AcademyHealth Calls for Withdrawal of Proposed OMB Research Rule

In this edition of AcademyHealth’s Situation Report, we explore efforts to protect the federal research enterprise from proposed changes to federal grantmaking, renewed congressional momentum for Medicare Advantage prior authorization reform, competing approaches to lowering health care costs, and the potential workforce consequences of ending Temporary Protected Status for some health care workers. We also examine the impact of reinstated Medicaid funding for Planned Parenthood and other family planning providers after a year of restrictions.

In today’s issue:

• AcademyHealth Responds to OMB Proposed Rule on Federal Financial Assistance

• 340B is Back in the News. Our Guide Has Context.

• Prior Authorization Reform Gains Momentum as Congress Revisits Medicare Advantage Oversight

• House Hearing Highlights Competing Strategies for Lowering Health Care Costs

• Ending Temporary Protected Status Could Worsen Staffing Shortages in the U.S. Health Care System

• Medicaid Funding Reinstated After One Year: What’s Next for Planned Parenthood and Other “Prohibited Entities”

AcademyHealth Responds to OMB Proposed Rule on Federal Financial Assistance

Today, AcademyHealth submitted formal comments calling for the complete withdrawal of the Office of Management and Budget’s proposed rule on federal financial assistance, arguing that it would fundamentally alter how the federal government awards, manages, and oversees research grants. You can read AcademyHealth’s full comment here.

Unlike recent executive actions that may be reversed by future administrations or the courts, this proposed rule would codify sweeping changes to federal grantmaking in regulation. AcademyHealth argues that the proposal would introduce political review into the grantmaking process by requiring senior political appointees to approve awards, fundamentally changing the role of peer review in determining which research receives federal support. The rule would also prohibit federal funding for activities related to DEI, gender ideology, and disparate-impact liability. These are restrictions that could significantly limit health disparities research and other studies that rely on demographic analyses. It would expand agencies’ authority to suspend or terminate grants and restrict researchers’ ability to publish, collaborate internationally, attend scientific conferences, and disseminate findings.

In our formal comments, AcademyHealth argues that these changes would have far-reaching consequences for the integrity, independence, and long-term stability of the U.S. research enterprise. The proposed rule, if finalized, would affect not only what research is funded, but also how research is conducted, communicated, and translated into improvements in health care and public policy.

AcademyHealth has also published a blog summarizing our comments and the key issues raised by the proposal. The public comment period remains open through July 13, and AcademyHealth encourages members and organizations across the research community to submit comments before the deadline. Guidance on submitting comments is available here.

340B is Back in the News. Our Guide Has Context.

Medicare proposed this week to slash payments to hospitals for 340B drugs by more than a third, from the current average sales price plus 6 percent to minus 33.4 percent. The agency says new drug acquisition cost surveys show hospitals are paying significantly less for these drugs than Medicare has been paying them. Hospital groups are pushing back, arguing the cut will disproportionately harm safety-net providers and noting that because Medicare must implement the change in a budget-neutral way, for-profit hospitals that don’t participate in 340B would see a net payment increase.

This is a contested proposal with real tradeoffs, and the arguments on both sides draw on evidence. If you are trying to make sense of the competing claims, our May Decisionmakers’ Guide on 340B walks through the research on how payment-based approaches to the program tend to work in practice, what the legal landscape looks like after the Supreme Court’s 2022 ruling, and what to watch for when reform happens through CMS payment cuts rather than program restructuring.

If you are trying to make sense of the competing claims you are hearing about this proposal, our 340B guide is the place to start. Read it here.

Prior Authorization Reform Gains Momentum as Congress Revisits Medicare Advantage Oversight

A bipartisan effort to reform prior authorization in Medicare Advantage is once again gaining traction in Congress. The Improving Seniors’ Timely Access to Care Act, which recently advanced out of a House subcommittee, would increase transparency and oversight of prior authorization decisions while accelerating the adoption of electronic prior authorization systems. The legislation would require Medicare Advantage plans to report denial and approval data, direct CMS to publicly post plan performance, and support greater use of electronic systems to reduce reliance on manual processes such as faxed requests and paperwork.

Supporters argue the bill would help address longstanding concerns that prior authorization can delay medically necessary care and create administrative burdens for both clinicians and patients. They note that while CMS recently finalized regulations establishing decision timelines for Medicare Advantage plans, federal law would provide stronger and more durable protections. The bill has attracted broad bipartisan support, with hundreds of House and Senate cosponsors as well as backing from provider organizations, physician groups, and hospital associations.

Despite its popularity, the legislation has repeatedly stalled in Congress since it was first introduced in 2019. Advocates believe the current version has a stronger chance of passage because many of its costlier provisions have already been implemented through regulation, reducing concerns about federal spending. As Congress considers these reforms, researchers can help determine whether greater transparency, public reporting, and electronic prior authorization improve patient access while reducing administrative burden. Evidence will be critical to understanding the impact of these changes on care, costs, and patient experience.

House Hearing Highlights Competing Strategies for Lowering Health Care Costs

A recent House hearing on health care affordability highlighted bipartisan agreement that the U.S. health system is becoming increasingly unaffordable, while exposing sharp disagreements over how to address rising costs. Republican lawmakers and employer representatives emphasized direct contracting, an approach that allows employers to negotiate directly with hospitals, clinics, and physicians instead of relying on traditional insurance arrangements. Supporters argued that direct contracting can reduce administrative costs, improve price transparency, and give employers greater control over health care spending.

Democrats acknowledged the potential benefits of greater transparency and direct contracting but argued that coverage losses resulting from recent Medicaid and Affordable Care Act (ACA) policy changes could ultimately increase costs throughout the system. They pointed to projections that millions could lose health coverage, leading more people to delay care or seek treatment in emergency departments, where costs are often shifted to hospitals, employers, and insured patients. The hearing also reflected broader disagreements about the effects of H.R. 1 and whether affordability challenges are primarily driven by rising medical prices, insurance arrangements, or declining coverage.

Despite the partisan divide, lawmakers from both parties expressed support for improving transparency in health care pricing and spending, with witnesses highlighting claims data, price comparisons, and efforts to identify wasteful spending as tools to help employers and patients make more informed decisions. The hearing underscored competing approaches to addressing affordability, from market-based strategies such as direct contracting to policies focused on maintaining insurance coverage and reducing uncompensated care. As policymakers weigh these options, researchers can help evaluate whether direct contracting lowers costs and improves outcomes, as well as how coverage changes affect health care spending across the system.

Ending Temporary Protected Status Could Worsen Staffing Shortages in the U.S. Health Care System

The U.S. healthcare workforce could face significant disruption after the Supreme Court’s ruling allowed the Trump administration to end the Temporary Protected Status (TPS) for Haiti and Syria. Congress enacted TPS law to enable migrants to live and work in the U.S. if they cannot return to their home country due to natural disasters or armed conflicts. The recent court’s ruling ended the TPS status of thousands of Haitian and Syrian immigrants. Experts say that the ruling will have major impact on the health care workforce given the reliance on immigrant labor in health care settings especially in long-term care sector.

According to a report published in JAMA last year, approximately 50,000 physicians (roughly nine percent of all doctors) and 145,000 registered nurses (about four percent of all registered nurses) are noncitizens, including people with TPS. Additionally, more than 440,000 noncitizens worked as nursing aides or assistants, accounting for approximately nine percent of all nursing aides and assistants. With more than one million noncitizens working in health care, revoking TPS protections could place additional strain on an already understaffed U.S. health care workforce. For health care systems in states like Massachusetts and New York that heavily rely on Haitian and Syrian health care workers, the ending of Temporary Protected Status has serious implications. Effective July 10, many Haitian and Syrian health care workers with TPS could no longer be authorized to live and work in the U.S. Fewer health care workers may lead to longer waiting times, lower quality of care, and poor health outcomes.

The Supreme Court’s ruling has direct implications for the health care workforce, access to care, and the quality of care. Health services researchers can explore the impact of immigration policy on access to care and patient outcomes, especially among vulnerable populations. Additionally, health services researchers can examine how workforce disruptions influence workforce productivity, patient safety, and health care costs.

Medicaid Funding Reinstated After One Year: What’s Next for Planned Parenthood and Other “Prohibited Entities”

Since the Hyde Amendment took effect in 1977, federal funds, including Medicaid, have been prohibited from covering abortion services in the United States. When H.R. 1 was signed into law on July 4, 2025, Planned Parenthood and certain other providers became temporarily ineligible to receive Medicaid reimbursement under the law. This is because H.R. 1 considers Planned Parenthood, along with Health Imperatives in Massachusetts and Maine Family Planning, “prohibited entities”; 501(c)3 organizations that provide family planning services and abortions and received more than $800,000 from federal and state Medicaid. Supporters of the restriction argued that organizations providing abortions should not receive Medicaid reimbursements, while opponents argued the policy would reduce access to other reproductive and preventive health services.

One year later, the funding ban is up, and these clinics can resume billing Medicaid for non-abortion services. Before H.R. 1, Planned Parenthood’s revenue stream from Medicaid was more than $800 million, and more than half their patients relied on Medicaid for health coverage. Although the funding ban only lasted a year and an extension was not put passed by Congress, the effects of funding cuts are staggering. Planned Parenthood published a report this week showing that nearly 30 of their clinics across the country have closed since defunding. Planned Parenthood Keystone reported that more than 20,000 Pennsylvanians who depend on Medicaid for their care were placed at risk of losing access to their provider of choice following federal funding restrictions.

Whether Congress revisits the issue remains uncertain, but according to The Hill, “Senate Republicans are cooler to the idea of a third reconciliation bill at the moment, and don’t think it’s realistic given the narrow margins the GOP holds and the general reluctance of some lawmakers to start an abortion fight so close to the midterms.” Listen to this clip from NPR to see how providers on the frontlines at these clinics have handled the past year’s tumult, and where their priorities are now that funding is reinstated.

For health services researchers, the temporary funding restriction creates an opportunity to study how changes in provider eligibility affect access to reproductive health services, continuity of care, Medicaid utilization, and patient outcomes.