HHS Budgets for New Office Amid Big Health Tech Overhaul

The Department of Health and Human Services (HHS) has earmarked $14 billion for its newly created Administration for a Healthy America (AHA), part of a $94.7 billion discretionary budget proposal for fiscal year 2026 that targets areas like digital infrastructure, electronic health record (EHR) modernization and interoperability.

It also allocates $130 million to establish the CTO office under the CIO, which had previously moved last year under the new Assistant Secretary for Technology Policy (ASTP), formerly the Office of the National Coordinator for Health IT (ONC).

The new CTO will focus on promoting a nationwide interoperable health IT infrastructure to ensure providers and patients can efficiently and securely exchange electronic information across all levels of the health care continuum. The CTO will also be responsible for continuing Trusted Exchange Framework and Common Agreement (TEFCA) implementation.

The budget release marks the first major details revealing how the agency aims to centralize several subagencies and drive a reimagined health care ecosystem since its March reorganization announcement.

Some of the agency’s new initiatives in recent weeks include improvements to prior authorization rules and expanding private partnerships for health technology modernization.

Private Sector Commits to Health Tech Modernization

The White House has been advocating for working with the private sector on modernization efforts across sectors. New plans at HHS demonstrate increased private collaborations across its transformation initiatives in line with that.

HHS secured a pledge from health insurers who agreed to standardize prior authorization submissions using FHIR APIs, increase transparency in decision-making and expand real-time responses to minimize delays in care.

The Centers for Medicare & Medicaid Services (CMS) also secured commitments from more than 60 companies — including Amazon, Apple, Google and OpenAI — to improve access to electronic health records, expand interoperability between patients and providers and advance personalized digital health tools.

“For too long, patients in this country have been burdened with a health care system that has not kept pace with the disruptive innovations that have transformed nearly every other sector of our economy,” said CMS Administrator Dr. Mehmet Oz in an agency announcement. “We stand ready for a paradigm shift in the U.S. health care system for the benefit of patients and providers.”

This plan includes aligning common infrastructure with private-sector innovation and building a national health care directory focusing on interoperability, which early adopters as part of the pledge will target for early 2026.

“We’re asking real companies to make real commitments, to build data-sharing networks, to create apps that deliver real health outcomes, to help us kill the clipboard and give people a health care system that’s smart and secure,” said Amy Gleason, CMS strategic advisor and acting administrator of the U.S. DOGE Service, in a CMS video update.

The agency is currently seeking input from the public regarding the market of digital health products for Medicare beneficiaries and broader health technology infrastructure.

New Policy Targets Prior Authorization

One of the priorities within HHS this year has been to streamline prior authorization. ASTP released its HTI-4 final rule that introduces specific technical standards and certification requirements that will guide future system design.

Assistant Secretary for Technology Policy and National Coordinator for Health IT Thomas Keane told GovCIO Media & Research during a July 31 press briefing that the final rule supports the agency’s goal of lowering patient and provider burden around prior authorization.

“In this regulation, we finalized standards to allow for real-time prescription benefit checks so that providers and patients can determine benefits at the point of care,” said Keane. “We believe that this work will help patients and providers determine patient benefits at the point of care.”

The standards also allow for payer-provider interoperability to facilitate benefit checks and feature updated standards used by industry for electronic prescribing. The rule finalizes the adoption of three certification criteria to support more “efficient management of electronic prior authorization tasks and reduce administrative burden for providers,” said HHS Senior Policy Advisor Alex Baker during the briefing.

“The [HTI-4 rule] will enable providers to interact with the prior authorization APIs that CMS required certain payers that it regulates to establish as part of the CMS interoperability and prior authorization final rule,” Baker said at the briefing. “The use of technology certified to these criteria will also support health care providers that are participating in the Medicare Promoting Interoperability Program.”

Prior iterations of the rule proposed a single criterion that would incorporate electronic prescribing, real-time prescription benefit checks and electronic prior authorization. Baker said the updated HTI-4 final rule will allow for a more flexible and diverse electronic prior authorization marketplace.

“We are finalizing three different criteria for each of the capabilities, which we believe will allow for more flexibility and in the marketplace,” Baker said at the briefing. “There are a wide variety of different companies that may be looking to certify products to these criteria and may want to focus on one of the pieces of functionality, as opposed to certifying for all three.”