Health Care Watch: March 17, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from March 9 – March 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 March 11, the House passed a stopgap funding bill through September 30, in a 217-213 vote. The bill would reduce non-defense spending by $13 billion while increasing defense spending by nearly $6 billion over the budget window. The legislation would also extend a series of health care policies through September 30, including Medicare telehealth flexibilities and waivers allowing for hospitals to continue the hospital at home program. On March 14, the Senate passed the bill by a 54-46 margin.
On March 11, the Ways & Means Health Subcommittee held a hearing entitled After the Hospital: Ensuring Access to Quality Post-Acute Care (PAC). Members and witnesses discussed PAC services including home health services, inpatient rehabilitation, long-term care, and nursing home care. Many Democratic members discussed the impact potential cuts to Medicaid could have on access to PAC services as well as the impact of potential repeal of the nursing home staffing mandate finalized by the Biden Administration last year. Many Republican members focus their comments on long-term care hospitals.
On March 12, the House passed the Pandemic Unemployment Fraud Enforcement Act, legislation that would extend the deadline from five years to 10 years to prosecute the theft of COVID-era unemployment insurance.
On March 13, Rep. Raul Grijalva (D-AZ) passed due to complications from cancer.
Senate
On March 11, Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bernie Sanders (I-VT) and House Ways & Means Health Subcommittee Ranking Member Lloyd Doggett (D-TX) introduced the bicameral Medicare Dental, Hearing, and Vision Expansion Act. The legislation would expand access to dental, vision, and hearing care for Medicare beneficiaries. A summary of the legislation can be found here.
On March 12, Finance Committee Ranking Member Ron Wyden (D-OR) stated that Senate Republicans and Democrats are in talks to pass a health care package that was dropped from the December funding package. The package would reauthorize the SUPPORT Act and the Pandemic and All-Hazards Preparedness Act as well as extend Medicare telehealth flexibilities and allowance for hospital at home care. The package also includes funding for community health centers and transparency requirements for pharmacy benefit managers (PBMs). Some of these provisions are already included, in some from, in the government funding bill. On March 14, Sen. Rick Scott (R-FL) objected to Sen. Wyden’s unanimous consent request to pass this legislation and reports indicate a handful of GOP holds were placed on the bill. It is not yet clear if Senators will attempt to move this bill through regular order.
On March 12, Finance Committee Ranking Member Wyden, Reps. Deborah Ross (D-NC) and Kathy Castor (D-FL), along with nine senators, introduced the Insurance Fraud Accountability Act. The legislation creates new civil penalties for agents and brokers submitting incorrect information due to negligence or knowingly submitting false or fraudulent information. A one-page summary of the bill can be found here.
On March 13, the HELP Committee voted 12-11 to advance the nomination of Dr. Bhattacharya, to serve as Director of the National Institutes of Health (NIH). The Committee also voted, 14-9, to advance the nomination of Dr. Marty Makary to serve as Commissioner of the Food & Drug Administration (FDA), with Sens. Maggie Hassan (D-NH) and John Hickenlooper (D-CO) joining Republicans to advance the nominee. The nominees will receive a full Senate vote in the coming weeks.
On March 13, HELP Committee Chairman Bill Cassidy (R-LA) announced that he is launching a GOP working group aimed at reforming the Centers for Disease Control and Prevention (CDC). The working group includes Sens. Ron Johnson (R-WI), Mike Lee (R-UT), Roger Marshall (R-KS), Lisa Murkowski (R-AK) Rand Paul (R-KY), and Tim Scott (R-SC).
On March 14, the Finance Committee held a hearing to consider the nomination of Dr. Mehmet Oz to serve as Administrator of the Centers for Medicare & Medicaid Services (CMS). Members asked Dr. Oz a variety of questions regarding the Medicare and Medicaid programs, rural hospitals, prior authorization, Medicare Advantage (MA), waste, fraud, and abuse, and pharmacy benefit managers (PBMs). Many Democratic members also asked Dr. Oz about his thoughts on potential cuts to the Medicaid program. Dr. Oz discussed his desire to focus on chronic illness and prevention, increase health care transparency, and address waste fraud and abuse in the Medicare and Medicaid programs.
REGULATORY UPDATE
On March 8, FDA approved Omlyclo, the first interchangeable biosimilar to Xolair, which is indicated to treat severe asthma and mitigate food allergy reactions.
On March 9, Department of Health & Human Services (HHS) employees received an email offering $25,000 buyouts to leave their positions. Employees had until March 14 to accept the “voluntary separation offer.” The buyouts follow an early retirement offer sent to HHS employees last week.
On March 9, the Administration for Strategic Preparedness and Response (ASPR) announced that it is no longer shipping free COVID-19 tests to individuals who order them from covidtests.gov.
On March 9, Dr. Douglas Kelly, FDA’s Deputy Center Director for Science and Chief Scientist of the Center for Devices and Radiological Health, announced that he is leaving the agency.
On March 10, CMS released the Marketplace Integrity and Affordability Proposed Rule which proposes to roll back a number of Biden administration Exchange plan policies that aimed to make it easier for consumers to enroll in and maintain coverage but that the Trump administration argues facilitated improper signups. In particular, the rule proposes to end the monthly special enrollment period for low-income people, require more eligibility verifications, reduce the open enrollment period for healthcare.gov states and more. The rule also aims to carry out Administration priorities by adding sex-trait modification to a list of items and services that cannot be covered as an essential health benefit as of 2026 and cancel subsidized coverage for Deferred Action for Childhood Arrival (DACA) recipients by returning to the previous definition of “lawfully present.” A fact sheet detailing the proposed rule can be found here. Comments on the proposed rule are due by April 11, 2025, and can be made here.
On March 10, NIH announced that plans to centralize its peer-review process, by moving peer review for grant applications, cooperative agreements, and research and development contracts under the NIH's Center for Scientific Review. NIH stated that this change would save the agency $65 million.
On March 10, FDA released a statement clarifying policies for compounders as national GLP-1 supply begins to stabilize. The statement includes timelines during which the agency does not intend to take action against compounders for violations of the FD&C Act arising from conditions that depend on semaglutide injection products’ inclusion on FDA’s drug shortage. The announcement comes after a district court denied the plaintiffs’ preliminary injunction motion in Outsourcing Facilities Association v. FDA.
On March 11, HHS Acting General Counsel Sean Keveney announced a reorganization of the Office of the General Counsel (OGC). Keveney stated that OGC will consolidate the number of regional offices from 10 to four. Regional offices will be maintained in Philadelphia, Atlanta, Kansas City (MO), and Denver. Additionally, OGC created a senior position, the Chief Counsel for Food, Research, and Drugs who will be responsible for supervising FDA’s Chief Counsel, including the Food and Drug Division of OGC, and the NIH Branch of OGC. Robert Foster, the current FDA Chief Counsel and Deputy General Counsel in OGC, will serve as the Chief Counsel for Food, Research, and Drugs.
On March 11, FDA announced that Hilary Perkins will serve as FDA’s Chief Council. Two days later, FDA announced that Hilary Perkins had resigned.
On March 11, HHS announced that Robert Foster will serve as HHS Deputy General Counsel.
On March 12, CMS announced that the Centers for Medicare & Medicaid Innovation (CMMI) completed a comprehensive review of its models and has identified models that will conclude as scheduled and others that will end early on December 31, 2025, generating expected savings of $750 million. Participants in the selected models will have through the end of 2025 to transition to other models to minimize disruption to their operations and the beneficiaries they serve. CMMI will end 8 models in total, including the two Biden-era drug pricing models that were under development: Medicare $2 Drug List Model (impacting Part D generic drugs) and the Accelerating Clinical Evidence (ACE) Model (impacting accelerated approval drugs). A third Biden-era drug pricing model – the Cell & Gene Therapy Access (CGT) Model – will continue.
On March 13, John Burklow was removed as NIH's Chief of Staff and replaced by a political appointee. The agency is expected to appoint Seana Cranston as NIH’s new Chief of Staff.
WHITE HOUSE
On March 12, Federal District Judge Tanya Chutkan ordered Elon Musk and the Department of Government Efficiency (DOGE) to turn over records and answers to questions surrounding DOGE’s plans to downsize federal government agencies, fire workers, and suspend contracts.
On March 13, the Trump Administration withdrew the nomination of Dave Weldon to serve as Director of CDC just hours before he was set to appear before the Senate HELP Committee. Weldon released a statement saying he was informed his nomination did not have the votes to pass on the Senate floor and speculating pharmaceutical companies lobbied against him. “The concern of many people is that big Pharma was behind this which is probably true,” Weldon wrote.
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
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
Contract Year 2026 Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, and Medicare Cost Plan Programs, and PACE (CMS-4208); Final Rule; 3/6/25
FY 2026 Inpatient Psychiatric Facilities Prospective Payment System Rate and Quality Reporting Updates (CMS-1831); Proposed Rule; 3/7/25
FY 2026 Inpatient Rehabilitation Facility (IRF) Prospective Payment System Rate Update and Quality Reporting Program (CMS-1829); Proposed Rule; 3/7/25
FY 2026 Skilled Nursing Facility (SNFs) Prospective Payment System and Consolidated Billing and Updates to the Value-Based Purchasing and Quality Reporting Programs (CMS-1827); Proposed Rule; 3/7/25
REPORTS
Office of Inspector General (OIG)
On March 12, OIG released the Medicaid Fraud Control Units (MFCUs) Annual Report for fiscal year (FY) 2024. The report found that MFCUs recovered $3.46 for every $1 spent in FY 2024, had 1,151 convictions, 493 civil settlements and judgements, and recovered $1.4 billion.
ADDITIONAL POLICY NEWS
On March 7, Federal Trade Commission (FTC) Commissioners voted 4-0 to seek a temporary restraining order and preliminary injunction against GTCR’s acquisition of Surmodics, the maker of specialized coatings for medical devices. FTC alleges that the deal would combine the two largest makers of specialized coatings and is anticompetitive.
On March 11, a federal judge in Charlotte, North Carolina ruled in favor of Merck in a case alleging that the drugmaker did not properly warn patients about potential adverse reactions to its HPV vaccine. Judge Kenneth Belle found that the company did not have the authority to unilaterally add warnings about two conditions to the label for its HPV vaccine.
On March 13, the Medicare Payment Advisory Commission (MedPAC) released its March 2025 Report to the Congress on Medicare payment policy. The report evaluates the adequacy of fee-for-service Medicare payments and makes recommendations for how those payments should be updated. The 2025 report makes recommendations for: acute care hospital inpatient and outpatient services, physicians and other health professional services, outpatient dialysis facilities, skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and hospice providers. The report also provides a status report on MA and Part D, including recent trends in enrollment, plan offerings, and Medicare’s payment to plans.
On March 13, the Medicaid and CHIP Payment and Access Commission (MACPAC) released its March 2025 Report to Congress on Medicaid and CHIP that includes recommendations to improve the usability and transparency of the managed care external quality review process; improvements on timely access to home- and community-based services (HCBS); and ways to streamline Medicaid Section 1915 authorities for HCBS and reduce the administrative burden on states and the federal government.
On March 13, U.S. District Judge William Alsup ordered federal agencies to reinstate tens of thousands of probationary employees who were fired earlier this year. Judge Alsup ordered the departments of Defense, Treasury, Energy, Agriculture and Veterans Affairs to immediately offer all fired probationary employees their jobs back. Judge Alsup stated that the Office of Personnel Management’s (OPM) decision to terminate the employees was unlawful. On the same day, a second federal judge, Judge James Bredar, ordered the mass reinstatement of fired probationary employees at 18 agencies. Judge Bredar concluded that the administration had implemented reductions in force without providing legally required notice to state governments. Both judges stated that the Administration’s large-scale terminations violated federal law and regulations.