ARN Health Policy Digest – May 2026

​We are pleased to present the May issue of the ARN Health Policy Digest. This member benefit provides updates on health policy and legislative and regulatory developments that may be of interest to rehabilitation nurses.

​President Trump Releases his President's Budget Request for FY 2027

On Friday, April 3, the administration released the FY27 President's Budget Request (PBR). The budget included major cuts to domestic programs while increasing the defense budget by $1.5 trillion. The PBR once again eliminates and reorganizes agencies under HHS, similar to the changes in the FY 2026 budget that Congress largely rejected, proposing over a 12 percent cut to federal health agencies. Similar to the FY26 President's Budget, HHS proposes to combine multiple agencies—including HRSA, into the Administration for a Healthy America (AHA), which is allocated $14.7 billion. The budget also consolidates programs formerly housed in the ACL and ACF under a new operating division, the Administration for Children, Families, and Communities (ACFC).

The PBR includes a proposed cut of $5 billion to the NIH and once again proposed to eliminate and consolidate several of the Institutes and Centers (I/Cs). However, the proposed level of consolidation is less significant than FY26 that proposed to shrink the agency from 27 I/Cs to only eight. Additionally, the PBR includes a directive for NIH to forward fund all research grants in 2027, meaning grants would get lump sums in the first year. Without increased funding, this proposal would likely decrease the number of grants NIH can fund each year. The budget, like in FY26, also proposes a 15 percent cap on indirect costs for research.

Of note to ARN members, most HRSA Title VIII nursing workforce programs proposed to be eliminated as HRSA itself was moved to AHA. The Nurse Corps Scholarship and Loan Repayment was the only program that received funding. Unlike in FY26, the National Institute of Nursing Research (NINR) was provided funding, however the funding was cut by approximately 40 percent. The traumatic brain injury programs at the CDC were moved to the newly created National Center for Injury Prevention Control at AHA and are proposed to be level funded from FY 2026. Additionally, TBI programs at the administration for community living have been moved to the administration for Children, Families, and Communities which is a new agency created in the president's budget. The programs are also proposed to be level funded at FY 2026 levels. 

​CMS Releases Proposed Skilled Nursing Facility Rule for FY 2027

 On April 2, CMS released the Skilled Nursing Facility (SNF) proposed rule for updates to Medicare payment polices and rates for FY 2027, with a fact sheet here. CMS proposes a 2.4% update to the Prospective Payment System (PPS) for SNFs based on the proposed SNF market basket of 3.2% and a negative 0.8% productivity adjustment. This rule also proposes updates to the SNF Quality Reporting Program (QRP) that would eliminate COVID-19 vaccine reporting measures. Additionally, CMS seeks comments on advanced care planning in the QRP as well as comments on updating the Patient Driven Payment Model payment system to address Case Mix Upcoding. ARN will review the rule and provide comments and feedback where is applicable.

CMS Releases Proposed Inpatient Rehabilitation Rule for FY 2027

​ On April 2, CMS released the Inpatient Rehabilitation Facility (IRF) proposed rule for updates to the Medicare payment policies and rates for IRFs under the IRF Prospective Payment System (PPS) and IRF Quality Reporting Program (QRP) for FY 2027, with a fact sheet here. This proposed rule includes a 2.4% increase to IRF PPS payment rates based on the proposed IRF market basket update of 3.2% with a negative adjustment of 0.8% for a productivity adjustment. The proposed rule also included updates to the timeframe for data submission for QRP data. CMS also seeks feedback on potential enhancements to IRF PPS, including updating how primary diagnoses and comorbidities are used to classify patients by case mix. Additionally, CMS seeks comments on Advanced care planning in the QRP. ARN will review the rule and provide comments and feedback where is applicable.

Notice of Funding Opportunities 

​Below is a list of other funding opportunities for interested ARN members.

• Nurse Education, Practice, Quality, and Retention -Transition to Practice Program (NEPQR-TPP) (HRSA-26-086)
• Nursing Workforce Diversity (HRSA-26-095)
• Nursing Home Staffing Campaign (CMS-2V2-26-001)
• Limited Competition: Community-Partnered Nursing Research Centers for Schools and Colleges for Nursing with Limited NIH Funding (P20 Clinical Trial Optional) (FOR-NR-25-006)
• Community Partnered Nursing Research Centers (P20 Clinical Trial Optional) (PAR-25-439)
• Leveraging Nursing Research to Advance Healthy School Environments for All (FOR-NR-25-002)