Health Care Watch: October 27, 2025
he following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from October 27 - November 1. 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
Federal Government Shutdown Update
On October 28, the Senate failed for the 13th time to advance the House-passed continuing resolution that would fund the government through November 21. No new Democrats voted in favor of the measure.
Senate Democrats continue to vote against the bill because it does not include an extension of the enhanced and expanded Affordable Care Act (ACA) premium subsidies. Republicans continue to say they will not start negotiations until the federal government is funded and re-opened.
Pressure to break the logjam is growing as the shutdown hits the one month mark, with the impact extending to more federal programs, including: unpaid benefits for Supplemental Nutrition Assistance Program (SNAP) as of November 1; depleting emergency resources for the Special Supplemental Program for Women, Infants and Children (WIC); closure of Head Start programs; over 1 million federal employees missing paychecks, including air traffic controllers, and a call from the President of the American Federation of Government Employees (AFGE) to end the shutdown by passing a clean funding bill. Members of the military may also miss their next paycheck, though Vice President Vance announced at the Senate Republican’s weekly lunch that the military would get paid, though the mechanism is unclear.
Responses to this pressure are now being seen in bills from both sides of the aisle to fund discrete parts of the government. Senator Josh Hawley (R-MO) introduced legislation to fund SNAP and Senator Ben Ray Lujan introduced legislation to fund SNAP, WIC, and reimburse states for funding these benefits during the shutdown. Senate Majority Leader John Thune (R-SD) stated that he does not support consideration of the one-off bills and argued that Congress should instead fund these programs by funding the entire federal government.
Tentative optimism is building that these growing pressure points indicate the end is in sight, though we will first need to get past the November 1 start of ACA marketplace open enrollment season, and the November 4 gubernatorial elections in New Jersey and Virginia.
Late on October 30, President Trump posted on Truth Social a call for Senate Republicans to end the filibuster in order by bypass the requirement for 60 votes to reopen the federal government. Senate Majority Leader Thune has rejected calls to end the filibuster in the past.
As the calendar gets closer to the current continuing resolution’s end date of November 21, GOP leaders are considering an updated CR end date between December to March, with rumors of some Members even considering a CR through the end of CY2026, which would surely be opposed by Democrats.
House
The House continues to be in recess, pending Senate action on a government funding bill. On October 27, Speaker Mike Johnson (R-LA) said Majority Leader Steve Scalise (R-LA) is working with the Chairs of three House committees to develop a Republican health care plan. On October 29, Majority Leader Scalise said items under discussion include funding of ACA cost sharing reductions, pharmacy benefit manager reforms, and expanding individual coverage health reimbursement arrangements.
Senate
On October 27, Finance Committee Ranking Member Ron Wyden (D-OR) and Senate Democratic Leader Chuck Schumer (D-NY) along with 28 Senators sent a letter to Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz calling on the Trump Administration to open window-shopping before the 2026 ACA Marketplace Open Enrollment begins on November 1. The letter can be found here.
On October 29, the Finance Committee held a hearing to consider the nominations of Arjun Mody to be Deputy Commissioner Social Security (testimony here); Jeffrey Goettman to be a Deputy United States Trade Representative (testimony here); Julie Callahan to be Chief Agricultural Negotiator, Office of the United States Trade Representative (testimony here), and Thomas Bell to be Inspector General, Department of Health & Human Services (testimony here).
On October 29, the Health, Education, Labor & Pensions (HELP) Committee held a hearing on The Future of Biotech: Maintaining U.S. Competitiveness and Delivering Lifesaving Cures to Patients. Witnesses included Lowell Schiller, Nonresident Scholar, USC Schaeffer Institute (testimony here); John Crowley, President and CEO, Biotechnology Innovation Organization (testimony here); Josh Makower, MD, Yock Family Professor of Medicine and of Bioengineering, Byers Family Director and Co-Founder Stanford Mussallem Center for Biodesign, Stanford University Schools of Medicine and Engineering (testimony here); Aaron Kesselheim, MD, Professor of Medicine, Harvard Medical School/Brigham and Women’s Hospital (testimony here); and Reshma Ramachandran, MD, Assistant Professor of Medicine, Yale School of Medicine (testimony here).
On October 30, the HELP Committee was scheduled to hold a hearing to consider the nomination of Casey Means to be Medical Director in the Regular Corps of the Public Health Service and Surgeon General of the Public Health Service. The hearing was delayed as Means, who is pregnant, went into labor.
REGULATORY UPDATE
On October 27, Texas Attorney General Ken Paxton (R) sued Johnson & Johnson, the makers of Tylenol, in state court asserting that the company deceptively marketed the painkiller while knowing its active ingredient increased the risk of autism and other disorders.
On October 28, it was reported that furloughed federal employees are being brought back to help process applications for a piece of the $50 billion Rural Health Transformation Fund. Applications are due on November 5 and CMS expects to announce which states will get funding by December 31.
On October 28, HHS Secretary Robert F. Kennedy, Jr., fired Steven Hatfill, a senior adviser at the Administration for Strategic Preparedness and Response (ASPR), for “veering off message” and misrepresenting himself as the “Chief Medical Officer” of ASPR, according to White House officials. Hatfill appeared on Steve Bannon’s “War Room” podcast without authorization, where he defended Kennedy’s decision to defund mRNA vaccine research and made false claims about vaccine safety.
On October 28, the Consumer Financial Protection Bureau issued a new interpretive rule that results in the removal of certain protections for those with medical debt that are currently available in some states. The rule clarifies that the Fair Credit Reporting Act (FCRA) generally preempts State laws, which includes those that act to keep medical debt off consumers’ credit reports. More than a dozen states, including California, Colorado, Maryland, Minnesota, New York, Oregon, Washington, and most of New England, have enacted laws in recent years to keep medical debt from affecting consumers’ credit.
On October 29, HHS confirmed the United States Preventive Services Task Force (USPSTF) November in-person meeting is postponed, coming after HHS postponed the July meeting earlier this year. An HHS spokesperson attributed the delay to the government shutdown.
On October 29, HHS Secretary Kennedy, FDA Commissioner Marty Makary, and CMS Administrator Oz held a joint press conference on “Accelerating Biosimilar Development and Expanding Patient Access.” During the event, Dr. Makary and Dr. Oz discussed their agencies’ efforts to increase biosimilar adoption and reduce costs for patients. The FDA issued Draft Guidance in conjunction with the announcement.
On October 30, CMS released a Fact Sheet entitled “Plan Year 2026 Marketplace Plans and Prices.” The fact sheet notes that the average HealthCare.gov premium after tax credits is projected to be $50 per month for the lowest cost plan in 2026 for eligible enrollees, which represents a $13 increase from 2025. In addition, it notes that, when compared to years prior to the COVID-19 pandemic, Marketplace enrollees this year will have access to, on average, plans with lower premiums after tax credits and more plan choices overall.
On October 30, the Health Resources and Services Administration (HRSA) approved rebate models under the 340B Rebate Model Pilot Program. The pilot program is open only to drug manufacturers for drugs selected to be negotiated under the Medicare Drug Negotiation Program for Initial Price Applicability Year (IPAY) 2026. It appears that all IPAY 2026 selected drugs are participating in the rebate pilot other than Entresto. Specifically, the approved list includes rebate models for: Eliquis, Enbrel, Farxiga, Fiasp/Novolog, Imbruvica, Januvia, Jardiance, Stelara, and Xarelto.
On October 31, CMS issued a final rule that announces final policy changes for Medicare payments under the Physician Fee Schedule (PFS), and other Medicare Part B issues, effective on or after January 1, 2026. For CY 2026, the final rule provides for an update to the physician qualifying alternative payment model (APM) conversion factor of +0.75% and an update to the nonqualifying APM conversion factor for of +0.25%. CMS also finalized updates to the geographic practice cost indices (GPCIs) and malpractice relative value units (RVUs). Finally, CMS finalized various other Part B policies, including those related to Part B drugs, behavioral health, telehealth, and skin substitutes. CMS issued a fact sheet that summarizes major provisions of the final rule.
WHITE HOUSE
A list of all administrative and health care-related EOs can be found here. FHP Strategies will update this document, as needed.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Medicaid Managed Care – State Directed Payments (CMS-2449); Proposed Rule; 6/9/25
Medicaid Program; Prohibition on Federal Medicaid Funding for Sex Trait Modification Procedures Furnished to Children and Youth (CMS-2451); Proposed Rule; 7/18/25
Medicare and Medicaid Programs; Hospital Condition of Participation: Limiting Participation Based on the Performance of Sex Trait Modification Procedures on Children (CMS TBD); Proposed Rule; 8/7/25
Center for Medicare & Medicaid Innovation Payment Models (CMS-5544); Proposed Rule; 8/19/25
Transparency in Coverage (CMS-9882); Proposed Rule; 8/20/25
Amendments to Rules Governing Organ Procurement Organizations (CMS-3409); Proposed Rule; 8/21/25
Medicare and Medicaid Programs; Repeal of Minimum Staffing Standards for Long-Term Care Facilities; Interim Final Rule; 8/22/25
Contract Year 2027 Policy and Technical Changes to Medicare Advantage, Medicare Prescription Drug Benefit, Medicare Cost Plan, and Programs of All-Inclusive Care for the Elderly Programs (CMS-4212); Proposed Rule; 9/4/25
Ensuring Safety through Domestic Security with Made in America PPE and Essential Medicine Procurement by Medicare Providers and Suppliers (CMS-1516); Prerule; 9/12/25
Global Benchmark for Efficient Drug Pricing (GLOBE) Model (CMS-5545); Proposed Rule; 9/25/25
Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model (CMS-5546); Proposed Rule; 10/2/25
CY 2026 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1830); Final Rule; 10/8/25
CY 2026 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1834), Final Rule, 10/9/25
CY 2026 Part A Premiums for the Uninsured Aged and for Certain Disabled Individuals Who Have Exhausted Other Entitlement (CMS-8090); Notice; 10/22/25
CY 2026 Inpatient Hospital Deductible and Hospital and Extended Care Services Coinsurance Amounts (CMS-8089); Notice; 10/22/25
Medicare Part B Monthly Actuarial Rates, Premium Rates, and Annual Deductible Beginning January 1, 2026 (CMS-8091); Notice; 10/22/25
CY 2026 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Updates (CMS-1828); Final Rule, 10/24/25
FDA
Evaluating the Safety of Antimicrobial New Animal Drugs with Regard to their Microbiological Effects on Bacteria of Human Health Concern; Guidance for Industry; Notice; 7/10/25
Postapproval Pregnancy Safety Studies; Guidance for Industry; Availability; Notice; 8/21/25
Formal Dispute Resolution and Administrative Hearings of Final Administrative Orders Under Section 505G of the Federal Food, Drug, and Cosmetic Act; Guidance for Industry; Availability; Notice; 9/2/25
Use of Real-World Evidence To Support Regulatory Decision-Making for Medical Devices; Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 9/9/25
Defining Durations of Use for Approved Medically Important Antimicrobial Drugs Fed to Food-Producing Animals; Guidance for Industry (final guidance); Notice; 9/12/25
Sponsor Responsibilities – Safety Reporting Requirements and Safety Assessment for Investigational New Drug Application and Bioavailability/Bioequivalence Studies; Guidance for Industry; Availability; Notice; 9/29/25
Investigator Responsibilities – Safety Reporting for Investigational Drugs and Devices; Guidance for Investigators, Industry, and Institutional Review Boards; Availability; Notice; 9/29/25
Use of Bayesian Methodology in Clinical Trials of Drug and Biological Products; Draft Guidance for Industry; Availability; Notice, 10/29/25
REPORTS
HHS Office of the Inspector General
On October 27, OIG posted a new report entitled “Medicare Improperly Paid Suppliers $22.7 Million Over 7 Years for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Provided to Enrollees During Inpatient Stays.” The report found that none of $22.7 million in payments for DMEPOS items that were examined in its audit should have been paid by Medicare. In addition, suppliers may have incorrectly collected up to $5.9 million in deductible and coinsurance amounts. The report includes recommendations to CMS to recoup overpayments and enhance safeguards to prevent improper payments in this area.
ADDITIONAL POLICY NEWS
On October 27, Cigna announced a new rebate-free pharmacy benefit model for its fully-insured lives, beginning in 2027. In this arrangement, discounts negotiated with manufacturers will be passed on directly to patients at the pharmacy counter rather than to employers through rebates. Evernorth, the health services division of Cigna, will launch this model which will become standard for all Evernorth pharmacy benefits clients beginning in 2028.
On October 28, U.S. District Judge Susan Illston indefinitely extended her injunction barring the Trump administration from mass firing federal employees during the shutdown, blocking all new or pending reductions in force (RIFs) at major agencies. Judge Illston rejected the Justice Department’s argument that a lapse in appropriations gave agencies authority to terminate workers. The Justice Department is expected to appeal to the Ninth Circuit.
On October 28, 25 states and the District of Columbia filed a lawsuit against the United States Department of Agriculture and Secretary of Agriculture Brooke Rollins arguing that USDA is unlawfully suspending SNAP, and incorrectly claiming that USDA must completely suspend SNAP benefits for the month of November as a result of the ongoing federal government shutdown. The lawsuit argues that USDA can use contingency reserves assigned to the SNAP program to fund the program during the government shutdown. On October 30, Judge Indira Talwani of the U.S. District Court for the District of Massachusetts spoke at a hearing in the litigation and indicated she would probably order the Trump administration to use reserves to partially fund food assistance.
On October 29, the Institute for Clinical and Economic Review (ICER) issued a revised Evidence Report that found the current estimated net prices for injectable semaglutide (Wegovy) and tirzepatide (Zepbound) are below ICER’s health benefit price benchmarks for obesity. ICER warned that despite the high cost-effectiveness of these treatments, there are serious affordability concerns, estimating fewer than 1% of eligible patients could be treated before crossing the ICER $880 million annual budget impact threshold.