Health Care Watch: January 13, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from January 5 – January 11. Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
House
On January 3, the 119th Congress convened. Rep. Mike Johnson (R-LA) was elected as Speaker.
On January 3, the House adopted a rules package that requires nine members to trigger a vote to remove the Speaker, providing more stability for Speaker Johnson in the 119th Congress. Last Congress, just one member could trigger such a vote.
On January 7, the Democratic Steering and Policy Committee filled six of the seven open seats on the Energy & Commerce Committee. Democratic members chosen to fill the seats include Reps. Alexandria Ocasio-Cortez (NY), Kevin Mullin (CA), Troy Carter (LA), Jennifer McClellan (VA), Greg Landsman (OH) and Jake Auchincloss (MA). Rep. Rob Menendez (D-NJ) won a 10-way race to fill the final seat.
On January 7, the Democratic Steering and Policy Committee recommended that three members return to the Ways & Means Committee. Members who lost their seats in the 118th Congress after the GOP gained the majority and will now return to the committee include Reps. Brendan Boyle (PA), Stacey Plaskett (VI), and Tom Suozzi (NY).
On January 7, GOP Doctors Caucus co-chairs, Reps. Greg Murphy (R-NC) and John Joyce (R-PA), named Catherine Hayes as the caucus’ Executive Director. Hayes previously served as senior director of government relations at the American Association of Orthopedic Surgeons.
On January 8, Ways & Means Committee Ranking Member Richard Neil (D-MA) announced the subcommittee assignments. The Health Subcommittee will include Rep. Lloyd Doggett (TX) as Ranking Member and Reps. Boyle, Linda Sánchez (CA), Mike Thompson (CA), Judy Chu (CA), Dwight Evans (PA), Danny K. Davis (IL), and Steven Horsford (NV).
On January 9, Rep. Kim Schrier (D-WA) stated that Democratic lawmakers who are medical providers are in discussions to create a caucus. The caucus would provide an alternative or an opportunity to work with the longstanding GOP Doctors Caucus. Rep. Schrier expressed her openness to working with Republicans, noting that the caucus may not be exclusive to Democrats.
On January 9, the House Congressional Pro-Choice Caucus announced that it is renaming itself to become the Congressional Reproductive Freedom Caucus. The caucus also elevated Rep. Ayanna Pressley (D-MA) to co-chair.
House Budget Committee Chairman Jodey Arrington (R-TX) began floating a menu of policies that would result in an estimated $5.7 trillion in federal savings over the next 10 years that could be used to offset the costs of extending the expiring tax cuts, other spending, or deficit reduction. These proposals include $479 billion in cuts to Medicare via site neutral payments, changes to bad debt and uncompensated care payments, and extending the 2% sequester. Proposed changes to Medicaid include $2.3 trillion in savings by implementing per capita caps and work requirements, equalizing payments for able-bodied adults, limiting provider taxes, and reducing the FMAP floor. The document also highlights “repealing major Biden health rules” that would save an estimated $420 billion and would presumably include repealing the nursing home staffing rule.
Senate
On January 3, the Finance Committee announced that six new members would join the Committee for the 119th Congress. New members include Roger Marshall (R-KS), Bernie Sanders (I-VT), Tina Smith (D-MN), Ben Ray Luján (D-NM), Raphael Warnock (D-GA), and Peter Welch (D-VT).
On January 7, Sen. Mike Crapo (R-ID) was named Chairman of the Finance Committee. Upon assuming Chairmanship, Chairman Crapo stated that the Committee will conduct aggressive oversight of theInflation Reduction Act (IRA), enact policies that “mitigate the adverse consequences of this law on patients, innovators and taxpayers,” reform pharmacy benefit manager practices and Medicare physician payments, and address the growing rate of chronic disease.
On January 7, Health, Education, Labor & Pensions (HELP) Committee Chairman Bill Cassidy (R-LA)announced that five new Republican members would be joining the committee. New members include Sens. Josh Hawley (MO), Jim Banks (IN), Mike Crapo (ID), Tim Scott (SC) and Marsha Blackburn (TN). Sens. Ted Budd (NC) remains in Congress but will not be returning to the Committee.
On January 7, HELP Committee Ranking Member Bernie Sanders (I-VT) announced that Democratics Sens. Andy Kim (NJ), Lisa Blunt Rochester (DE), and Angela Alsobrooks (MA) will join the HELP Committee for the 119th Congress. Sens. Jacky Rosen (D-NV), Tina Smith (D-MN), and Ben Ray Luján (D-NM) remain in Congress but will not be returning to the Committee.
On January 7, the Budget Committee released a bipartisan staff report on the findings of their investigation into the ways in which private equity investment in health care has negative consequences for patients and providers. The Committee focused on two private equity firms that currently or previously invested in two prominent hospital operators. The Committee reviewed more than one million pages of documents from Leonard Green & Partners, Prospect Medical Holdings, Medical Properties Trust, Apollo Global Management (Apollo), Lifepoint Health and Ottumwa Regional Health Center. The report states that documents obtained by the Committee detailed how private equity’s ownership of hospitals earned investors millions, while patients suffered and hospitals experienced health and safety violations, understaffing, reduced quality of patient care, and closures.
REGULATORY UPDATE
On January 3, the Department of Health & Human Services (HHS) announced $306 million in awards to continue its H5N1 Avian Flu response. HHS stated that while CDC’s assessment of the risk of avian influenza to the general public remains low, the U.S. Department of Agriculture (USDA) and HHS continue to closely collaborate with Federal, State, local, industry and other stakeholders to protect human health, animal health, and food safety.
On January 6, the Food & Drug Administration (FDA) issued draft guidance with the Office for Human Research Protections that, when finalized, will provide recommendations for including tissue biopsies as part of clinical trials. The draft guidance is intended to assist industry, clinical investigators, institutions, and institutional review boards in understanding considerations for tissue biopsies in adults and children as part of clinical trials that evaluate investigational medical products and/or that are conducted or supported by HHS.
On January 6, FDA issued draft guidance to provide recommendations on the use of artificial intelligence (AI) intended to support a regulatory decision about a drug or biological product’s safety, effectiveness or quality. Specifically, the guidance provides a risk-based credibility assessment framework that may be used for establishing and evaluating the credibility of an AI model for a particular context of use.
On January 6, FDA issued draft guidance that includes recommendations to support development and marketing of safe and effective AI-enabled devices throughout the device’s Total Product Life Cycle. The guidance, if finalized, would be the first guidance to provide comprehensive recommendations for AI-enabled devices throughout the total product lifecycle, providing developers an accessible set of considerations that tie together design, development, maintenance and documentation recommendations to help ensure safety and effectiveness of AI-enabled devices.
On January 6, FDA published new draft guidance aimed at helping improve the accuracy and performance of pulse oximeters across the range of skin pigmentation. The draft guidance document provides FDA’s recommendations regarding non-clinical and clinical performance testing to support premarket submissions for pulse oximeters for medical purposes, including devices with a pulse oximeter function that estimates the amount of oxygen in arterial blood and pulse rate. Among other topics, the draft guidance also provides recommendations for labeling, which are intended to promote the safe and effective use of pulse oximeters and help users understand the benefits and risks associated with the use of the device.
On January 6, FDA and the National Institutes of Health (NIH) announced that registration is open for the FDA-NIH Rare Disease Day 2025 meeting. The two-day public event will be held on February 27 and 28, 2025. The meeting will feature panel discussions, rare diseases stories, in-person exhibitors and scientific posters, and an art exhibition. Registration can be found here.
On January 7, the Consumer Financial Protection Bureau (CFPB) released a final rule that will remove an estimated $49 billion in medical bills from the credit reports of about 15 million Americans. The CFPB’s action will ban the inclusion of medical bills on credit reports used by lenders and prohibit lenders from using medical information in their lending decisions. The rule will also increase privacy protections and prevent debt collectors from using the credit reporting system to coerce people to pay bills they don’t owe.
On January 7, the Substance Abuse and Mental Health Services Administration (SAMHSA) awarded 14 states and Washington, D.C. with $1 million, one-year Certified Community Behavioral Health Clinic (CCBHC) Medicaid Demonstration Program planning grants, with funding authorized by the Bipartisan Safer Communities Act of 2022 to address the ongoing national mental health and substance use disorder crises.
On January 7, the Centers for Medicare & Medicaid Services (CMS) released the updated inpatient rehabilitation facility (IRF) and long-term care hospitals (LTHC) Provider Preview Reports. These reports contain provider performance scores for quality measures, which will be published on the compare tool on Medicare.gov and the Provider Data Catalog (PDC) during the March 2025 refresh.
On January 8, FDA issued draft guidance entitled Evaluation of Sex-Specific and Gender-Specific Data in Medical Device Clinical Studies. The draft guidance encourages science-driven consideration of sex and/or gender, as appropriate for both the scientific question being addressed and the intended use of the device, when designing medical device clinical studies and reporting data from such studies in accordance with legal requirements.
On January 8, FDA issued draft guidance entitled Developing Drugs for Optical Imaging. The guidance provides recommendations to drug companies on the design of clinical trials for optical imaging drugs used with imaging devices during surgery to detect tumors or other pathology or to delineate normal anatomical structures.
On January 8, HHS announced seven winners of the KidneyX Sustainability Prize, designed to incentivize development of solutions to reduce water or power usage during dialysis care. The KidneyX Sustainability Prize aims to seize opportunities for sustainability by identifying and supporting solutions to reduce the resource demands of maintenance dialysis. All winners can be found here.
On January 8, CMS announced a Notice of Funding Opportunity (NOFO) available through the Nursing Home Staffing Campaign. The NOFO will accept applications from organizations interested in administering financial incentives aimed at recruiting registered nurses (RNs) to work in nursing homes and state survey agencies. Organizations eligible to apply are non-profit organizations that have relationships with RN schools or RN students.
On January 9, FDA issued draft guidance entitled Obesity and Overweight: Developing Drugs and Biological Products for Weight Reduction. This guidance provides recommendations to industry regarding the development of drugs and biological products intended for reduction and long-term maintenance of body weight in patients with obesity or overweight. Notably, the new draft calls obesity “a chronic disease,” whereas the previous guidance from 2007 called it “a chronic, relapsing health risk.”
On January 10, CMS released its proposed Medicare Advantage (MA) and Part D Advance Notice. CMS proposes to increase plan payments in 2026 by 4.33% (or 2.23% if the estimated coding trend is backed out). Comments are due February 10 and the final rate announcement will be issued by April 7. A fact sheet can be found here.
On January 10, CMS released Draft Calendar Year (CY) 2026 Part D Redesign Program Instructions concurrently with the CY 2026 MA and Part D Advance Notice. The purpose of the Draft CY 2026 Part D Redesign Program Instructions is to provide interested parties with draft guidance for CY 2026 regarding the implementation of Inflation Reduction Act (IRA) provisions that affect the structure of the defined standard Part D drug benefit. The draft program instructions also provide guidance on the “successor regulation” exception to the IRA’s formulary inclusion requirement for selected drugs. Comments on the draft program instruction are due by February 10, 2025. A fact sheet can be found here.
On January 10, HHS issued its AI Strategic Plan which establishes both the strategic framework and operational roadmap for responsibly leveraging emerging technologies to enhance HHS's core mission. Additionally, the Plan outlines the ways in which HHS will deliver on its goal of being a global leader in innovating and adopting responsible AI that achieves advances in the health and well-being of all Americans.
WHITE HOUSE
On January 8, President Biden announced that 23.6 million consumers have selected plan year 2025 coverage through the Marketplaces since the start of the 2025 Marketplace Open Enrollment Period, including 3.2 million new consumers.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Healthcare System Resiliency and Modernization (CMS-3426); Proposed Rule; 10/12/23
Amendments to Rules Governing Organ Procurement Organizations (CMS-3409); Proposed Rule; 8/8/24
FDA
Considerations for Including Biopsies in Clinical Trials; Draft Guidance for Industry, Investigators, Institutions, and Institutional Review Boards; Notice; 9/27/24
Communications From Firms to Health Care Providers Regarding Scientific Information on Unapproved Uses of Approved/Cleared Medical Products: Questions and Answers; Guidance for Industry (2023-663); Notice; 10/23/24
Validation of Certain In Vitro Diagnostic Devices for Emerging Pathogens During a Section 564 Declared Emergency; Draft Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 10/29/24
REPORTS
Office of Inspector General (OIG)
On January 3, OIG released a report examining comparable access for Medicare enrollees if critical access hospital (CAH) payments for swing-bed services were similar to those of the fee-for-service (FFS) prospective payment system (PPS). OIG found that swing-bed utilization for skilled nursing services at CAHs increased by 2.8% from CY 2015 through 2020, while the average daily reimbursement amount increased by 16.6% over the same period. Additionally, OIG found that 87 of 100 sampled CAHs were within a 35-mile driving distance of an alternative facility that had skilled nursing care available. OIG estimate that 1,128 of the 1,297 CAHs in its sampling frame had an alternative facility within 35 miles that could have provided care during CY 2020. Finally, OIG estimates that Medicare could have saved up to $7.7 billion over a 6-year period if payments made at CAHs were reimbursed using SNF PPS rates. OIG recommends that CMS seek a legislative change that will allow it to reimburse CAHs at rates that align with those paid to alternative facilities when it determines that similar care is available at alternative facilities.
Government Accountability Office (GAO)
On January 8, GAO released a report examining HHS leading practices for older Americans. GAO stated that services funded under the Older Americans Act of 1965 (OAA) overlap with 36 other federal programs but do not duplicate the social services and assistance they provide to older adults. GAO found that these programs differ in the population served, goals and services provided, or both. GAO stated that the overlapping programs can complement OAA-funded services, for example by providing more specialized services relevant to an agency's expertise. GAO found that nine departments and agencies administer the 36 non-OAA programs, which indicates there is fragmentation of services for older adults. GAO recommends that HHS ensure Administration for Community Living (ACL) develops a written plan for its work with the Coordinating Committee that incorporates leading practices on interagency collaboration.
HEARINGS
House
Ways & Means Committee
January 14; 10:00 AM; 1100 Longworth
Committee Organizational Meeting for the 119th Congress
Senate
Judiciary Committee
January 15; 9:30 AM; 2216 Hart
The Nomination of the Honorable Pamela Jo Bondi to be Attorney General of the United States
Homeland Security and Governmental Affairs Committee
January 15; 1:00 PM; 342 Dirksen
Nomination of Russell Vought for the Director of the White House Office of Management and Budget
Special Committee on Aging
January 15; 3:30 PM; 106 Dirksen
Improving Wellness Among Seniors: Setting a Standard for the American Dream
ADDITIONAL POLICY NEWS
On January 16 and 17, the Medicare Payment Advisory Commission (MedPAC) will hold its January 2025 public meetings. Topics of discussion include assessing payment adequacy and updating payments of physician and other health professional services, hospital inpatient services, skilled nursing facilities, home health agencies, inpatient rehabilitations services, outpatient dialysis services, and hospice services. The meetings will also discuss eliminating Medicare’s coverage limit on stays in freestanding inpatient psychiatric facilities, the Medicare prescription drug program, ambulatory surgical center services, the Medicare Advantage program, and reducing beneficiary cost-sharing for outpatient services at critical access hospitals. Additional details on times and topics can be found here.