Health Care Watch: August 25, 2025
The following Federal Health Policy (FHP) Strategies Weekly Health Care Watch provides a summary of legislative and regulatory health care activities from August 17 – August 23. 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 August 19, Ways & Means Committee Chairman Jason Smith (R-MO) issued a statement in response to a Health Affairs study that found substantial growth in urban hospitals classifying as rural to enhance Medicare payments. Chairman Smith stated that the committee must restore integrity, commonsense, and balance to the system.
On August 20, Education & Workforce Ranking Member Bobby Scott (D-VA) sent a letter to committee Chairman Tim Walberg (R-MI) urging him to hold an oversight hearing examining the Trump Administration's HHS layoffs.
On August 21, Ways & Means Health Subcommittee Ranking Member Lloyd Doggett (D-TX) announced that he will not seek reelection if the redistricted congressional map in Texas is upheld by the federal court.
The House will return from recess on September 2.
Senate
On August 19, Sen. Chris Murphy (D-CT) and the left-leaning advocacy group Protect Our Care issued a report detailing the potential impacts of the One Big Beautiful Bill Act (OBBBA) on hospitals. The report details possible hospital closures, the impact of potential closures on patients, and rural hospitals and health care. Accompanying the report is a Hospital Crisis Watch tool to track hospital closures.
The Senate will return from recess on September 2.
REGULATORY UPDATE
On August 18, the Centers for Medicare & Medicaid Services (CMS) announced that Rujul Desai will be joining the agency as a senior counselor to CMS Administrator Dr. Mehmet Oz. Desai will focus on digital health ecosystems, proper enforcement of immigration laws, implementation of the OBBA and protection of children’s health. He previously served as HHS deputy general counsel and chief legal officer for CMS.
On August 18, the Department of Health & Human Services (HHS) launched MAHA in Action, a new platform and interactive tool that features updates on federal reforms being implemented across HHS agencies. The tracker also includes an interactive map following Secretary Kennedy’s MAHA Tours.
On August 18, the Food & Drug Administration approved Wegovy (semaglutide) injection to treat metabolic-associated steatohepatitis (MASH) in adults with moderate-to-advanced fibrosis.
On August 19, it was reported that FDA is working to centralize adverse events reporting. According to two current FDA staff, the new system would combine vaccine, drug, and device adverse event reporting systems into one automated platform. It would also use artificial intelligence (AI) to identify potential or common issues with FDA authorized and approved products earlier, with the goal of finding adverse events in real-time.
On August 19, HHS issued a declaration that allows FDA to issue Emergency Use Authorizations (EUAs) for animal drugs to treat or prevent infestations caused by the New World Screwworm (NWS). This declaration applies only to drugs for animals
On August 19, CMS launched an oversight initiative to ensure that enrollees in Medicaid and the Children’s Health Insurance Program (CHIP) are U.S. citizens, U.S. nationals, or have a satisfactory immigration status. CMS will begin providing states with monthly enrollment reports identifying individuals whose citizenship or immigration status could not be confirmed through federal databases, including the Department of Homeland Security’s Systematic Alien Verification for Entitlements (SAVE) program. CMS stated that States are responsible for reviewing cases, verifying the citizenship or immigration status of identified individuals, requesting additional documentation if needed, and taking appropriate actions when necessary, including adjusting coverage or enforcing non-citizen eligibility rules.
On August 19, CMS announced the Crushing Fraud Chili Cook-Off Competition – a market-based research challenge aimed at harnessing explainable AI, specifically machine learning (ML) models, to detect anomalies and trends in Medicare claims data that can be translated into novel indicators of fraud. The challenge also seeks innovative, scalable technologies that reduce labor-intensive processes while keeping humans meaningfully in the loop to ensure effective oversight and interoperability.
On August 20, more than 750 HHS staffers signed a letter sent to HHS Secretary Kennedy and members of Congress stating that he is “endangering the nation’s health by repeatedly spreading inaccurate health information.” The letter was also signed by former Centers for Disease Control & Prevention (CDC) officials, including Dr. Anne Schuchat.
On August 20, HHS Secretary Kennedy announced that Matt Buckham will serve as his chief of staff. Buckham was previously serving as acting chief of staff.
On August 21, HHS and CMS announced the establishment of the Healthcare Advisory Committee—a group of experts charged with delivering strategic recommendations directly to HHS Secretary Kennedy and CMS Administrator Dr. Oz to improve how care is financed and delivered across Medicare, Medicaid and the Children's Health Insurance Program (CHIP), and the Health Insurance Marketplace. The advisory committee will focus on developing: 1) actionable policy initiatives to promote chronic disease prevention and management; 2) opportunities for a regulatory framework of accountability for safety and outcomes that reduce unnecessary red; 3) levers to advance a real-time data system, enabling a new standard of excellence in care, rapid claims processing, rapid quality measurement, and rewards; 4) structural opportunities to improve quality for the most vulnerable in the Medicaid program; and 5) sustainability of the Medicare Advantage program. CMS is accepting nominations for advisory committee members. More information regarding the nomination process can be found here.
On August 21, HHS, through its Administration for Children and Families (ACF), terminated California’s Personal Responsibility Education Program (PREP) grant after the state refused to remove gender ideology from the federally-funded education program to prevent teenage pregnancy and sexually transmitted infections.
On August 21, the Supreme Court ruled 5-4 to allow the Trump Administration to proceed with almost $800 million in cuts to National Institutes of Health (NIH) grants tied to diversity, equity, and inclusion (DEI). The funding correlates to nearly 1,700 grants focused on issues such as heart disease, HIV/AIDS, Alzheimer’s disease, alcohol and substance abuse and mental health issues.
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
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
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
HEARINGS
House
Energy & Commerce Health Subcommittee
September 3, 10:15am
Hearing on AI applications
September 10, 10:15am
TBD
REPORTS
Office of Inspector General (OIG)
On August 19, OIG issued a report examining Palmetto’s administration of Excess Plan Medicare segment pension assets. OIG found that Palmetto did not correctly update its Excess Plan Medicare segment pension assets from January 1, 2017, to January 1, 2022, in accordance with Federal requirements. Palmetto identified $2.5 million as its Excess Plan Medicare segment pension assets as of January 1, 2022; however, OIG determined that those assets were $2.6 million as of that date. Therefore, Palmetto understated its Excess Plan Medicare segment pension assets by $169,446. OIG recommends that Palmetto increase its Excess Plan Medicare segment pension assets by $169,446 and recognize $2.6 million as the Excess Plan Medicare segment pension assets as of January 1, 2022, and improve policies and procedures to ensure that going forward, it calculates Excess Plan Medicare segment pension assets in accordance with Federal requirements.
On August 21, OIG issued a report finding that Medicare enrollees left acute-care hospitals against medical advice at increasing rates. OIG found that rates at which enrollees leave acute-care hospitals against medical advice (AMA) have steadily increased since 2006 across most demographics and spiked during the COVID-19 public health emergency. Additionally, OIG found that enrollees who left AMA were more likely to have poor health outcomes than enrollees discharged to their homes. OIG stated that the rates at which enrollees have left AMA appear inversely correlated to the quality-of-care ratings of the associated hospitals—the lower the rating, the higher the rates. Finally, OIG stated that dual eligible enrollees and enrollees with a mental health diagnosis were more likely to leave AMA than Medicare-only enrollees and enrollees without a mental health diagnosis, respectively.
ADDITIONAL POLICY NEWS
On August 15, Dr. Paul Thomas and Dr. Kenneth Stoller, and the group Stand for Health Freedom filed a lawsuit against the CDC arguing that CDC’s recommendations for pediatric immunizations are mandates that have illegally escaped federal rulemaking. The lawsuit asks that the federal court reclassify nearly all vaccines on CDC’s pediatric immunization schedule.
On August 19, J.D. Power issued a report detailing Medicare Advantage (MA) plan member satisfaction. The report finds that overall customer satisfaction with MA plans is 623 (on a 1,000-point scale), down 29 points from a year ago. The primary cause of this decline in customer satisfaction is a 39-point drop in members’ overall level of trust in their MA plan. Additionally, the report finds that only 38% of first-year members say their insurer fulfills their service expectations, rising to 45% among established members, or those who have been with the same plan for more than one year.
On August 19, the American Academy of Pediatrics (AAP) released a children’s immunization schedule. The schedule recommends that children receive the COVID-19, flu, and respiratory syncytial virus (RSV) vaccines. This recommendation breaks from HHS guidance which does not recommend that children receive the COVID-19 vaccine. Shortly after AAP released its immunization schedule, HHS Secretary Kennedy accused the group of conflicts of interest due to corporate influence, calling it a “pay-to-play scheme to promote commercial ambitions of AAP’s Big Pharma benefactors.”
On August 20, the Journal of the American Medical Association (JAMA) issued a research letter finding that two federal vaccine advisory committees, including the CDC Advisory Committee on Immunization Practices (ACIP), have had record-low conflicts of interest over the last decade.