Health Care Watch: September 28, 2025

The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from September 28 – October 4. 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 September 19, the House passed H.R. 5371, it’s continuing resolution for Fiscal Year 2026 that would fund the government until November 21.

• The House subsequently recessed. The Speaker announced on Friday that the House will not be in session next week through October 13 though that could change if the Senate is successful in passing the continuing resolution next week.

Senate

• On September 30, the Senate failed to advance the House-passed continuing resolution. The vote was 55-45, with 60 votes needed to overcome the filibuster and pass the measure. Senate Democrats Catherine Cortez Masto (D-NV) and John Fetterman (D-PA) joined Independent Senator Angus King (I-ME) to vote for the measure.

• On October 1, the federal government entered a lapse in appropriations, or “shutdown” causing disruption in many federal programs, furloughs for thousands of employees in government agencies, and other ripple effects in federal programs. Medicare, Medicaid, CHIP and Federal Marketplaces, financed through mandatory programs tied to taxpayer contributions and not explicitly to Congressional appropriations, are expected to mostly function normally until the shutdown ends.

• On October 1, the Senate again voted on the House-passed resolution. The vote was 55-45, with 60 votes required for passage. The same three Democratic and Independent Senators voted again with Republicans. An additional Senate vote on H.R. 5371 on October 3 fell by 54-44, with the same Senators voting with Republicans, and Senators Moran (R-NE) and Coons (D-DE) absent.

• For now, the dominant issue, among others, preventing the government from re-opening is connected to demands from most House and Senate Democrats that Republicans in Congress commit to extending enhanced advance premium tax credits (eAPTCs) simultaneously with passage of the continuing resolution. The eAPTCs expire on January 1, 2026.

• While some Congressional Republicans and the White House have shown openness to discussing possible policy extensions later this fall, there is little willingness at this juncture to enact an extension, especially without reforms to the structure of the credits.

REGULATORY UPDATE

• On September 30, CMS issued final guidance that details requirements for drugs negotiated under the Medicare Drug Price Negotiation Program for Initial Price Applicability Year (IPAY) 2028. For IPAY 2028, CMS will select up to 15 additional negotiation-eligible drugs covered under Part D and/or Part B. Additionally, CMS may select drugs negotiated in the first or second cycles of negotiation to be renegotiated if those selected drugs meet certain eligibility and selection criteria. The guidance also provides details on other changes based on public feedback which are discussed in a CMS Fact Sheet.

• On September 30, the FDA approved a second generic option for the abortion pill mifepristone. Evita Solutions had applied to make another generic mifepristone on October 1, 2021, according to the FDA’s September 30 approval letter.

• On September 30, CMS issued guidance to states clarifying its interpretation of a provision that allows federal financing to pay for emergency Medicaid services for undocumented patients who are ineligible for full Medicaid benefits. CMS said federal financing is available only “for care and services necessary for the treatment of an emergency medical condition actually furnished (i.e., rendered)” and that Medicaid managed care payments, including risk-based capitation payments, do not qualify for federal financing as emergency Medicaid services. The guidance indicates that states are still able to cover such services through other means and will have one year from the guidance’s publication date to come into compliance.

• On October 1, CMS announced that it had directed the Medicare Administrative Contractors to implement a temporary hold on the processing of all Medicare claims. CMS notes that this standard practice is typically for up to 10 business days and ensures that Medicare payments are accurate and consistent with statutory requirements. Given certain provisions of law expired on September 30t at midnight (e.g., expanded telehealth coverage), the hold prevents the need for reprocessing large volumes of claims should Congress act after the statutory expiration date. According to CMS, this should have a minimal impact on providers due to the concurrent 14-day “payment floor” which already places an automatic hold on claims. The notice also states that practitioners who choose to perform telehealth services that are not payable by Medicare after October 1, 2025 may want to evaluate providing beneficiaries with an Advanced Beneficiary Notice of Noncoverage.

• On October 2, CMS submitted a proposed rule for OMB review on a second new drug pricing model titled the "Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model.” This follows the September 25 submission to OMB of a proposed rule on the first drug pricing model titled "Global Benchmark for Efficient Drug Pricing (GLOBE) Model.” Both models are now under OMB review.

WHITE HOUSE

• On September 30, President Trump signed an Executive Order Unlocking Cures for Pediatric Cancer With Artificial Intelligence that directs federal agencies to leverage artificial intelligence (AI) technology to advance research and develop new strategies for treating pediatric cancers. The initiative includes doubling the annual funding for the existing Childhood Cancer Data Initiative, increasing the federal investment from $50 million to $100 million. A fact sheet is available here.

• On September 30, President Trump announced a deal with Pfizer to align U.S. drug prices with “most favored nation” (MFN) levels in exchange for a three-year grace period from Section 232 tariffs. The agreement includes MFN pricing for all state Medicaid programs and for new innovative Pfizer medicines, repatriation of foreign revenue to benefit U.S. patients, and direct-to-consumer discounts through a new TrumpRx platform. In return, Pfizer will avoid Section 232 tariffs if it makes additional U.S. manufacturing investments. Trump indicated more agreements with other manufacturers could be announced soon, warning that companies refusing to deal will face tariffs.

• On October 1, the Trump administration announced they are delaying threatened 100 percent tariffs on drugmakers that aren’t building facilities in the U.S. President Trump had previously stated on his Truth Social account that, “[s]tarting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product,” unless the drugmaker is in the process of building a manufacturing plant in the U.S.

• 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

• CY 2026 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1832); Final Rule; 9/25/25

• 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)

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

• Post approval 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

REPORTS

Office of Inspector General (OIG)

• On September 29, OIG updated its list of civil monetary penalties (CMPs) and Affirmative Actions taken against health care providers and others.

• On September 30, OIG issued a report “HRSA Rural Communities Opioid Response Program Award Recipients Generally Met All Core Activities and Benchmarks.” The OIG found that award recipients reported challenges in establishing or expanding their medication assisted treatment programs in rural communities, including lack of transportation, hiring and retaining staff, the COVID-19 pandemic, and lack of recovery housing. The report did not contain any OIG recommendations or comments from HRSA.

Congressional Budget Office (CBO)

• On September 30, CBO announced its plans for the shutdown, noting that it will continue to support the work of congressional committees and issue cost estimates.

ADDITIONAL POLICY NEWS

• On September 29, PhRMA announced it will launch a direct-to-consumer (DTC) drug sales site, AmericasMedicines.com, in January 2026, framing it as a response to President Trump's MFN pricing push and highlighting $500 billion in U.S. investments and patient assistance efforts.

• On September 30, Kaiser Family Foundation published an analysis of the impact on ACA marketplace premium payments if eAPTCs expire.