Health Care Watch: February 24, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from February 16 – February 22. 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 19, Majority Leader Steve Scalise (R-LA) stated that the House will hold a vote on its proposed budget resolution the week of February 24 and called on Senate Republican leaders to stop their efforts to pass a competing measure. Majority Leader Scalise said that the Committees will have the month of March to assemble policy specifics for the reconciliation package and noted that the House will aim to pass the package in April.
Senate
On February 19, Former Majority Leader Mitch McConnell (R-KY) announced that he will not seek reelection. Sen. McConnell served seven terms in the U.S. Senate and served as Majority Leader for six years (2015 - 2020).
On February 19, Senate Democrats sent a letter to Department of Health & Human Services (HHS) Secretary Robert F. Kennedy, Jr. (RFK Jr.) demanding answers surrounding the firing of more than 5,000 HHS workers last week.
On February 20, Judiciary Committee Chairman Chuck Grassley (R-IA) released an op-ed entitled Congress Must Permanently Classify Fentanyl-Related Substances to Curb the Crisis. The op-ed discusses the Halt All Lethal Trafficking (HALT) of Fentanyl Act, legislation that would amend the Controlled Substances Act to permanently classify fentanyl-related substances as Schedule I.
On February 21, the Senate voted 52-48 to adopt a budget resolution focused on defense, border security, and energy policy. The resolution directs the Finance and Health, Education, Labor & Pensions (HELP) Committees to report changes of at least $1 billion and directs all committees to submit their proposed spending plans by March 7, 2025. Notably, this bill differs from the House bill as it does not include extending the 2017 tax cuts and will instead focus on immigration, energy, and defense policy and a second bill would deal with tax policies. The Senate GOP has described this bill as a Plan B in case the House is unable to pass its all-encompassing bill the week of February 25. Passage of the Senate resolution places pressure on the House which plans to take up its chamber’s resolution next week.
REGULATORY UPDATE
On February 14, the Food & Drug Administration (FDA) approved Merilog (insulin-aspart-szjj) as biosimilar to Novolog (insulin aspart) for the improvement of glycemic control in adults and pediatric patients with diabetes mellitus. Merilog, a rapid-acting human insulin analog, is the first rapid-acting insulin biosimilar product approved by FDA.
On February 18, Centers for Disease Control and Prevention (CDC) Principal Deputy Director Nirav Shahis announced that he will be stepping down at the end of February.
On February 19, CMS Administrator nominee Dr. Mehmet Oz pledged to divest his investments in hospitals and health care insurers if confirmed to lead the agency.
On February 19, HHS Secretary RFK Jr. announced that federal policy will no longer include language on transgender or non-binary people. Secretary RFK Jr. told federal agencies and partners that there are only “two sexes, male and female” and that all federal policy will reflect this rhetoric. This announcement comes after President Trump’s executive order (EO) on defining gender.
On February 20, HHS ordered the CDC to halt some vaccine advertisements, stating that HHS Secretary RFK Jr. wants messages surrounding vaccines to focus on informed consent.
On February 20, it was reported that HHS Secretary RFK Jr. is looking to remove members of outside panels that advise federal officials on vaccines. As part of a larger effort, RFK Jr. would replace members of committees who he believes have conflicts of interest in an attempt to minimize industry influence.
On February 20, Robert Foster was named as FDA’s Chief Counsel. Foster previously served as an oversight lawyer on the Senate HELP Committee.
On February 20, HHS’ Office for Civil Rights (OCR) announced a $1,500,000 civil money penalty against Warby Parker, Inc., a manufacturer and online retailer of prescription and non-prescription eyewear, concerning violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule, following the receipt of a breach report regarding the unauthorized access by one or more third parties to customer accounts.
On February 21, FDA announced that the semaglutide shortage has been resolved. FDA stated that it confirmed with the drug’s manufacturer that their stated product availability and manufacturing capacity can meet the present and projected national demand. FDA also stated that it will provide compounders with a grace period to wind down operations, dispensing, and distribution of GLP-1 biosimilars.
WHITE HOUSE
On February 18, President Trump issued an EO aimed at expanding access to in vitro fertilization (IVF). The EO directs the Assistant to the President for Domestic Policy to submit a list of policy recommendations on protecting IVF access and aggressively reducing out-of-pocket and health plan costs for IVF treatment within 90 days of the order. The EO also asks that the Domestic Policy Council examine which laws exacerbate the cost of IVF treatments. A fact sheet detailing the EO can be found here.
On February 18, President Trump issued an EO instituting Presidential supervision and control of the entire executive branch. Additionally, the EO states that all executive departments and agencies, including independent agencies, shall submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President before publication in the Federal Register.
On February 19, President Trump issued an EO that dramatically reduces the size of the Federal Government. The EO initiated a reduction in the elements of the Federal bureaucracy that the President determined are “unnecessary” including various advisory committees such as the HHS Secretary’s Advisory Committee on Long Covid and the Centers for Medicare and Medicaid Services’ (CMS) Health Equity Advisory Committee. The EO states that reducing the size of the Federal Government will minimize Government waste and abuse, reduce inflation, and promote American freedom and innovation. A fact sheet detailing the EO can be found here.
On February 19, hours after stating that the Medicaid program would not be touched, President Trump endorsed a House budget proposal that would likely make significant cuts to Medicaid. White House spokesperson Kush Desai stated that the Trump administration “is committed to protecting Medicare and Medicaid while slashing the waste, fraud, and abuse within those programs.” Desai quickly updated the statement omitting the mention of Medicare.
On February 20, the Trump Administration filed a brief defending the Inflation Reduction Act’s (IRA) Medicare drug price negotiations against a lawsuit from Novartis. The brief is very similar to previous filings from the Biden Administration, signaling the government’s intent to defend negotiations.
A list of all health care-related EOs is attached to this email. FHP Strategies will update this document, as needed.
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
Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2026 Rates (CMS-1833); Proposed Rule; 2/14/25
FY 2026 Hospice Wage Index, Payment Rate Update, and Quality Reporting Requirements (CMS-1835); Proposed Rule; 2/20/25
HEARINGS
House
Energy & Commerce Committee
Health Subcommittee
February 26; 10:00 AM; 2123 Rayburn
An Examination of How Reining in PBMs Will Drive Competition and Lower Costs for Patients
Senate
Special Committee on Aging
February 26; 3:30 PM; Dirksen 106
REPORTS
Office of Inspector General (OIG)
On February 18, OIG released a report examining Medicare enrollees continuing treatment for opioid use disorder (OUD). OIG found that about 40% of Medicare enrollees who started treatment with buprenorphine continued, noting that fewer enrollees who continued treatment died compared to those who did not continue treatment. Additionally, OIG found that just one-third of enrollees who started buprenorphine received at least one behavioral therapy service and those who did not receive any of these services were less likely to continue treatment. Finally, OIG found that few enrollees received services billed to Medicare under payments aimed, in part, at helping enrollees stay in treatment. OIG recommends that CMS: 1) educate Medicare providers about Medicare services that help enrollees continue treatment for OUD; 2) educate Medicare enrollees about Medicare services that help enrollees continue treatment for OUD; 3) assess and make changes, as appropriate, to the new bundled payment codes for office-based treatment to ensure they meet provider and enrollee needs; and 4) inform providers of emergency department services about the Medicare payment for the initiation of medication for the treatment of OUD and connecting patients to ongoing care.
On February 20, OIG released a report examining over-the-counter (OTC) COVID-19 test kits. OIG found that Medicare may have paid up to $454 million in potentially improper payments to providers for 38.7 million OTC COVID-19 tests furnished to nearly 3.2 million enrollees that exceeded the monthly quantity limit. These potentially improper payments primarily occurred because CMS did not implement nationwide system edits to prevent multiple Medicare Administrative Contractors from paying providers for claims for OTC COVID-19 tests that exceeded the quantity limit. OIG recommends that for items or services for which the Medicare program establishes a quantity limit, CMS use the results of this audit to research and determine the best methods to detect and prevent improper payments to providers.
ADDITIONAL POLICY NEWS
On February 20, the ERISA Industry Committee sent a letter to the Departments of Labor, HHS, and Treasury asking for a stay of enforcement of the September 2024 Final Rule under the Mental Health Parity and Addiction Equity Act while ERIC’s lawsuit challenging the validity of the Final Rule is pending.