Health Care Watch: January 20, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from January 12 – January 18. 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 14, Ways & Means Committee Chairman Jason Smith (R-MO) announced subcommittee chair assignments for the 119th Congress. Rep. Vern Buchanan (R-FL) will continue to serve as Chairman of the Health Subcommittee and Rep. David Schweikert (R-AZ) will continue to serve as Oversight Subcommittee Chairman. Republican Health Subcommittee members include Reps. Adrian Smith (NE), Mike Kelly (PA), Greg Murphy (NC), Kevin Hern (OK), Carol Miller (WV), Brian Fitzpatrick (PA), Claudia Tenney (NY), Blake Moore (UT), David Kustoff (TN), and Greg Steube (FL).
On January 14, Energy & Commerce Committee Chairman Brett Guthrie (R-KY) announced Republican subcommittee assignments. Rep. Buddy Carter (GA) will serve as Chairman of the Health Subcommittee and Rep. Neal Dunn (FL) will serve as Vice Chair. Republican Health Subcommittee membership includes Reps. Morgan Griffith (VA), Gus Bilirakis (FL), Dan Crenshaw (TX), John Joyce (PA), Troy Balderson (OH), Diana Harshbarger (TN), Mariannette Miller-Meeks (IA), Kat Cammack (FL), Jay Obernolte (CA), John James (MI), Cliff Bentz (OR), Erin Houchin (IN), Nick Langworthy (NY), Tom Kean, Jr. (NJ), and Michael Rulli (OH).
On January 16, Speaker Mike Johnson’s (R-LA) timeline for reconciliation was released. Speaker Johnson stated that he wants the chamber to pass a budget resolution for reconciliation by February 26. Speaker Johnson wants to release the budget resolution and mark it up the week of February 3 with a floor vote the week of February 10 and have the Senate consider the resolution the week of February 17. He wants the House to pass the resolution with any Senate changes the week of February 24 with a goal of getting it to President-elect Donald Trump’s desk before April 20. Note that within the reconciliation instructions, Republican leadership is working to detail cuts as “floors” instead of “ceilings.”
On January 15, Appropriations Committee Chairman Tom Cole (R-OK) announced Republican subcommittee assignments for the 119th Congress. Rep Robert Aderholt (R-AL) will serve as Subcommittee Chairman of the Labor, Health and Human Services, Education, and Related Agencies Subcommittee and Rep. Julia Letlow (LA) will serve as Vice Chair. Republican membership of the subcommittee includes Reps. Mike Simpson (ID), Andy Harris (MD), Chuck Fleischmann (TN), John Moolenaar (MI), Andrew Clyde (GA), Jake Ellzey (TX), Stephanie Bice (OK), and Riley Moore (R-WV).
On January 17, a document containing potential policies to be included in the upcoming reconciliation package was released. Health related policies include limiting federal health program eligibility based on citizenship (up to $35 billion in 10-year savings), eliminating Medicare coverage of bad debt (up to $42 billion in 10-year savings), Medicare site neutrality (up to $146 billion over 10 years), preventing dual classification for hospitals under Medicare (up to $10 billion/10), reforming the Inflation Reduction Act’s (IRA) policies to “discourage price setting” for orphan drugs (up to $20 billion/10), among other policies. Note, the amended Treat and Reduce Obesity Act (TROA) that passed out of the Ways & Means Committee in June 2024 is also included on the list of potential policies.
REGULATORY UPDATE
On January 13, the Centers for Medicare & Medicaid Services (CMS) issued the final Department of Health & Human Services (HHS) Notice of Benefit and Payment Parameters for 2026. The rule finalizes safeguards, beginning in 2026, to protect consumers from unauthorized changes to their health care coverage, as well as options to ensure the integrity of the Federally facilitated Marketplaces (FFMs). The rule will also make it easier for consumers to understand their costs and enroll in coverage through HealthCare.gov beginning in plan year 2026. The final rule includes updates to the HHS-operated risk adjustment program; 2026 user fee rates for issuers; changes to calculations for the Basic Health Program (BHP); and annual public reporting of aggregated, summary-level information from the Affordable Care Act (ACA) Quality Improvement Strategy (QIS). A fact sheet detailing the final rule can be found here.
On January 13, HHS and the Departments of Labor and Treasury rescinded a proposed rule that would have required ACA plans to cover certain preventive services, such as over-the-counter contraceptives, without cost-sharing. Officials stated that they rescinded the rule to “focus on other matters.”
On January 13, the HHS Assistant Secretary for Planning and Evaluation (ASPE) issued a report releasing new data projecting the impact of the IRA’s $2,000 out-of-pocket (OOP) cap on Part D drugs. The report found that about 11 million people with Part D are expected to hit the $2,000 cap in 2025 and will no longer have OOP drug costs after reaching the cap. These enrollees are projected to save a combined $7.2 billion, or about $600 per enrollee.
On January 14, the Federal Trade Commission (FTC) held an open meeting at which the agency released a second interim staff report on pharmacy benefit managers (PBMs). The report focuses on PBM’s influence over specialty generic drugs, including significant price markups by PBMs for cancer, HIV, and a variety of other critical drugs. The report found that the “Big 3 PBMs” -- consisting of Caremark Rx, LLC (CVS), Express Scripts, Inc. (ESI), and OptumRx, Inc. (OptumRx) -- marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent which resulted in more than $7.3 billion in revenue from dispensing drugs in excess of the drugs’ estimated acquisition costs from 2017-2022.
On January 15, news reports identified key health officials that will be joining the incoming Trump Administration. According to reports, John Brooks will return as CMS Chief Operating Officer, Drew Snyder is expected to run the Medicaid program, Abe Sutton will likely lead the Center for Medicare & Medicaid Innovation (CMMI), Chris Klomp will lead the Medicare program and Alec Aramanda will serve as his deputy, Stephanie Carlton will serve as Chief of Staff to CMS Administrator nominee Mehmet Oz, and Stefanie Spear will serve as HHS Deputy Chief of Staff.
On January 15, HHS and the Drug Enforcement Administration (DEA) published a series of rules related to telemedicine prescribing of controlled substances, including a special registration proposed rule and a final rule on telemedicine prescribing of buprenorphine. The proposed rule for special registration outlines three types of registration to waive in-person visit requirements prior to virtual prescribing of controlled substances and a state registration for every state in which a patient is treated by the special registrant. Providers would need to apply for the special registrations. The DEA also proposes that providers be required to review nationwide prescription drug monitoring programs after three years. Comments on the proposed rule are due March 15. DEA’s final rule for the telemedicine prescribing of buprenorphine will enable practitioners to prescribe a six-month initial supply of Schedule III-V medications to treat opioid use disorder via audio-only telemedicine interaction without a prior in-person evaluation. Practitioners can then prescribe additional medication via other telemedicine encounters or after an in-person encounter.
On January 15, the Substance Abuse and Mental Health Services Administration (SAMHSA) released updated National Behavioral Health Crisis Care Guidance. The updated National Guidance reflects the national transition to the 988 Suicide & Crisis Lifeline in 2022 and other progress and emerging needs related to behavioral health crisis care and provides a framework for transforming behavioral health crisis care systems in communities throughout the United States.
On January 16, HHS announced that it will provide $211 million to the Rapid Response Partnership Vehicle (RRPV) Consortium to enhance mRNA platform capabilities so that the U.S. is better prepared to respond to emerging infectious diseases like avian flu. The funding, from the Biomedical Advanced Research and Development Authority (BARDA), will support development and long-term manufacturing capability of an RNA-based vaccine platform technology to combat evolving 21st century biothreats.
On January 17, CMS announced the selection of 15 Medicare Part D drugs subject to the IRA’s Medicare Drug Price Negotiation program for initial price applicability year (IPAY) 2027 - unveiling the list ahead of the February 1 deadline. The selected drug list for IPAY 2027 include:
Ozempic; Rybelsus; Wegovy (Novo Nordisk)
Trelegy Ellipta (GSK)
Xtandi (Astellas Pharma)
Pomalyst (Bristol Myers Squibb)
Ibrance (Pfizer)
Ofev (Boehringer Ingelheim)
Linzess (AbbVie)
Calquence (AstraZeneca)
Austedo; Austedo XR (Teva)
Breo Ellipta (GSK)
Tradjenta (Boehringer Ingelheim)
Xifaxan (Salix)
Vraylar (AbbVie)
Janumet; Janumet XR (Merck)
Otezla (Amgen)
CMS noted that, together, these 15 drugs accounted for about $41 billion in total gross covered prescription drug costs from November 2023 through October 2024. Combined with the first 10 Part D drugs subject to Medicare negotiation for IPAY 2026, the 25 drugs accounted for over one-third of total gross covered prescription drug costs under Part D during the same period. Manufacturers with a selected drug will have until February 28, 2025, to decide if they will participate in the program. It is unclear how the incoming Trump administration will handle negotiation for the IPAY 2027 drugs.
On January 17, FDA announced that it will hold a workshop on March 27 and 28 entitled Optimizing Pregnancy Registries; Public Workshop. The workshop will aim to inform interested parties on the safety of medical products during pregnancy.
WHITE HOUSE
On January 14, the Biden Administration and HHS announced hires for three high-level positions. Alicia Rouault will serve as Chief Technology Officer and Associate Deputy Assistant Secretary for Technology Policy, Dr. Meghan Dierks will serve as Chief Artificial Intelligence Officer, and Kristen Honey will serve as Chief Data Officer.
On January 14, President-elect Donald Trump’s transition team selected Heather Flick to serve as Chief of Staff to HHS Secretary Nominee RFK Jr. Flick served in a number of senior roles at HHS during the first Trump administration – from the HHS acting general counsel, before becoming its acting secretary for administration and a senior adviser to then-HHS Secretary Alex Azar.
On January 15, the Biden Administration released a fact sheet detailing progress of the Cancer Moonshot initiative and announced new government and private sector actions to accelerate progress. The Biden Administration announced that the National Cancer Institute (NCI) will double its investment in research on early-onset cancer, the Centers for Disease Control and Prevention (CDC) will be supporting community groups in addressing cancer-causing environmental exposure, the Department of Veterans Affairs (VA) will expand access to cancer genetic testing and at-home colorectal cancer screening, and the Environmental Protection Agency (EPA) will finalize new actions to prevent cancer caused by the chemical ethylene oxide.
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
REPORTS
Government Accountability Office (GAO)
On January 13, GAO released a report examining private health insurance premium subsidies during the COVID-19 pandemic. GAO found the tight timeline for implementing the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) subsidy resulted in challenges for employers and administrators, according to seven of eight selected employer groups and administrators GAO interviewed, with some noting challenges early in the implementation process. GAO stated that these challenges related to the requirement that employers and administrators send COBRA notices to eligible individuals and included uncertainty about the interpretation of the eligibility requirements and shortened timelines for sending the required COBRA notices. GAO did not have any recommendations.
Office of Inspector General (OIG)
On January 14, OIG released a report examining the Food & Drug Administration’s (FDA) accelerated approval pathway. OIG's review identified concerns about FDA’s use of the accelerated approval pathway in three of the 24 drugs reviewed. OIG found that for two of the three concerning approvals, FDA evaluated analyses not included in the sponsor’s original analysis plans, deviating from recommended practices. Additionally, FDA approved the three drugs despite concerns from its own reviewers and/or advisory committees. Finally, OIG found that for one drug, some meetings with the sponsor appeared to be missing from the administrative file and other meetings are not fully documented for other drugs in OIG’s sample. OIG noted that two of the three drugs that raised concerns are now off the market, and completion of the confirmatory trial for the third drug has been delayed. OIG recommends that FDA should: 1) define specific factors that would require FDA’s accelerated approval council to advise on certain drug applications; and 2) take steps to ensure appropriate documentation of meetings with sponsors is included in drug approval administrative files.
Department of Health and Human Services (HHS)
On January 15, HHS released a report, in response to the Consolidation in Health Care Markets Request for Information (RFI), highlighting the impacts of increasing consolidation in the nation's health care markets and recent influx of Private Equity (PE) and other private investors active in the space. The report includes case studies and contains five key themes: 1) provider consolidation leads to higher prices and less access for patients; 2) mergers and acquisitions in health care services, especially in PE-backed transactions, results in process changes and quality reductions; 3) physicians that worked with PE firms offer mixed reviews; 4) there is widespread desire for transparency on PE-led transactions; and 5) people are dissatisfied with private health insurers, especially vertically integrated insurers.
HEARINGS
Senate
HELP Committee
January 21; 10:00 AM; 562 Dirksen
ADDITIONAL POLICY NEWS
On January 15, National Institutes of Health (NIH) Director Monica Bertagnolli announced that she plans to resign on January 17, 2025.
On January 16 and 17, the Medicare Payment Advisory Commission (MedPAC) held its January 2025 public meetings. Topics of discussion included 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 also discussed 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. All topics and staff presentations can be found here.