Insights^

On October 31, 2025, the Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2026 Medicare Physician Fee Schedule (PFS) Final Rule. The CMS press release can be found here. A fact sheet from CMS can be found here. The rule takes full effect on January 1, 2026.

CONVERSION FACTOR

For CY26, CMS will implement two separate conversion factors (CFs). For Alternative Payment Model (APM) participants, known as Qualifying Participants (QPs), the aggregate final CF is set at $33.57, a 3.77% increase ($1.22) from the CY25 CF of $32.35. For non-qualifying participants (non-QPs), the aggregate final CF is $33.40, reflecting a 3.26% increase ($1.05) from the previous year. Notably, these aggregate updates represent a very slight reduction from the originally proposed updates (down from $33.59 or 3.8% for qualifying APMs and $33.42 or 3.3% for nonqualifying APMs – a $0.02 cut in the proposed aggregate update for both categories).

A summary of the various components of those aggregate payment updates is below.

• The primary reason for the bifurcation of the CFs is the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, which reformed Medicare physician payments by replacing the outdated Sustainable Growth Rate (SGR) formula with the Quality Payment Program (QPP). Under MACRA, starting in CY26, a statutory update of 0.75% is provided for QPs that meet thresholds for participation in Advanced APMs (that emphasize quality and cost accountability) and 0.25% for non-QPs.

• In addition to the MACRA updates, the final rule includes a one-year increase of 2.50% applicable to both QPs and non-QPs, as included in this year’s One Big Beautiful Bill Act (OBBBA). Enacted to address concerns over physician payment adequacy, the OBBBA’s 2.50% adjustment helps offset inflation and other economic factors while Congress considers longer-term/systemic reforms to the PFS (which were considered during the development of the OBBBA but were ultimately dropped from the bill due to a combination of cost concerns and a lack of broad Republican consensus).

• Finally, the CF updates account for shifts in relative value units (RVUs), which are used to determine payment rates based on the resources required for services. CMS finalized a 0.49% adjustment to accommodate two broad-based changes in work and practice expense (PE) RVUs, as well ordinary shifts in RVUs (generally due to code values being revised). As discussed below, the broad-based modifications will have the practical effect of somewhat offsetting (in some instances, substantially) the positive CF update for certain specialties/services, particularly those delivered in the facility setting.

EFFICIENCY ADJUSTMENT

As noted above, CMS finalized two broad-based adjustments to RVUs as part of the CY26 rule. The first, an efficiency adjustment, will reduce the work component of the aggregate RVU calculations. The work RVU quantifies the physician’s professional effort in providing a service, encompassing factors such as time, skill, physical and mental effort, and psychological stress due to potential risks to the patient.

As with the proposed rule, CMS used the final rule to criticize its historical dependency on survey data from the American Medical Association’s Relative Value Scale Update Committee (AMA-RUC) for determining work RVUs. And the agency reiterated its concerns over the limited number of codes that undergo annual reevaluation and once again raised the notion that time assumptions in many PFS valuations are overstated.

CMS opted to largely finalize the efficiency adjustment as originally proposed. The adjustment will involve a broad-based -2.5% reduction to the intraservice physician time component of the work RVUs. The -2.5% is calculated as the sum of the Medicare Economic Index (MEI) productivity adjustments from the prior five years (CY21 through CY25). As with the proposed rule, the final rule does not apply the adjustment to time-based codes, such as evaluation and management (E/M) services, care management services, behavioral health services, services on the telehealth list, and maternity codes. However, in response to industry comments, CMS in the final rule opted to expand the list of exempt HCPCS codes, adding time-based physical medicine and rehabilitation (PM&R) services, remote therapeutic monitoring (RTM) services, time-based drug administration services (e.g., chemotherapy infusions), any new HCPCS codes for CY 2026, and certain codes involving high cost software inputs (e.g., CPT code 75577 for coronary atherosclerotic plaque assessment by CT).

Specialties most directly impacted by this change include cardiac surgery (-1% cut to work RVUs), colon and rectal surgery (-1%), interventional radiology (-1%), neurosurgery (-1%), nuclear medicine (-1%), pathology (-1%), plastic surgery (-1%), radiation oncology (-1%), radiology (-1%), and thoracic surgery (-1%).

PRACTICE EXPENSE

As part of CY26 proposed rule, CMS announced its intention to implement a second broad-based adjustment targeting the PE RVU. The PE RVU quantifies the non-physician costs associated with providing a medical service, including staff time, supplies, equipment, and indirect expenses like rent and administrative overhead. As outlined in both the proposed and final rules, CMS believes an adjustment to the PE RVU is necessary to address distortions in payment allocation resulting from the significant shift in physician practices from independent, non-facility settings to hospital-based or facility settings.

CMS largely finalized the PE RVU adjustment as originally proposed. CMS will adjust the indirect PE allocation methodology by reducing the facility indirect PE to half of the non-facility indirect PE for applicable services, calculated using a revised formula that scales down the indirect PE allocator for facility settings based on work RVUs or clinical labor inputs. This adjustment applies broadly to PFS services, excluding those without dual settings and those with specific exemptions, such as certain radiation oncology codes (which instead use Outpatient Prospective Payment System (OPPS) relative weights for PE valuation). In the aggregate, specialties most directly impacted by this change include cardiac surgery (-3% cut to aggregate PE RVUs), critical care (-5%), emergency medicine (-3%), gastroenterology (-3%), general surgery (-3%), infectious disease (-7%), neurosurgery (-5%), orthopedic surgery (-3%), and plastic surgery (-4%). Facility-based PE RVU cuts are, in some instances, much more dramatic (i.e., -10% or higher for many specialties).

SKIN SUBSTITUTES

Skin substitutes are currently reimbursed under the Medicare PFS in non-facility settings as separately payable items using the Average Sales Price (ASP) plus 6% methodology, with each product assigned a unique HCPCS Level II code and manufacturers required to report ASP data quarterly. Synthetic skin substitutes have been paid separately in physician offices since CY22, distinct from the application procedure codes (i.e., CPT 15271-15278). CMS has concerns with this approach, noting the increase in Medicare Part B spending on skin substitutes from $250 million in CY19 to $10 billion in CY24, while the beneficiary count has only doubled.

To address concerns about the potential overuse of skin substitute products, CMS finalized reclassifying skin substitutes as “incident-to” supplies rather than treating them as separately payable under the ASP + 6% methodology. In practice, “incident-to” classification means skin substitutes are considered integral but incidental components of the physician’s professional service during wound care. In place of the separate payment, the cost of such products will be “packaged” into the physicians’ PE RVU. As finalized, the PE RVU for such procedures will be adjusted to reflect a uniform OPPS-based rate of $127.28 per cm² for skin substitute products for CY26, representing up to a -90% reduction in aggregate per-service costs. Notably, that figure represents an increase relative to the proposed rate of $125.38 per cm².

In later years, CMS will differentiate the payment rates for skin substitute products in a manner consistent with their FDA regulatory status (i.e., distinct rates for products approved under the Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/P), Pre-Market Approvals (PMAs), or 510(k) pathways).

CHRONIC ILLNESS AND BEHAVIORAL HEALTH G-CODES

As part of the CY25 PFS final rule, CMS finalized three new G-codes for Advanced Primary Care Management (APCM) services. These codes – G0556 for non-complex APCM (requiring at least one serious condition and clinical staff time thresholds), G0557 for complex APCM (involving multiple conditions with significant staff involvement), and G0558 for APCM with direct physician or non-physician practitioner time thresholds – bundle elements from existing Chronic Care Management (CCM), Principal Care Management (PCM), and Communication Technology-Based Services (CTBS) into a single monthly payment structure. The intent was to reduce administrative burdens associated with fragmented billing requirements and increase access to coordinated care for beneficiaries with chronic or high-risk conditions.

In the CY26 PFS final rule, CMS built on that framework by finalizing three new add-on G-codes – GPCM1 (initial psychiatric Collaborative Care Model or CoCM, mirroring CPT 99492 for the first month of outreach, assessment, and treatment planning), GPCM2 (subsequent CoCM months, mirroring CPT 99493 for ongoing monitoring and adjustments), and GPCM3 (general Behavioral Health Integration or BHI services, mirroring CPT 99484 for at least 20 minutes of monthly care coordination) – which will be billed monthly alongside the base APCM codes.

TELEHEALTH

CMS finalized several updates to its PFS telehealth policies for CY 2026, including:

• CMS streamlined additions to the telehealth services list by eliminating the “provisional” versus “permanent” categories and concentrating evaluations only on whether the service can be adequately provided through interactive two-way audio-video technology.

• The agency permanently lifted limitations on the frequency of telehealth use for subsequent inpatient visits, subsequent nursing facility encounters, and critical care consultations.

• For services needing direct supervision, CMS permanently allows virtual supervision via real-time interactive audio-video communications (excluding audio-only). This covers “incident-to” billing, diagnostic testing, pulmonary rehab, and cardiac or intensive cardiac rehab services, but excludes services with a global surgery indicator of 010 or 090.

• In a change from the proposed rule, which did not extend the pandemic-era flexibility permitting teaching physicians to supervise residents virtually for billing purposes (instead proposing a return to the original mandate for physical presence during key parts of resident-delivered services), CMS finalized allowing teaching physicians to have a virtual presence in all teaching settings permanently, but only when the service is furnished virtually.

AMBULATORY SPECIALTY MODEL

CMS finalized the Ambulatory Specialty Model (ASM), a mandatory alternative payment model through the Innovation Center (CMMI) that targets beneficiaries with heart failure and low back pain. Starting January 1, 2027, the model holds specialists individually accountable through a two-sided risk payment adjustment on Medicare Part B fees, ranging roughly between –9% and +9% in the first payment year. Performance will be evaluated across four domains: quality (e.g., BP control, functional improvement), cost reduction, care-improvement activities (like patient engagement and social needs screening), and interoperability via certified EHRs. Specialists must treat at least 20 Medicare patients per condition annually and operate within selected Core-Based Statistical Areas (CBSA). CMS finalized the ASM as proposed, without significant changes. The agency will announce selected geographic areas/participant lists in late 2025 and early 2026.

QUALITY PAYMENT PROGRAM

CMS finalized several refinements to the Quality Payment Program (QPP), including maintaining the Merit-based Incentive Payment System (MIPS) performance threshold at 75 points for the 2028-2030 payment years, adding five new quality measures (i.e., transplant waitlist ratios) while removing 10 others (i.e., social drivers of health), and introducing six new Value Pathways (MVPs) for specialties like diagnostic radiology and podiatry. CMS finalized these refinements as proposed, without modifications.

MEDICARE SHARED SAVINGS PROGRAM (MSSP)

The CY26 PFS final rule includes several updates to the Medicare Shared Savings Program (MSSP), including:

• Limiting participation in the BASIC track’s one-sided risk level to a maximum of five performance years during an ACO’s first agreement period in the glide path (if eligible), requiring ACOs to transition more quickly to two-sided risk models. This applies to periods beginning on January 1, 2027.

• Increasing flexibility in eligibility and financial reconciliation requirements by allowing ACOs to have fewer than 5,000 assigned beneficiaries in benchmark years 1 or 2, provided they have at least 5,000 in benchmark year 3. Such ACOs are restricted to the BASIC track with capped shared savings and losses. This applies to agreement periods beginning on or after January 1, 2027.

• Removing the health equity adjustment applied to an ACO’s quality score, beginning in performance year 2026 (instead of 2025). CMS finalized the revised start date in response to comments and made terminology revisions for performance years 2023 through 2025 (instead of 2023-2024).

• Renaming the “health equity benchmark adjustment” to “population adjustment” for performance year 2025 and subsequent years, to better reflect its focus on beneficiaries enrolled in Medicare Part D low-income subsidy or dually eligible for Medicare and Medicaid.

• Updating the APM Performance Pathway (APP) Plus quality measure set for performance year 2025 and subsequent years, including removing Quality ID: 487 Screening for Social Drivers of Health.

• Expanding CAHPS survey modes to include a web-based option (web-mail-phone) beginning with performance year 2027, to increase response rates.

• Extending Extreme and Uncontrollable Circumstances (EUC) protections to include cyberattacks (e.g., ransomware/malware) for quality and financial evaluations from performance year 2025 onward.

• Revising the definition of a beneficiary eligible for Medicare Clinical Quality Measures (CQMs) for performance year 2025 and beyond, requiring one primary care service from specified providers.

• Requiring ACOs to report changes during the performance year to their ACO participant list (Change of Ownership scenarios resulting in a new TIN) and SNF affiliate list.

• Revising the definition of primary care services for beneficiary assignment to align with PFS changes, including new behavioral health integration and psychiatric collaborative care management add-on services when furnished with advanced primary care management, effective for performance year starting January 1, 2026. In a change from the proposed rule, CMS did not finalize the exclusion of HCPCS code G0136 (administration of a standardized, evidence-based Social Determinants of Health Risk Assessment tool), continuing to include it with its updated code descriptor.

• Revising quality monitoring policies to track whether ACOs meet both the quality performance standard and the alternative quality performance standard for performance years beginning January 1, 2026, with extended actions (prior to termination or immediate termination) if an ACO fails either.

AGENCY REPLIES TO REQUESTS FOR INFORMATION (RFIS)

In the proposed rule, CMS issued several RFIs on a variety of issues. For some those RFIs, the CY26 final rule contains a summary of the stakeholder comments and CMS feedback on industry’s comments – a review of these specific RFIs is below. For most, however, CMS reiterated what it requested from stakeholders and noted that it had received significant feedback from industry but did not include a summary of those comments or feedback on the information it received (i.e., reducing regulatory burdens, enhancing payment for global surgeries, PDMP data integration, prevention and management of chronic disease, etc.).

• How to handle cost-sharing for APCM services, and whether waiving or adjusting cost-sharing requirements for APCM services could enhance access and utilization: Commenters recommended eliminating cost-sharing for APCM services, arguing that cost-sharing could limit uptake. CMS responded that APCM does not fully align with preventive service categories but acknowledged similarities with “personalized prevention plan services” (e.g., health risk assessments, self-management oversight). CMS noted the complexity of APCM bundling both preventive and treatment services, solicited further comments on application and inclusions (e.g., Annual Wellness Visits), and stated it would consider the input for future rulemaking without specific actions in this rule.

• Whether and how to standardize “core elements” within the MVP reporting requirements: Many commenters supported standardizing core elements to improve data comparability and reliability, but some expressed concerns that rigid standardization could limit flexibility for diverse patient populations. Suggestions included specific measures for core elements and mechanisms for updates. CMS reiterated its commitment to balancing standardization with flexibility and pledged to continue stakeholder engagement for future policy development without immediate changes.

• Input on transitioning to digital quality measurement within the QPP and MSSP: Most commenters supported changes aligning beneficiary definitions, noting reduced confusion and burden in reporting, which aids the dQM transition. Some raised concerns about technical challenges (e.g., EHR incompatibilities, data deduplication, vendor limitations). One encouraged integrating dQM into ACO requirements. CMS thanked commenters and stated it would not address RFI comments in this rule but would consider them for future rulemaking.

On October 29, 2025, the Senate HELP Committee held a hearing on the future of biotech. The members heard testimony on the current state of biotech in the United States as well as how to address coming challenges. There was strong bipartisan support of the need for domestic drug manufacturing and maintaining US competitiveness in the global arena.

Opening Statements

• Chairman Bill Cassidy (R-LA)

Witness Testimony

• Lowell Schiller, JD, Nonresident Senior Scholar, USC Schaeffer Institute – Testimony
• John F. Crowley, JD, MBA, President and CEO, Biotechnology Innovation Organization (BIO) – Testimony
• Josh Makower, MBA, Yock Family Professor of Medicine and Bioengineering, Byers Family Director and Co-founder Stanford Mussallem Center for Biodesign, Stanford University Schools of Medicine and Engineering – Testimony
• Aaron S. Kesselheim, JD, MPH, Professor of Medicine, Harvard Medical School/Bringham and Women’s Hospital – Testimony
• Reshma Ramachandran, MPP, MHS, Assistant Professor of Medicine, Yale School of Medicine – Testimony

Member Discussion

Domestic Manufacturing

The most widespread concern from members, including Sens. Banks (R-IN), Blunt Rochester (D-DE), Kaine (D-VA), and Chairman Cassidy (R-LA), was how to encourage domestic manufacturing of biotech. Sen. Blunt Rochester highlighted the lack of a national comprehensive plan to address US biotech innovation and manufacturing. When asked by Sen. Banks about ways for the Food and Drug Administration (FDA) to improve manufacturing, Mr. Schiller indicated a need to update regulations for modern technology and processes as well as have parity between domestic and global inspection standards. Chairman Cassidy raised the potential of using robotics to support domestic manufacturing of generic drugs, but Mr. Schiller responded that the upfront capital needed to open a robotics-based plant makes it unobtainable for companies.

Funding and Staffing Changes

Sen. Murray (D-WA), along with Sens. Hickenlooper (D-CO) and Blunt Rochester (D-DE), expressed concerns that funding changes to the National Institutes of Health (NIH) will greatly reduce US competitiveness and innovation in biotech due to decreased research. All 5 witnesses agreed that the funding changes pose serious risks to innovation and continued drug development. Dr. Ramachandran specifically highlighted the negative impacts on patients due to the cancellation of clinical trials and the brain drain that is occurring as scientists find employment opportunities in other countries. Mr. Crowley emphasized the important role that the NIH plays in basic and translation research, which builds the foundation for startup biotech companies and encourages investment capital from academic institutions and private organizations.

Similar concerns were raised about layoffs at the FDA and the Centers for Disease Control and Prevention (CDC). Sen. Kim (D-NJ) asked about current challenges with FDA resources, to which Dr. Makower responded that vacancies needed to be filled at a one-to-one rate to keep up with the workload of approvals, manufacturing plant inspections, and questions from biotech developers. Dr. Ramachandran highlighted the need for CDC action and surveillance to address growing public health concerns, like drug resistant super bugs, that have biotech solutions, novel antibiotics.

Cost

Sen. Sanders (I-VT) was the first to raise the point of the high cost of pharmaceuticals, often out pricing patients who cannot afford their medications. Dr. Ramachandran shared her experiences where patients request to skip a month of one of their medications or choose not to fill a prescription after seeing the cost at a pharmacy. Sen. Hassan (D-NH) suggested biosimilars could be a way to decrease costs if they can be brought to market quickly. Dr. Kesselheim agreed but elaborated that efforts need to be made to encourage prescribing of biosimilars as well as regulatory guidance to allow them to be interchangeable with their counterparts at pharmacies.

Sen. Hickenlooper questioned if there have been any negative outcomes on negotiating drug prices under the Inflation Reduction Act (IRA). Dr. Kesselheim stated there have been no changes to innovation and the results have only showed drug prices can be decreased. Sen. Cassidy followed up, trying to understand if there has been a difference in investments by biotech companies because of the IRA. Mr. Crowley stated the largest result he has seen is the focus shift from small to large molecules.

Possible Regulations

Sen. Moody (R-FL) asked what regulatory improvements could be made to improve the FDA. Mr. Crowley expressed the need for faster, clearer guidance from the FDA through the approval process. He also suggested the consideration of surrogate endpoints or risk/benefit assessments for rare disease therapies.

Sen. Kaine wanted input from the panel about the Vaccine Injury Compensation Program and whether reform was needed. Dr. Kesselheim expressed support for the VICP, especially how it supports US production of vaccines. Mr. Crowley was also supportive of the program, stating that the system works and should be preserved and strengthened.

Chairman Cassidy led the conversation about the 3^rd party review process for the FDA, questioning why the FDA will re-review approvals. Dr. Makower expressed the variable quality for 3^rd party reviews and the need to implement a quality control process if there is a desire to increase 3^rd party usage. Dr. Ramachandran echoed the point and discussed the need for greater oversight.

On October 23, 2025, the Senate HELP Committee held a hearing to examine the 340B Program’s growth and impact on patients. The members heard testimony on how the program functions as well as some current challenges that have been identified. There was strong bipartisan support for the continuation of the program, but there were also calls from both sides of the aisle for careful regulations to ensure the program’s continuing success.

Opening Statements

• Chairman Bill Cassidy (R-LA)

Witness Testimony

• Michelle Rosenberg, Director, Health Care, U.S. Government Accountability Office (GAO)– Testimony
• Dr. Aditi Sen, Chief, Health Policy Studies Unit, Congressional Budget Office (CBO) – Testimony
• William B. Feldman, Physician and Health Policy Researcher, University of California, Los Angeles – Testimony

Member Discussion

The most common line of questioning from members, including Sen. Tuberville (R-AL), Sen. Murkowski (R-AK), Sen. Kim (D-NJ), Sen. Collins (R-ME), and Sen. Banks (R-IN), was regarding how 340B Program facilities use the savings from the program in their operating budgets. Ms. Rosenberg responded each time that there are no specific requirements in the program on how to use the funds, and Dr. Sen elaborated that the CBO does not have the data required to have a full understanding of how different entities are using the funds. Sen. Hassan (D-NH) suggested that reporting requirements for revenue generated by the program could increase transparency and guide future regulations on its use.

Sen. Baldwin (D-WI), who is a member of a bipartisan 340B working group, raised concerns about the new 340B Rebate Model Pilot Program, which requires program participants to purchase pharmaceuticals at market price and receive a rebate later, creating greater upfront costs. Dr. Feldman shared these concerns and suggested a 3^rd party clearing house could be a solution to ensure that pharmaceutical companies and health care providers are able to reach equitable agreements.

Sen. Marshall (R-KS) suggested that creating a definition of a patient under the program, considering factors such as recency or frequency of visits, could aid in regulating eligibility requirements. Dr. Sen agreed but cautioned that any narrowing of the definition would have implications that would need to be understood.

When asked by Sen. Kaine (D-VA) and Sen. Baldwin about recommendations for 340B program reforms, Ms. Rosenberg suggested the 15 recommendations GAO previously made to HRSA, through reports on June, 28 2018, January 10, 2020, and January 27, 2020, that have not been implemented. These include addressing duplicate discount policies, more auditing of contracts and hospital systems, and more data collection on cost savings and use. Sen Hickenlooper (D-CO) continued this line of questioning with the need for more HRSA oversight, which requires authorization to impose regulations and staffing levels to uphold them.

Sen. Kim, Sen. Murray (D-CT), Sen. Markey (D-MA), and Sen. Alsobrooks (D-MD) all discussed how stretched 340B hospital systems’ budgets are, and they raised concerns about how policy decisions such as not renewing advance premium tax credits (APTCs) could make things worse. Dr. Feldman agreed and stressed that any increase in the uninsured population would lead to providing more uncompensated care and a larger burden on the providers in those systems. Sen. Collins and Sen. Murkowski were concerned that regulations limiting 340B hospitals would have a disproportionate impact on rural hospitals that rely more heavily on the 340B program to provide care to their patients.

On October 22, 2025, the Senate Special Committee on Aging held a hearing on how shoppable health services can improve outcomes and lower costs. Committee members heard testimony on different ways to reduce costs, especially for older Americans.

Witness Testimony 

• Mark Cuban, Co-Founder, Cost Plus Drugs – Testimony
• G. Keith Smith, Co-Founder, Surgery Center of Oklahoma and the Free Market Medical Association – Testimony
• Don Moulds, Chief Health Director, CalPERS – TestimonyJeanne Lambrew, Director of Health Care Reform and Senior Fellow, The Century Foundation – Testimony

Member Discussion

Prescription Drugs and Pharmacy Benefit Managers (PBMs)

One major topic of discussion was ways to address the high cost of prescription drugs. Sen. Tuberville (R-AL) asked how direct-to-patient programs, like Cost Plus Drugs save patients money. Mr. Cuban responded by saying that these companies build trust with patients through transparent pricing and can charge less as there are no intermediaries.

There was bipartisan interest in addressing concerns about PBMs. Sen Husted (R-OH) mentioned his concerns about a lack of competition if insurance companies are able to create monopolies by owning PBMs and pharmacies. He also noted his concerns that this would further increase price and push smaller independent providers out of business. Sen. Warren (D-MA) expanded on this line of questioning through the discussion of the Department of Defense TRICARE provider, Cigna, who also owns PBM Express Scripts, as well as specialty pharmacy Accredo. She noted her concern that this enables Express Scripts to highly encourage patients to use Accredo and reimburse other pharmacies at lower rates causing independent practices to go out of business.

Sen. Justice (R-WV) mentioned mimicking state legislation that passes the PBM cost savings onto patients as a way to respond to large profits by PBMs.

Pricing Transparency

Multiple senators, including Sen. Tuberville, Sen. Marshall (R-KS), and Sen. Moody (R-FL), questioned whether publishing prices encouraged patients to shop for care. Dr. Smith testified that his clinic often serves out-of-state and out-of-country patients due to their low prices. Patients were also able to use his clinic’s publicly posted prices to negotiate with their local hospital systems and price match.

Chairman Scott (R-FL) and Ranking Member Gillibrand (D-NY) were curious about the logistics of reference-based pricing in the CalPERS system and how competition between hospital systems can be beneficial. Dr. Moulds emphasized that due to CalPERS’ size, they had more power than smaller systems but still faced price differentials between geographic areas that had greater amounts of providers and smaller amounts of providers. Dr. Moulds was also frank that not all health services can be referenced-based, and that CalPERS makes decisions on how to balance encouraging members to receive care with the potential cost of care.

Advance Premium Tax Credits (APTC)

Sen. Gillibrand was the first of many members, including Sen. Warnock (D-GA) and Sen. Kelly (D-AZ), to highlight the increased premium costs due to the expiration of APTCs. Concerns were raised about the affordability of health insurance and how the 55-65 aged community will respond to the increased price. Dr. Lambrew emphasized that adults aged 55-65 will be the most affected by the rise in premium costs due to their reliance on the health care marketplace and their greater need to receive care. Dr. Lambrew and Mr. Cuban agreed that many will forgo health insurance to pay for other expenses.

Sen. Johnson (R-WI) pressed Dr. Lambrew on the design of the Affordable Care Act and the continued growth in health care costs. Dr. Lambrew maintained the position that although the tax credits were not part of the original design of the ACA, they were an improvement that should be continued.

On September 17, 2025, the House Energy and Commerce Committee (E&C) marked up five bills related to various health care issues, including legislation to reauthorize rural health, telehealth, and pediatric rare disease drug development programs. Although the bills marked up enjoyed bipartisan support, Democratic members expressed disappointment that the markup did not include legislation passed out of the E&C Health Subcommittee on September 11 related to reauthorization of health care workforce and newborn screening programs. Democratic members also criticized the One Big Beautiful Bill Act’s provisions related to Medicaid and urged the Committee to pass a permanent extension of the Affordable Care Act (ACA) expanded tax credits. Democratic members called for the committee to conduct oversight on several Department of Health and Human Services (HHS) actions, including the firing of the director of the Centers for Disease Control and Prevention (CDC), the cutting of federal research funding, the reductions in force at HHS, and changes to the Advisory Committee on Immunization Practices. Committee Chair Brett Guthrie (R-KY-2) stated that he was willing to consider such requests but did not commit to a specific timeline for future hearings.

Opening Statements

• Committee Chair Bret Guthrie (R-KY-2)
• Committee Ranking Member Pallone (D-NJ-6)

Health Care Legislation Marked Up

• H.R. 2493, Improving Care in Rural America Reauthorization Act of 2025 (Rep. Buddy Carter, R-GA-1), a bill to reauthorize grant programs for rural health care services outreach, rural health network development, and small health care provider improvement through Fiscal Year 2030.
  • Reps. Buddy Carter (R-GA-1), Kim Schrier (D-WA-8), and Troy Carter (D-LA-2) expressed support for the bill. However, Rep. Schrier criticized the One Big Beautiful Bill Act for Medicaid cuts and criticized the Rural Health Transformation Fund as being overly focused on the “Make America Healthy Again agenda. Rep. Troy Carter also brought up his disappointment that legislation related to health workforce program reauthorization was not included in the markup.
  • Rep. Kathy Castor (D-FL-14) offered an amendment to insert a permanent extension of ACA tax credits into H.R. 2493, which numerous Democratic members voiced support for. Republicans countered that it was the Inflation Reduction Act that set the ACA expanded tax credit expiration date and that this issue is not within E&C’s jurisdiction. Rep. Guthrie noted that conversations are underway regarding possible next steps related to the tax credits, but that H.R. 2493 is not the bill to extend the tax credits. This amendment was withdrawn.
  • Final vote tally for H.R. 2493: Passed 49-0.
• H.R. 3419 (Rep. David Valadao, R-CA-22), a bill to reauthorize the telehealth network and telehealth resource centers grant programs through Fiscal Year 2030.
  • Final vote tally for H.R. 3419: Passed 48-0.
• H.R. 2846, (Rep. Chrissy Houlahan, D-PA-6), a bill to amend title II of the Public Health Service Act to include as an additional right or privilege of commissioned officers of the Public Health Service (and their beneficiaries) certain leave provided under title 10, United States Code to commissioned officers of the Army (or their beneficiaries).
  • Final vote tally for H.R. 2846: Passed 46-0.
• H.R. 1262, Give Kids a Chance Act of 2025 (Rep. Michael McCaul, R-TX-10), a bill to expand the FDA’s authority with respect to research on rare pediatric diseases, including by permitting the FDA to take enforcement action against drug sponsors that fail to satisfy pediatric study requirements and by reauthorizing programs that support pediatric research.
  • Rep. Neal Dunn (R-FL-2) offered an amendment to add H.R. 1843, a bill to increase transparency in generic drug applications, to H.R. 1262. This amendment was agreed to by voice vote.
  • Rep. Castor offered an amendment to add language to H.R. 1262 that would prevent any modifications from being made to the CDC’s Adult and Child and Adolescent Immunization Schedules in effect on May 26, 2025, that would result in a reduction to no-cost coverage of vaccines. Other Democratic members expressed support for the amendment, but Republican members questioned the amendment’s germaneness. This amendment was withdrawn.
  • Rep. Diana DeGette (D-CO-1) offered an amendment to add the health care extenders from the December 2024 year-end agreement in H.R. 1262. Rep. Morgan Griffith (R-VA-9) noted that even though he is willing to work on these extenders, he did not support this amendment because of concerns about germaneness and that some of the extenders have moved separately. This amendment was withdrawn.
  • Final vote tally for H.R. 1262: Passed 47-0 as amended.
• H.R. 3302, Healthy Start Reauthorization Act of 2025 (Rep. Alexandria Ocasio-Cortez, D-NY-14), a bill to reauthorize the Healthy Start Initiative through Fiscal Year 2030.
  • Final vote tally for H.R. 3302: Passed 49-0.