit drugs. Members discussed bills on emerging drug threats and treatment policies, with bipartisan support for the Combatting Illicit Xylazine Act and Alternatives to Pain Act.
  • HHS, CMS unveil Healthcare Advisory Committee members. Committee members will provide nonbinding recommendations on strengthening and modernizing federal healthcare programs, including improving care delivery, payment systems, and patient outcomes.
  • CMS finalizes rule to modernize claims processing. The rule establishes Health Insurance Portability and Accountability Act (HIPAA)-adopted standards for electronic healthcare claims attachments and electronic signatures.
  • CMS Innovation Center announces ASPIRE model. The Accelerating State Pediatric Innovation Readiness and Effectiveness (ASPIRE) model is intended to improve states’ care coordination for children with or at risk of complex medical and behavioral health needs.
  • HHS chooses not to nominate CDC director. National Institutes of Health Director Bhattacharya will continue to lead the Centers for Disease Control and Prevention (CDC) without the formal moniker of acting director, with some authorities instead going to US Department of Health and Human Services Secretary Kennedy.

Congress

Reconciliation watch. Congressional Republicans have renewed their focus on the possibility of moving funds for the Iran war, the US Department of Homeland Security, and other priorities using the partisan budgetary process known as reconciliation. This possible “reconciliation 2.0” effort (1.0 being the One Big Beautiful Bill Act that Congress enacted in July 2025) is far from certain, given slim Republican majorities in the House and Senate, but is actively being discussed in both chambers. While the focus of this effort would not be healthcare, health provisions remain on the table as potential savings to pay for the bill’s other provisions.

House Energy and Commerce Health Subcommittee reviews legislation targeting illicit drugs. Committee members during the hearing discussed a range of opioid-related legislation aimed at addressing emerging drug threats, expanding treatment access, and strengthening enforcement. The Combatting Illicit Xylazine Act and the Alternatives to Pain Act received bipartisan support, while other proposals, including a bill to expand state reporting requirements for substance use block grants and a bill to roll back parts of the opioid treatment final rule, raised concerns about reporting burdens and access to medication-assisted treatment. Throughout the hearing, Democrat committee members expressed concerns that the administration’s funding cuts to the Substance Abuse and Mental Health Services Administration could reverse the progress that has been made to combat opioid overdoses. Republican committee members questioned witnesses about their opinions on the Food and Drug Administration’s (FDA) drug scheduling classifications and whether Congress could improve these classifications to better address the opioid crisis.

Administration

HHS, CMS unveil Healthcare Advisory Committee members. On March 26, 2026, Centers for Medicare & Medicaid Services (CMS) Administrator Oz and US Department of Health and Human Services (HHS) Secretary Kennedy announced the members of the Healthcare Advisory Committee, a federal advisory body that will provide nonbinding recommendations to HHS and CMS to improve and modernize Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and marketplace programs. The committee will focus on chronic disease prevention, reducing administrative burden, improving data use, strengthening care for vulnerable populations, and enhancing Medicare Advantage (MA) sustainability.

The following administration officials, industry stakeholders, and healthcare professionals will serve on the committee:

Members will serve two-year terms and meet regularly in public sessions. The first meeting is expected later this year, and additional details will be published in the Federal Register and on the CMS website.

CMS finalizes rule to modernize claims processing. The Administrative Simplification; Adoption of Standards for Health Care Claims Attachments Transactions and Electronic Signatures final rule replaces manual processes, such as faxing and mailing, with standardized electronic exchange for healthcare claims attachments, including medical records, imaging, clinical notes, telehealth documentation, and laboratory results. The final rule also adopts standards for electronic signatures to ensure secure, authenticated transmission of this information.

The rule builds on HIPAA’s administrative simplification provisions, which require the HHS secretary to adopt standards for electronic transactions, code sets, and unique identifiers. While the proposed rule addressed both claims and prior authorization attachments, the final rule is limited to healthcare claims attachments. CMS’s fact sheet indicates HHS will continue evaluating alternative approaches for prior authorization attachments. CMS estimates the updates outlined in the final rule will generate about $781 million in annual savings across the healthcare system by reducing administrative burden and accelerating claims processing. The rule takes effect May 26, 2026. HIPAA-covered entities, including health plans, healthcare clearinghouses, and healthcare providers that conduct electronic transactions, are required to comply by May 26, 2028.

CMS Innovation Center announces ASPIRE model. The 10-year state-based voluntary model, announced on March 24, 2026, aims to improve care coordination for children up to age 21 enrolled in Medicaid and CHIP who have or are at risk of developing complex medical and/or behavioral conditions. This model is a departure for the Innovation Center, whose models typically focus on Medicare payers. ASPIRE will support states in adopting coordinated, wrap-around care models that address physical and behavioral health needs, promote long-term health and economic stability into adulthood, and equip families and caregivers to partner in caring for children with medically and/or behaviorally complex conditions and those with risk factors for developing such conditions. Targeted conditions may include behavioral health conditions; substance use disorders; chronic conditions; and certain physical, intellectual, and developmental disabilities. The Innovation Center plans to select up to five state Medicaid agencies through cooperative agreements to implement the model, with participating states partnering with accountable entities, such as managed care plans and accountable care organizations, responsible for managing total cost of care and improving outcomes for enrolled children and youth. A notice of funding opportunity is expected in 2026 to solicit state participation.

HHS chooses not to nominate CDC director. After suggesting that it would announce a CDC director nominee this week, the administration changed course and announced that National Institutes of Health Director Bhattacharya will continue to direct CDC without the formal moniker of acting director, with some authorities instead going to HHS Secretary Kennedy. Under federal law, an acting official may serve for 210 days, a clock that began after the firing of then-CDC Director Monarez in August 2025 and expired March 26, 2026. Submitting a nomination, regardless of Senate confirmation, would have reset this timeline and started an additional 210-day acting service period. In the absence of a nomination, the agency will continue operating without a Senate-confirmed director, and officials have indicated that a nominee is expected in the near term.

Bipartisan Legislation Spotlight

Sens. Shaheen (D-NH), Collins (R-ME), Warnock (D-GA), and Kennedy (R-LA) introduced the Improving Needed Safeguards for Users of Lifesaving Insulin Now (INSULIN) Act. The bill would cap the cost of insulin at $35 per month for individuals on private and employer insurance. The bill also would establish an insulin resource center and hotline to help connect uninsured diabetes patients with resources and programs to secure insulin, and would create a pilot grant program for 10 states to identify uninsured diabetes patients and provide them with insulin at $35 a month. Sens. Shaheen, Collins, Warnock, and Kennedy’s INSULIN Act legislation reflects a unified bipartisan agreement among these senators after years of advancing competing insulin pricing proposals.

Quick Hits

  • FTC launches healthcare task force. The Federal Trade Commission (FTC) Bureau of Competition, Bureau of Consumer Protection, Bureau of Economics, Office of Policy Planning, and Office of Technology will form a task force focused on healthcare enforcement and advocacy. According to the memorandum from FTC Chairman Ferguson, the healthcare task force will coordinate agency-wide efforts, share resources and intelligence, and lead targeted initiatives addressing competition and consumer protection issues across the healthcare sector.
  • GAO releases report, recommendations to improve transparency in FDA advisory committees. The US Government Accountability Office (GAO) found that the FDA relies on more than 30 advisory committees for scientific expertise and is required to assess financial conflicts of interest for members. GAO recommended, in concurrence with HHS, the FDA set a timeline for issuing public guidance and clarify how it evaluates conflicts and appearance issues for members and guest speakers in the interim. Highlights from the report can be found here.
  • Florida initiates Medicaid moratorium on DME suppliers. CMS Administrator Oz announced that CMS approved Florida’s request to pause enrollment of new durable medical equipment (DME) suppliers in the state’s Medicaid program because of concerns about fraud, waste, and abuse.
  • Vice Chair Malone quits ACIP. Robert Malone, MD, vice chair of the Advisory Committee on Immunization Practices (ACIP), resigned from his position on March 24, 2026, following a recent federal court ruling that found that the committee’s current members lacked sufficient expertise and blocked the panel from meeting or acting.

Next Week’s Diagnosis

Congress is expected to enter a two-week recess for Easter and Passover, with both chambers currently scheduled to return the week of April 13, 2026. This could change, as lawmakers continue to struggle to resolve their impasse over funding for the Department of Homeland Security. Because of the recess, our Check-Up will be on hiatus next week and will return April 10, 2026, to recap the two-week period.

On the administrative and regulatory front, we continue to await the release of the president’s fiscal year (FY) 2027 budget request. We also await the final MA technical rule and final rate notice on MA payments for 2027, along with the proposed Medicare payment rules for FY 2027, including the Inpatient Prospective Payment System proposed rule.



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