Health Care Watch: July 7, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from June 29 – July 6. 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 July 3, the House passed the Senate-passed version of H.R. 1, the One Big Beautiful Bill Act, by a vote of 218-214. GOP Reps. Brian Fitzpatrick (PA) and Thomas Massie (KY) voted against the legislation. President Trump signed the bill into law on July 4. The bill will reduce the Medicaid provider tax safe harbor to 3.5% in expansion states (starting FY2028), reduce Medicaid State Directed Payments to 100% of Medicare rates in expansions states and 110% of Medicare rates in non-expansion states (starting January 1, 2028), institute Medicaid work requirements for able-bodied adults (not later than January 1, 2027), a 2.5% Medicare “doc fix” in 2026, and includes $50 billion over five years for a rural health transformation program for states, described as funding for rural hospitals, and provides $20 million to the Department of Health & Human Services to implement the provider tax section, up from $6 million.
The House returns to session on July 14.
Senate
On July 1, the Senate passed its version of the One Big Beautiful Bill in a 51-50 vote with Vice President JD Vance casting the tie-breaking vote. Sens. Susan Collins (R-ME), Rand Paul (R-KY) and Thom Tillis (R-NC) joined Democrats in voting against the bill.
On June 28, Finance Committee Ranking Member Ron Wyden (D-OR) issued astatement following the Congressional Budget Office’s (CBO) preliminary analysis of the new Senate text of the Republican reconciliation bill showing the legislation would cut Medicaid by $930 billion.
REGULATORY UPDATE
On June 27, the Food & Drug Administration (FDA) announced that it has eliminated the Risk Evaluation and Mitigation Strategies (REMS) for currently approved BCMA- and CD19-directed autologous chimeric antigen receptor CAR T-cell immunotherapies. FDA determined that the approved REMS for the following products should be eliminated because a REMS is no longer necessary to ensure that the benefits of the autologous CAR T-cell immunotherapies outweigh their risks: Abecma, Breyanzi, Carvykti, Kymriah, Tecartus, Yescarta.
On June 27, FDA announced that Anindita “Annie” Saha will take on the lead policy role on artificial intelligence at the agency’s drug division. Saha has worked at the agency for 20-years and will keep her role as Associate Director for Strategic Initiatives at the Digital Health Center of Excellence.
On June 30, CMS issued a 60-day Information Collection Request (ICR) for the Medicare Drug Price Negotiation Program for drugs selected for the Initial Price Applicability Year (IPAY) 2028. The ICR outlines the required data manufacturers must submit to support the negotiation and counteroffer processes, including clinical, financial, and patent information. Comments are due by August 29, 2025.
On June 30, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2026 Home Health (HH) Prospective Payment System (PPS) proposed rule. CY 2026 updated rates include the proposed CY 2026 HH payment update of 2.4% ($425 million increase); an estimated 3.7% decrease that reflects the net impact of the proposed permanent behavior adjustment ($655 million decrease); an estimated 4.6% decrease that reflects the net impact of the proposed temporary adjustment ($815 million decrease); and an estimated 0.5% decrease that reflects the effects of a proposed update to the fixed-dollar loss (FDL) ratio ($90 million decrease). CMS estimates that Medicare payments to HHAs in CY 2026 would decrease in the aggregate by 6.4%, or $1.135 billion, compared to CY 2025, based on the proposed policies. CMS proposes to recalibrate the PDGM case-mix weights, update the low utilization payment adjustment (LUPA) thresholds, functional impairment levels and comorbidity adjustment subgroups, and update the fixed-dollar loss (FDL) for outlier payments for CY 2026. Additionally, the rule proposes changes to the face-to-face encounter policy to broaden the language to align with language in the Coronavirus Aid, Relief, and Economic Security (CARES) Actregarding which practitioners can perform the face-to-face encounter. Finally, the rule proposes durable medical equipment, prosthetic devices, prosthetics, orthotics, and supplies (DMEPOS) accreditation policies in an attempt to confirm that suppliers meet DMEPOS quality standards. A fact sheet detailing the proposed rule can be found here.Comments are due by September 2, 2025.
On June 30, CMS issued the End-Stage Renal Disease (ESRD) PPS proposed rule. For CY 2026, CMS is proposing to increase the ESRD PPS base rate to $281.06, an increase of $7.24 from the current CY 2025 base rate, which CMS expects would increase total payments to all ESRD facilities, both freestanding and hospital-based, by approximately 1.9%. CMS is proposing to make routine annual updates to the ESRD PPS-specific wage index that is used to adjust ESRD PPS payments as well as proposing routine updates to the fixed dollar loss (FDL) and Medicare allowable payment (MAP) amounts for CY 2026. The rule also updates the AKI dialysis payment rate for CY 2026 to $281.06, which is equal to the proposed CY 2026 ESRD PPS base rate. Finally, the rule proposes termination of the ESRD Treatment Choices Model. A fact sheet detailing the proposed rule can be found here. Comments are due by August 29, 2025.
On June 30, the Department of Justice (DOJ) announced the results of its 2025 National Health Care Fraud Takedown. DOJ brought criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various health care fraud schemes involving over $14.6 billion in intended loss.
On July 2, HHS and the DOJ announced the creation of the HHS-DOJ False Claims Act Working Group to strengthen enforcement against fraud and abuse across the healthcare industry. The new group has identified the follow as priority enforcement areas:
Medicare Advantage;
Drug, device or biologics pricing, including arrangements for discounts, rebates, service fees, and formulary placement and price reporting;
Barriers to patient access to care, including violations of network adequacy requirements;
Kickbacks related to drugs, medical devices, durable medical equipment, and other products paid for by federal healthcare programs; and
Materially defective medical devices that impact patient safety
The group also encourages whistleblowers to identify and report violations of the federal False Claims Act involving priority enforcement areas.
WHITE HOUSE
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
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 Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Medicare Part B (CMS-1832); Proposed Rule; 4/25/25
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
Medicaid Managed Care-State Directed Payments (CMS-2449); Proposed Rule; 6/9/25
Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2026 Rates (CMS-1833); Final rule; 6/20/25
FDA
Requirements for Additional Traceability Records for Certain Foods: Compliance Date Extension; Proposed Rule; 5/27/25
Approaches to Assessment of Overall Survival in Oncology Clinical Trials; Draft Guidance; Notice; 6/17/25
Ultra-Processed Foods; Request for Information; Notice; 6/30/35
Consideration of Enforcement Policies for In Vitro Diagnostic Tests During a Section 564 Declared Emergency; Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 6/30/25
HRSA
340B Rebate Guidance; Notice; 6/1/25
HEARINGS
House
House Energy & Commerce Committee
Health Subcommittee
July 9; 10:00 AM; 2123 Rayburn
Senate
HELP Committee
July 9; 10:00 AM; 430 Dirksen
Witnesses: TBD
Senate Appropriations Committee
July 9; 2:30 PM; 124 Dirksen
Witnesses: TBD
Senate Appropriations Committee
July 10; 11:00 AM; 124 Dirksen
ADDITIONAL POLICY NEWS
On June 27, the Supreme Court, in a 6-3 decision, ruled that the United States Preventative Task Force (USPSTF) is constitutional because the HHS Secretary has the power to appoint and fire members and reject their screening and drug recommendations.
On June 30, the Supreme Court declined to consider an appellate court’s 2023 decision overturning portions of an Oklahoma law regulating pharmacy benefit managers. The 10th Circuit appeals court ruled that federal laws regulating private employer-sponsored health plans and Medicare’s drug benefit preempt the 2019 state law’s provisions that aimed to bolster independent pharmacies’ bargaining power with PBMs.
On July 1, another federal judge temporarily blocked much of HHS’ reorganization. U.S. District Judge Melissa DuBose in Rhode Island ruled that the 19 states that sued over the layoffs and termination of congressionally mandated programs have shown irreparable harm from the cuts.