What’s in Congress’ sweeping health care deal: PBM reform, telehealth, science funding

STAT News – Tuesday, January 20, 2026
By John Wilkerson and Daniel Payne

Congress has reached a deal on several health care policies, including a crackdown on drug-industry middlemen, transparency measures for hospital billing, pediatric cancer research measures, and Medicare coverage of multi-cancer screening tests.

Those measures are part of a bill to fund the Health and Human Services Department, which itself is part of a package of government spending bills for labor, education, defense, homeland security, transportation, and housing. The appropriations bill would give HHS $116.8 billion for fiscal 2026, an increase of $210 million over 2025 and $33 billion more that the Trump administration requested.

Both the Senate and the House still must pass the legislation, and details could change before then. Many of the reforms in the health care package were part of a deal Congress struck in December of 2024 that quickly fell apart after then President-elect Trump and Elon Musk attacked it. Government funding runs out at the end of the month.

Overall, the HHS spending package rejects many of the most dramatic changes to the federal health care infrastructure that President Trump’s administration has proposed, such as reorganizing the National Institutes of Health, creating a new Administration for a Healthy America, and sharply cutting Centers for Disease Control and Prevention funding.

The HHS spending bill would slightly boost biomedical research funding at the National Institutes of Health, and it rejects policies that would give the administration more control over that funding. The CDC would be flat funded at $9.1 billion, compared to the roughly $4 billion funding level proposed by the administration.

The reforms to pharmacy benefit managers have been a long time coming. PBMs negotiate rebates on prescription drugs on behalf of clients like health insurers and employers, and drugmakers have been lobbying for years to rein in PBM practices.

“PBM reforms in Medicare and Medicaid have been debated and included in various pieces of bipartisan legislation for over seven years but none have crossed the finish line” said Ipsita Smolinski, founder and managing director of the consulting firm Capitol Street.

The bill would prohibit PBMs from linking their payments to drug prices in Medicare and increase transparency in that program. And in the commercial market, the bill would require PBMs to pass through 100% of rebates to employer-sponsored insurance plans. There also is a measure requiring that PBMs give pharmacies who want to be part of their network reasonable contracts.

However, some of those measures could be taken out if the nonpartisan Congressional Budget Office determines that they would cost money, Smolinski said. The commercial market changes are measures that the CBO could determine would increase government spending.

The package of health care policies is broad and includes an extension of several existing public health programs such as funding for health centers.

Industry groups cheered the funding for programs — from research to HIV prevention — that the Trump administration previously planned to cut. The extension of telehealth and other key programs were also welcomed by health industry leaders, who emphasized the need for further legislative progress on a number of fronts — and a desire for more stability in what health policies to expect from Washington.

“We are grateful for the bipartisan support for health centers and the funding increase included through the end of 2026,” Advocates for Community Health CEO Amanda Pears Kelly said in a statement.

But she noted that health centers face “immense strain from workforce shortages, ongoing pressure on the 340B program, changes to Medicaid, and years of underinvestment.”

Here are the major policy areas in the health care package:

Hospital billing

Starting in 2028, providers on separate campuses would be required to bill with separate National Provider Identifier numbers. The move is intended to keep hospitals, which are usually paid more because their facilities offer higher levels of care, from charging more for services at affiliated — but separate — locations.

The language is part of a larger push for “site-neutral” payments, in which care from health providers costs the same amount no matter where it’s offered. Hospitals have pushed back against such reforms, arguing that the higher levels of care they offer require higher levels of payments.

The American Hospital Association said in a statement that the package includes several positive changes and extensions.

But the group pointed out the identifier change as a concern, saying the requirement “is redundant, as hospitals already disclose care locations, and would impose unnecessary costs and administrative burden by forcing changes to existing billing systems.”

The bill also includes changes to some payments to hospitals that care for a disproportionate share of low-income patients, potentially increasing payments and flexibility in how the money is used in the coming year.

Lawmakers also agreed to delay for one year cuts to Medicare payments for clinical lab tests that hospitals often run.

Cancer screening

The bill would allow Medicare to pay for tests that screen for multiple cancers, including a blood test made by Grail. Medicare coverage would be phased in, starting in 2029 with 65-year-olds and increasing by one year of age each subsequent year.

Pediatric cancer research

The bill would renew until Sept. 30, 2029, a program that encourages the development of drugs treating rare pediatric diseases. Under the priority review voucher program, the Food and Drug Administration awards vouchers in return for approval of drugs for rare pediatric diseases.

Vouchers can be sold, and they’re valuable because they require the FDA to review drugs in six months, compared to the usual 10-month timeline.

Another measure would allow the FDA to require companies to run studies on combinations of cancer drugs in children. The bill also gives the FDA more tools for getting drugmakers to finish studies.

Telehealth

Medicare coverage of telehealth services from the home would be extended for two years, even for older adults who don’t live in rural areas. The telehealth flexibilities were first put into place during the pandemic and have become popular.

Generics

The bill includes a measure to help speed generic drug reviews by the FDA.

Generic drugmakers must have the same active and inactive ingredients in the same concentration as the branded drugs they plan to copy. When generic drugs contain the wrong amount of an inactive ingredient, the FDA cannot tell them how much they’re off by, forcing generic drugmakers to guess, often multiple times.

The new measure would require the FDA to specify differences in concentrations between the generic and brand-name drug.

Rare disease drugs

The bill clarifies the extent to which pharmaceutical companies are entitled to monopolies on orphan drugs, which treat patient populations of fewer than 200,000.

Orphan drugs get a seven-year monopoly. The bill makes clear that the seven years of marketing exclusivity applies to specific uses or indications, instead of giving drugmakers a monopoly for the treatment of an entire disease or condition.

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