FY2026 Federal Budget Process – Updates and Resources

House Passage and Key Provisions
On February 3, 2026, the House voted to finalize the Senate amendments to the Consolidated Appropriations Act, 2026 (H.R. 7148) with a vote of 217-214. The package includes fiscal year 2026 appropriations for Labor, Health and Human Services, and Education, along with critical health extenders. The bill provides nearly $117 billion in discretionary funding for HHS, maintains FY 2025 funding levels, and includes several provisions directly impacting echo programs and medical education.

1. NIH Funding: $47.2 Billion
   The appropriations package provides $47.2 billion for NIH; a $415 million increase (+0.9%) over FY 2025. The National Cancer Institute would receive $7.35 billion, which includes funding for childhood cancer research under the CAROL Act framework, though not specifically itemized as a separate line. Additionally, the National Heart, Lung, and Blood Institute would receive $3.99 billion.
   • ASE Advocacy: ASE joined the Ad Hoc Group for Medical Research in urging Congressional appropriators to finalize robust FY 2026 NIH funding and has consistently advocated for CAROL Act support.
2. Indirect Costs: Critical Protection (Section 224)
   The bill included a provision explicitly prohibiting any alterations to how facilities and administrative (F&A) costs are calculated for NIH grants, maintaining the standards from third quarter FY 2017. The bill bars the use of any funds “to develop or implement a modified approach” or expand deviations from negotiated rates beyond FY 2017 Q3 proportional effects. This protection is crucial for universities and academic medical centers with echo programs, ensuring they can recover full indirect costs on NIH-funded grants without facing caps that might threaten program sustainability. The explicit prohibition on modifying the approach provides much-needed stability for research institutions.
   • ASE Advocacy: ASE joined the Ad Hoc Group letter supporting the Financial Accountability in Research (FAIR) Model, which protects negotiated indirect cost rates and prevents arbitrary caps.
3. Telehealth Extensions Through 2027 (Section 6209)
   ASE was excited to see that the package extends pandemic-era telehealth flexibilities through December 31, 2027. Key extensions include removal of geographic requirements, expansion of originating sites, broader practitioner eligibility, continued coverage for FQHCs and Rural Health Clinics, and delayed in-person requirements for mental health services.
   • ASE Advocacy: ASE continues to advocate for permanent telehealth legislation, supporting the CONNECT Act (S.1261/H.R.4206), which would permanently extend Medicare telehealth flexibilities, eliminate geographic restrictions, expand provider types, and preserve audio-only services to ensure patients can receive high-quality cardiovascular care without unnecessary barriers.
4. Additional Extensions
   • In-Home Cardiopulmonary Rehabilitation (Section 6211): Allows cardiac and pulmonary rehabilitation via audio/video technology in patients’ homes from January 31, 2026 through January 1, 2028.
   • Medicare-Dependent Hospitals (Section 6202): Extended through January 1, 2027, supporting small rural hospitals.

Look Back: January Funding Challenges and Continuing Resolution

Earlier in January, the House had passed a similar appropriations package on January 22, but the Senate voted 55-45 against advancing H.R. 7148 on January 29, with eight Republicans joining all Democrats to block the package. The rejection came after Senate Democrats vowed to block the six-bill spending package following an ICE shooting incident in Minneapolis, with Senate Majority Leader Chuck Schumer demanding new ICE guardrails before advancing the package that included Department of Homeland Security funding.

Government funding expired January 30 at 12:01 AM, resulting in a brief partial government shutdown until the House voted on the amended legislation on February 3. The healthcare provisions themselves were not controversial, but were caught in the broader DHS dispute.

Prior to that, on November 12, President Trump had signed the Continuing Appropriations and Extensions Act, 2026 (H.R.5371), ending the nation’s longest-ever government shutdown after 43 days. The measure passed the House 222-209 and the Senate 60-40, providing full-year FY 2026 funding for Agriculture-FDA, Legislative Branch, and Military Construction-Veterans Affairs appropriations, while extending all other agencies, including Health and Human Services, through January 30, 2026. The law rescinded over 4,000 federal worker layoffs, provided back pay to furloughed employees, and barred further workforce reductions until the January 30 deadline.

The November continuing resolution extended critical Medicare, Medicaid, and telehealth provisions through January 30, including COVID-era telehealth flexibilities, the Acute Hospital Care at Home program, Medicare-dependent hospitals, and funding for Community Health Centers ($1.4 billion) and the National Health Service Corps ($115.3 million). FDA received approximately $7 billion in funding.

Additional Information and Resources:

• ASE Webinar: Congressional Appropriations Process and Federal Budget Updates
• ASE Overview on NIH Funding: NIH Research Funding and Echocardiography