July returned federal and state policymakers to two intertwined themes that have shaped much of 2026: the money that funds the healthcare system, and the rules that govern who—and, increasingly, what—delivers care. On Capitol Hill, lawmakers moved to keep the government funded into fiscal year 2027 while charting a decade-long trajectory for federal health spending. In the courts, graduate nursing students won at least temporary relief on federal loan limits, a direct sequel to litigation we flagged last month. And across the states, the throughline was artificial intelligence: where it fits within a licensed professional’s scope of practice, when it crosses into clinical decision-making, and who is accountable when it does. Below is our read on what moved in July and why it matters for boards, employers, and the professionals they serve.
Federal activity
Congress advances an FY2027 funding stopgap and a long-range budget blueprint
On July 18, two measures set the near- and long-term shape of federal healthcare funding.
- H.R. 9770, the Continuing Appropriations Act for Fiscal Year 2027, is a stopgap designed to keep the federal government open by holding most agencies at current funding levels. For the health sector, the bill sustains existing support for federal health programs, carves out increased funding for Indian Health Service facilities and the Women, Infants, and Children (WIC) program, and preserves mandatory Medicare and Medicaid payments and other Social Security Act entitlements at current-law levels. It is structured to avoid furloughs and keep essential health and nutrition programs running without interruption.
- H.Con.Res. 113 runs alongside it, setting the congressional budget for fiscal year 2027 and establishing spending targets through 2036. The resolution charts federal health spending rising from roughly $1.01 trillion in 2027 to about $1.33 trillion by 2036, and builds in enforcement mechanisms and targeted adjustments—including provisions tied to healthcare fraud control and disability reviews. Together, the two measures function as both the immediate spending patch and the multi-year fiscal blueprint for federal healthcare.
Propelus takeaway: The pairing signals continued investment in health and, notably, in fraud-control capacity—consistent with the enforcement posture we’ve tracked all year. Federally funded entities should plan for sustained oversight, not a pause.
Court temporarily lifts graduate nursing loan caps as the “professional degree” fight continues
Last month we reported on the nursing-coalition lawsuit challenging the U.S. Department of Education’s exclusion of advanced nursing degrees from the federal “professional degree” definition. In July, that dispute produced its first major development.
Following an order from Judge Beryl Howell, the Department expanded its list of qualifying “professional programs,” temporarily raising the federal loan cap for students in nursing, occupational therapy, physician assistant studies, and several psychology subfields.
The relief is provisional. The Department maintains that its original, more restrictive definition is lawful and intends to keep litigating. Because institutions may still elect to apply the lower cap, students in otherwise identical programs could face different borrowing limits depending on where they enroll—an uneven landscape that bears watching as the case proceeds.
Propelus takeaway: A temporary win for advanced-practice pipelines, but the underlying policy question is unresolved.
Welcome Back to the Health Care Workforce Act (H.R. 9747 / S. 5012)
Introduced July 16, these companion bills authorize grants to support the integration of internationally educated healthcare professionals into the U.S. workforce, including funding for licensing assistance, credentialing guidance, and system-level improvements to address workforce shortages.
State updates
State activity in July clustered around a single, fast-moving question: how artificial intelligence intersects with licensed practice, alongside continued movement on compacts, scope of practice, and workforce study.
Rural health — Louisiana SR198
Introduced June 1, this resolution urges the Louisiana Department of Health to report on implementation of the Louisiana Rural Health Transformation Program, a five-year, federally funded initiative with $208.4 million for its first year. The program focuses on improving rural health outcomes and includes the Rural Tech Catalyst Fund.
AI governance in professional practice — Pennsylvania HB 2678
Newly introduced, Pennsylvania HB 2678 would require every state professional licensing board to adopt profession-specific rules governing how licensees use AI. As drafted, boards would need to address:
- When and how AI may be used within a professional’s authorized scope of practice.
- Required human review, supervision, and approval of AI-generated outputs before they are relied upon.
- Plain-language disclosure to patients, clients, or consumers when AI materially contributes to a service.
- A meaningful right for individuals to reach a licensed human rather than interacting only through an AI system.
- Preservation of core professional duties—ethics, confidentiality, recordkeeping, and independent judgment.
- Clear limits barring AI from independently delivering professional services or making professional decisions.
- Standards for enforcement and discipline where AI use amounts to unprofessional conduct or a practice-act violation.
- Appropriate exceptions for purely administrative or clerical uses that do not involve individualized professional services.
Propelus takeaway: Worth watching on two fronts: whether Pennsylvania’s health boards move proactively to guide licensees, and whether states converge on a common approach or fragment into a patchwork.
English-language proficiency requirement – Michigan SB1109
Introduced July 15, SB1109 would remove the English-language proficiency requirement for health professional licensure, aiming to reduce barriers for diverse applicants.
Utah — AI-assisted prescribing draws national attention
Utah has emerged as one of the most closely watched states on AI in clinical settings, driven by efforts involving AI-enabled prescription-renewal workflows. The debate turns on whether AI systems can perform functions historically treated as the practice of medicine, whether prescribing authority can be delegated to an automated workflow, and how state medical boards should define the “practice of medicine” when AI is in the loop—in short, when automated medication management stops being administrative support and becomes clinical practice.
Propelus takeaway: Expect Utah to serve as an early test case for defining when AI becomes a “clinical actor,” with implications for how boards nationwide draw that line.
Licensure compacts and multi-topic legislation — Rhode Island HB 7127
Enacted and effective June 12, Rhode Island HB 7127 is a wide-ranging measure. It enters Rhode Island into the PA Licensure Compact and extends the sunset on the state’s Nurse Licensure Compact participation by two years, to January 1, 2029, absent further action by the General Assembly. The bill also bars the Department of Health and the Board of Medical Licensure and Discipline from sharing state and federal criminal-record information with the Interstate Medical Licensure Compact. On the practice side, it adds a one-hour nutrition CE requirement to physicians’ biennial renewal, expands pharmacists’ authority to independently prescribe certain drugs, devices, and laboratory tests deemed critical to improving public health, and allows dental hygienists to practice at the top of their license.
Propelus takeaway: A single bill touching compacts, CE, and scope of practice is a useful reminder that omnibus health legislation can quietly reset renewal and credentialing requirements across multiple professions at once.
Healthcare workforce — Rhode Island SR 3346
Rhode Island SR 3346 is a nonbinding resolution establishing a 15-member special legislative commission to study the state’s healthcare workforce, with a focus on educating and retaining primary care providers.
Propelus takeaway: Study commissions rarely make headlines, but they often preview the next cycle’s legislation—especially on workforce pipeline and retention.
Stay ahead with us
Through our unified solutions—Propelus CE Broker™, Propelus EverCheck™, and Propelus Immuware™—Propelus provides the infrastructure that connects boards, professionals, and employers in a single, secure ecosystem. In a 2026 landscape where AI, enforcement, and workforce policy are moving in tandem, you need a partner who doesn’t simply react to change but anticipates it. We are committed to keeping your workforce qualified, compliant, and strategically positioned for whatever comes next. Get in touch with Propelus CE Broker to learn how we can support your workforce.