Health Care Watch: February 17, 2025
he following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from February 9 – February 15. 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 February 12, the Budget Committee released the text of its budget resolution. The resolution includes minimum spending cut targets of $1.5 trillion over 10 years, with reconciliation instructions to the Energy & Commerce Committee to save $880 billion and instructions to the Ways & Means Committee to decrease revenue (tax cuts) by $4.5 trillion.
On February 13, the Budget Committee held a markup of its proposed budget resolution. The budget resolution provides a fiscal framework for Republican priorities including border security, tax cuts, defense spending, and energy policy. During mark-up, the Committee accepted an amendment capping tax cuts at $4 trillion with a dollar-for-dollar increase to that ceiling if Republicans cut additional spending, up to a total of $2 trillion in cuts. A one-pager detailing the budget resolution can be found here. The Budget Committee voted 21-16, along party lines, to advance its budget resolution. House Republican Leadership stated that they are planning to have the resolution to the House floor sometime during the last week of February.
On February 13, GOP Doctors Caucus leader Greg Murphy (R-NC) stated he is working on a plan to breaking up UnitedHealthcare’s health care “monopoly” health care power. Rep. Murphy stated this would happen in conjunction with the Federal Trade Commission (FTC).
The House is in recess until February 24.
Senate
On February 12, Health, Education, Labor & Pensions (HELP) Committee Chairman Bill Cassidy (R-LA) and Ranking Member Bernie Sanders (I-VT) announced subcommittee assignments for the 119th Congress. Sen. Roger Marshall (R-KS) will chair the Subcommittee on Primary Health and Retirement Security and Sen. Ed Markey (D-MA) will serve as Ranking Member.
On February 12, the Budget Committee voted 11-10, along party lines, to approve and advance the Committee’s proposed budget resolution. The resolution included instructions to the Finance Committee to cut spending by $1 billion. Finance Chairman Crapo stated during mark-up that the intention was to repeal President Biden’s Minimum Nursing Home Staffing Standards rule. The resolution could reach the Senate floor as early as next week.
On February 12, HELP Committee Chairman Cassidy and Judiciary Committee Chairman Chuck Grassley (R-IA) introduced the OPTN Fee Collection Authority Act which would authorize the Health Resources & Services Administration (HRSA) to collect registration fees from Organ Procurement and Transplantation Network (OPTN) member institutions, ensuring HRSA’s ability to maintain the organ transplant system.
On February 13, the Senate voted 52-48 to confirm Robert F. Kennedy, Jr., as Secretary of the Department of Health & Human Services (HHS). Former Majority Leader Mitch McConnell (R-KY) was the only Republican to vote against his nomination.
On February 13, Judiciary Committee Chairman Grassley and Sen. Catherine Cortez Masto (D-NV) reintroduced bipartisan, bicameral legislation entitled the Combatting Illicit Xylazine Act. The legislation would classify Xylazine as Schedule III under the Controlled Substances Act, while protecting its legitimate use in large animal veterinary medicine. Reps. Jimmy Panetta (D-CA) and August Pfluger (R-TX) introduced companion legislation in the House.
On February 13, Finance Committee Chairman Crapo and GOP Committee members Steve Daines (R-MT), Majority Leader John Thune (R-SD), Majority Whip John Barrasso (R-WY), Ron Johnson (R-WI), James Lankford (R-OK), Roger Marshall (R-KS), Marsha Blackburn (R-TN) and Thom Tillis (R-NC) sent a letter to President Donald Trump vowing to oppose any tax package that fails to make the tax provisions in the Tax Cuts and Jobs Act permanent.
On February 13, Finance Committee member Sen. Tina Smith (D-MN) announced that she will not run for re-election and will instead retire after the end of her term in 2026.
REGULATORY UPDATE
On February 7, HHS announced that all employees must be back in the office by April 28, 2025. The return to office memo also states that political and senior employees must report to an HHS facility by February 24, 2025.
On February 11, Tom Engels was sworn in to serve as Administrator of HRSA. Engels previously served as the HRSA Administrator during the first Trump administration from 2019 to 2021.
On February 11, the Centers for Medicare & Medicaid Services’ (CMS) Center for Medicare & Medicaid Innovation (CMMI) stated that it will no longer collect data from its payment model participants on race, ethnicity, sexual orientation, gender identity, or preferred language. The new policy comes after President Trump issued executive orders (EOs) instructing federal agencies to remove policies and activities that promote diversity, equity, inclusion and accessibility.
On February 11, CMS announced that the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) is looking for new members. Nominations for new members are due February 17, 2025.
On February 14, CMS announced a reduction in funding for the Affordable Care Act (ACA) Navigator program from $98 million to $10 million. CMS stated that the savings from this reduction will allow the Federally-facilitated Exchanges (FFEs) to focus on more effective strategies that improve Exchange outcomes and to reduce the user fee in future years, which would translate into a reduction in premium.
WHITE HOUSE
On February 12, President Trump announced several new HHS nominees. Newly announced nominees include Gustav Chiarello III to serve as Assistant Secretary for Financial Resources, Gary Andres to serve as Assistant Secretary for Legislation, and Michael Stuart to serve as General Counsel. President Trump also nominated Terry Cole to serve as the Administrator of the Drug Enforcement Administration (DEA).
On February 13, President Trump signed an EO establishing the Make America Healthy Again Commission which will be chaired by newly appointed HHS Secretary RFK Jr. The EO states that the commission will be tasked with investigating and addressing the root causes of America’s escalating health crisis, with a focus on childhood chronic disease. The commission stated that its goals are to increase transparency and open-source data and root out conflicts of interest in health research, prioritize “gold standard” research, and ensure expanded treatment options and health coverage flexibility for beneficial lifestyle changes and disease prevention – among other priorities.
On February 14, the Trump Administration eliminated thousands of federal health care agency jobs, targeting employees across public health and science agencies who were hired in the past one to two years. Senior officials were informed that roughly 5,200 people on probationary employment across agencies including NIH and the Centers for Disease Control and Prevention (CDC) would be fired.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
Patient Protection and Affordable Care Act; Individual Health Insurance Market and Exchange Program Integrity (CMS-9884); Proposed Rule; 2/11/25
ADDITIONAL POLICY NEWS
On February 10, the Medicare Payment Advisory Commission (MedPAC) released a comment letter on the proposed rule on Advance Notice of Methodological Changes for Calendar Year (CY) 2026 for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. In its letter, MedPAC discusses technical update to medical education payments in the non–end-stage renal disease (ESRD) United States per capita costs (USPCC) baseline, CMS hierarchical condition category (CMS–HCC) risk-adjustment model for calendar year 2026, MA coding pattern difference adjustment, normalization factors for CMS–HCC risk-adjustment models, and normalization factors for CMS’s prescription drug hierarchical condition category risk-adjustment model.
On February 10, U.S. District Judge John McConnell ruled that the Trump administration must immediately restore frozen funding, including funding to the National Institutes of Health (NIH), that were paused by the Trump administration for not complying with certain EOs. Judge McConnell stated that the Trump administration violated his previous order from late January and ordered the agencies to restore funding.
On February 10, a group of 22 Democratic state attorneys general filed a federal lawsuit against the Trump administration, arguing that NIH’s decision to set a 15% cap on payments for indirect costs would cause major harm to institution budgets, jeopardizing basic operations and medical research. The court granted a temporary injunction the same day, blocking the policy from going into effect in the 22 states that filed suit. On February 11, after the Association of American Medical Colleges (AAMC) joined the suit, the judge broadened the injunction to apply nationwide.
On February 11, District Court Judge John Bates ordered the Trump Administration to restore health agency webpages and datasets that went dark to comply with EOs on DEI and gender identity. Judge Bates granted a request from Doctors for America for a temporary restraining order, stating that the physicians' group showed substantial likelihood of success on its claims that HHS, CDC and FDA acted arbitrarily and capriciously in removing the webpages.