Health Care Watch: August 4, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from July 27 – August 2. 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 31, Ways & Means Health Subcommittee member Rep. Danny Davis (D-IL) announced that he will not seek re-election. Rep. Davis will have served in Congress for 30 years.
The House will return from recess on September 2.
Senate
On July 29, the Health, Education, Labor & Pensions (HELP) Committee Ranking Member Bernie Sanders (I-VT), alongside seven Democratic members of the committee, launched an investigation into Department of Health & Human Services (HHS) Secretary Kennedy’s decision to remove all members of the Advisory Committee on Immunization Practices (ACIP).
On July 29, the Senate voted 51-47, along party lines, to confirm Susan Monarez to serve as Director of the Centers for Disease Control and Prevention (CDC). Monarez was sworn in as CDC Director on July 31.
On July 30, Democratic Leader Chuck Schumer (D-NY), along with Sens. Ron Wyden (D-OR), Jeff Merkley (D-OR), Jeanne Shaheen (D-NH), and Ben Ray Luján (D-NM) introduced legislation that would reverse the health care cuts in the recently passed reconciliation package and permanently extend the Affordable Care Act (ACA) premium tax credits.
On July 30, the Committee on Homeland Security & Governmental Affairs voted 11-2 to advance the Risky Research Review Act. This legislation establishes an independent Life Sciences Research Security Board which will have nine members and examine gain-of-function and other high-risk life sciences research.
On July 20, the HELP Committee voted unanimously to advance S. 2292, the Over-the-Counter Monograph Drug User Fee Amendments, legislation to reauthorize the Food & Drug Administration's (FDA) over-the-counter monograph drug user fee program.
On July 31, the Appropriations Committee voted 26-3 to approve the draft fiscal year 2026 Labor, Health and Human Services, Education, and Related Agencies appropriations bill.
On July 31, the HELP Committee held a hearing entitled Making Health Care Affordable: Solutions to Lower Costs and Empower Patients. The hearing discussed rising health care costs and the impact the costs have on patients’ access to care. The Committee discussed solutions to address rising health care costs including increased transparency, pharmacy benefit manager (PBM) reform, adjustments to facility fees, and Medicare for All legislation.
REGULATORY UPDATE
On July 28, it was reported that HHS Secretary Kennedy is considering replacing all 16 current members of the U.S. Preventive Services Task Force. Secretary Kennedy postponed a meeting of the panel scheduled for earlier this month following a Supreme Court decision stating that the HHS Secretary has the authority to replace members of the Task Force.
On July 28, HHS announced the Hepatitis C Elimination Initiative Pilot to prevent, test for, treat, and cure Hepatitis C (HCV) in individuals with substance use disorder (SUD) and/or serious mental illness (SMI). The pilot will be administered by the Substance Abuse and Mental Health Services Administration (SAMHSA) and is designed to support communities severely affected by homelessness and to gain insights on effective ways to identify patients, complete treatment, cure infections, and reduce reinfection by Hepatitis C.
On July 28, 2025, the Centers for Medicare & Medicaid Services (CMS) released preliminary technical Medicare Part D bid information for contract year (CY) 2026. CMS estimates that the average base premium for 2025 will be $38.99, up from $36.78 in 2024. CMS alsoannounced continuation of the Part D Premium Stabilization Demonstration for CY 2026 but stated that it will reduce the amount of premium stabilization from the government. Key changes include a reduced base beneficiary premium (BBP), a $50 cap on year-over-year premium increases, and the return to standard risk corridor protections. For CY 2026, CMS will lower the BBP by $10 for participating standalone PDPs.
On July 28, the Federal Trade Commission (FTC) launched a public inquiry to better understand how consumers may have been exposed to false or unsupported claims about gender-affirming care, especially as it relates to minors. In a Request for Information(RFI), FTC is encouraging members of the public to comment on any issues or concerns that are relevant to the FTC’s consideration of this topic.
On July 28, FDA recommended the removal of the voluntary hold for ambulatory patients who may now receive Elevidys, a Sarepta Therapeutics gene therapy for Duchenne Muscular Dystrophy (DMD). FDA’s investigation concluded that the death of an 8-year-old boy was unrelated to the gene therapy product itself. FDA stated that it will continue to work with the sponsor regarding non ambulatory patients, which remains subject to a voluntary hold, following two deaths.
On July 29, FDA recommended a scheduling action to control certain 7-hydroxymitragynine (7-OH) products under the Controlled Substances Act (CSA). This action would place restrictions on production, distribution, and possession of the substance.
On July 29, FDA’s Chief Medical and Scientific Officer and Director of the Center for Biologics Evaluation and Research (CBER), Dr. Vinay Prasad, abruptly left the agency. Director of the Center for Drug Evaluation and Research (CDER), Dr. George Tidmarsh will take over as acting director of CBER. Scott Steele and Dr. Brittany Goldberg will work as deputy directors of CBER.
On July 29, HHS Secretary Kennedy discussed overhauling the Vaccine Injury Compensation Program (VICP). Secretary Kennedy stated that the VICP routinely dismisses meritorious cases and that he will not allow the VICP to continue to ignore its mandate and fail its mission of quickly and fairly compensating vaccine-injured individuals.
On July 30, HHS announced the publication of its Living HHS Open Data Plan and the rollout of a refreshed HealthData.gov website. The Living Open Data Plan introduces a dynamic, modular approach to data management by aiming to foster collaboration and eliminate silos across HHS operating divisions
On July 30, Peter Bowman-Davis, HHS’ Acting Chief Artificial Intelligence (AI) Officer, left the agency. Clark Minor, HHS Chief Information Officer and Chief Technology Officer, will take over responsibilities as Acting Chief AI Officer.
On July 31, HRSA issued a notice – entitled 340B Program Notice: Application Process for the 340B Rebate Model Pilot Program – to announce the availability of a new 340B Rebate Model Pilot Program. The new pilot program provides qualifying drug manufacturers a voluntary mechanism to effectuate the 340B ceiling price through a rebate model for select drugs (IPAY 2026 drugs) to all covered entities. Note, for manufacturers that meet application submission deadlines, the rebate model can be effective by January 1, 2026. Comments on the notice are due by September 2, 2025.
On July 31, CMS issued the fiscal year (FY) Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital Prospective Payment System (LTCH PPS) Final Rule. CMS finalized a 2.6% increase in IPPS operating payment rates for general acute care hospitals that successfully participate in the Hospital Inpatient Quality Reporting (IQR) program and are meaningful electronic health record (EHR) users under the Medicare Promoting Interoperability Program, reflecting a projected FY 2026 hospital market basket percentage increase of 3.3%, reduced by a 0.7 percentage point productivity adjustment. Based on the 2023-based IPPS market basket, CMS is also establishing a national labor‑related share of 66%. Overall, for FY 2026, CMS expects the changes in operating and capital IPPS payment rates will generally increase hospital payments by $5 billion. For FY 2026, CMS is making an annual update of 2.7% to the LTCH standard payment rate. The rule also finalizes a proposal to discontinue the low wage index hospital policy for FY 2026 and subsequent years, modifies four current quality measures and removes four others, finalizes updates to the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program, and makes technical updates to the Hospital Value-Based Purchasing (VBP) Program. Additionally, the rule includes changes to the Transforming Episode Accountability Model (TEAM) including capturing quality measure performance using patient-reported outcomes in the outpatient setting without increasing participant burden, improving target price construction, and broadening the three-day Skilled Nursing Facility Rule waiver, giving patients a wider choice of and access to post-acute care. A fact sheet detailing the final rule can be found here.
On July 31, CMS issued the FY 2026 Skilled Nursing Facility (SNF) PPS Final Rule. For FY 2026, CMS is finalizing updated SNF PPS rates by 3.2% based on the final SNF market basket of 3.3%, plus a 0.6% market basket forecast error adjustment, and a negative 0.7% productivity adjustment, which amounts to an increase in SNF PPS payments of $1.16 billion compared to payments in FY 2025. The rule also includes several changes to the Patient-Driven Payment Model (PDPM) ICD-10-CM code mappings, a series of operational and administrative proposals for the SNF Value-Based Purchasing (VBP) program, and a proposal to remove four standardized patient assessment data elements from the Minimum Data Set (MDS) for the SNF Quality Reporting Program (QRP). Additionally, CMS is seeking public input on approaches and opportunities to streamline regulations and reduce burdens on those participating in the Medicare program through a standalone Request for Information (RFI). A fact sheet detailing the final rule can be found here.
On July 31, FDA announced that it will require safety labeling changes to all opioid pain medications to better emphasize and explain the risks associated with their long-term use. These changes follow a public advisory committee meeting in May that reviewed data showing serious risks for patients who use opioids over long periods. The labeling changes will include the following updates: clearer risk information, dosing warnings, clarified use limits, treatment guidance, safe discontinuation, overdose reversal agents, drug interactions, more risks with overdose, and digestive health.
On July 31, HHS spokesperson Andrew Nixon stated that the Department plans to remove all members of the CDC Advisory Committee to the Director, stating that the CDC Director has full discretion to restructure this committee to align with the agency’s priorities and ensure a fresh perspective.
On August 1, CMS issued the FY 2026 Inpatient Rehabilitation Facility Prospective Payment System (IRF PPS) Final Rule. In this rule, CMS finalizes routine payment updates, changes to quality reporting requirements, and other policies. Similar to the proposed rule, this is a positive rule for providers that maintains stability in the structure and level of payments for FY2026 and makes no significant policy changes. Specifically, the rule provides for a routine annual update to the payment rates of 2.6% (the same as the proposed update in April), and updates to the wage index and other routine adjustments. CMS estimates these updates will result in an overall increase of $340 million in aggregate IRF payments for FY 2026. A fact sheet on the rule can be found here.
On August 1, CMS issued the FY 2026 Inpatient Psychiatric Facility Prospective Payment System (IPF PPS) Final Rule. In this rule, CMS updates the IPF PPS payment rates by 2.5%, based on the final 2021-based IPF market basket increase of 3.2% reduced by a 0.7 percentage point productivity adjustment. Additionally, CMS updates the outlier threshold so that outlier payments remain at 2.0% of total payments. Total estimated payments to IPFs are expected to increase by 2.4%, or $70 million, in FY 2026, relative to IPF payments in FY 2025. A fact sheet on the rule can be found here.
On August 1, CMS issued the FY 2026 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Program Requirements Final Rule. For FY 2026, CMS will update the hospice payment rate by 2.6% (an estimated increase of $750 million in payments from FY 2025). This results from the 3.3% inpatient hospital market basket percentage increase reduced by a proposed 0.7 percentage point productivity adjustment. The FY 2026 rates for hospices that do not submit the required quality data would reflect the FY 2026 hospice payment update percentage of 2.6% minus four percentage points as required by law, which would result in a 1.4% reduction over the previous year’s payment rate. The hospice cap amount for FY 2026 is $35,361.44 (FY 2025 cap amount of $34,465.34 increased by the FY 2026 hospice payment update percentage of 2.6%). A fact sheet on the rule can be found here.
WHITE HOUSE
On July 27, President Trump announced a trade deal with the European Union (EU). The EU will purchase $750 billion in U.S. energy and make new investments of $600 billion in the U.S. by 2028. Under the trade deal, the EU will pay the U.S. a tariff rate of 15%, including on autos and auto parts, pharmaceuticals, and semiconductors. A European Commission fact sheet on the trade deal states that a 15% ceiling will apply to European pharmaceuticals if the Trump Administration opts to impose a sector tariff.
On July 29, the Trump Administration froze and then released research grant funding for the National Institutes of Health (NIH). The White House Office of Management and Budget (OMB) confirmed that NIH funds were released as of July 30.
On July 30, President Trump gathered CEOs from 60 health care and information technology companies to launch a new patient data modernization initiative. The companies reportedly committed to laying the foundation for a next-generation digital health ecosystem that will aim to improve patient outcomes, reduce provider burden, and drive value. The Administration’s efforts focus on two broad areas: 1) promoting a CMS Interoperability Framework to easily and seamlessly share information between patients and providers; and 2) increasing the availability of personalized tools so that patients have the information and resources they need to make better health decisions.
On July 31, President Trump sent letters to the CEOs of large drug manufacturers outlining a series of demands aimed at ending “global freeloading” and securing Most-Favored-Nation (MFN) drug pricing for American patients. The President’s demands include:
Extending MFN pricing to Medicaid: Manufacturers must offer their full portfolio of existing drugs at MFN rates to all Medicaid patients.
Guaranteeing MFN pricing for newly launched drugs: Manufacturers must contract with the U.S. to guarantee Medicare, Medicaid, and commercial payers receive MFN prices on all new drugs (upon launch and moving forward).
Repatriating revenues to the U.S.: Manufacturers must return increased revenues earned abroad (via tougher foreign negotiations) to American patients and taxpayers through explicit agreements with the U.S. government.
Participating in direct purchasing at MFN pricing: Companies are expected to engage in Direct-to-Consumer (DTC) and/or Direct-to-Business (DTB) distribution models for high-volume, high-rebate drugs so Americans receive the same MFN prices manufacturers offer third-party payers.
The letter warned that if manufacturers do not voluntarily comply with binding commitments by September 29, the Administration will consider using “every tool in [its] arsenal” to force reductions in drug prices for American families. The letters were sent to top executives at AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, BMS, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Lilly, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi.
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
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
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; 7/9/25
Medicaid Program; Prohibition on Federal Medicaid Funding for Sex Trait Modification Procedures Furnished to Children and Youth (CMS-2451); Proposed Rule; 7/18/25
FDA
Approaches to Assessment of Overall Survival in Oncology Clinical Trials; Draft Guidance; Notice; 6/17/25
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
Evaluating the Safety of Antimicrobial New Animal Drugs with Regard to their Microbiological Effects on Bacteria of Human Health Concern; Guidance for Industry; Notice; 7/10/25
Safety Labeling Changes--Implementation of Section 505(o)(4) of the Federal Food, Drug, and Cosmetic Act; Draft Guidance for Industry; Availability; Notice; 7/21/25
Development of Non-Opioid Analgesics for Chronic Pain, Draft Guidance for Industry; Availability; Notice; 7/21/25
Expanded Access to Investigational Drugs for Treatment Use: Questions and Answers; Guidance for Industry; Availability; Notice; 7/21/25
REPORTS
Office of Inspector General (OIG)
On July 29, OIG issued a report examining hospital reports of patient harm events to CMS and states. OIG found significant discrepancy between the events that CMS and states expected hospitals to report and the events that hospitals reported. Nationwide, OIG determined that 16% (15 of 94) of harm events that hospitals identified and captured in their incident reporting or other surveillance systems were required to be reported externally per CMS and/or State requirements. However, in OIG’s sample, hospitals reported only 5 of 15 captured events per these requirements. For the remaining 79 events not required to be reported externally, hospitals voluntarily reported 7 of those events for learning purposes. OIG concluded that hospitals reported few patient harm events to CMS and states, thereby limiting hospital transparency and accountability for harm that occurred in their facilities.
On July 29, OIG issued a report examining additional steps CMS should take to help hospitals prepare for future emerging infectious disease outbreaks. OIG found that although CMS took significant actions to help hospitals prepare for a future emerging infectious disease outbreak, OIG identified gaps in CMS controls that could negatively affect hospital preparedness during a future event with a scope and duration similar to COVID-19. Specifically: 1) CMS did not ensure that surveyors were trained to cover key planning areas for an emerging infectious disease outbreak; 2) CMS did not ensure that hospital emergency preparedness plans met the needs of all at-risk patient populations; and 3) CMS’ guidance did not address the mental health of hospital frontline staff as part of hospital emergency preparedness planning. OIG made five recommendations to CMS, including that it collaborate with its emergency preparedness partners to expand surveyor training, require that hospital accreditation organization standards and survey processes cover the needs of people from all at-risk patient populations, and encourage hospitals to take into consideration the mental health of hospital frontline staff as part of emergency preparedness planning.
ADDITIONAL POLICY NEWS
On July 29, a federal judge in Arkansas blocked the state’s law that would have prevented PBMs from owning or operating retail pharmacies in the state. Judge Brian Miller issued a preliminary injunction after finding that the law likely violates the Commerce Clause and is preempted by TRICARE.
On July 29, IQVIA released a white paper entitled The Impact of Formulary Controls on Commercially Insured Patients in Five Chronic Therapeutic Areas. The white paper finds that over 75% of commercially insured patients were initially denied coverage when attempting to fill a new prescription across the five therapeutic areas analyzed and more than 90% of patients were initially denied in four of the five therapeutic areas.