Health Care Watch: June 2, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from May 24 – May 31. 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
House Appropriations Committee Chairman Tom Cole (R-OK) has stated that he would like to move the appropriations bills on the House floor prior to the August recess.
The House will return from recess on June 3.
On June 4, the House will consider H.R. 2483, the SUPPORT for Patients and Communities Reauthorization Act of 2025. This legislation reauthorizes a number of programs targeting substance use and mental health disorders.
Senate
Majority Leader John Thune (R-SD) has targeted July 4 for the Senate to have completed consideration of its bill, although that could slip to the following week given the recess schedule. President Trump has asked that both chambers pass identical legislation by July 4, an unlikely proposition. A unified bill is more likely to pass both chambers, in identical form, by the August recess. Staff continues to meet with the Parliamentarian to determine which provisions in the House bill meet the Senate’s strict budget reconciliation rules.
The Senate will return from recess on June 2.
REGULATORY UPDATE
On May 27, Department of Health & Human Services (HHS) Secretary Robert F. Kennedy, Jr., announced that the COVID-19 vaccine for healthy children and pregnant women was removed from the Centers for Disease Control & Prevention’s (CDC) recommended immunization schedule.
On May 27, following a meeting with HHS Secretary Kennedy, Argentina’s Minister of Health Mario Lugones announced that Argentina will follow the United States’ lead and withdraw from the World Health Organization.
On May 27, the Centers for Medicare & Medicaid Services (CMS) announced that it is ramping up its financial oversight of state Medicaid expenditures to comply with President Trump’s Executive Order (EO) entitled Ending Taxpayer Subsidization of Open Borders. As part of the action, CMS is increasing financial oversight across the board to identify and stop improper spending. Actions taken by the Agency include: 1) focused evaluations of select state Medicaid spending reports (CMS-64 form submissions); 2) in-depth reviews of select states’ financial management systems; and 3) assessing existing eligibility rules and policies to close loopholes and strengthen enforcement.
On May 27, Food & Drug Administration (FDA) Commissioner Dr. Marty Makary and other top agency officials began a national listening tour to meet with pharmaceutical and biotech CEOs. The series of meetings will begin next week and will be held in cities across the country with the goal of receiving input on how FDA can modernize its regulatory framework to better support innovation and patient access to safe and effective therapies.
On May 28, CMS announced that it sent letters to select hospitals performing pediatric sex trait modification procedures outlining urgent concerns with both the quality standards adherence and profits related to the procedures. The letters focus on requesting: 1) detailed explanations of how informed consent is obtained for pediatric patients and whether parental involvement is mandatory; 2) planned updates to clinical guidelines considering comprehensive review of scientific research; 3) documentation requirements for adverse outcomes, including cases involving regret or de-transition; and; 4) provider financials, including billing codes utilized for sex trait modifications, facility and provider level revenue, facility and provider level profits, and projected revenue for these service lines. Hospitals are expected to respond within 30 days.
On May 28, FDA announced that Dr. Shantanu Nundy will lead its artificial intelligence (AI) policy work. Nundy previously served as chief medical officer for care navigator Accolade Health.
On May 28, HHS notified Moderna that it is canceling a $600 million contract with the company to develop vaccines against potential pandemic flu viruses including H5N1, the bird flu virus.
On May 29, FDA released draft guidance entitled Replacing Color Additives in Approved or Marketed Drug Products. The guidance describes considerations for replacing a color additive, regardless of the reason for the change, including: 1) ensuring that the selected color additive conforms with the color additive requirements; 2) updating information, including labeling, composition statements, master batch records and drug product specifications; 3) documenting information to support the change, including maintaining appropriate records at the manufacturing site; and 4) submitting information to support the change in a supplement.
On May 30, CMS announced deadlines for the submission of Medicare Advantage (MA) risk adjustment data for risk adjustment data validation sampling. As previously announced, CMS is accelerating the auditing of MA contracts for payment years (PYs) 2018 through 2024. As part of this process, MA organizations must submit their risk adjustment data corrections (i.e., closed period deletes) by the announced deletes, which begin with June 16 for plan year (PY) 2020 and continue week-by-week through July 15 for PY2024.
WHITE HOUSE
On May 28, it was announced that the White House plans to send a small package of spending cuts to Congress next week. The “rescissions bill” formalizes the spending cuts made by Elon Musk and the Department of Government Efficiency (DOGE). Speaker Johnson stated that the House is eager and ready to act on DOGE’s findings to deliver more cuts and noted that the House will act quickly once receiving the bill.
On May 29, Elon Musk announced that he will be leaving the Administration. In a social media post, Musk stated that “as my scheduled time as a Special Government Employee comes to an end, I would like to thank President Trump for the opportunity to reduce wasteful spending."
On May 30, 2025, President Trump released his FY 2026 HHS budget proposal. The proposal includes a major reorganization of HHS, combining multiple agencies including the Health Resources and Services Administration (HRSA), Substance Abuse and Mental Health Services Administration (SAMHSA), Office of the Assistant Secretary for Health (OASH), National Institute for Environmental Health Sciences (NIEHS), and some programs from the CDC into a new entity called the Administration for a Healthy America (AHA). As part of the reorganization, the budget recommends shifting the 340B program into CMS. The budget does not include many specific proposals for CMS but does include $12 million to provide oversight and auditing of covered entities and drug manufacturers participating in the 340B program, and $22 million to restart the durable medical equipment, prosthetics, orthotics, and supplies competitive bidding program.
A list of all administrative and health care-related EOs can be found here. FHP Strategies will update this document, as needed.
HEARINGS
Senate
Judiciary Committee
June 4; 10:00 AM; 430 Dirksen
Reauthorization of the Over-the-Counter Monograph Drug User Fee Program
Witness: Dr. Jacqueline Corrigan-Curay, Acting Director, Center for Drug Evaluation and Research, FDA
House
Appropriations Committee
Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
June 5; 10:30 AM
Markup of FY26 Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Bill
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
CMS
CY 2026 Hospital Outpatient PPS Policy Changes and Payment Rates and Ambulatory Surgical Center Payment System Policy Changes and Payment Rates (CMS-1834); Proposed Rule; 4/21/25
CY 2026 Changes to the End-Stage Renal Disease (ESRD) Prospective Payment System and Quality Incentive Program (CMS-1830); Proposed Rule; 4/24/25
CY 2026 Home Health Prospective Payment System Rate and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Bidding Program Updates (CMS-1828); Proposed Rule; 4/25/25
CY 2026 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1832); Proposed Rule; 4/25/25
Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability (CMS-9884); Final Rule; 5/2/25
Medicaid Eligibility Changes Under the Affordable Care Act of 2010; Giving States Freedom to Use Immigration Information to Determine State Residency for Medicaid Eligibility (CMS-2349); Final Rule; 5/27/25
FDA
Recommendations for Complying With Over-the-Counter Monograph Procedure for Minor Changes C001: Minor Changes to Solid Oral Dosage Forms for Certain Over-the-Counter Monograph Drugs (2024-622); Notice; 5/27/25
Requirements for Additional Traceability Records for Certain Foods: Compliance Date Extension; Proposed Rule; 5/27/25
REPORTS
Government Accountability Office (GAO)
On May 29, GAO released a report detailing CMS oversight of prior authorization criteria related to behavioral health services. GAO found that eight of nine selected Medicare Advantage (MA) organizations it reviewed reported requiring prior authorization for behavioral health services, particularly inpatient and other specialized care. In deciding whether to authorize inpatient behavioral health services, seven organizations reported using internal coverage criteria, while the use of internal coverage criteria was less common for other services. GAO is recommending that CMS target behavioral health services in its program audit prior authorization denial reviews and planned reviews of internal coverage criteria. CMS stated that because these services make up a small percentage of MA services, it could not commit to targeting them at this time but would take the recommendation under advisement in the future.
Congressional Budget Office (CBO)
CBO is expected to release its score of H.R. 1, the One Big Beautiful Bill Act, as passed by the House of Representatives, the week of June 2.
ADDITIONAL POLICY NEWS
On May 28, in a unanimous ruling, the U.S. Court of International Trade struck down President Trump’s tariffs on dozens of countries, stating that his justification of the tariffs with broad claims of national emergencies exceeded his legal authority. The following day, a federal appeals court temporarily reinstated the tariffs. The Court of Appeals for the Federal Circuit in Washington stated that it was pausing the lower court's ruling to consider the government's appeal and ordered the plaintiffs in the cases to respond by June 5 and the administration by June 9.
On May 28, it was announced that Andy Slavitt will serve as co-chair of the Health Care Payment Learning and Action Network Executive Forum (HCPLAN). The HCPLAN is a public-private initiative launched by HHS to accelerate the transition of the U.S. health care system from traditional fee-for-service models to alternative payment models (APMs) that emphasize value over volume. Slavitt previously served as acting CMS Administrator during the Obama Administration and a Senior Adviser on the Biden White House’s COVID-19 response team.