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The Capitol Insights newsletter is provided by our regulatory affairs contractor, Capitol Associates Inc. While not specific to imaging, the newsletter covers the top federal health policy activity of the week.

How the Byrd Rule Shapes the Budget Reconciliation Process (6/13/2025)

What Happened in Congress This Week?

National Institutes of Health (NIH) Director Jay Bhattacharya testified before a Senate Appropriations subcommittee about the President’s proposed NIH budget for next year, which would cut the NIH’s budget by nearly 40% and reorganize the agency. The hearing displayed bipartisan concerns about the steep cuts to research funding.

How the Byrd Rule Shapes the Budget Reconciliation Process

After passing the House, the One, Big, Beautiful Bill Act is now being considered in the Senate, which is expected to change key parts of the House’s version. Importantly, the Senate has different rules from the House about what can be included in the final version of the bill. This additional constraint is known as the Byrd Rule.

The Byrd rule is the namesake of former Senate Majority Leader Robert Byrd (D-WV). The Rule was first adopted by the Senate in 1985 and was codified as part of the Congressional Budget Act in 1990.

The Byrd Rule says that all aspects of a budget reconciliation bill passed by the Senate must directly impact federal revenues or spending. Any Senator can raise a point of order challenging a provision in a reconciliation bill for violating the Byrd Rule. There is a six-part test to determine if a provision can be challenged using a point of order. The Economic Policy Innovation Center provides a helpful overview of the test:

A provision of a reconciliation bill is considered extraneous and subject to a point of order if it:

1. Does not produce a change in outlays or revenues or a change in the terms and conditions under which outlays are made or revenues are collected;
2. Produces an outlay increase or revenue decrease when the instructed committee is not in compliance with its instructions;
3. Is outside the jurisdiction of the committee that submitted the title or provision for inclusion in the reconciliation measure;
4. Produces a change in outlays or revenues that is “merely incidental” to the non-budgetary components of the provision;
5. Would increase the deficit for a fiscal year beyond the budget window covered by the reconciliation measure; or
6. Recommends changes to Social Security.

If a provision is challenged with a point of order, the Senate parliamentarian is responsible for determining if the provision is compliant or in violation of the Byrd Rule. The Senate can override the Senate parliamentarian with a supermajority (60 votes). Currently, Republicans hold 53 seats in the Senate, making it improbable that they could override the Parliamentarian’s as no Democrats are expected to support their efforts.

There are a few matters in the House’s bill that could potentially be challenged as a violation of the Byrd Rule. One key example is a provision of the bill that bans states from enforcing artificial intelligence regulations for 10 years. Many speculate that this portion of the bill fails the Byrd Rule test and thus will not make it to the final version of the bill. Other non-healthcare-related policies are also expected to be challenged.

The Byrd Rule plays a significant role as Senators begin drafting their version of the long-awaited reconciliation bill. It will have a substantial impact on the final form of the legislation and could frustrate the House of Representatives goals for certain policies.

Top Stories in Healthcare Policy

CVS and Cigna are suing Arkansas over a new law banning companies from owning both pharmacy benefit managers (PBMs) and pharmacies, set to take effect in 2026. Their PBMs, Caremark and Express Scripts, filed lawsuits on May 29 claiming the law is unconstitutional. CVS warned it may close all 23 of its Arkansas pharmacies, while Cigna said the law could force some pharmacies to shut down.

The White House released a memo directing HHS and Secretary Kennedy to take action to ensure that Medicaid reimbursement payments are not higher than the Medicare rates as a way to target waste, fraud, and abuse in Medicaid.

On Thursday, the Departments of Health and Human Services, Labor, and the Treasury announced the addition of two new additional independent dispute resolution (IDR) entities, Capitol Bridge, LLC and Livanta LLC (DBA: Commence). There are now 15 total IDR entities. The federal agencies believe this is a crucial step to improving the IDR process.

CMS also published a new FAQ for how to handle situations where errors are identified after an IDR determination is made.

U.S. hospitals spend an average of $9.51 million on IT operating expenses, according to 2023 data based on over 5000 hospitals. While IT overhauls are no longer optional for health systems, these investments can vary significantly in scale and cost based on facility size and goals.

HHS Secretary Kennedy has appointed 8 new members to the Centers for Disease Control and Prevention’s (CDC) Advisory Committee for Immunization Practices (ACIP), after his unprecedented move of firing all previous expert panelists earlier this week. The new panel consists of expert scientists, public health professionals, and physicians, but also includes well-known vaccine skeptics.

After reports last week that Senate Republicans were considering including cuts to the Medicare Advantage program in their version of the One Big Beautiful Bill Act, they are now retreating from that idea.

Workers for the National Institutes of Health (NIH) protested the Trump administration’s massive cuts to NIH grants, funding, and overseas institutions that have caused “a dramatic reduction in life-saving research” in an open letter to NIH Director Jay Bhattacharya. The letter criticizes current leadership for prioritizing political motivations over human safety.

Healthcare leaders warn against the One Big Beautiful Bill Act’s proposal to limit graduate and professional school federal loans, saying that these limits on medical student loans could worsen physician shortages.

President Trump signed an executive order to strengthen national cybersecurity, directing federal agencies to adopt new initiatives for cyber defense, including AI and software development measures.

The National Institute of Health (NIH) reinstated its directive requiring universities and research institutes to confirm they do not have DEI programs or Israel boycotts to receive grants, after briefly rescinding the ban hours before.

The Centers for Disease Control and Prevention (CDC) has rehired about 460 people who previously received layoff notices, which is the agency’s largest reinstatement to date. In April, around 2,400 CDC employees were fired during the Department of Health and Human Services’ (HHS) reorganization.