In this edition of AcademyHealth's Situation Report, we highlight the end of a brief federal shutdown and the passage of a spending package that stabilizes HHS funding while extending key policies shaping care delivery, including telehealth flexibilities and at home care. We also examine new evidence underscoring prior authorization as a major barrier to care, ongoing congressional scrutiny of proposed NIH funding cuts and structural reforms, and emerging research on how federal student loan caps could further strain the nursing workforce.
In today’s issue:
- Partial Shutdown Ends, Spending Package Stabilizes HHS Funding
- KFF Poll Underscores Prior Authorization As Key Area for Reform
- Senate Presses NIH Director on Funding Cuts, Structural Reforms
- Loan Cap Potential Impact on Nursing Shortage
Partial Shutdown Ends, Spending Package Stabilizes HHS Funding
A brief partial government shutdown ended this week after Congress approved, and President Trump signed, a funding package that keeps most federal agencies funded through the end of the fiscal year, including the Department of Health and Human Services (HHS). The final deal moved forward by advancing five appropriations bills while temporarily extending Department of Homeland Security (DHS) funding for two weeks, allowing negotiations to continue on a separate track.
For the health services research (HSR) community, the most immediate takeaway is that the agreement reduces near-term uncertainty for HHS operations and associated research and program functions. The package includes $116.6 billion in discretionary funding for HHS and modestly reduces spending tied to agency administrative operations, while maintaining overall stability for federal health agencies throughout the year.
Notably, the legislation also finalizes several high-impact health policy extenders. It provides a two-year extension of Medicare telehealth flexibilities, including continued removal of geographic restrictions and expanded practitioner eligibility, key provisions that help sustain access and allow continued evaluation of telehealth’s effects on cost, quality, and equity. It also includes a five-year extension of the Acute Hospital Care at Home waiver, offering longer-term certainty that supports program investment and strengthens the evidence base around hospital-at-home models.
The spending package further advances pharmacy benefit manager (PBM) reforms, including measures intended to reduce incentives tied to drug list prices in Medicare Part D and increase transparency in employer PBM contracting, which could meaningfully shape ongoing research and policymaking on drug affordability and market oversight. Additional provisions address Medicare Advantage “ghost networks,” which refer to healthcare providers listed in a health plan’s provider directory who cannot provide care, by requiring more accurate provider directories and establishing new outpatient service identifiers that may improve the Center for Medicare & Medicaid Services' ability to track and compare pricing across outpatient settings.
Although the week began with funding instability, the final agreement restores operational continuity and locks in several policy changes that will generate new questions, and new opportunities, for HSR on affordability, access, and care delivery.
KFF Poll Underscores Prior Authorization As Key Area for Reform
According to the latest KFF Health Tracking Poll, affordability is the public’s biggest concern when getting health care. For health services researchers, these findings go beyond public opinion. They point directly to how insurance design and administrative processes shape access, quality, cost, and outcomes across the health care system.
KFF polls have also demonstrated that beyond costs, one in three insured people report prior authorizations to be a "major burden" when accessing health care, with seven out of ten calling it a barrier to care. This is even more stark among adults with a chronic condition that requires ongoing medical treatment who often require more treatments and medications, resulting in more interactions with health insurance companies and health care providers. Four in ten (39 percent) insured adults with a chronic condition say prior authorizations are the single biggest burden when it comes to getting health care. During the prior authorization process, some treatments or medications recommended by a provider may be delayed and, in some instances, an insurance company may end up denying medication or treatment. AcademyHealth research champion Miranda Yaver calls this "rationing by inconvenience" in which health insurers deny coverage, often through prior authorization, which increases economic burden on patients, worsens care, and places administrative strain on providers, patients, and health systems to deal with appeals leading to worse health outcomes and physician burnout. Understanding and measuring these dynamics is core to health services research, which examines how policies and system-level decisions affect patient access, equity, provider burnout, and health outcomes. Health services researchers, like Yaver, play a critical role in communicating evidence on the real-world impacts of mechanisms such as prior authorization and claim denials.
Senate Presses NIH Director on Funding Cuts, Structural Reforms
In a Senate hearing this Tuesday, lawmakers questioned NIH Director Jay Bhattacharya about funding cuts in 2025 and their repercussions on critical biomedical and public health research. Serving as a review of his first 10 months of NIH Director, the hearing surfaced bipartisan concern over the administration's budget proposal, abrupt termination of ongoing grants, and staffing reductions that lawmakers warned are constraining the agency’s operational capacity and threatening the nation’s scientific infrastructure. Senators also pressed Bhattacharya for co-signing the HHS memo announcing plans to reduce the U.S. childhood vaccine schedule to match Denmark’s schedule. When questioned about whether he shares Secretary Kennedy’s views on vaccines and autism, Bhattacharya responded that he has not seen any scientific evidence suggesting vaccines cause autism.
In his testimony, Bhattacharya outlined his broad plan to structurally overhaul the NIH in an effort to modernize the agency and improve its efficiency, accountability, and focus on measurable patient impact. He noted changes already underway, including the centralization of peer review to reduce duplication, the creation of a new analytic office intended to address research replication and rigor, and a revised funding strategy that aligns investments with national health priorities. Bhattacharya framed the need for modernization as necessary reforms to ensure that taxpayer dollars are spent more strategically and that NIH-funded research produces clearer downstream benefits for patients and health systems. While many senators acknowledged the need for reform, lawmakers already raised concerns about the pace and scope of potential changes, questioning whether large-scale structural reform implemented alongside recent grant terminations and staffing reductions would risk further destabilizing the agency.
NIH funding stability, peer-review integrity, and workforce capacity are foundational to the evidence pipeline that informs evidence-based care delivery and health policy. Proposed structural reforms at the agency therefore warrant close attention from the HSR community. As the time approaches for Congress to revisit NIH policy, it is critical for researchers to participate in any public comments opportunities that arise and engage their representatives to ensure that efforts to reform and modernize the agency do not come at the expense of scientific rigor, research workforce sustainability, or long-term research capacity.
Loan Cap Potential Impact on Nursing Shortage
New research from the Michigan Nurses’ Study found that proposed federal limits on graduate student borrowing could have major consequences for the health care workforce. Nearly one in three nurses in Michigan carries student loan debt, with advanced practice nurses reporting median balances exceeding $66,000. Researchers warn that the cap could deter prospective graduate nursing students, shrinking the pipeline for nurse practitioners, midwives, and nursing faculty at a time when the nation is already facing serious staffing shortages.
Nurses with student debt were also significantly more likely to cite finances as a top concern and to report pay and benefits as key reasons for leaving their positions. Workforce instability driven by debt pressures compounds longstanding issues like chronic understaffing, increased readmissions, and longer wait times across various health care settings.
With more nurses retiring or leaving practice post-pandemic, combined with an aging population expected to increase care needs, tightening access to graduate education risks further eroding the nation’s clinical capacity. Health services researchers should continue monitoring how financial barriers shape the future nursing workforce, and how constraints on training pipelines may affect health systems and access to care. Read more from AcademyHealth’s Nursing Interest Group on the ‘deprofessionalization’ of nursing and the impact of these caps on the long-term health of the workforce here. Read more about borrowing caps and the changing definition of ‘professional degree’ on education and workforce here.
Previous Editions
This is the latest in a series of Situation Report updates from AcademyHealth. You can find prior issues here.
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