This Week (February 17 - 21)

This week, the House is out of session, but the Senate is expected to continue work on a budget resolution. This Week in Health Policy will not publish next week due to the holiday. We will resume publication Friday, February 28.

Last Week (February 10 - 14)

Health Care Highlights

House and Senate kick off budget reconciliation process, tee up large health care cuts. On Thursday (February 13), the House Budget Committee voted 21-16, along party lines, to approve Chairman Jodey Arrington's (R-TX) FY2025 budget resolution that provides reconciliation instructions to the Ways and Means Committee for up to a $4.5 trillion net increase in the deficit over 10 years to accommodate Tax Cuts and Jobs Act (TCJA) extensions and requires other committees to achieve $1.5 trillion in savings. The language includes a claw-back mechanism that would reduce the Ways and Means Committee's level of tax cut extensions if mandatory spending — which is largely made up of Medicare, Medicaid and Social Security payments — isn't cut by $2 trillion. Committees, including Ways & Means, are required to report reconciliation legislation by March 27. The Energy and Commerce Committee, which has jurisdiction over the Medicaid program, is instructed to lower the deficit by no less than $880 billion over the budget window, which is close to the anticipated savings of moving Medicaid payments to a per-capita-cap payment system. The House Agriculture Committee, which over sees the Supplemental Nutrition Assistance Program, is instructed to cut at least $230 billion over a decade. Other offsets impacting health care, such as site neutral payments and pharmacy benefit manager reforms, are expected to be part of the discussions.

Even with the House action, the debate with the Senate regarding a one bill vs. two bill strategy for reconciliation remains unsettled. On Wednesday (February 12) the Senate Budget Committee voted 11-10 to approve an FY2025 budget reflecting the Senate's two-bill plan that would provide border security funding first and push tax decisions until later, in a second bill. Senate floor consideration is possible next week, when the House is in recess.

RFK Jr. confirmed to lead HHS, other nominees advance. On Thursday (February 13), the Senate voted 52-48 to confirm Robert F. Kennedy Jr. as Secretary of the Department of Health and Human Services (HHS), with Sen. Mitch McConnell (R-KY) breaking with Republicans to vote against the nomination. The Senate also approved the nomination of Tulsi Gabbard to be Director of National Intelligence in a 52-48 vote, and on Wednesday (February 12), the Senate Finance Committee approved the nomination of Jamieson Greer to be United States Trade Representative (USTR) 15-12, with Senator Sheldon Whitehouse (D-RI) joining Republicans to vote in favor. On Wednesday (February 12), President Trump also nominated Gustav Chiarello to serve as Assistant Secretary for Financial Resources at HHS, Gary Andres as Assistant Secretary for Legislative Affairs at HHS, and West Virginia state Sen. Michael Stuart as General Counsel for HHS.

DEA delays effectiveness of controlled substances telehealth rule. On Friday (February 14), the Drug Enforcement Administration (DEA) and HHS published a final rule delaying the effective date of two final rules published in the Federal Register on January 17 that extend telehealth flexibilities allowing practitioners registered by the DEA to prescribe buprenorphine and other Schedule III-V drugs via telemedicine and allowing Veterans Affairs practitioners to remotely prescribe schedule II-V drugs in certain circumstances. The effective date of those rules is delayed until March 21 under the President's January 20 Regulatory Freeze memo.

CMS cuts ACA navigator funding. On Friday (February 14), the Centers for Medicare and Medicaid Services (CMS) announced it has reduced funding for the Affordable Care Act (ACA) navigator program to $10 million, down from $98 million for the 2024 plan year.

Regulatory agenda. On Tuesday (February 11), the Office of Management and Budget posted a notice that a proposed rule on the Affordable Care Act individual health insurance market and exchange program integrity is pending for review.

GAO to probe DOGE's Treasury data access. On Wednesday (February 12), the Government Accountability Office (GAO) said it would examine the reports that the Department of Treasury granted DOGE employees "unprecedented access" to the federal payment system last month. The notice came in response to a request from Sens. Elizabeth Warren (D-MA) and Ron Wyden (D-OR) to investigate the claims. House Energy and Commerce Committee Ranking Member Pallone (D-NJ), Senate Finance Committee Ranking Member Ron Wyden (D-OR), and House Ways and Means Committee Ranking Member Neal (D-MA) have also requested that the HHS Office of Inspector General (OIG) review DOGE's access to CMS and HHS data.

Latest Trump executive actions. This week, President Trump signed several executive orders (EO) and other actions that have implications for health care:

• MAHA Commission: On Thursday (February 13), President Trump signed an EO that creates the Make America Healthy Again (MAHA) Commission led by newly confirmed HHS Secretary RFK Jr. The EO directs federal agencies to examine childhood chronic illnesses and deliver policy recommendations. The commission will examine factors like diet, environmental toxins, medical treatments, and corporate influence, with an initial report due in 100 days.
• Trade: On Thursday (February 13), Trump signed a memorandum directing the Administration to conduct a review to calculate and ultimately impose reciprocal tariffs on a country-by-country basis, accounting for both tariff rates and non-tariff barriers. Any new tariffs under the memo could be months away. The President said there would be no exemptions from the potential tariffs, specifically indicating implications for pharmaceuticals. He said, "[I]t's not going to be a big shock to the system, but what it's going to do is it's going to bring pharmaceuticals back to our country. Much more important than the money. It's a lot of money, but it's going to bring pharmaceuticals back to our country. It's going to bring chips back to our country … we're going to do a lot more automobile manufacturing." Some reciprocal tariffs may come into effect shortly after April 1.
• Federal workforce reductions: On Tuesday (February 11), President Trump signed an EO implementing DOGE that sets a new 1:4 hiring ratio for the federal workforce that directs agencies to hire "no more than one employee for every four employees that depart." The EO also directs agency heads to immediately take "large-scale reductions in force," prioritizing layoffs for offices that perform functions "not mandated by statute," including all agency diversity, equity, and inclusion (DEI) initiatives. The EO does not apply to functions related to public safety, immigration enforcement, or law enforcement. On Friday (February 14) STAT News reported that 5,200 workers across federal agencies, including the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention (CDC), will be laid off by the end of the day and provided a month's paid leave under the order. The CDC is estimated to lose about 1,300 workers. The layoffs are targeting workers who have been hired in the past two years.

Updates on legal challenges to previous Trump executive actions. This week, dozens of court cases challenging Trump administration actions continue to progress.

• Gender-affirming care for children. On Thursday (February 13), a federal judge in Maryland issued a nationwide injunction blocking parts of two EOs that seek to block federal funding "to promote gender ideology" and to institutions that provide gender transition care to people under 19 years old. The temporary restraining order is in place for 14 days, while the case brought by families with transgender or nonbinary children proceeds. A hearing for a separate lawsuit brought by Democratic attorneys general is scheduled for Friday (February 14).
• Foreign aid. On Thursday (February 13), a federal judge in Washington DC ordered the Trump administration to lift the 90-day freeze on foreign aid funding. Separately, another federal judge in Washington DC extended by one week a temporary restraining order halting a directive to place US Agency for International Development (USAID) workers on leave.
• Deferred resignation for federal workers. On Monday (February 10), a federal judge in Rhode Island lifted a temporary restraining order on the Office of Personnel Management's (OMB) deferred resignation program, allowing the option for federal workers to resign with full pay and benefits through September 30 to continue.
• NIH indirect costs. On Monday (February 10), a federal judge in Massachusetts temporarily blocked NIH guidance to cap indirect cost rates for NIH grant recipients at 15%. The guidance stated that the new rate would apply to both new grants issued and future expenses for existing grants beginning February 10. The same day, two other lawsuits were filed in Massachusetts, brought by public and private universities and hospitals seeking a nationwide injunction. On Wednesday (February 12), Popular Information reported NIH leadership distributed a memo directing staff to resume issuing grants with the previously negotiated indirect cost rates in response to court rulings.
• Health agency webpages. On Tuesday (February 11), a federal judge in Washington DC ordered the Trump administration to restore webpages containing public health information that were taken down and named in a lawsuit led by Doctors for America. In response some guidance, including FDA's draft guidance on diversity action plans have been reposted.
• Federal grants. On Monday (February 10), a federal judge in Rhode Island ordered the Trump administration to comply with a previous ruling to unfreeze federal grants in response to a filing from 22 Democratic attorney's general that the administration failed to comply. The case comes in response to a now rescinded OMB memo that directed federal departments and agencies to "temporarily pause all activities related to obligation or disbursement of all Federal financial assistance" to ensure funding is consistent with President Trump's executive orders, including those related to DEI programs, gender, and bans on federal abortion funding.

Hearings, Markups, and Other Committee Activity

House Energy and Commerce Committee announces Data Privacy Working Group. On Wednesday (February 12), Chairman Brett Guthrie (R-KY) and Rep. John Joyce (R-PA) announced the creation of a Republican working group to explore a legislative framework on data privacy.

• More information available here.

House Ways and Means Health Subcommittee held a hearing on "Modernizing American Health Care: Creating Healthy Options and Better Incentives." On Tuesday (February 11), the Subcommittee held a hearing on modernizing the US health care system. During the hearing, the subcommittee heard from a panel of witnesses representing life insurance companies, small employers, providers, and health care advocates. Themes throughout the hearing included lowering health care costs and improving outcomes, with many Republicans focused on ways to give employers additional flexibilities and tools, such as health savings accounts and individual coverage health reimbursement arrangements (ICHRAs). Democrats during the hearing spoke critically of executive actions to limit federal spending, including recent proposals to limit NIH funding for indirect costs, as well as Republican congressional proposals to reduce federal spending on Medicaid.

• More information available here.

Senate Special Committee on Aging held a hearing on "Optimizing Longevity: From Research to Action." On Wednesday (February 12), the Committee heard from a panel of witnesses representing providers, academic, and health researchers. During the hearing, topics included ways to address the rise in chronic conditions through healthy lifestyle choices. Republicans focused their comments on the existing efficiencies within the health care system, while Democrats largely spoke about the importance of addressing social determinants of health.

• More information available here.

House Oversight Subcommittee on Health Care and Financial Services held a hearing on "Examining the Growth of the Welfare State, Part I." On Tuesday (February 11), the Subcommittee held a hearing during which it heard from a panel of policy experts. Topics at the hearing included Medicaid and nutrition programs, with Republicans expressing concerns about fraud, waste, and abuse, and Democrats raising concerns about potential funding cuts to those programs.

• More information available here.

House Oversight Subcommittee on Delivering on Government Efficiency (DOGE) held a hearing "The War on Waste: Stamping Out the Scourge of Improper Payments and Fraud." On Wednesday (February 12), the DOGE Subcommittee held its first hearing during which panelists and Republican discussed improper payments and fraud, waste, and abuse in federal programs, such as Medicare and Medicaid. Democrats focused most of their comments on the negative impact of proposed cuts to Medicaid.

• More information available here.

Reports, Studies, and Journals

CDC: Notes from the Field: Seroprevalence of Highly Pathogenic Avian Influenza A(H5) Virus Infections Among Bovine Veterinary Practitioners — United States, September 2024. The study found three out of 150 large animal vets had antibodies for the H5N1 bird flu, with none reporting symptoms and two of the three unaware of being in contact with infected animals.

Government Accountability Office: Medicaid: Enrollment in and CMS Oversight of Former Foster Care Children Eligibility Group. The report provides an overview of Medicaid enrollment for children who age-out of the foster care system, finding 112,000 individuals were enrolled in this group in 2023.