AHRQ Cuts and OMB Rule Threaten U.S. Research Enterprise

In this edition of AcademyHealth’s Situation Report, we examine growing pressure on the systems that generate and use evidence to improve health and health care. AHRQ grant cancellations and proposed changes to federal research grantmaking are raising questions about the independence and sustainability of the nation’s research infrastructure, while debates over 340B, Medicaid work requirements, and ACA enrollment highlight the importance of rigorous evidence in evaluating policy. We also look at how rapidly evolving technologies—from AI scribes to interoperable health data—are creating new opportunities and new questions for health services researchers.

In this issue:

• AHRQ Grant Cancellations Continue to Draw National Attention

• U.S. Leadership in Research and Discovery Is Under Threat

• Senate Funding Deal Would Block OMB Research Rule—For Now

• 340B Debate Intensifies as CMS and HRSA Advance Competing Reform Strategies

• Court Allows Medicaid Work Requirement Rollout to Proceed Amid Ongoing Legal Challenge

• ACA Enrollment Decline Raises Questions About Affordability and Fraud

• Medical Schools Grapple With AI Scribes

• CMS Health Tech Ecosystem Expands Interoperability Efforts

AHRQ Grant Cancellations Continue to Draw National Attention

As AcademyHealth continues documenting the impact of AHRQ grant cancellations, our analysis and advocacy have been featured in national media outlets examining the growing disruption to the nation’s health services research enterprise. AcademyHealth President and CEO Aaron Carroll emphasized that these decisions affect not only researchers, but also patients, health systems, and the evidence needed to improve care.

Recent coverage includes:

• Trump administration has quietly throttled an agency devoted to the safety of American healthcare (CBS News)

  • Highlights concerns about the ongoing dismantling of AHRQ, including grant cancellations, staffing reductions, and the broader implications for patient safety research, health care quality, and evidence-based decision-making.

• Group Says AHRQ Grant Cancellations Top $131M Across 28 States (Inside Higher Ed)

  • “When these cancellations started, there was no public accounting of what was being lost, so we built one,” AcademyHealth CEO Aaron Carroll told Inside Higher Ed. “A tally can’t fully capture the impact. This funding trained the next generation of researchers and studied how to make care safer and more affordable, much of it in the very areas AHRQ said it wanted to protect.”

• Tracker Tallies Over $250M in Cancelled Grants from HHS Agency

  • Features AcademyHealth’s tracking of AHRQ grant cancellations and funding losses, documenting how disruptions to the agency are affecting researchers, institutions, and the nation’s health services research infrastructure.
    

    Check out our tracker, which captures the widespread impact of the grant cancellations here.

340B Debate Intensifies as CMS and HRSA Advance Competing Reform Strategies

Federal efforts to reform the 340B Drug Pricing Program, which requires drugmakers to provide upfront discounts on outpatient medications to eligible safety-net hospitals and clinics, accelerated this month as both CMS and HRSA advanced proposals that could significantly reshape how the program operates. CMS recently proposed cutting Medicare payments to hospitals for drugs purchased through the 340B program by more than one-third. Currently, Medicare generally pays hospitals the drug’s average market price plus an additional 6 percent. Under the proposal, Medicare would instead pay the average market price minus 33.4 percent. CMS argues that updated data show hospitals are purchasing these drugs at heavily discounted prices and that Medicare is currently reimbursing hospitals at rates well above what they paid for the medications. At the same time, HRSA announced it will move forward with a revised 340B Rebate Model Pilot Program, which would replace upfront discounts for certain drugs with manufacturer-issued rebates beginning in 2027.

Supporters of these changes, including pharmaceutical manufacturers, argue that both the reimbursement reduction and rebate model would improve transparency, strengthen program integrity, and better align payments with actual acquisition costs. Hospitals and safety net providers counter that the proposals could increase administrative burden, create cash flow challenges, and reduce resources they rely on to provide care in underserved communities. Since Medicare payment changes must be implemented in a budget neutral fashion, some stakeholders have also noted that reductions to 340B hospitals could result in increased payments elsewhere in the system.

The 340B debate is increasingly driven by competing interpretations of the evidence, with both manufacturers and provider groups citing research to support their positions. AcademyHealth’s A Decisionmaker’s Guide to Competing Health Evidence: The 340B Drug Pricing Program examines what we know about payment-based reforms, how different policy approaches affect hospitals and patients, and what lessons can be drawn from past 340B disputes. Researchers and policymakers looking to understand the competing claims surrounding recent CMS and HRSA actions can start with the guide here.

Court Allows Medicaid Work Requirement Rollout to Proceed Amid Ongoing Legal Challenge

A federal judge has denied a request from 26 states to temporarily block portions of CMS’ Medicaid work requirement implementation rule, allowing the current rollout timeline to remain in place while broader legal challenges continue. The states argued that recent guidance, particularly changes to how beneficiaries qualify for the medical frailty exemption, would create significant administrative burdens and increase the risk of eligible individuals losing coverage.

The ruling comes as states race to meet federal implementation deadlines and finalize systems for identifying individuals who should be exempt from work requirements. While the court declined to halt the rule, it did not rule on the merits of the states’ broader challenge, which remains ongoing.

Evidence from previous Medicaid work requirement demonstrations suggests that administrative processes can be just as important as eligibility rules in determining who loses coverage. For health services researchers, the implementation of medical frailty exemptions presents an important opportunity to study how policy design, administrative burden, and state implementation choices affect enrollment, access to care, health outcomes, and health equity.

For a deeper look at how CMS’ medical frailty guidance could affect vulnerable populations and state implementation efforts, read AcademyHealth Research Associate Brianna Bragg’s analysis, The Medical Frailty Crisis: How Rushed Implementation Threatens Medicaid’s Most Vulnerable, here.

Medical Schools Respond to Rise of AI Scribes

As AI scribes become more common in clinical settings, medical schools are wrestling with when and how trainees should use them. STAT News reports that educators want future physicians to understand AI tools but are concerned that relying on them too early could interfere with the development of clinical reasoning and documentation skills.

Institutions are taking different approaches, from restricting AI scribes during early training to developing customized tools and requiring students to complete portions of their work independently. The variation highlights a broader evidence gap: AI adoption is moving faster than research on its effects on medical education and clinical practice.

For health services researchers, that creates important questions about how AI-enabled tools affect training, workflow, care delivery, patient outcomes, and the skills clinicians need to practice safely and effectively.

Join AcademyHealth at Health Datapalooza this September 24-25 to have more conversations about the role of AI and the future of health care delivery. Learn more here.

The U.S.’s Global Leadership in Research and Discovery is Under Threat

In a recent BMJ commentary, Lucinda Hiam, a 2025-26 Harkness fellow, highlighted that one of the greatest strengths of the U.S. health care system lies in its global leadership in research and discovery. She argues that this strength rests on a broad ecosystem spanning federally funded research institutes, universities, biotechnology, philanthropy, clinicians, and patients and that the system is now under threat.

Hiam points to two distinct threats: the administration’s proposed changes to federal grantmaking that could give political appointees greater influence over research funding, and the cancellation or withholding of already appropriated AHRQ grants. She notes that the latter reflects a broader struggle between Congress, which appropriated the funding on a bipartisan basis, and the administration, which has declined to release it.

“For all its contradictions, America’s health system risks losing one of the few things it has excelled at: the ability to generate evidence, innovation, and new treatments.”

Hiam spoke with AcademyHealth Director of Advocacy Josh Caplan while reporting the piece.

Senate Bipartisan Funding Deal to Avoid Shutdown and Delay OMB Rule

On Sunday, Senate leaders introduced a bipartisan continuing resolution to keep federal agencies funded at current levels through December 11 to avoid government shutdown during the campaign season. The House passed a similar funding measure, but the Senate bill excludes the administration’s $1 billion request to support the proposed “Trump-class” battleships and blocks the transfer of money from other programs to the Border Patrol. This short-term funding extension would give more time for Congress to negotiate full-year spending plans as Republicans seek to increase defense spending by 44 percent and cut non-defense programs by 10 percent.

The bipartisan government funding bill would delay the implementation of the proposed OMB rule from October 1 until at least December 11. The rule, if implemented, would politicize the grantmaking process by allowing political actors to influence what research is funded, how it is carried out, and how results are interpreted and communicated. This rule would fundamentally threaten the scientific integrity and independence that are critical to America’s research infrastructure.

The Senate’s continuing resolution bill is an important milestone to delay the detrimental effects of the proposed OMB rule. However, the fight is far from over. The Senate is expected to vote on the bill this week, and any differences between the House and Senate bills must be resolved before it reaches the president’s desk and becomes law.

CMS Expands Health Tech Ecosystem with New Interoperability Initiatives

One year after launching the CMS Health Tech Ecosystem, CMS announced eight new initiatives to expand health data interoperability and reduce administrative burden across the health care system. The initiatives include price transparency, real-time insurance benefits, modern scheduling, clinical trial matching, Bulk FHIR for population health and research, pharmacy data exchange, the ACCESS program, and efforts to make diagnostic imaging easier to share across providers. CMS also reported significant progress in giving patients greater access to their health records through third-party apps, while acknowledging that broader provider adoption and continued interoperability improvements will be needed to fully realize these goals.

For the health services research community, he expansion of interoperable data infrastructure creates new opportunities—and new questions. Better access to claims, clinical, and patient-generated data could strengthen research on health care quality, care delivery, implementation, and outcomes, but researchers will also need to assess whether these technologies actually reduce administrative burden, improve care, and deliver value for patients.

With health data policy and technology evolving rapidly, there has never been a more important time to convene researchers, policymakers, innovators, and patients. Health Datapalooza 2026, taking place September 24-25 in Washington, D.C., will bring together leaders from across the health data ecosystem for practical, evidence-driven discussions on interoperability, AI, digital health, and the policies shaping the future of health care. Register today to be part of the conversation.

Kennedy, Oz Contend Fraud Crackdown, Not Skyrocketing Prices, Led Millions To Leave Obamacare

In a Department of Health and Human Services report released in June, Affordable Care Act enrollment fell by nearly three million people, from more than 22 million individuals enrolled in ACA plans in 2025 to about 19.2 million as of February 2026. According to KFF, average monthly premium payment increased by 58 percent while annual deductibles increased by 37 percent from last year. The Trump administration argues that the recent decline in ACA enrollment is the result of its fraud control efforts, not rising insurance costs. However, many health policy experts disputed this claim and attributed the loss of coverage to sharp increases in premiums and deductibles.

As the Trump administration continues to strengthen its anti-fraud efforts, policy experts questioned whether fraud is the primary reason millions of Americans lose coverage. Policy analysts claimed that the Trump administration overstated the extent of ACA fraud based on questionable assumptions. Additionally, some experts worry that the blur distinction between fraud, administrative errors, and policy disagreements can lead to misleading claims about the scope of fraud. Aggressive anti-fraud measures may increase administrative burdens and create barriers to enrollment, which may result in many eligible individuals losing health care coverage. With the midterm elections approaching, health care costs will be a key debate topic with Democrats focusing on affordability while Republicans emphasizing anti-fraud measures.