Health Care Watch: March 24, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from March 16 – March 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 March 14, a group of House Democrats launched the Congressional Doctors Caucus. Members of the caucus include three newly elected members: Reps. Herb Conaway Jr. (D-NJ), an internist; Maxine Dexter (D-OR), a pulmonologist; and Kelly Morrison (D-MN), an OB-GYN. Other members include Reps. Ami Bera (D-CA), an internist; Raul Ruiz (D-CA), an emergency medicine doctor; and Kim Schrier (D-WA), a pediatrician.
On March 18, Rep. Maxine Waters (D-CA) sent a letter to Department of Health & Human Services (HHS) Secretary Robert F. Kennedy, Jr. (RFK. Jr) urging him to refrain from cutting $700 million in Centers for Disease Control and Prevention (CDC) funding for HIV prevention as a result of the 2025 Continuing Resolution.
Senate
On March 17, Judiciary Committee Chairman Chuck Grassley (R-IA) and Ranking Member Dick Durbin (D-IL), along with Sens. John Cornyn (R-TX) and Richard Blumenthal (D-CT), introduced the Drug Competition Enhancement Act. The legislation would prohibit branded drug manufacturers from engaging in “product hopping” by making it an antitrust violation. On the same day, this group of Senators also introduced the Affordable Prescriptions for Patients Act which places a limit on the number of patents a manufacturer can contest, preventing a “patent thicket.”
REGULATORY UPDATE
On March 14, the Centers for Medicare & Medicaid Services (CMS) announced that agreements have been signed with manufacturers of the 15 drugs covered under Medicare Part D selected for the second cycle of the Medicare Drug Price Negotiation Program. All drugs selected for the second cycle of the program can be found here. The negotiation period for the second cycle of drug price negotiations ends on November 1, 2025. Any negotiated prices will be effective beginning in 2027.
On March 14, the Food & Drug Administration (FDA) issued a letter notifying health care providers that the agency is aware that the United States is experiencing interruptions in the supply of hemodialysis bloodlines because of recent supplier issues. FDA stated that it has updated the medical device shortage list to include hemodialysis bloodlines. FDA expects the duration of this shortage to extend through early fall of 2025 and recommends that health care providers experiencing delays in the supply of hemodialysis bloodlines consider strategies to conserve their use.
On March 17, following an order from a Maryland federal judge, federal agencies began rehiring probationary workers that were fired earlier this year. Probationary employees across HHS and their managers were notified via email that their terminations would be rescinded, but they would be placed on paid administrative leave. Staff at FDA, National Institutes of Health (NIH), the Assistant Secretary for Technology Policy/Office of the National Coordinator for Health IT, FDA, CDC, and CMS all received emails.
On March 18, FDA announced a set of actions and initiatives focused on infant formula. FDA will begin the nutrient review process and increase testing for heavy metals and other contaminants. FDA will also extend the personal importation policy, encouraging companies to work with the FDA on any questions regarding increased transparency and clearer labeling, communicate regularly with consumers and industry stakeholders as significant developments occur, and collaborate with NIH and other scientific bodies to address priority scientific research gaps.
On March 18, HHS Secretary RFK Jr. renewed the public health emergency (PHE) declaration with regards to the national opioid crisis. The PHE will allow sustained federal coordination efforts and preserve flexibilities that enable HHS to continue leveraging expanded authorities to conduct certain activities in response to the opioid overdose crisis.
WHITE HOUSE
On March 18, a judge ordered the public release of a Trump Administration filing related to Amy Gleason’s role at HHS and the Department of Government Efficiency (DOGE). The filing shows that Gleason – identified last month by the White House as the leader of DOGE – was also detailed to HHS and formally hired by the department as a “consultant/expert” on March 4 while retaining her status as a DOGE employee.
On March 18, President Trump fired Democratic Federal Trade Commissioners (FTC) Alvaro Bedoya and Rebecca Kelly Slaughter. The firings sparked outrage from Democratic lawmakers and antimonopoly advocates, who accused President Trump of trying to eliminate opposition to corporate interests within FTC, including on drug pricing. Both ousted commissioners plan to challenge their removals in court.
On March 18, the White House announced that Calley Means will be joining the Administration as a special government employee where he is expected to work closely with HHS Secretary Kennedy. Means played a central role in helping to develop Kennedy’s Make America Health Again (MAHA) movement.
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
HEARINGS
Senate
Finance Committee
March 25; 10:00 AM; 215 Dirksen
Witness: Frank Bisignano
Week of March 24
Expected vote on Dr. Mehmet Oz’s nomination for CMS Administrator
REPORTS
Office of Inspector General (OIG)
On March 18, OIG released a report examining Medicare Administrative Contractors (MACs) Medicare cost report oversight requirements. OIG found that MACs did not consistently meet Medicare cost report oversight requirements. OIG also found that, for Federal fiscal years 2019–2020, each of the 12 MAC jurisdictions failed to comply with the contract requirements for audit and reimbursement desk review and audit quality (AR-4) for at least one of the three years. Additionally, CMS identified 287 total audit issues among all MAC jurisdictions during OIG’s review period, including MACs not performing proper reviews; inadequate review of graduate medical education and indirect medical education reimbursement; improper review of allocation, grouping, or reclassification of charges to cost centers; improper calculation and reimbursement for nursing and allied health programs; and inadequate review of bad debts. OIG made three recommendations to CMS to improve its efforts in ensuring that MACs meet their cost report oversight requirements, including increasing transparency about its processes and providing additional training.
ADDITIONAL POLICY NEWS
On March 18, U.S. District Judge Theodore Chuang stated that Elon Musk and DOGE likely violated the Constitution in multiple ways, specifically stating that DOGE appeared to have violated the Constitution’s separation of powers when it effectively eliminated the U.S. Agency for International Development (USAID) and left the aid agency unable to perform its basic legally required functions. In an injunction against DOGE, Judge Chuang wrote that DOGE “shall not take any action, or engage in any work, relating to the shutdown of USAID.” Judge Chuang’s ruling orders that DOGE restore access to official computer systems for USAID employees, including those on administrative leave.
On March 18, a memo from the State Department’s Foreign Assistance Office stated that whatever is left of USAID’s global health work will be folded into a global health security and diplomacy office at the State Department. The memo states that USAID will cease existence on September 30 and lays out the plans for what comes next. This memo comes after a Federal Judge declared that DOGE and Elon Musk’s effort to erase the agency likely violated the Constitution in multiple ways.
On March 18, Children’s Health Defense, a group once chaired by HHS Secretary RFK Jr, stated its support for Dr. Joseph Ladepo, the current Florida Surgeon General, to serve as the CDC Director nominee.