Top News
White House Proposes Rules Giving Political Appointees Control Over Federal Grants
The White House Office of Management and Budget (OMB) recently published a proposed rule that would give Trump administration officials greater authority over federal grant making. The more than 400-page proposal would require “senior appointees” at federal agencies to review and approve all discretionary grants, codifying a process the administration has already been carrying out since taking office. The rules would allow officials to cancel or deny grants deemed inconsistent with the president’s executive orders and policy priorities, a shift that critics say would replace the traditional scientific peer-review process with political loyalty.
The proposal includes several other notable provisions, including bans on grants related to diversity, equity, and inclusion (DEI) initiatives, gender-affirming care, and voter registration activities, while also prohibiting agencies from excluding faith-based organizations from consideration. Notably absent from the proposal was an expected cap on indirect research cost reimbursement rates at 15 percent, which courts and Congress had previously blocked; however, the rules would generally prohibit the use of indirect cost funding for publishing articles in scientific journals, except in limited circumstances.
CMS Publishes Medicaid Community Engagement Requirement Interim Final Rule
On June 1, the Centers for Medicare & Medicaid Services (CMS) released the long-awaited interim final rule (IFR) on Medicaid Community Engagement Requirements (CER). Starting January 1, 2027, the One Big Beautiful Bill Act (OBBBA) will require certain individuals covered under the Medicaid expansion population, or through a comparable section 1115 waiver, to participate in community engagement activities. Major provisions in the IFR include the following:
- Several groups are excluded from the requirement entirely, including pregnant individuals, veterans with a total disability rating, caregivers of young children or disabled individuals, former foster youth, American Indians and Alaska Natives, and those who are medically frail, among others.
- Individuals can satisfy the requirement by working, volunteering, or participating in a work program for at least 80 hours a month, enrolling in an educational program at least half-time, or earning income equivalent to 80 hours at the federal minimum wage.
- States have the option to provide temporary exceptions for individuals facing short-term hardships, such as a medical hospitalization, a presidentially declared disaster in their county, or high local unemployment rates.
- States must verify compliance at application and renewal and must give individuals 30 days to demonstrate they meet the requirement or qualify for an exemption before disenrolling them, with the option to reapply if coverage is lost.
This IFR constitutes one of the most significant modifications to the Medicaid program since the Affordable Care Act (ACA) and ranks among the most substantial Medicaid regulations in years. The community engagement requirement is expected to place substantial financial and administrative burden on states. Comments on the rule are due July 31, 2026.
Administrative Action
Executive Order Reclassifies Thousands of Civil Servant Positions
On June 3, 2026, President Trump signed an executive order reclassifying roughly 8,000 career federal positions into Schedule Policy/Career roles. The move removes federal employees’ civil service protections, making it easier for the federal government to terminate their employment due to performance challenges, including if an employee’s political believes interfere with their ability to follow certain directives or carry out the president’s policy agenda. While these individuals will lose certain job protections, the executive order does not impact hiring practices for these roles. Critics argue this allows the federal government to fire workers based on their political affiliation, though the order explicitly prohibits this.
The 8,000 civil servants impacted mostly reside in leadership, policy-oriented positions (GS-15 or higher), including public health and scientific roles in the Department of Health and Human Services. Earlier this year, the Office of Personnel Management (OPM) published a rule that created the job Schedule position of Policy/Career. The OPM’s final rule originally estimated that 50,000 positions would be reclassified, but the current order reflects a focus on senior-level positions and decision makers within the government. The Administration clarified that they have no plans to move additional positions over to Schedule Policy/Career in the near future.
Executive Order Seeks to Strengthen Security on Artificial Intelligence While Accelerating Innovation
On June 2, President Trump signed an executive order directing federal agencies to strengthen cybersecurity defenses and accelerate the use of advanced artificial intelligence (AI) tools across government and critical infrastructure. This order is part of the administration’s effort to promote AI innovation, protect American technological leadership, and modernize government systems without imposing what it describes as burdensome regulations on AI development.
The order requires agencies to prioritize protection of federal civilian, defense, and national security systems, expand access to AI-enabled cybersecurity tools and services, and improve coordination between government, industry, and critical infrastructure operators to identify and address software vulnerabilities. It also establishes a voluntary process for AI developers to work with federal officials to evaluate highly capable AI models for cybersecurity risks before broader release and collaborate on efforts to strengthen the security of critical infrastructure. The administration emphasized that the framework does not create licensing, permitting, or pre-approval requirements for AI development. Several provisions carry aggressive implementation timelines, with agencies directed to take key actions within 30 days.
CMS To Modernize Medicare Claims Platform
The Centers of Medicare and Medicaid (CMS) has awarded two information technology companies nearly $2 billion to modernize the adjudication of health care claims. Earlier this year, CMS released a request for information (RFI) seeking input on replacing its outdated, 1979-era Medicare claims processing system with a real-time, cloud-based system called ClaimsCore. On June 3rd, the agency awarded contracts to HealthEdge Software and Peraton to build and implement a near real-time claims adjudication system to facilitate integration across systems, reduce administrative burden, and strengthen fraud prevention. For beneficiaries, CMS expects the new system to mean faster claims resolution, clearer cost and coverage information at the point of care, reduced surprise billing, and better digital access to benefits data.
The initiative will be implemented from May 2026 through November 2033 across seven performance periods, though CMS Administrator Mehmet Oz has stated the core upgrades will be complete within three years. This project is part of the Trump administration’s broader push to modernize Medicare technology and combat healthcare fraud.
Trump Administration Directs Federal Agencies to Align Childhood Vaccine Policy with International Benchmarks
President Trump signed an executive order directing federal health agencies to align U.S. childhood immunization recommendations with best practices from peer countries. This order builds on the Department of Health and Human Services (HHS) assessment that compared American vaccine guidance with that of other developed nations, which was released earlier this year. The HHS review concluded that the U.S. recommends more childhood vaccine doses than peer countries and identified a smaller set of vaccines that are consistently recommended across those nations.
The order instructs the Centers for Disease Control and Prevention (CDC) and its Advisory Committee on Immunization Practices (ACIP) to review the assessment along with the latest clinical data and then take the appropriate steps to update the childhood and adolescent vaccine schedule. The order also encourages consideration of greater flexibility in vaccine timing and sequencing and emphasizes parental authority and religious liberty as guiding principles. Any vaccines that remain on the CDC-recommended schedule would continue to be covered without cost-sharing through private insurance and public programs, including Medicaid, the Children’s Health Insurance Program (CHIP), and Vaccines for Children. This action represents the latest step in the administration’s broader effort to reassess federal vaccine policy and examine how U.S. immunization recommendations compare with those used internationally.
State Action
Florida Attorney General Sues OpenAI
On Monday, June 1, the Florida Attorney General James Uthmeier filed a lawsuit alleging that OpenAI endangers the health of Florida residents. The lawsuit comes in the aftermath of multiple teen suicides and mass shootings in Florida in which individuals were encouraged to continue their actions after confiding their plans and questions into ChatGPT, OpenAI’s chatbot. The complaint alleges that OpenAI and its Chief Executive Officer Sam Altman failed to comply with Florida’s prohibition on unfair and deceptive trade practices when it prioritized rushing to market, ignored repeated safety warnings from experts inside and outside the company, and released a product that actively enables and encourages harm to individuals. The lawsuit also notes that OpenAI collects data from minors without explicit consent from their parents, as well as causing behavioral addiction and cognitive harm.
The lawsuit follows OpenAI’s recent launch of ChatGPT for Clinicians, a free AI tool designed assist in tasks like medical research and documentation requests for U.S. physicians, nurse practitioners, physician assistants, and pharmacists. Meanwhile, a recently published journal article found that ChatGPT Health, OpenAI’s consumer-facing health tool for patients, failed to adequately identify and respond to health crises in more than half of researcher-conducted conversations.
Industry Updates
Healthcare and Public Sector Coordinating Council Releases Framework for AI Cybersecurity and Governance in Healthcare
The Healthcare and Public Sector Coordinating Council (HSCC) Cybersecurity Working Group released a new implementation guide outlining a cybersecurity governance framework that includes best practices for health care payers, providers, and organizations deploying artificial intelligence (AI) across clinical and operational settings. The framework includes standards and oversight mechanisms that guide responsible use of traditional machine learning, generative AI, and increasingly autonomous agentic AI systems, with recommendations for managing threats such as data poisoning, hallucinations, and adversarial attacks.
The guidance calls for healthcare organizations to establish dedicated AI governance structures, conduct AI-specific security testing and risk assessments, strengthen oversight of third-party AI vendors, and implement safeguards to protect patient data and prevent unauthorized disclosure of protected health information. The framework also introduces governance principles for agentic AI systems capable of taking actions across clinical workflows, emphasizing human oversight, auditability, access controls, and mechanisms to halt autonomous actions when necessary. As healthcare organizations accelerate AI adoption, the guide aims to provide a standardized approach for balancing innovation with cybersecurity, patient safety, privacy, and regulatory compliance.
U.S. Has Highest Healthcare Spending, But Is Among Lowest Health Outcomes
A new report from the Commonwealth Fund finds that the United States continues to dramatically outspend peer nations on health care while delivering worse outcomes. In 2024, the U.S. devoted 18% of its GDP to health care- nearly twice the OECD average- while producing a life expectancy of just 79 years. Roughly 27 million Americans remain uninsured and recent federal policy changes are projected to push that number even higher and result in tens of thousands of more avoidable deaths. The U.S. also has the fewest number of primary care physicians per capita among OECD nations (0.3 per 1,000 people, compared to an OECD average of 1.1), and Americans spend far more out of pocket on prescription drugs than peer countries.
The report also highlights severe inequities within the U.S. system, pointing to racial and geographic disparities. The authors recommend four broad policy actions to improve the performance of the U.S. healthcare system: reducing health care costs through stronger price oversight, expanding access to affordable coverage, investing in the primary care workforce, and addressing racial and geographic disparities in health outcomes.
Save the Date: 2026 Annual Conference
HealthCare Roundtable 22nd Annual Conference
November 4-6, 2026
The Mayflower Hotel
Washington, D.C.
