Health Care Week in Review | Government Shutdown Enters Second Month; CMS Releases CY 2026 PFS Final Rule

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in health care regulations, notices, and guidance; federal legislation and congressional committee action; reports, studies, and analyses; and other health policy news. 

Regulations, Notices & Guidance

• On October 27, 2025, the Food and Drug Administration (FDA) released draft guidance entitled, Quality Management System Information for Certain Premarket Submission Reviews. This draft guidance provides guidance to industry and FDA staff about the expectations for quality management system regulation (QMSR) requirements for premarket submissions once the final rule amending 21 CFR part 820 goes into effect. The medical device current good manufacturing practice (CGMP) requirements of the QMSR have been updated to align more closely with the international consensus standard for devices by incorporating by reference an international standard specific for device quality management systems. When finalized, this guidance is intended to assist medical device manufacturers in preparing and maintaining the Quality Management System (QMS) and other information required in premarket submissions stemming from the QMSR.
• On October 28, 2025, FDA released draft guidance entitled, Menstrual Products – Performance Testing and Labeling Recommendations. This draft guidance document provides FDA’s recommendations for performance testing, labeling, and information for inclusion in premarket notification submissions, when necessary, for certain menstrual products. The recommendations reflect updated review practices and are intended to promote consistency and transparency in menstrual product labeling and testing recommendations for manufacturers of these devices.

Event Notices

Please note that two asterisks (**) preceding the item indicate a new event. 

• November 6, 2025: FDA announced a meeting of the Digital Health Advisory Committee. This is a virtual meeting open to the public.
• November 10, 2025: The National Institutes of Health (NIH) announced a meeting of the Council of Councils. This is a virtual meeting open to the public.
• November 13, 2025: FDA announced a meeting of the Pediatric Advisory Committee. This is a virtual meeting open to the public.
• November 16-18, 2025: NIH announced a meeting of the National Institute of Environmental Health Sciences. This is a hybrid meeting with some sessions open to the public.
• December 1, 2025: NIH announced a peer review meeting of the draft National Toxicology Program (NTP) Developmental and Reproductive Toxicity Technical Report on 2-Hydroxy-4-methoxybenzophenone. This is a hybrid meeting open to the public.
• December 1, 2025: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health & Human Development. This is a hybrid meeting open to the public.
• December 4, 2025: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health and Human Development. This is a hybrid meeting with some sessions open to the public.
• December 4-5, 2025: The Health Resources and Services Administration (HRSA) announced a meeting of National Advisory Council on Nurse Education and Practice. This is a hybrid meeting open to the public.
• December 5, 2025: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health & Human Development. This is a hybrid meeting with some sessions open to the public.
• December 10, 2025: The Centers for Medicare & Medicaid Services (CMS) announced a town hall meeting on fiscal year (FY) 2027 applications for new technology add-on payments. This is a virtual meeting open to the public.
• December 10, 2025: FDA announced a workshop entitled, Advancing the Development of Pediatric Therapeutics (ADEPT) 10: Addressing Challenges in Neonatal Product Development – Leveraging Rare Disease Frameworks. This is a hybrid meeting open to the public.
• January 23, 2026: NIH announced a meeting of the National Center for Complementary & Integrative Health. This is a virtual meeting open to the public.
• January 26-27, 2026: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health & Human Development. This is a virtual meeting with some sessions open to the public.
• February 9-10, 2026: NIH announced a meeting of the Fogarty International Center Advisory Board. This is a hybrid meeting with some sessions open to the public.
• March 30-31, 2026: NIH announced a meeting of the National Institute of Diabetes and Digestive and Kidney Diseases. This is a hybrid meeting with some sessions open to the public.
• May 4, 2026: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health & Human Development. This is a hybrid meeting open to the public.
• June 1-2, 2026: NIH announced a meeting of the Fogarty International Center Advisory Board. This is a hybrid meeting with some sessions open to the public.
• June 5, 2026: NIH announced a meeting of the Eunice Kennedy Shriver National Institute of Child Health & Human Development. This is a hybrid meeting with some sessions open to the public.
• September 10-11, 2026: NIH announced a meeting of the Fogarty International Center Advisory Board. This is a hybrid meeting with some sessions open to the public.

Reports, Studies & Analyses

• On October 28, 2025, the HHS Office of Inspector General (OIG) released a report entitled, Medicare Improperly Paid Suppliers $22.7 Million Over 7 Years for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Provided to Enrollees During Inpatient Stays. OIG conducted an audit to determine whether Medicare payments to suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) items complied with Medicare requirements. The report found that between 2018 and 2024, none of the audited payments for DMEPOS items should have been made. Suppliers collected $22.7 million in payments for items that did not meet Medicare requirements, and may also have incorrectly collected up to $5.9 million in deductible and coinsurance amounts from beneficiaries or someone on their behalf. OIG noted a substantial decrease in improper payments after CMS modified Common Working File (CWF) edits in January 2020.
  
  OIG made five recommendations to CMS, including: (1) direct durable medical equipment Medicare administrative contractors (DME MACs) to recover up to $22.7 million in improper payments from suppliers for the audit period; (2) direct DME MACs to recommend that suppliers refund enrollees up to $5.9 million in deductible and coinsurance amounts that may have been incorrectly collected; (3) instruct DME MACs to notify suppliers that received overpayments to consider conducting internal investigations to identify and return any similar overpayments; (4) identify and direct DME MACs to recover improper DMEPOS payments for claims outside of the audit period; and (5) review system edits to determine whether any refinements are necessary. CMS concurred with the first through fourth recommendations, and did not concur with the fifth recommendation.
  
  
• On October 29, 2025, OIG released a report entitled, CMS’s Special Focus Facility Program for Nursing Homes Has Not Yielded Lasting Improvements. The report assessed the effectiveness of the Special Focus Facility (SFF) program, a CMS initiative aimed at addressing quality issues at the poorest-performing nursing homes in the U.S. with records of serious noncompliance. OIG found that most nursing homes that graduate from the SFF program do not maintain their improvements over the long term. Between 2013 and 2022, nearly two-thirds of nursing homes that improved enough to graduate later exhibited the same type of quality problems that initially placed them in the program. OIG also found that for facilities that violate federal requirements, the SFF program relies too heavily on financial penalties that do not require changes in nursing home operations. OIG issued three recommendations to CMS, including: (1) impose more nonfinancial enforcement actions to encourage sustained compliance; (2) assess the extent and effectiveness of enhanced enforcement actions for SFF graduates; and (3) incorporate nursing home ownership information into the SFF program. CMS concurred with OIG’s second recommendation but did not comply with the first or third recommendations.

Hearings & Markups

• On October 29, 2025, the Senate Health, Education, Labor & Pensions (HELP) Committee held a hearing entitled, The Future of Biotech: Maintaining U.S. Competitiveness and Delivering Lifesaving Cures to Patients. Witnesses included: Lowell Schiller, JD, Nonresident Senior Scholar, USC Schaeffer Institute; John F. Crowley, JD, MBA, President and CEO, Biotechnology Innovation Organization; Josh Makower, MD, MBA, Yock Family Professor of Medicine and of Bioengineering, Stanford University Schools of Medicine and Engineering, and Byers Family Director and Co-founder, Stanford Mussallem Center for Biodesign; Aaron S. Kesselheim, MD, JD, MPH, Professor of Medicine, Harvard Medical School/Brigham and Women’s Hospital; and Reshma Ramachandran, MD, MPP, MHS, Assistant Professor of Medicine, Yale School of Medicine.
• On October 29, 2025, the Senate HELP Committee held a hearing to consider nominations. Among the nominees was Thomas Bell, to be Inspector General, HHS.

Other Health Policy News

Federal Government Shutdown Continues

The federal government is currently shut down following the expiration of a continuing resolution (CR) on October 1, 2025, and will not resume operations until Congress passes an annual appropriations act or an interim continuing resolution (CR).

Although the House narrowly passed the Republican-backed CR on September 19 (217-212), the Senate rejected both the Republican-backed CR (44-48) and Democrat-backed CR (47-45) that same day. On October 28, 2025, the Senate failed to pass a CR for the thirteenth time in a vote of 54-45, falling short of the 60 votes required to proceed, with three Senators from the Democratic caucus voting alongside Republicans in favor of the bill.

Democrats argue that the beginning of Affordable Care Act (ACA) Open Enrollment on November 1 will put pressure on congressional Republicans and the White House to approve an extension of the enhanced premium tax credits (EPTCs), as significant increases in premiums will become more apparent to Americans. Republican leaders have expressed a willingness to consider a modified extension of the subsidies, but not until a “clean” CR is passed to re-open the government. In addition, several other upcoming pressure points could upend the stalemate and lead to a resolution. Specifically, Supplemental Nutrition Assistance Program (SNAP) benefits expire on November 1, affecting nearly 40 million Americans. The Trump Administration has said it will not tap emergency funds to keep benefits running. In addition, air traffic controllers are set to miss another paycheck this week, and air traffic controller absences may increase and cause significant flight delays.

Because funding for Medicare benefits is considered mandatory spending and is not subject to the annual congressional appropriations process, Medicare payments will continue during the government shutdown. In the Full-Year Continuing Appropriations and Extensions Act, 2025, passed on March 15, 2025, Congress extended FY 2025 appropriations for Medicaid through the remainder of FY 2025 and provided advance appropriations for Medicaid for the first quarter of FY 2026, ensuring that Medicaid payments will continue for now.

Although the Trump Administration has threatened further reductions-in-force (RIFs) at federal agencies until Congress passes a CR, these actions continue to face legal challenges. On October 15, a federal judge in California issued a temporary restraining order against the Trump Administration, halting the RIFs initiated at HHS. Therefore, the permanency of recent RIFs remains unclear.

If the shutdown extends into November, Republicans may need to amend their bill’s extension date, currently set for November 21, 2025, to provide enough time for Congress to act on appropriations bills without an immediate funding deadline. This extension may be through the end of December or even into 2026, depending on what Democrats, who have so far opposed lengthier CRs, are willing to accept.

While an agreement has yet to materialize, there are early signs of bipartisan engagement on a pathway to re-open the government at some point soon.

Department of Education Releases Final Rule on Public Service Loan Forgiveness Program

On October 30, 2025, the Department of Education (ED) released its final rule on the Public Service Loan Forgiveness (PSLF) program, amending the definition of “qualifying employer” to exclude organizations that engage in “unlawful activities.” In a press release, Under Secretary of Education Nicholas Kent stated that the PSLF program was not intended to “subsidize organizations that violate the law, whether by harboring illegal immigrants or performing prohibited medical procedures that attempt to transition children away from their biological sex.” The final rule follows the Trump Administration’s Executive Order (EO) entitled, Restoring Public Service Loan Forgiveness, signed on March 7, 2025. The EO directed the Secretary of Education to revise the PSLF program to exclude organizations that “engage in activities that have a substantial illegal purpose” from the definition of “public service.”

The final rule can be found here. A fact sheet on the final rule can be found here.

FDA Reverses 2015 Guidance

On October 29, 2025, FDA issued draft guidance reversing its 2015 guidance that required comparative clinical studies when there is “residual uncertainty about whether there are clinically meaningful differences” between a biologic and a proposed biosimilar. Under the new draft guidance, FDA proposes eliminating the need for comparative efficacy studies to demonstrate biosimilarity. Instead, sponsors may demonstrate biosimilarity using a combination of comparative analytical assessments and comparative pharmacokinetic data. FDA expects this approach to streamline biosimilar development. Additionally, FDA announced plans to make it easier for biosimilars to be developed as interchangeable with brand-name biologics.

The draft guidance can be found here. A press release can be found here.

HRSA Announces Approval of Participants for 340B Rebate Model Pilot Program

On October 30, 2025, HRSA announced the approval of eight participants for the 340B Rebate Model Pilot Program, including Bristol Myers Squibb, Immunex Corporation, Astra Zeneca AB, Pharmacyclics, Merck Sharp Dohme, Boehringer Ingelheim, Novo Nordisk Inc., Janssen Biotech, Inc., and Janssen Pharmaceuticals, Inc. The program, which will go into effect on January 1, 2026, will allow approved manufacturers to provide rebates following covered entities’ purchase of the ten drugs designated for the program.

CMS Release CY 2026 Final Rule for Medicare Physician Fee Schedule

On October 31, 2025, CMS released its Calendar Year (CY) 2026 final rule for the Medicare Physician Fee Schedule (PFS). In the final rule, CMS finalized two separate conversion factors: one for qualifying alternative payment model (APM) participants (QPs) and one for physicians and practitioners who are not QPs. The final CY 2026 qualifying APM conversion factor of $33.57 represents a projected increase of $1.22 (+3.77%) from the current conversion factor of $32.35. The final CY 2026 nonqualifying APM conversion factor of $33.40 represents a projected increase of $1.05 (+3.26%) from the current conversion factor of $32.35. CMS also finalized its proposal to use the Medicare Economic Index (MEI) productivity adjustment percentage, resulting in a -2.5 percent efficiency adjustment for select services. Notably, CMS has also finalized an updated list of Healthcare Common Procedure Coding System (HCPCS) codes that will be exempt from the efficiency adjustment. The changes outlined in the final rule are effective on January 1, 2026.

The final rule can be found here. A fact sheet can be found here. A CMS press release announcing the final rule can be found here.

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