Weekly Health Care Policy Update – October 2, 2026

October 15, 2026

In this update:  

  • Trump Administration
    • President Trump Executes $810 Million in Pocket Rescissions; GAO Declares Unlawful
  • Legislative
    • Politico Publishes House Democrats’ Health Care Working Group Agenda
  • Federal Agencies
    • ARPA-H Introduces SURPASS Program
    • CMS Finalizes GLOBE Model
    • HHS Issues Guidance on SUD Records for Medicaid Work Requirements
    • CMS Launches Initiative to Focus Medicaid Quality Measurement on Outcomes
    • CMS Announces Lower Parts C and D 2027 Premiums
  • Other
    • Federal Judge Rolls Back Disability Protections
    • MACPAC Holds September 2026 Meeting
    • Eric Cantor Named as Next PhRMA CEO
    • MAHA Network Hosts Two Policy Events
  • New York State
    • DOH Submits 1115 MRT Waiver Extension Request to CMS
    • NYC DOHMH Releases 2026 Healthcare Accountability Report

Trump Administration

 President Trump Executes $810 Million in Pocket Rescissions; GAO Declares the Action Unlawful
On September 25th, the Trump Administration announced plans to cancel $810 million in spending approved by Congress, including substantial funding for HHS programs. The Administration is using a rarely invoked budget mechanism known as a “pocket rescission,” which allows the President to request the cancellation of funds shortly before the end of the federal fiscal year. The Administration used the same mechanism last year to cancel foreign aid funding, but this year’s action targets domestic programs.
 
The cuts include $567 million for HHS services supporting refugees, asylum seekers, unaccompanied children, and other noncitizens, $28 million in HHS research funding, and $5 million for the HHS Office of Minority Health. The White House argues that the targeted programs are wasteful, duplicate other federal efforts, or conflict with the Administration’s priorities.
 
The decision raises legal concerns because the Impoundment Control Act (ICA) of 1974 gives Congress 45 days to review proposed rescissions, but the Administration announced the cuts just five days before the September 30th fiscal year deadline. Senate Appropriations Committee Chair Susan Collins (R-ME) criticized the move as an unlawful attempt to bypass Congress’ constitutional authority over spending.
 
On September 29th, the Government Accountability Office (GAO) sent a letter to congressional leaders concluding that the pocket rescissions violate both the ICA and the Constitution’s vesting of spending authority in Congress.
 
However, the administration did not reverse course and the funds lapsed automatically when fiscal year 2026 ended on September 30th.

A statement from the White House is available here and the OMB rescission documents are available here. The GAO letter is available here.

Legislative

Politico Publishes House Democrats’ Health Care Working Group Agenda
On September 25th, Politico published an 84-page memo delivered to House Minority Leader Hakeem Jeffries (D-NY) by a working group led by Reps. Alexandria Ocasio-Cortez (D-NY) and Terri Sewell (D-AL) outlining a health policy agenda for the party’s first 100 hours, first 100 days, and first year in power, should Democrats win the House majority in November. The memo states that “undoing H.R. 1 is the floor, but not the ceiling” and organizes its recommendations into eight categories: reversing the OBBBA’s cuts, building toward universal coverage through Traditional Medicare, curbing corporate consolidation, expanding preventive care, strengthening reproductive health, investing in the health care workforce, “reclaiming MAHA,” and expanding access to medical innovation. Over 100 existing or potential bills are referenced. Notably, the memo does not endorse Medicare for All, instead listing it as one of several options alongside a public option and a Medicare buy-in.
 
The agenda calls for Democrats to “put science back in charge of public health and medical research,” backing legislation that would protect vaccine recommendations from political interference, and would restrict the administration’s ability to withhold, delay, or redirect NIH research funding for policy reasons. Additionally, the memo proposes legislation to break up vertically integrated health care companies, separate PBMs from the pharmacies they own, end the Trump administration’s 340B rebate model pilot, and impose site-neutral hospital payment policies.
 
The full working group memo is available here. The original Politico story is available here.

Federal Agencies

ARPA-H Introduces SURPASS Program
On September 30th, HHS and ARPA-H launched the Simulation-augmented, Real-time Platform Adaptive Seamless Trials (SURPASS) program, a five-year effort aimed at redesigning clinical trials by replacing traditional trial phases with continuous, adaptive trials that use predictive computational models, shared infrastructure, and real-time data analysis to speed up drug development. ARPA-H’s press release cites the high cost and high failure rate of current drug development as the motivation for the program. The formal solicitation also notes that replacing traditional control-group data with computer-simulated data must be “graduated and evidence-based.” The announcement included no funding information.
 
Alongside SURPASS, ARPA-H also announced three complementary projects: STACK, which aims to use AI to expand clinical trial site capacity; COMMONS, which aims to build a national data-sharing infrastructure for trials; and CINCH, which aims to let patients contribute their own real-world data to research.
 
ARPA-H will host a webinar on SURPASS on October 15th. Proposals are due on January 22, 2027 with a required “Solution Summary” submission deadline of November 30, 2026. More information on webinar registration, proposals, and the SURPASS program is available here.
 
CMS Finalizes GLOBE Model
On September 30th, CMS finalized the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a mandatory five-year model that ties Medicare Part B drug prices to international benchmarks. The model modifies the existing Medicare Part B Drug Inflation Rebate Program, under which manufacturers already owe rebates when drug prices rise faster than inflation. GLOBE will instead calculate those rebate amounts using a benchmark reflecting prices paid in a set of economically-comparable countries, drawing on manufacturer-reported international pricing data or data from commercial sources. CMS will test the approach on drugs commonly used in oncology, rheumatology, immunology, ophthalmology, and endocrinology where annual Medicare spending exceeds $100 million.
 
The model will run from January 1, 2027 through March 31, 2032, with manufacturer rebate invoicing and reconciliation continuing through March 31, 2034, and will apply to roughly a quarter of Traditional Medicare beneficiaries selected through a randomized set of geographic regions. CMS projects the model will generate roughly $440 million in savings, substantially below the agency’s initial $11.9 billion estimate, primarily because the final rule allows manufacturers participating in the GENEROUS model to be excluded from GLOBE.
 
The CMS press release is available here. The final rule is available here.
 
HHS Issues Guidance on SUD Records for Medicaid Work Requirements
On September 29th, HHS’s Office for Civil Rights issued FAQ guidance clarifying how state Medicaid agencies may use substance use disorder (SUD) records protected under 42 CFR Part 2 to verify whether an applicant or beneficiary qualifies for the medically frail exclusion from the OBBBA’s Medicaid work requirements. The guidance builds on CMS’s September 8th slide deck, which allowed states to use up to five years of claims and encounter data, rather than the standard 12-month lookback, to verify whether a beneficiary with SUD meets the rule’s “stable recovery” exclusion; this new guidance addresses how states can actually access and use that data given confidentiality protections.
 
The guidance identifies two circumstances in which a state Medicaid agency may use Part 2 records for this purpose without obtaining a new, separate consent from the beneficiary. First, if a treatment provider already has the patient’s written consent covering all future uses and disclosures for treatment, payment, and health care operations, the program may disclose the records to the state Medicaid agency, which can use them to verify a work requirement exclusion. Second, the Medicaid agency may obtain the applicant or beneficiary’s written consent specifically authorizing use of those records to determine eligibility for the exclusion.
 
More information is available here.
 
CMS Launches Initiative to Focus Medicaid Quality Measurement on Outcomes
On September 25th, CMS announced the launch of Investing in Health Outcomes (IHO), a new initiative to shift Medicaid and CHIP quality measurement toward improvements in patient health rather than care processes and reporting requirements. The 37 participating states, including New York, represent approximately 56 million Medicaid and CHIP beneficiaries and signed a voluntary pledge to advance four priorities:

  • Prioritize health outcomes, particularly in preventive care, chronic disease management, and behavioral health;
  • Streamline quality measures to reduce reporting burden while maintaining accountability;
  • Expand the use of digital quality measures and near-real-time data; and
  • Link financial incentives to improvements in health outcomes.

CMS notes that a May 2026 review of Medicaid managed care programs across 42 states identified approximately 450 reporting requirements covering 258 unique quality measures, many of which focus on care processes rather than health outcomes. Under the new initiative, participating states will develop health outcome targets and identify opportunities to incorporate outcome-based measures into their Medicaid quality strategies and future contracts. CMS plans to hold workshops later this year on quality measure selection, value-based payment arrangements, reducing reporting burdens, and digital quality measurement.
 
A press release is available here and more information on the initiative is available here.
 
CMS Announces Lower Parts C and D 2027 Premiums 
On September 28th, CMS released its projections for 2027 Medicare Advantage (MA) and Part D premiums and enrollment. Overall, CMS expects the average monthly MA premium to decrease by 16.5%, from $14.37 in 2026 to $12 in 2027. The average monthly premium for stand-alone Part D plans is projected to increase slightly, from $35.09 to $36, while the average prescription drug premium for MA plans that include drug coverage is expected to decrease by 38%, from $11.32 to $7. CMS also expects core supplemental benefits, including dental, hearing, and vision coverage, to remain stable. However, independent analysts estimated that out of pocket maximums will increase by ~9%.
 
Based on projections submitted by insurers, MA enrollment is expected to decrease from 36.3 million in 2026 to 34 million in 2027 as insurers scale back plan offerings and exit certain markets amid rising medical costs and financial pressures. If this occurs, it would mark the first annual decline in MA enrollment since at least 2007. However, CMS expects actual enrollment to exceed insurers’ projections, noting that similar predictions for 2026 did not materialize. Despite plan exits, the total number of available MA plans is expected to remain relatively stable, decreasing from 5,553 to 5,532. More than 99% of Medicare beneficiaries will have access to at least one MA plan, and 97% will have access to at least 10 plans. The annual Medicare Open Enrollment Period runs from October 15th through December 7th.
 
A CMS press release is available here.

Other

Federal Judge Rolls Back Disability Rule
On September 23rd, U.S. District Judge James Wesley Hendrix of the Northern District of Texas struck down several provisions of a 2024 HHS rule that prioritizes the “most integrated” setting for services to people with disabilities. The ruling follows a lawsuit filed by 17 states that initially also challenged the rule’s inclusion of gender dysphoria as a protected disability. The court’s current decision targets provisions requiring federally funded health care and other programs to provide services to people with disabilities in community settings rather than institutions whenever appropriate.

The court approved a joint request from the states and the Trump Administration to eliminate six provisions of the rule. The decision applies nationwide, not just in the 17 states that filed the lawsuit. The court also dismissed the remaining claims without deciding them, bringing the case to a close.

The ruling removes these requirements from HHS regulations but does not overturn existing protections under Section 504 of the Rehabilitation Act or the Americans with Disabilities Act, which continue to require community-based services in appropriate circumstances.

The court order is available here.

MACPAC Holds September 2026 Meeting 
On September 24th and 25th, the Medicaid and CHIP Payment and Access Commission (MACPAC) held its first meeting of the 2026-2027 work cycle. Commissioners discussed the implementation of new Medicaid community engagement (work) requirements, including the interim final rule and a framework for monitoring implementation. They also reviewed proposed federal rules on state-directed payments and health care-related taxes and compared inpatient hospital payment rates across states. Additional discussions focused on Medicaid utilization management policies for medications used to treat opioid use disorder, care for children and youth in foster care enrolled in Medicaid managed care, safeguards for beneficiaries receiving self-directed home- and community-based services, and Medicaid coverage of assistive technology for adults.

More information on the meeting as well as the full agenda is available here.

Eric Cantor Named as Next PhRMA CEO
On September 29th, PhRMA announced that Eric Cantor, former Republican House Majority Leader, will become the organization’s next president and CEO effective November 9th, succeeding Stephen Ubl. Cantor represented Virginia in the House from 2001 to 2014, losing his primary in 2014 to tea party-backed challenger Dave Brat, the first time in U.S. history a sitting House Majority Leader lost a party primary. He has since served as Vice Chairman and Managing Director at the investment bank Moelis & Company, a role he will continue alongside his new position. PhRMA’s lobbying spending reached a record $38 million last year, up 22% from 2024.

PhRMA’s press release is available here.

MAHA Network Hosts Two Policy Events 
On September 28th and 29th, the Make America Healthy Again (MAHA) Center and MAHA Institute hosted two separate events in Washington featuring HHS Secretary Kennedy, Vice President Vance, CMS Deputy Administrators Amy Gleason and Dan Brillman, and Cabinet officials including Agriculture Secretary Brooke Rollins, EPA Administrator Lee Zeldin, and CMS Administrator Dr. Mehmet Oz. The Tuesday summit featured nine publicly traded sponsor companies including UnitedHealth, Walmart, Grail, Anthropic, and OpenAI, drawing criticism from MAHA allies.

The Summit included a series of panel discussions on issue areas important to the MAHA movement including prevention, alternative medicine, artificial intelligence (AI) and health technology, food supply and environment, and federal health policy.

The Summit closed without specific new policy announcements, though among the notable events was Secretary Kennedy’s endorsement of AI as both a supplement to physician guidance and a corrective force, telling a closing session with Vice President Vance that AI can offer “a second opinion that is much better informed than any doctor in the country” and could free Americans from “medical tyranny.” He cited the ability of AI to assess complex medical histories on behalf of patients, compare treatment protocols in rapidly evolving fields like cancer treatment, and contradict official guidance on masking, social distancing, or vaccine effectiveness. Vance and Oz separately explained and defended CMS’s September cancellation of ACA coverage for 750,000 people, arguing that terminated plans belonged to “phantom enrollees” who did not exist and were being used by brokers to collect fraudulent commissions.

New York State

DOH Submits 1115 MRT Waiver Extension Request to CMS 
On September 30th, the New York State (NYS) Department of Health (DOH) submitted its five-year extension request for the Medicaid Redesign Team (MRT) 1115 waiver demonstration, which is currently authorized through March 31, 2027. Compared to the draft request released in July 2026 (see SPG summary here), the final extension request does not include any material changes.
 
The final request includes an overview and assessment of written and verbal public comments received from individuals, providers, advocacy groups, and other stakeholders. The majority of commenters expressed support for the continuation of the health-related social needs (HRSN) program, with many commenters providing qualitative and quantitative evidence demonstrating the impact of Social Care Network-coordinated services. Commenters also expressed support for the one-year “non-risk” funding bridge for HRSN services and recommended additional protections for high-acuity and historically marginalized populations, continued investment in interoperable social care data systems, and continued support for community-based organization capacity.
 
The final extension request and related documents are available here.
 
NYC DOHMH Releases 2026 Healthcare Accountability Report
This week, the New York City (NYC) Department of Health and Mental Hygiene (DOHMH) released the “Healthcare Accountability Annual Report 2026.” This is the City’s second annual report issued pursuant to the 2023 Healthcare Accountability and Consumer Protection Act.
 
The report provides background on key health care accountability issues, examines hospital and health insurer financial practices using publicly available data, and offers detailed analyses of hospital and payer price transparency data, and City spending on health care. This year’s report expands the hospital Net Community Benefit analysis and adds two new areas of hospital accountability analysis: the Proportional Share Index (a safety net indicator) which assesses hospitals’ share of care for Medicaid and uninsured patients relative to their capacity, and hospital bad debt data. Additional data examined include executive compensation, claims denials and appeals, financial assistance gaps, health insurance premiums, and price disparities.
 
The report is available here.