Health Care Watch: April 14, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from April 6 – April 12. 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 April 8, the Ways & Means Health Subcommittee held a hearing entitled Lowering Costs for Patients: The Health of the Biosimilar Market. The hearing discussed the biosimilar market, pharmacy benefit managers (PBMs), physician and patient education, awareness, barriers to access of biosimilars, and the Inflation Reduction Act (IRA). Broadly, committee members agreed on the importance of biosimilars in increasing access and affordability of drugs. Democrats largely focused their comments on the Trump Administration’s recent cuts to scientific funding and research and reductions in force (RIF) at the Department of Health & Human Services (HHS).
On April 8, the Energy & Commerce Committee held a markup but ended up postponing, due to time constraints, consideration of health care legislation including H.R. 2483, the SUPPORT for Patients and Communities Reauthorization Act of 2025, H.R. 1520, Charlotte Woodward Organ Transplant Discrimination Prevention Act, and H.R. 2484, Seniors’ Access to Critical Medications Act. This legislation will now be marked up on April 29.
On April 10, House Republicans passed the Senate-passed budget resolution, 216-214, after cancelling the vote the day before. House GOP leadership was able to secure the necessary votes after holdouts were pressured by President Trump, and Speaker Mike Johnson (R-LA) committed to ensuring the final reconciliation bill would contain $1.5 trillion in cuts or they could remove him from office. Authorizing committees will now begin developing policies within their jurisdiction to reach their savings targets.
On April 11, HHS staff briefed Energy & Commerce Committee staff on HHS Secretary Robert F. Kennedy, Jr.’s overhaul of the agency, including major RIFs. Secretary Kennedy's staff reportedly said he will not be able to testify before the committee on the staffing cuts for 60 days. Committee Democrats have been pushing for a hearing as soon as possible.
The House is in recess until April 28.
Senate
On April 8, Finance Committee Ranking Member Ron Wyden (D-OR) and Sen. Rand Paul (R-KY), along with Minority Leader Chuck Schumer (D-NY) and Sens. Tim Kaine (D-VA), Jeanne Shaheen (D-NH), Peter Welch (D-VT), and Elizabeth Warren (D-MA) released a resolution that would repeal President Trump’s global tariffs. The resolution will be treated as a privileged resolution that must receive a vote on the Senate floor and would terminate the emergency that President Trump declared to implement the recent tariffs.
On April 10, Appropriations Chair Susan Collins (R-ME) and Vice Chair Patty Murray (D-WA) released guidance for Fiscal Year (FY) 2026 programmatic, language, and Congressionally Directed Spending (CDS) requests. The Committee stated that it is moving forward with the FY 2026 appropriations process and will begin hearings later this month. General guidance for FY 2026 appropriations requests is available here.
The Senate is in recess until April 28.
REGULATORY UPDATE
On April 6, HHS Secretary Kennedy, following the death of a second child due to the recent measles outbreak,stated that the most effective way to prevent the spread of measles is with the MMR vaccine. This is Secretary Kennedy’s most direct comment regarding the efficacy of the MMR vaccine since his confirmation as Secretary.
On April 7, the Centers for Medicare & Medicaid Services (CMS) released its 2026 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. CMS will increase MA payments, on average, by 5.06% in 2026 (2.23% proposed), driven largely by a higher-than-expected fee-for-service growth rate of 9.04% (5.93% proposed). CMS estimates that the overall payment increase will result in over $25 billion in additional payments from 2025 to 2026. CMS finalized its proposal to fully implement the 2024 CMS-HCC risk adjustment model in 2026. CMS will continue to use separate normalization factors for PDPs and MA-PDs. A fact sheet detailing the final rule can be found here.
On April 7, CMS released Final CY 2026 Part D Redesign Program Instructions (the Final CY 2026 Program Instructions). The purpose of the Final CY 2026 Program Instructions is to provide interested parties with guidance for CY 2026 regarding the implementation of the IRA changes to the structure of the defined standard Part D drug benefit. Although the IRA requires Part D plans to include on their formularies drugs selected for negotiation which a maximum fair price is in effect (“selected drugs”), the guidance makes clear that an exception to this formulary requirement is the recently revised immediate substitution policy. Thus, under the final instructions, Part D plans may immediately substitute a selected brand drug with a generic drug of the selected drug, and a selected reference drug with an interchangeable biological product of the selected drug, provided the notice and timing requirements are met.
On April 10, CMS Administrator Dr. Mehmet Oz shared his agenda and vision for the agency. Administrator Oz stated that under his leadership, CMS will work to modernize Medicare, the Marketplaces, and Medicaid. This includes: 1) empowering patients with personalized solutions so they can better navigate the health system by implementing President Trump’s Executive Order on Transparency; 2) equipping providers with better information about the patients they serve and holding them accountable for health outcomes; 3) identifying and eliminating fraud, waste, and abuse; and 4) shifting the paradigm for health care from a system that focuses on sick care to one that fosters prevention, wellness, and chronic disease management.
On April 10, CMS sent a letter to states notifying them that the agency does not intend to approve new or extend existing requests for federal matching funds for state expenditures on two types of programs: 1) designated state health programs (DSHP); and 2) designated state investment programs (DSIP). CMS stated that this action is being taken to preserve the core mission of the Medicaid program and to put an end to spending that duplicates resources available through other federal and state programs or is not directly tied to healthcare services.
On April 10, the Food & Drug Administration (FDA) announced that it will be replacing animal testing in the development of monoclonal antibody therapies and other drugs with more effective, human-relevant methods. The new approach is designed to improve drug safety and accelerate the evaluation process, while reducing animal experimentation, lowering research and development costs, and ultimately, drug prices. FDA stated that its animal testing requirement will be reduced, refined, or potentially replaced using a range of approaches, including AI-based computational models of toxicity and cell lines and organoid toxicity testing in a laboratory setting, called New Approach Methodologies (NAMs).
On April 11, CMS released the following Medicare FY26 proposed rules:
Hospital Inpatient Prospective Payment System (PPS) and Long-Term Care Hospital PPS – which proposes to increase hospital inpatient rates by 2.4% and LTCH rates by 2.6%; finalize a transition to discontinue the low wage index policy; make changes to quality reporting, readmissions, hospital-acquired condition, and value-based purchasing programs; and evaluates New Technology Add-on Payment (NTAP) applications.
Inpatient Rehabilitation Facility PPS – which proposes to increase rates by 2.6% and make changes to the IRF Quality Reporting Program;
Skilled Nursing Facility PPS – which proposes to increase rates by 2.8%, including a 0.6% market basket forecast error adjustment and make changes to the SNF Value-Based Purchasing and Quality Reporting Programs;
Hospice Wage Index and Payment Rate Update – which proposes to increase rates by 2.4%; and
Inpatient Psychiatric Facility PPS – which proposes to increase rates by 2.4% and make changes to the IPF Quality Reporting Program.
In each rule, CMS noted that it is requesting information from stakeholders on streamlining regulations and reducing administrative burdens in the Medicare program. Comments on each rule are due by June 10, 2025.
On April 11, CMS announced that it will delay the effective date of the Final Local Coverage Determinations (LCDs) on Skin Substitute Grafts/Cellular and Tissue-Based Products for the Treatment of Diabetic Foot Ulcers and Venous Leg Ulcers until January 1, 2026. CMS is requesting that peer-reviewed publications and high-quality findings from other public sources of skin substitute study results be submitted to CMS by November 1, 2025. CMS notes that evidence received will be sent to the Medicare Administrative Contractors (MACs) to review to determine if revisions to the LCD are appropriate.
WHITE HOUSE
On April 7, the White House Office of Management and Budget (OMB) released two revised policies on federal agency use of artificial intelligence (AI) and federal procurement: Accelerating Federal Use of AI through Innovation, Governance, and Public Trust and Driving Efficient Acquisition of Artificial Intelligence in Government.
On April 8, President Trump stated, at a National Republican Congressional Committee dinner, that “[the administration is] going to be announcing very shortly a major tariff on pharmaceuticals.” This statement came a day before U.S. Trade Representative Jamison Greer told the Ways & Means Committee that the Administration plans to launch an investigation into whether to apply tariffs to pharmaceutical imports.
On April 8, the Trump administration filed an appeal against a federal district judge’s order barring the National Institutes of Health (NIH) from cutting funding for grantees’ administrative and facilities expenses. Last week, Judge Angel Kelley ordered a permanent injunction in the case, stating that NIH’s move to cut indirect costs violated the Administrative Procedure Act.
On April 9, President Trump announced a 90-day pause of the higher tariffs against more than 60 countries that went into effect earlier the same day. He stated that he plans to keep the Administration’s global baseline tariff increase of 10% in place for all countries and noted that tariffs imposed on China will continue to rise, increasing to 125%.
On April 9, President Trump issued a new Executive Order (EO) entitled Reducing Anti-Competitive Regulatory Barriers, which directs agencies to identify regulations that create monopolies, impose unnecessary barriers to market entry, or limit competition, and to recommend recission or modification. The EO also directs the Federal Trade Commission (FTC) to issue an RFI within 10 days seeking public input on identifying anticompetitive regulations. Within 90 days, the FTC is also directed to create a list of anticompetitive regulations to be rescinded or modified.
A list of all administrative and health care-related EOs can be found here. FHP Strategies will update this document, as needed.
HEARINGS
Senate
Appropriations Committee
April 30; 10:30 AM; 106 Dirksen
Biomedical Research: Keeping America’s Edge in Innovation
REPORTS
Government Accountability Office (GAO)
On April 9, GAO released a report examining implementation of a mechanism to coordinate activities related to drug shortages. GAO found that challenges with the FDA’s oversight of medical products, including drug shortages, led to its inclusion on GAO’s High-Risk List. As of July 31, 2024, there were 102 drug shortages being tracked by FDA. GAO made two recommendations to the HHS Secretary: 1) identify and implement a mechanism to formally coordinate its drug shortage activities and collaborate with other federal stakeholders; and 2) ensure this mechanism takes GAO leading practices for collaboration into consideration.
ADDITIONAL POLICY NEWS
On April 7, Texas federal district judge Matthew Kacsmaryk sided with the nursing home industry, striking down the Biden Administration’s nursing home staffing rule. Judge Kacsmaryk stated that staffing and other deficiencies at nursing homes “deserve an effectual response. But any regulatory response must be consistent with Congress’s legislation governing nursing homes.” Judge Kacsmaryk stated that the rule exceeded CMS’ authority.
On April 9, a three-judge panel of the 4th Circuit Court of Appeals lifted a lower-court's ruling that blocked the Trump Administration’s mass termination of probationary federal employees. The appeals court’s 2-1 rulingstated that the coalition of Democratic attorneys general who brought the case appeared to lack legal standing to challenge the firings.