Health Care Watch: September 8, 2025
On September 9, Ways & Means Committee Chairman Jason Smith (R-MO) and Energy & Commerce Committee Chairman Brett Guthrie (R-KY) issued a statement calling for greater transparency in Medicare coverage decisions following a Government Accountability Office (GAO) report that examined National Coverage Determinations (NCDs) issued by the Centers for Medicare & Medicaid Services (CMS).
On September 9, the Appropriations Committee advanced the Fiscal Year 2026 Labor, Health and Human Services, Education, and Related Agencies Appropriations Act in a 35 to 28 vote. Tacked onto the appropriations bill was an amendment that would block funding for the new Wasteful and Inappropriate Service Reduction (WISeR) model at CMS’ Center for Medicare & Medicaid Innovation. The model would require prior authorization for certain procedures under traditional Medicare. The amendment, which was adopted, was offered by Rep. Lois Frankel (D-FL).
On September 10, the Energy & Commerce Committee held a markup of several public health reauthorization bills. All of the legislation marked up was advanced to the full committee.
Federal funding expires on September 30. Discussions are underway to extend funding through a continuing resolution. While President Trump has asked for the CR to provide funding through January 31, a short-term extension, perhaps weeks, is more likely. A temporary government shutdown is also a strong possibility. Democrats have stated they want an extension of the COVID-era Affordable Care Act (ACA) enhanced premium tax credits to be included in any funding deal. While such an addition is unlikely in a short-term funding bill this month, it is looking increasingly likely that the more generous subsidies will get extended before the end of the year.
Senate
On September 9, the Homeland Security and Governmental Affairs Subcommittee on Investigations held ahearing entitled How the Corruption of Science has Impacted Public Perception and Policies Regarding Vaccines. During the hearing, Aaron Siri, a vaccine injury lawyer who has advised Department of Health & Human Services Secretary Robert F. Kennedy Jr., discussed details of an unpublished study that he said shows that vaccinated children were more likely to develop chronic conditions compared to the unvaccinated.
On September 11, Finance Committee Ranking Member Ron Wyden (D-OR) and Reps. Jim Costa (D-CA) and Beth Van Duyne (R-TX) introduced the Permanent OPTN Fee Authority Act. This legislation would shift the authority from the United Network for Organ Sharing (UNOS) to the Health Resources and Services Administration (HRSA) to collect fees from hospitals every time a patient is added to the transplant list.
REGULATORY UPDATE
On September 9, the American Hospital Association sent a letter to the Federal Trade Commission (FTC) and the Department of Justice (DOJ), asking the agencies to investigate drug companies’ efforts to impose rebate models within the 340B Program, stating that these actions may violate federal antitrust laws and warrant immediate action.
On September 10, CMS issued preliminary guidance for states regarding the implementation of new federal payment limits for State Directed Payments (SDPs) in Medicaid managed care. The letter to states provides key program elements and preliminary guidance on section 71116 of the One Big Beautiful Bill Act:
Payment Limits: Beginning with rating periods on or after July 4, 2025, SDPs for inpatient hospital services, outpatient hospital services, nursing facility services and qualified practitioner services at an academic medical center must not exceed 100% of Medicare rates in Medicaid expansion states, or 110% of Medicare rates in non-expansion states. In the absence of a Medicare rate, the Medicaid state plan rate applies.
Grandfathering Period: Certain eligible SDPs submitted or approved before July 4, 2025, may qualify for temporary grandfathering until rating periods beginning January 1, 2028, followed by a phased reduction until they meet the new payment limits.
Next Steps for States: States must revise any pending or future SDP preprints that do not qualify for grandfathering to comply with Section 71116 before CMS will continue review. For applicable SDPs that are currently under review by CMS, CMS will notify states of whether an SDP likely qualifies for grandfathering in our approval letters for the SDP once CMS has completed its review.
On September 10, the Food & Drug Administration (FDA) issued draft guidance titled Development of Non-Opioid Analgesics for Chronic Pain in an effort to accelerate safe and effective non-opioid treatments and to reduce prescription-related opioid misuse. The new draft guidance emphasizes efficient drug development approaches, with specific attention to trial design, appropriate patient populations, and meaningful outcomes such as reducing the need for opioid use.
On September 10, the FTC sent letters to several large health care employers and staffing firms urging them to conduct a comprehensive review of their employment agreements—including any noncompete or other restrictive agreements—to ensure they are appropriately tailored and comply with the law. The letters follow a Commission vote last week to withdraw from defending the Biden administration’s nationwide noncompete ban, which the courts had enjoined on constitutional grounds.
On September 18 and 19, CDC’s Advisory Committee on Immunization Practices (ACIP) will hold its regular meetings.
WHITE HOUSE
On September 9, the Make America Healthy Again Commission released its Make Our Children Healthy Again Strategy. The strategy outlines targeted executive actions to advance research, realign incentives, increase public awareness, and strengthen private-sector collaboration. Specifically, the Strategy focuses on five key areas: restoring science and research; historic executive actions; process reform and deregulation; public awareness and education; and private sector collaboration. The Strategy includes plans that could impact drug policy including changes to the childhood vaccine schedule, launching a new vaccine injury research program, stricter oversight of drug DTC advertisements, and new approaches to speed drug development
On September 9, President Trump issued a memorandum directing the HHS Secretary to take appropriate action to ensure transparency and accuracy in direct-to-consumer prescription drug advertising, including by requiring more information on risks associated with these products in the ads. Additionally, the memorandum directs the FDA Commissioner to take appropriate action to enforce the Federal Food, Drug, and Cosmetic Act’s prescription drug advertising provisions. A factsheet detailing the memorandum can be found here. In response, the FDA sent letters directing pharmaceutical companies to take down misleading ads and announced plans to begin a rulemaking process to close the so-called “adequate provision loophole” - which it says allows companies to conceal safety risks in their ads.
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
Contract Year 2027 Policy and Technical Changes to Medicare Advantage, Medicare Prescription Drug Benefit, Medicare Cost Plan, and Programs of All-Inclusive Care for the Elderly Programs (CMS-4212); Proposed Rule; 9/4/25
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
Expanded Access to Investigational Drugs for Treatment Use: Questions and Answers; Guidance for Industry; Availability; Notice; 7/21/25
Formal Dispute Resolution and Administrative Hearings of Final Administrative Orders Under Section 505G of the Federal Food, Drug, and Cosmetic Act; Guidance for Industry; Availability; Notice; 9/2/25
Use of Real-World Evidence To Support Regulatory Decision-Making for Medical Devices; Guidance for Industry and Food and Drug Administration Staff; Availability; Notice; 9/9/25
HEARINGS
House
Ways & Means Committee
Oversight Subcommittee
September 16; 2:00 PM; 1100 Longworth
Virtue Signaling vs. Vital Services: Where Tax-Exempt Hospitals are Spending Your Tax Dollars
Witnesses: Ge Bai, Professor of Practice, Johns Hopkins University; Will Hild, Executive Director, Consumers’ Research, the Federalist Society; Christopher Whaley, Associate Professor of Health Services, Policy & Practice, Brown University School of Public Health; Stanley Goldfarb, M.D., Board Chair, Do No Harm; Jill Horwitz, Professor, UCLA School of Law.
Energy & Commerce Committee
Subcommittee on Health
September 18; 9:30 AM; 2123 Rayburn
Examining Policies to Enhance Seniors’ Access to Breakthrough Medical Technologies
Legislation to be discussed:
H.R. 842, Nancy Gardner Sewell Medicare Multi-Cancer Early Detection Screening Coverage Act
H.R. ____, Ensuring Patient Access to Critical Breakthrough Products Act of 2025
H.R. ____, To amend title XVIII of the Social Security Act to ensure transparency in the national coverage determination process under the Medicare program and to make certain adjustments to Medicare local coverage determinations.
H.R. 3826, Expanding Access to Diabetes Self-Management Training Act of 2025
Senate
HELP Committee
September 17; 10:00 AM; 430 Dirksen
Witnesses: Former CDC Director Susan Monarez
Special Committee on Aging
September 17; 3:30 PM; 216 Hart
Prescription for Trouble: Drug Safety, Supply Chains, and the Risk to Aging Americans
REPORTS
Government Accountability Office (GAO)
On September 9, GAO issued a report examining Medicare NCDs. OIG found that CMS met specified time frames of 9 or 12 months for 83% (44 of 53) of the analyses it made determinations for from October 2012 through February 2025. The remaining nine took an additional 6 to 351 days to finalize. OIG found that the agency did not systematically identify the causes of delays when it did not meet specified time frames. OIG stated that according to CMS officials, the agency works with contractors to help mitigate workload and staffing constraint challenges. OIG made two recommendations to CMS: 1) identify the causes of NCD delays to better ensure that analyses are finalized within specified time frames; and 2) make available to the public the criteria it uses to prioritize its coverage analyses. HHS concurred with OIG’s recommendations.
Congressional Budget Office (CBO)
On September 9, CBO issued a report examining growth in the 340B Drug Pricing Program. CBO found that about 90% of health care facilities that participate in the 340B program also participate in the Prime Vendor Program (PVP). Health care facilities participating in the PVP spent $43.9 billion on 340B drugs in 2021, up from $6.6 billion in 2010. Most spending on drugs purchased through the PVP in 2021, 87% was on drugs that were administered or distributed in outpatient departments of hospitals and their off-site outpatient clinics. CBO estimates that one-third of the increase in spending in the program from 2010 to 2021 can be attributed to trends in market wide growth in drug spending and disproportionate growth among drug classes that account for more spending in the 340B program than in the overall market. CBO examined three additional factors that contributed to growth in spending under the 340B program: 1) the integration of hospitals and off-site clinics; 2) increased facility participation after the implementation of the ACA; and 3) expanded use of off-site pharmacies. Finally, CBO found that the 340B program encourages behaviors that tend to increase federal spending, noting that in many cases, the evidence about the behaviors is limited, and the magnitude of each is unknown.
ADDITIONAL POLICY NEWS
On September 8, Minnesota Gov. Tim Walz (D) issued an executive order directing the State’s health and commerce departments to create a plan that ensures Minnesotans can easily receive vaccines.
On September 9, the American Academy of Family Physicians (AAFP) released its recommendations for COVID-19 vaccines. AAFP broke from HHS Secretary Kennedy’s recommendation and recommended that all children ages 6-23 months be vaccinated against COVID-19 and states that children 2-18 years should get a single dose of the vaccine if they meet certain criteria that make them high risk.
On September 11, the Medicare Payment Advisory Commission (MedPAC) released a comment letter in response to the Calendar Year (CY) 2026 Physician Fee Schedule (PFS) proposed rule. The letter addresses various provisions in the rule including the PFS payment update for CY 2026, development of strategies for updates to practice expense data collection and methodology, updates to practice expense methodology, use of outpatient prospective payment system (OPPS) data for rate setting, payment for services in urgent care centers, and the efficiency adjustment.