Insights

There are only 8 more days left with both the House and the Senate in session before the August recess, and Congress has a lot on its plate. The top of the list includes fiscal year 2027 appropriations bills, Republican hopes for Reconciliation 3.0, and dealing with renewed conflict in Iran. Overshadowing it all is the unexpected death of Senate Budget Committee Chairman Lindsey Graham (R-SC). Let’s get into it. Welcome to the Week Ahead!

The Administration

The Department of Health and Human Services (HHS) postponed the U.S. Preventive Services Task Force’s meeting for the fourth time in the past year, citing an “unprecedented” volume of applications from prospective members. The delay follows a broader overhaul of the task force’s membership. In May, HHS removed chair John Wong and vice chair Esa Davis, and the agency has been soliciting nominations for a new slate of members. Given the pattern of repeated delays over the past year, it will be important to see if HHS names new task force members or sets a new meeting date in the coming weeks, and whether congressional Democrats and advocacy groups, who have previously pushed back on changes to the task force, respond to this latest postponement.

Meanwhile, the White House is once again focusing on the H-1B visa program with new a Department of Labor (DOL) investigation into visa fraud. Vice President Vance announced the new effort, following court challenges to the $100,000 H-1B fee imposed by the Trump administration in September 2025. The initiative will focus on checking underpayment of foreign workers, layoffs of qualified Americans, and labor trafficking. While much of the focus has been on the information technology industry, it will be important to pay attention to how the investigation impacts the health care workforce, which includes a significant number of H-1B visa holders.

The Senate

The passing of Sen. Graham has major implications for the Senate’s agenda, as he chaired the Senate Budget Committee, which would be responsible for drafting instructions for a third reconciliation bill. Sen. Ron Johnson (R-WI) is the most senior Republican on the Committee without an existing chairmanship, is next in line for the post and his office has said he is “prepared to serve.” Sen. Johnson is a staunch fiscal hawk who previously called for cuts during the debates over the first reconciliation package. This suggests he may demand cuts to offset the price tag of a third package. Sen. Graham’s passing also means that, until his temporary replacement is named and until Sen. Mitch McConnell (R-KY) returns, the Republican majority is down to 51 Senators.

The Senate Health, Education, Labor, and Pensions (HELP) Committee is looking to start filling in the gaps in federal health policy leadership with a nomination hearing on July 15. Up for review are Sean Kaufman to be Assistant Secretary for Preparedness and Response (ASPR) and Dr. Erica Schwartz to be Director of the Centers for Disease Control and Prevention (CDC). The nomination hearings indicate that HELP Committee Chairman Bill Cassidy (R-LA) is willing to work with the Trump administration to move forward with their picks despite losing his primary in May. Also, on his to-do list are nomination hearings for the US Surgeon General and the yet-to-be-announced Director for the Food and Drug Administration (FDA). And that’s assuming that Dr. Schwartz lasts longer than her predecessors’ 29 days!

We are also tracking a July 14 Senate Judiciary Committee hearing on how the debate over what products are eligible for patents impacts genetic medicine. Our conversations on the Hill indicate that the hearing will be focused on S. 1545, the Patent Eligibility Restoration Act of 2025 (PERA). If this bill were to eventually become law it would make it easier for diagnostic methods, genetic testing applications, and personalized-medicine inventions built around genetic material to be patented.

Other Health Care Hearings This Week

• July 15: Senate Armed Services Personnel Subcommittee hearing on the Tricare pharmacy program
• July 15: Senate Aging Committee hearing on foreign ownership and control in America’s drug supply chain

The House

House Republican leadership is returning to Washington after failing to advance appropriations bills before the July 4^th recess. The House Rules Committee is scheduled to consider a rule on July 13 that would include the national security and Department of State appropriations legislation (along with a Veterans bill with a variety of health care provisions). However, it remains to be seen if House Republican leadership can overcome the efforts by some House Republicans to halt floor action unless progress is made on the SAVE America Act. At the same time, there continues to be interest in reconciliation 3.0 in the House, with some calling for provisions to enact health care priorities such as expanding access to health savings accounts and strengthening federal price transparency requirements. House Speaker Mike Johnson (R-LA-4) reportedly met with members of the House Budget Committee on July 12. Despite this movement, hurdles such as a thin Republican majority and dwindling days on the calendar make a third reconciliation package a tall order.

While the House as a whole deals with all these priorities and more, the House Energy and Commerce Health Subcommittee is set to examine America’s leadership in biomedical innovation and the FDA’s role in drug development on July 15. Based on our conversations on the Hill, we expect the hearing to include a focus on how the US can improve the drug research and approval process to be competitive with China, as well as drug user fee reauthorization.

Other Health Care Hearings This Week

• July 14: House Education and Workforce Committee hearing on the impact of DEI on medical schools
• July 15: House Select Committee on China hearing on the federal research security enterprise

There You Have It

Movies are a great way to take shelter from the summer heat, and July is setting up to have a lot of options between the new live-action Moana, The Odyssey, the next Spider-Man, and more. Is there one that you are looking forward to? Let us know. Make it a great week!

Washington is looking forward to a three-day weekend, as the nation gears up to celebrate 250 years of independence. However, there’s still a lot going on in the health care space. Medicare payment rules are being reviewed, House conservatives are making a push for health care reform in Reconciliation 3.0, and a 340B reform discussion draft has been published. So, let’s get into it. Welcome to the Week Ahead!

The Administration

Minds may be focused on summer, but it’s also rules season for the Centers for Medicare and Medicaid Services (CMS) as the agency works with the Office of Management and Budget (OMB) to release both proposed and finalized versions of several of the payment rules for calendar (CY) and fiscal year (FY) 2027. The CY27 Physician Fee Schedule proposed rule and CY27 Hospital Outpatient Prospective Payment System (HOPPS) proposed rule are usually released in early to mid-July. We expect the CY27 PFS to acknowledge the statutory end of the 2.5% pay bump that Congress provided for physicians through the 2025 reconciliation bill, which is certain to prompt renewed calls from physician groups for both a short-term fix and longer-term reform of how the PFS rate is calculated. It will also be important to see if CMS responds to concerns about other controversial provisions of the CY26 PFS final rule, such as the -2.5% efficiency adjustment and the reductions to the practice expense portion of the reimbursement calculation for facility-based services. For the CY27 HOPPS proposed rule, we expect CMS to continue its multi-year phase-out of the inpatient-only list and propose a larger 340B conversion factor offset than CY26. CMS may also propose differentiated skin-substitute rates based on Food and Drug Administration (FDA) regulatory categories. These expectations are based on CMS comments included in the CY26 HOPPS final rule fact sheet. CMS and OMB are also still working on releasing the FY27 Hospital Inpatient Prospective Payment System (IPPS) final rule and the FY27 Inpatient Psychiatric Facility (IPF) Prospective Payment System (PPS) final rule, which we expect in late July-early August.

Meanwhile, speculation continues as to who will be President Trump’s next nominee for Food and Drug Administration (FDA) Commissioner. A few names have reportedly emerged as finalists, although the White House has not confirmed this report. Reported finalists include Dr. Heidi Overton, who currently serves as deputy director of the White House Domestic Policy Council, Dr. Jeffery Vacirca, who is the CEO of the board of New York Cancer & Blood Specialists, and Stephen Ferrara, who previously served as Chief Medical Officer for the Navy and the Central Intelligence Agency (CIA). A June 24 report from RBC Capital Markets also listed John Crowley, CEO of the Biotechnology Innovation Organization (BIO), and current acting commissioner Kyle Diamantas as top candidates. Crowley’s appointment would be a big win for pharmaceutical companies and could go a long way in repairing the administration’s relationship with the sector.

In other nomination news, President Trump has announced Chris Klomp will be nominated for Deputy Secretary of Health and Human Services. Klomp has been on the rise after becoming Chief Counselor of HHS in February. This role will require Senate confirmation, but he has already cleared one hurdle: approval from Senate HELP Committee Chair Bill Cassidy (R-LA), who has expressed his support on social media.

The Senate

The Senate has left town until July 13, but right before packing his bags, Senate HELP Committee Chair Cassidy dropped a discussion draft to reform the 340B Drug Pricing Program. The proposed changes aim to prevent duplication of drug discounts, create reporting requirements on how 340B revenue is being used, and impose a sliding fee scale for low-income patients. The discussion draft shows that Chair Cassidy is not taking it easy despite his lame duck status. However, it’s unclear how much progress he can make before his term ends.

The House

Whispers about Reconciliation 3.0 are getting louder again, this time focusing on potential health policy inclusions. House Freedom Caucus members authored a letter to Speaker of the House Mike Johnson (R-LA-4) calling for “health care freedom reforms”, such as expanding access to health savings accounts (HSAs) and strengthening federal price transparency requirements. However, like everything else in the House these days, passage of a third reconciliation bill is complicated by President Trump’s demands to pass his election bill, the SAVE America Act. Speaker Johnson has proposed including a grant program in a third reconciliation package to fund state efforts to implement portions of the SAVE America Act. While this could preemptively meet the Byrd Rule in the Senate, which requires measures passed through reconciliation to have a budgetary impact, it may leave both hardline conservatives (who want full passage of the SAVE America Act) and certain Senate Republicans (who have voiced concerns about the SAVE America Act) unsatisfied.

Additionally, the Ways and Means Committee is looking to take another run at a bill requiring additional transparency from nonprofit hospitals, after it was pulled from a previous Committee markup. The legislation, as previously proposed, would require nonprofit hospitals to meet new transparency requirements when filing their Form 990 with the Internal Revenue Service each year. Our conversations on the Hill indicate that Committee Republicans are still working through the process of incorporating stakeholder feedback and hope to move on it soon.

Also on our radar, the House Majority Leader’s schedule for the week of June 29 incudes H.R. 5347, the Health Care Efficiency Through Flexibility Act. This bill would preserve existing accountable care organization (ACO) quality reporting collection types through performance year (PY) 2029, bar CMS from deeming an ACO’s data “unrepresentative” solely because some participants couldn’t submit via the chosen collection type (subject to certain requirements) and establish an optional digital quality measure pilot (PY 2028–2032) with reporting relief for participants.

Looking ahead: House Democrats are gearing up for future possibilities if they retake the chamber in the midterm elections. Party leadership has established 5 Cost of Living working groups to discuss possible policies to address affordability, which will be the number 1 priority if Democrats win back control of the chamber, according to Minority Leader Hakeem Jeffries (D-NY-8). The Health working group will be headed by Reps. Alexandria Ocasio-Cortez (D-NY-14) and Terri Sewell (D-AL-7) and aims to develop policy recommendations to lower health care costs and expand access. The materials produced by the working group will likely form the backbone of Democratic health policy and signal the changes Democrats will try to enact if they regain control of the House.

House Health Care Hearings This Week

• House Veterans’ Affairs Health Subcommittee legislative hearing on health care legislation
• House Financial Services markup of the Securing Facilities for Mental Health Services Act
• House Education and Workforce HELP Subcommittee hearing on direct contracting

There You Have It

The 4^th of July is almost here, and with it the United States is celebrating the 250^th anniversary. About 45% of Americans were also alive for the 200^th celebrations. If you were there, let us know what you remember about it. Make it a great week!