Holland & Knight Health Dose: January 21, 2026

Looking Ahead

The U.S. Senate is out of session this week, and all action is expected to take place in the U.S. House of Representatives following the release of a package containing the final four appropriations bills. The text of the final four appropriations bills – Defense, Labor-Health and Human Services (LHHS), Transportation-Housing and Urban Development (HUD), and Homeland Security – was released on January 20, 2026, signaling an intent to finalize work on appropriations for fiscal year (FY) 2026 and avert a potential government shutdown before the January 30, 2026, funding deadline.

At this time, it appears there is no strong appetite for another government shutdown, and the House is expected to consider and advance the appropriations package prior to adjourning next week, leaving the package for the Senate to consider upon its return.

Upcoming Events

The House Committee on the Budget will hold a hearing on January 21, 2026, titled "Reverse the Curse: Skyrocketing Health Care Costs and America's Fiscal Future."

The House Committee on Energy and Commerce will hold a markup of 11 energy and environmental policy-related bills on January 21, 2026.

The House Energy and Commerce Committee and House Committee on Ways and Means will hold hearings on January 22, 2026, featuring the CEOs of major health insurance companies, who are expected to testify before each panel.

The House Committee on Veterans' Affairs will hold a hearing on January 21, 2026, titled "Community Care Network Next Generation: One Trillion Dollars of Oversight."

The Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology (ASTP/ONC) will hold its annual meeting on February 11 and 12, 2026. The keynote sessions will highlight how health technology can advance transparency and affordability, explore the future of tech‑enabled care, examine data liquidity and discuss ways to accelerate the integration of artificial intelligence (AI) into clinical practice.

Administrative Updates

Executive Order Updates

The Trump Administration has continued to release wide-ranging executive orders (EOs). For the latest updates, see our "Trump's 2025 Executive Orders: Updates and Summaries" tracking chart.

Personnel Updates

• Julia Letlow (R-La.) announced a campaign for the Senate in Louisiana on January 20, 2026, following President Donald Trump's endorsement of her candidacy. The Senate seat is currently held by Sen. Bill Cassidy (R-La.), who has said he intends to run for re-election.

Trump Releases "The Great Healthcare Plan" to Lower Costs and Deliver Money Directly

The White House released a fact sheet outlining President Trump's healthcare proposal titled "The Great Healthcare Plan." The White House also released a video and an article.

The plan is structured around four core components designed to lower healthcare costs: 1) drug pricing reforms, including codification of most-favored-nation pricing arrangements, 2) policies to reduce insurance premiums such as funding cost-sharing reductions and reforming pharmacy benefit manager (PBM) practices, 3) insurance company accountability measures, including new transparency requirements for plain-English coverage comparisons, medical loss ratios, claims denial rates and average wait times for care, and 4) expanded price transparency requirements, mandating that providers and insurers participating in Medicare or Medicaid publicly post pricing and fee information.

Congressional Updates

Four Remaining Appropriations Bills Released

The remaining four appropriations packages for FY 2026 were released on January 20, 2026, as well as a number of policies that extend existing healthcare provisions or renew those that previously expired, which are largely based on the healthcare provisions initially included in a December 2024 funding package that ultimately did not advance in Congress. The healthcare package includes:

• PBM Reforms: Enhanced transparency in Medicare and Part D, Part D delinking, a Medicaid spread-pricing ban, required commercial rebate passthroughs to employers, updates to the National Average Drug Acquisition Cost (NADAC) survey methodology and changes to pharmacy network access standards
• Hospital at Home: Five-year extension of the hospital-at-home program
• Pediatric Priority Review Vouchers (PRVs): Five-year extension as part of the Mikaela Naylon Give Kids a Chance Act, which also includes new provisions to ensure completeness of pediatric studies under the Pediatric Review Equity Act (PREA)
• Community Health Centers: $4.6 billion for the program in FY 2026
• Teaching Health Centers: Five-year reauthorization with phased funding increases (in billions): FY 2025 – $0.156, FY 2026 – $0.225, FY 2027 – $0.250, FY 2028 – $0.275, FY 2029 – $0.300
• Diabetes Programs: $200 million per year for both the Special Diabetes Program and the Special Diabetes Program for Indians
• National Health Service Corps: Two-year extension at $350 million per year
• Disproportionate Share Hospital (DSH): Two-year buyout of scheduled DSH cuts, paired with DSH formula reform
• Medicaid and Children's Health Insurance Program (CHIP): Streamlined enrollment processes for eligible out-of-state providers under Medicaid and CHIP, from the Accelerating Kids Access to Care Act
• Generic Drug Transparency: Quarter 1/Quarter 2 policies aimed at accelerating generic drug approvals
• Patent Thickets: Inclusion remains uncertain due to unresolved policy and scoring concerns
• National Provider Identifier (NPI): Establishment of a site-neutral NPI policy
• Telehealth: Two-year extension of Medicare telehealth flexibilities
• Multi-Cancer Early Detection Act: Inclusion of the Multi-Cancer Early Detection Act
• 9/11 Health Program: Permanent extension of the World Trade Center Health Program

The House is expected to consider the package of appropriations bills later this week after the House Committee on Rules sets rules for floor debate on the package, which could be as soon as January 22, 2026. It is possible the Homeland Security appropriations provisions will be voted on separately, with the intent to send the bill to the Senate for consideration upon the Senate's return next week. Many of the provisions are extended to December 31, 2026, with certain exceptions.

Following the release of the final four appropriations bills, Speaker Mike Johnson (R-La.) heralded the Republican conference's completion of the appropriations process for all 12 subcommittee bills, saying that, “House Republicans are restoring regular order and returning the appropriations process to a committee-led approach, as it should be. The House has already passed eight conferenced appropriations bills with overwhelming support, and we expect a similar outcome for the final four bills on the House floor this week.” Speaker Johnson's statement signals the House will pass the remaining bills with a large portion of the Republican conference expected to vote in favor.

HELP Committee Advances Four Bipartisan Healthcare Bills

The Senate Committee on Health, Education, Labor, and Pensions (HELP) advanced four healthcare bills on January 15, 2026, including the Rural Hospital Cybersecurity Enhancement Act (S. 2169), Women and Lung Cancer Research and Preventive Services Act of 2025 (S. 1157), Protect Infant Formula from Contamination Act (S. 272) and Tyler's Law (S. 921), which would direct the U.S. Department of Health and Human Services (HHS) to issue guidance on whether emergency departments should make fentanyl testing a routine part of care for patients experiencing an overdose.

RSC Released the "Making the American Dream Affordable Again" Reconciliation 2.0 Framework

The document outlines policy options as the Republican Study Committee (RSC) look to pursue additional reconciliation opportunities.

The document presents several health, welfare and tax proposals described as a menu of options rather than a legislative package. Many items are designed to reduce federal spending, narrow eligibility for federal benefits and restructure healthcare markets, with several provisions carrying preliminary budget scores.

Key Healthcare Themes:

• Restructuring the Affordable Care Act (ACA) marketplace through parallel insurance markets, expanded Health Savings Accounts (HSAs)/Health Freedom Accounts, association health plans and short-term coverage
• Drug pricing reforms, including codifying TrumpRx, biosimilar incentives (the Biosimilar Red Tape Elimination Act), PBM rebate pass-throughs and direct-to-patient discounts
• Transparency and payment reforms such as price disclosure requirements and site-neutral payments in Medicaid
• Medicaid eligibility and financing changes, including Federal Medical Assistance Percentage (FMAP) penalties, elimination of Washington, D.C.'s, enhanced FMAP, limits on presumptive eligibility and restrictions tied to immigration status
• Offsets and rescissions, including elimination of the Prevention and Public Health Fund and other mandatory spending programs

A significant portion of the framework focuses on restricting access to Medicaid, Supplemental Nutrition Assistance Program (SNAP), housing assistance, tax credits and other benefits for non-citizens, coupled with penalties for states that do not comply.

Though the framework outlines a broad set of Republican policy priorities, only a subset of these proposals would be viable for inclusion in a reconciliation bill. Under Senate budget rules, provisions must have a direct and more-than-incidental budgetary impact to comply with the Byrd Rule, limiting eligibility primarily to drug pricing reforms, PBM policies, Medicaid payment changes (such as site-neutral payments and FMAP adjustments) and select tax-related provisions. Many regulatory, social policy and immigration-linked eligibility proposals would face significant procedural challenges and are unlikely to survive Senate scrutiny.

As a result, the framework should be viewed primarily as a signaling document and negotiating blueprint, with select components potentially advancing through reconciliation rather than wholesale adoption.

Energy and Commerce Committee Launches Investigation into Minnesota Medicaid

On January 20, 2026, House Energy and Commerce Committee Chair Brett Guthrie (R-Ky.), Subcommittee on Health Chair Morgan Griffith (R-Va.) and Subcommittee on Oversight and Investigations Chair John Joyce (R-Pa.) announced an investigation into Minnesota's state Medicaid program. The chairs issued a press release announcing they requested "communications, documents, and information on Minnesota Governor Tim Walz and the Temporary Commissioner of Minnesota's Department of Human Services, Shireen Gandhi, to better understand the ongoing Medicaid fraud occurring in the state of Minnesota and actions the state is taking to strengthen program integrity." The initiation of an investigation follows efforts by the federal government to pause federal funding for Minnesota following allegations of fraud. The letter cites a recent briefing from the Centers for Medicare & Medicaid Services (CMS) on "what is currently known," which serves as the basis for the committee's investigation in addition to its oversight capabilities.

Regulatory Updates

FDA and EMA Release Joint Principles for AI Use in Drug and Biologic Development

The Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER), in collaboration with the U.S. Food and Drug Administration (FDA) European Medicines Agency (EMA), have developed 10 guiding principles for the use of AI in drug and biological product development. The principles are intended to support consistent, reliable and safe application of AI across the product lifecycle by outlining baseline expectations related to design, risk management, data quality, documentation, performance assessment and life cycle oversight. The principles are designed to address the specific considerations associated with AI technologies and to help ensure that AI‑generated information used in regulatory decision‑making remains accurate, reliable and aligned with patient safety and regulatory standards.

HHS Releases 2025 Annual Financial Report

HHS released the 2025 Agency Financial Report on January 15, 2026, which details fiscal and performance results from October 1, 2024, through September 30, 2025. The report found Medicare Fee-for-Service (FFS) to have improper payment rates stemming from overpayments to be 6.34 percent, while Medicaid and CHIP overpayment rates were 5.73 percent and 6.71 percent, respectively. Improper payments due to underpayments were 0.22 percent, 0.39 percent and 0.34 percent respectively. An additional report on HHS' FY 2027 Annual Performance Plan and Report is expected to be published in February 2026.

Legal Updates

Supreme Court Agrees to Take Up Case on Drug Labeling

The U.S. Supreme Court agreed to hear a pharmaceutical manufacturers' appeal of a case regarding pharmaceutical patent law on January 16, 2026. The manufacturer had requested the Supreme Court review the case in February 2025. The case centers upon a process called "skinny labeling," an FDA pathway intended to increase generic drug competition by allowing generic drug makers to avoid lawsuits if the generic drug does not infringe on patented drug uses of a brand name drug. The Supreme Court had previously turned down a previous request to consider another case involving skinny labeling in 2023. The outcome of the case could have significant ramifications for generic drugs. 

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.