21 January 2025

This Week in Health Policy for January 20

This Week (January 20 - 24)

On Monday, January 20, Donald Trump was inaugurated as the 47th president and the new administration issued several executive orders and other administrative actions that could impact health care. The House and Senate will continue organizing activities, nomination hearings and discussions on FY 2025 spending and reconciliation plans. So far, no nomination hearings for Trump's health care nominees have been scheduled.

House Ways and Means Committee will hold a Member Day hearing on "Matters Within the Committee's Tax Jurisdiction."

  • Date: Wednesday, January 22 at 10am ET
  • More information available here.

Senate Health, Education, Labor & Pensions Committee will hold a hearing on "Starting the 119th Congress."

  • Date: Tuesday, January 21 at 10am ET
  • More information available here.

Senate Veterans' Affairs Committee will hold a hearing on the Nomination of Douglas Collins to be Secretary of Veterans Affairs

  • Date: Tuesday, January 21 at 10am ET
  • More information available here.

Last Week (January 13 - 17)

Health Care Highlights

119th Session of Congress activity. This week, House and Senate committees continued organizing activities, including agenda prioritization discussions and subcommittee assignments. In the Senate, several committees kicked off the nomination process, holding initial confirmation hearings on President-elect Trump's nominees, including Russell Vought for Office of Management and Budget (OMB) director and Scott Bessent to lead the Department of Treasury. Republican leaders also continued discussions around a budget reconciliation bill (or bills) to extend expiring Tax Cuts & Jobs Act (TCJA) provisions and address other priorities, including health care items. Decisions will soon be required about a revenue target and if and how tax changes or spending cuts will offset the cost of TCJA extensions, and there is a general effort underway to identify what changes are politically viable and coordinate with Trump executive order plans. Early proposals circulating in the House listed several spending reforms to generate revenue, including cuts to Medicaid spending and Medicare reforms, including site-neutral payments. Lawmakers also are continuing discussions around a March spending package that is expected to address expiring Medicare telehealth flexibilities and other health provisions. Click here for the list of proposals.

CMS publishes next list of Part D drugs subject to drug price negotiation. On Friday (January 17), the Biden administration published the list of 15 additional Medicare Part D drugs selected to participate in the Medicare Drug Price Negotiation Program. Negotiations for the selected drugs will occur in 2025 with negotiated prices taking effect in 2027. In the announcement, HHS said the selected drugs account for about $41 billion in total gross covered prescription drug costs under Medicare Part D and includes drugs to treat cancer, Type 2 diabetes (including Wegovy and Ozempic), asthma and other conditions. Click here for the fact sheet that includes the list of drugs. Click here for the press release.

CMS issues CY 2026 MA, Part D Advance Notice, Part D Redesign Program Instructions. On Friday (January 10), the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2026 Medicare Advantage (MA) and Part D Advance Notice, which includes a projected 4.3% payment bump for MA plans in CY 2026. If finalized, this would amount to a $21 billion increase in overall payments for CY 2026, when compared with CY 2025. CMS also released Part D Redesign Program Instructions, providing additional detail regarding implementation of the Inflation Reduction Act's (IRA) Part D drug benefit changes. Comments on the Advance Notice and Part D Redesign Program Instructions must be submitted by 11:59 PM Eastern Time on Monday, February 10, 2025. The 2026 Rate Announcement and the Final CY 2026 Part D Redesign Program Instructions are expected to be published no later than Monday, April 7, 2025. Click here for the Advance Notice fact sheet. Click here for the press release. Click here for the Advance Notice. Click here for the Draft Part D Redesign Program Instructions. Click here for the Draft Part D Redesign Fact Sheet.

Biden issues EO creating waiver from EtO limits. On Thursday (January 16), President Biden issued an executive order allowing sterilizer facilities to request a waiver from federal limits on the use of the solvent ethylene oxide (EtO), which is commonly used in medical device sterilization.

Commerce Department issues biotech export control rule. On Wednesday (January 15), the Commerce Department issued an interim final rule that creates two new export control categories for certain biotech equipment and technology used to develop or produce the biotech equipment that the department determined presents a national security concern. The rule blocks license applications for products in the new categories for certain countries. The rule includes a list of exemptions, including products FDA has authorized for marketing. The rule took effect Thursday (January 16) and is open for public comment through March 17. Click here for the press release. Click here for the interim final rule.

DEA issues rulemaking on telehealth prescribing. On Thursday (January 16), the Drug Enforcement Administration (DEA) issued a final rule that allows a provider to prescribe an initial 6-month supply of buprenorphine through a telephone consultation with additional prescriptions of buprenorphine requiring an in-person visit. The DEA also issued proposed rules that outlines three new special registrations for providers to prescribe controlled substances via telehealth. The proposal also adds new requirements for providers who remotely prescribe Schedule II drugs, including that they be located in the same state as the patient and that telemedicine prescriptions of Schedule II controlled substances, on average, account for less than 50% of total Schedule II prescriptions written in a calendar month. Comments on the proposed rule are due by March 18. Click here for press release. Click here for the final rule. Click here for the proposed rule.

HHS issues guidance for state Medicaid programs on HIV care, prevention. On Wednesday (January 15), HHS published an informational bulletin providing guidance for state Medicaid programs to improve access to HIV testing and other prevention and care delivery services. Click here for the informational bulletin.

CMS touts progress on ACO initiatives. On Wednesday (January 15), CMS published a fact sheet highlighting progress toward accountable care, noting that as of January 2025, 53.4% of traditional Medicare beneficiaries are enrolled in an accountable care relationship with a provider. Click here for the fact sheet.

Tri-Agencies publish FAQ on No Surprises Act. On Tuesday (January 14), the Departments of Health, Labor, Treasury (Tri-Agencies) published an FAQ on the No Suprises Act and the Consolidated Appropriations Act of 2021's gag clause provision. Among other things, the FAQ clarifies that downstream gag clauses are prohibited and states that providers cannot limit a plan from sharing de-identified claims data with a business associate. Click here for the FAQ.

CMS issues final 2026 NBPP rule. On Monday (January 13), CMS released the Notice of Benefit and Payment Parameters (NBPP) for 2026 final rule, which makes several changes to increase enrollment in the individual market, improve equity, and lower cost sharing for individuals. CMS finalized updates to the risk adjustment program, including a new model factor for Pre-exposure prophylaxis (PrEP), increased enforcement efforts and requirements for agents and brokers, modest updates to standardized and non-standardized plan requirements, proposals to ensure affordable coverage, and codifying the process known as "silver-loading." Click here for the fact sheet. Click here for the final rule.

Hearings, Markups, and Other Committee Activity

Senate Special Committee on Aging held a hearing on "Improving Wellness Among Seniors: Setting a Standard for the American Dream." On Wednesday (January 15), the Committee held a hearing during which they heard testimony from a panel of witnesses representing a local police department, research centers, and nonprofits. During the hearing, lawmakers and witnesses discussed preventive measures, such as fitness and diet, that could improve health and longevity, as well as the rise in financial scams targeting older Americans and the impact of high drug costs on seniors.

  • More information available here.

Senate Homeland Security and Governmental Affairs Committee held a hearing on the Nomination of Russel Vought to be Director, Office of Management and Budget. On Wednesday (January 15), the Committee heard testimony from Russel Vought, Trump's nominee to lead OMB. During the hearing, Vought fielded questions on a range of topics, including questions from Democrat members on whether he would distribute funds appropriated for SUPPORT Act programs and potential cuts to Veterans Affairs disability benefits.

  • More information available here.

Senate Finance Committee held a hearing to Consider the Anticipated Nomination of Scott Bessent, of South Carolina, to be Secretary of the Treasury. On Thursday (January 16), the Committee heard testimony from Scott Bessent, anticipated nominee to be Treasury Secretary. Topics at the hearing largely centered on partisan views on extending expiring TCJA provisions as well as President-elect Trump's intention to implement new tariffs. During the hearing, Sen. Catherine Cortez Masto (D-NV) asked Bessent to oppose allowing the enhanced tax credits for Affordable Care Act exchange plans to expire at the end of 2025. Bessent said he would do more research into the topic.

  • More information available here.

Reports, Studies, and Journals

Federal Trade Commission (FTC): Specialty Generic Drugs: A Growing Profit Center for Vertically Integrated Pharmacy Benefit Managers. The FTC released its second interim report on pharmacy benefit managers focused on specialty drug costs. The report accuses PBMs of marking up prices of specialty generic drugs and estimated the three largest PBMs generated $1.4 billion in revenue from spread pricing.

HHS, DOJ, FTC: HHS Consolidation in Health Care Markets RFI Response. The report summarizes public comments received from the March 2024 RFI on consolidation and calls for more transparency in ownership of health care entities and greater disclosures of private equity acquisition activity in health care, as well as more enforcement action to inhibit mergers and acquisitions and increased data sharing across federal, state, and local agencies.

HHS OIG: How FDA Used Its Accelerated Approval Pathway Raised Concerns in 3 of 24 Drugs Reviewed. The report, which looked at a sample of 24 accelerated approval drugs, identified inconsistencies in three approvals and recommended the Food and Drug Administration (FDA) better define when the agency's accelerated approval council advises on certain drug applications and better documenting meetings with drug sponsors.

HHS, DOL, DOT: Report To Congress on MHPAEA Enforcement and Implementation, 2024. The Departments of Labor, HHS and Treasury issued the annual report to Congress on the Mental Health Parity and Addiction Equity Act highlighting Departments' ongoing enforcement activities and compliance updates.

HHS Assistant Secretary for Planning and Evaluation: Inflation Reduction Act Research Series — Projecting the Impact of the $2,000 Part D Out-Of-Pocket Cap for Medicare Part D Enrollees with High Prescription Drug Spending. The report projects about 11 million Part D enrollees will reach the Inflation Reduction Act's $2,000 cap on out-of-pocket costs in 2025.

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Contact Information

For additional information concerning this Alert, please contact:

Washington Council Ernst & Young

Document ID: 2025-0283