The following is the latest health policy news from the federal government for May 2-8.  Some of the language used below is taken directly from government documents.

Congress

Reconciliation

  • Over the past several days the political gravity surrounding Medicaid cuts has begun to shift slightly.  Moderate Republicans have been pushing back more forcefully and more loudly against such cuts, with some saying they will not support more than work requirements and increased enforcement checks for eligibility.  Opposition to most Medicaid cuts led the Energy and Commerce Committee to delay a markup of its reconciliation bill planned for this week to give members more time to decide how to proceed.  In an even more telling sign of a political shift, strong supporters of the administration outside of Congress have begun framing cuts to Medicaid as a sure way for Republicans to lose the House majority in the 2026 mid-term elections.
  • This week, after a series of meetings with moderate Republicans, Speaker Johnson (LA) has stated that cuts to reduce the federal Medicaid match (FMAP) for the Medicaid expansion population will not be part of the reconciliation package.  Work requirements, more frequent eligibility checks for Medicaid, and stricter policies on non-citizen coverage continue to receive support from conservatives and Republicans from Democratic states while politically vulnerable Republicans remain opposed to per capita caps and limits on Medicaid provider taxes.  The Energy and Commerce Committee plans a May 13 markup but that date is not firm.
  • A group of 32 conservative Republicans, led by Rep. Lloyd Smucker (PA), wrote to House Speaker Johnson that they will not support a reconciliation bill if it adds to the federal budget deficit.  The letter states that if the reconciliation bill does not meet the spending reduction targets required by the budget resolution, tax cuts must be reduced equal to the amount that the cuts fall short.  You can read the letter here.
  • A group of 20 conservatives, led by Rep. Chip Roy (TX), declared in a “dear colleague” letter that if Congress does not enact structural Medicaid reform in reconciliation, Medicaid has the potential to bankrupt the federal government.  Read the letter here.
  • In addition, other issues, including the state and local tax deduction (SALT), energy tax credits, SNAP food benefits, rural school funding, and federal employee pension benefits, continue to raise challenges among congressional Republicans.

Medicare Provisions Under Ongoing Discussion

The Ways and Means Committee is simultaneously working on its own health care proposals.  Issues that have been under discussion since negotiations last December include addressing the current 2.83 percent reduction of Medicare payments to physicians; health care extenders, including for telehealth, the Medicare Acute Hospital Care at Home program, rural policies, and other policy changes; and long-term-care hospital payment relief.  Site-neutral Medicare payment policies for hospital outpatient departments has been highlighted as a potential pay-for.  Whether a health care package will be part of reconciliation or addressed at a later date on its own track remains unclear.

Estimates of Rise in Uninsured

At the request of ranking (minority party) members of the Senate Finance Committee and House Energy and Commerce Committee, the non-partisan Congressional Budget Office (CBO) estimated the effects of five proposed Medicaid cuts, including their effects on federal spending and the increase in the number of uninsured individuals.  The CBO estimates that:

  • Reducing the matching rate for the Medicaid expansion population would save the federal government $860 billion and increase the number of uninsured individuals by 2.4 million.
  • Limits to Medicaid provider taxes would save $880 billion and 3.9 million people would lose insurance.
  • Per capita caps on the Medicaid expansion population would save $296 billion and leave 1.5 million people without health insurance.

View the CBO report here.

The White House
  • The White House has issued an executive order calling for regulatory relief to promote the domestic production of critical medicines.  The major components of the order include streamlining the FDA’s review of domestic pharmaceutical manufacturing; enhancing inspection of foreign manufacturing facilities; streamlining review of domestic pharmaceutical manufacturing by the EPA; centralizing coordination of environmental permits to expand domestic pharmaceutical manufacturing capacity; and streamlining review of domestic pharmaceutical manufacturing by the Army Corps of Engineers.  Learn more from this executive order and an accompanying fact sheet.
  • The White House has issued an executive order calling for improving the safety and security of biological research.  The primary objective of this executive order is to more rigorously regulate gain-of-function research by ending federal funding of such research in “countries of concern,” strengthening oversight of federally funded gain-of-function research in the U.S., and establishing oversight of such research in the U.S. when that research is not funded by the federal government.  Learn more from this executive order and an accompanying fact sheet.
  • The Trump administration has withdrawn the nomination of Janette Nesheiwat, M.D. to serve as Surgeon General and forwarded to the Senate the nomination of Casey Means, M.D.
Proposed Federal FY 2026 Budget

The White House has released a broad outline of its proposed FY 2026 federal budget.  Overall, the proposed budget calls for HHS discretionary spending of $93.8 billion, a 26.2 percent reduction from the current year’s enacted budget.

Among the cuts proposed to achieve this reduction are:

  • CMS – a proposed cut of $674 million through the elimination of health disparities and health equity endeavors and Inflation Reduction Act outreach and education activities.
  • Health Resources and Services Administration (HRSA) – a proposed cut of $1.73 billion through the elimination of some programs and consolidation of overlapping programs.  HRSA itself is slated for elimination, with its programs to be distributed to other agencies.
  • The CDC – a proposed cut of $3.6 billion, which is just less than half of its current budget, eliminating some programs entirely and consolidating others.
  • The NIH – a proposed cut of $18 billion, from the current $48 billion to $27 billion, because the agency “… has broken the trust of the American people with wasteful spending, misleading information, risky research, and the promotion of dangerous ideologies that undermine public health.”  The proposed budget calls for eliminating some research areas, adding others, and consolidating some agency institutes.
  • Substance Abuse and Mental Health Services Administration (SAMHSA) – a proposed cut of $1.1 billion and a refocusing of some of the agency’s priorities.  SAMHSA itself is slated for elimination, with its remaining programs to be distributed to other agencies.
  • Agency for Healthcare Research and Quality (AHRQ) – a proposed cut of $129 million, the elimination of some of the agency’s priorities, and a greater focus on other current priorities.
  • Administration for Strategic Preparedness and Response (ASPR) – a proposed cut of $240 million for the Hospital Preparedness Program amid an expectation that states will assume the responsibilities that are part of that program.

The proposed budget also calls for spending $500 million on “Make America Healthy Again” initiatives.

Historically, presidential budget proposals have received little serious consideration before being dismissed by Congress – a circumstance that has not varied based on the party of the president submitting the budget or the party in the majority in Congress.  Their significance is generally that they present a statement of an administration’s priorities and plans.  Learn more from the proposed FY 2026 budget.  The administration is expected to release a more detailed budget in the near future.

Centers for Medicare & Medicaid Services
  • CMS announced that it is suspending eight improvement activities for the 2025 performance year in accordance with the Merit-based Incentive Payment System (MIPS) improvement activities suspension policy finalized in the 2021 physician fee schedule final rule.  The agency explains that it intends to propose removing these improvement activities in future rulemaking.  Find the notice here (scroll down to “Improvement Activities Suspension Announcement” for a direct download of the notice and information about the measures to be removed).
  • CMS has sent a bulletin to state Medicaid programs to provide technical direction to states and health insurance issuers on the submission of rate filing justifications for 2026 for single risk pool coverage in light of potential congressional actions that could affect 2026 individual market rates.  The bulletin also urges states and issuers to be prepared to react to congressional action that could affect 2026 individual market premiums, especially those actions that could lead to lower premiums for coverage on and off the exchanges.  Find the CMS bulletin here.
  • Nearly seven years ago, CMS issued a bulletin to the states providing guidance on situations in which health insurance issuers increase or “load” plan-specific premium rates to compensate for the lack of reimbursement of cost-sharing reductions (CSRs), a practice commonly referred to as “CSR loading.”  Now, to prepare for the possibility of the continued absence of an appropriation that could be used to fund CSR payments to issuers and in light of the adverse effect that CSR loading can impose on premiums for unsubsidized consumers, CMS has issued a new bulletin to the states to encourage states that permit CSR loading to consider requiring issuers that load Qualified Health Plan premiums to offer and market unloaded plans that are available exclusively outside health insurance exchanges.  Find that bulletin here.
  • CMS has published the annual graduate medical education (GME) update factors; this is a direct download zip file.  Affected providers can use these inflation factors to estimate the increase in direct GME per resident amounts between consecutive 12-month cost reporting periods.  The agency updates these files quarterly.
  • CMS has published a Paperwork Reduction Act notice of revisions of the minimum data set 3.0 (v1.20.1) nursing home and swing bed prospective payment system for the collection of data pertaining to the patient-driven payment model and the skilling nursing facility quality reporting program.  Go here for a link to a direct download of a zip file.
  • CMS has posted a bulletin that presents minor changes in its National Coverage Determination 210.15 for pre-exposure prophylaxis (PrEP) for HIV prevention.  Find that bulletin here.
  • CMS has posted the electronic clinical quality measure (eCQM) specifications for the 2026 reporting/performance period for hospital inpatient, hospital outpatient, and eligible clinician quality reporting programs.  CMS updates these specifications annually to align with current clinical guidelines and code systems so they remain relevant and actionable within the clinical care setting.  Measures will not be eligible for 2026 reporting unless and until they are proposed and finalized through notice-and-comment rulemaking for each applicable program.  Learn more about the new measures and where to find them from this CMS notice.
  • CMS has added the following items to its Quality Payment Program resource library.  All of these links are direct downloads of zip files.
  • CMS has launched a new “Fraud Detection Operations Center.”  Its activities are reported on a new CMS “Crushing Fraud, Waste, & Abuse” web page.  Learn more about the effort from this announcement on the X platform and find the “Crushing Fraud, Waste, & Abuse” web page here.
  • CMS has approved the following state plan amendments for Medicaid and CHIP programs.
    • To North Carolina, establishing a cost-based reimbursement methodology for the program NC Select Drugs, including cell and gene therapies administered in hospital inpatient, hospital outpatient, and professional outpatient settings.
    • To New Mexico, updating the Family Infant Toddler program fee schedules effective February 1, 2025.
    • To Pennsylvania, establishing a new class of supplemental payments to qualifying Medicaid-enrolled acute-care general hospitals that provide inpatient services to Medicaid beneficiaries.
    • To New Jersey, providing the state’s annual rate increases across all benefit categories as of January 1, 2025.
    • To Nevada, increasing the income standard for pregnant women in Medicaid to 200 percent of the federal poverty level.
    • To Connecticut, authorizing the state to enter into value-based supplemental drug rebate agreements on a voluntary basis.
    • To Connecticut, increasing its Medically Needy income standards.
    • To Nebraska, introducing a change to lactation counseling services, raising the current limit of five sessions per child to ten.
    • To Ohio, implementing a performance standard for qualified entities and hospitals determining presumptive eligibility for the following Medicaid eligibility groups:  parent/caretaker relatives, Group VIII adults, and former foster care children.
  • CMS has approved the following requests from state Medicaid programs to implement state-directed Medicaid payments:
    • To Michigan, implementing a uniform dollar increase established by the state for professional services provided by practitioners employed or under contract with approved public entities for the rating period covering October 1, 2022 through September 30, 2023 and incorporated into the capitation rates through a separate payment term of up to $584 million.
    • To Michigan, implementing a uniform dollar increase for psychiatric inpatient days for the rating period covering October 1, 2021 through September 30, 2022 and incorporated into the capitation rates through a separate payment term of up to $99 million.
    • To New Hampshire, implementing a minimum fee schedule established by the state for durable medical equipment for the rating period covering July 1, 2025 through June 30, 2026 and incorporated into the capitation rates through a risk-based rate adjustment.
    • To Arizona, implementing a uniform increase provided by the eligible public safety-net hospital established by the state for inpatient and outpatient hospital services for the rating period covering October 1, 2024 through September 30, 2025 and incorporated into the capitation rate through a separate payment term of up to $388 million.
    • To Arizona, implementing a uniform percentage increase, entitled Access to Professional Services Initiative, established by the state for qualified practitioners affiliated with one of the designated hospitals for the rating period covering October 1, 2024 through September 30, 2025 and incorporated into the capitation rate through a separate payment term of up to $310 million.
    • To Arizona, implementing a uniform percentage increase established by the state for a differential adjusted payments program-eligible providers for the rating period covering October 1, 2024 through September 30, 2025 and incorporated into the capitation rate through a risk-based adjustment.
    • To Arizona, introducing a uniform increase established by the state for acute inpatient and ambulatory outpatient services provided by Hospital Enhanced Access Leading to Health Improvements Initiative program-eligible hospitals for the rating period covering October 1, 2024 through September 30, 2025 and incorporated into the capitation rate through a separate payment term of up to $3 billion.
    • To New Jersey, introducing a pay-for-performance initiative focused on behavioral health performance improvement among acute-care hospitals for the rating period covering July 1, 2025 through June 30, 2026 and incorporated into the capitation rates through a separate payment term of up to $147 million.
    • To New Jersey, for a pay-for-performance initiative focused on maternal health performance improvement among acute-care hospitals licensed to provide labor and delivery services for the rating period covering July 1, 2025 through June 30, 2026 and incorporated into the capitation rates through a separate payment term of up to $63 million.
    • To Nevada, introducing a uniform increase for eligible inpatient and outpatient services at eligible private hospitals for the rating period covering January 1, 2025 through December 31, 2025 and incorporated into the capitation rates through a separate payment term of up to $1 billion.
    • To Massachusetts, implementing a uniform increase established by the state for eligible inpatient and outpatient hospital services for the rating period covering January 1, 2024 through December 31, 2024 and incorporated into the capitation rates through a separate payment term of up to $411 million.
    • To New York, introducing a population-based payment established by the state for Medicaid managed care enrollees attributed to eligible primary care providers who have active New York State Patient Centered Medical Home recognition and have attested to developing a referral workflow with regional social care networks for the rating period April 1, 2025 through March 31, 2026 and incorporated into the capitation rates through a separate payment term up to $133 million.
    • To New York, introducing population-based payment for Medicaid managed care enrollees attributed to eligible primary care providers who have active New York State Patient Centered Medical Home recognition for the rating period, April 1, 2025 through March 31, 2026 and incorporated into the capitation rates through a separate payment term up to $237 million.
    • To Tennessee, introducing a uniform percentage increase for inpatient and outpatient hospital services for the rating period from January 1, 2025 through December 31, 2025 and incorporated into the capitation rates through a separate payment term of up to $3.2 million.
    • To Wisconsin, implementing a uniform percentage increase for eligible home- and community-based services for the rating period from January 1, 2025 through December 31, 2025 and incorporated into the capitation rates through a risk-based rate adjustment.
    • To Wisconsin, introducing minimum and maximum fee schedules for sub-acute psychiatric community-based psychiatric and recovery center services for the rating period from January 1, 2025 through December 31, 2025 and incorporated into the capitation rates through a risk-based rate adjustment.
    • To Washington state, implementing a uniform increase for qualified licensed professionals employed by the University of Washington and/or a member of its affiliated physician practice plans or employed by a public hospital or other public entity for the rating period covering January 1, 2023 through December 31, 2023 and incorporated into the capitation rates through a separate payment term of up to $120.5 million.
    • To Pennsylvania, implementing a uniform percent increase for dental services for the rating period covering January 1, 2025 through December 31, 2025 and incorporated into the capitation rates through a risk-based rate adjustment.
Department of Health and Human Services
  • HHS has announced that CMS and the NIH will work together to help the NIH build a data platform enabling advanced research across claims data, electronic medical records, and consumer wearables.  CMS and NIH will start this partnership by establishing a data use agreement under CMS’s Research Data Disclosure Program focused on Medicare and Medicaid enrollees with a diagnosis of autism spectrum disorder.  This partnership will focus first on enabling research around the root causes of autism spectrum disorder, focusing on autism diagnosis trends over time, health outcomes from specific medical and behavioral interventions, access to care and disparities by demographics and geography, and the economic burden on families and health care systems.  Learn more from this HHS news release.
  • HHS’s Office for Civil Rights has clarified in a “Dear Colleague” letter its interpretation of what constitutes race-based discrimination under Title VI of the Civil Rights Act of 1964, the Affordable Care Act, and the Equal Protection Clause of the U.S. Constitution.  The letter explains that its interpretation applies not only to student admissions at HHS-funded institutions but also to academic and campus life, including the operations of university hospitals and clinics.  The letter reinforces the agency’s view that “…relying on race-based criteria, racial stereotypes, and facially neutral criteria that operates as a pretext for race are all prohibited…, including when diversity and racial-balancing are the aims.”  Learn more from this HHS news release, which includes a link to the letter.
HHS Newsletters, Reports, and Videos
Centers for Disease Control and Prevention (CDC)

The CDC has abolished its Healthcare Infection Control Practices Advisory Committee, which has long been responsible for national infection prevention guidelines in health care settings.

Congressional Budget Office (CBO)

The CBO has posted a presentation that describes how it would assess the budgetary effects of a policy that permits Medicare coverage of medications to treat obesity.  Find that presentation here.

Congressional Research Service

The Congressional Research Service has published a section-by-section summary of the continuing resolution signed into law on March 15 that is currently funding the federal government.  Go here for an overview of that summary and a link to the complete document.

Stakeholder Events

CMS – HCPCS Public Meeting – June 2

CMS will hold its first Healthcare Common Procedure Coding System (HCPCS) public meeting of 2025 to discuss CMS’s preliminary coding, Medicare benefit category, and Medicare payment determinations, if applicable, for new revisions to the HCPCS Level II code set for non-drug and non-biological

items and services.  The meeting will be held on Monday, June 2 from 9:00 to 5:00 (eastern), with the following day, June 3, available to address unfinished business.  Interested parties can attend the meeting in person at the CMS campus in Baltimore or participate virtually.  Learn more about the meeting and how to participate from this CMS notice.

CMS – Clinical Laboratory Fee Schedule Annual Public Meeting — June 27

CMS will hold a public meeting to receive comments and recommendations on the appropriate basis for establishing payment amounts for new or substantially revised Healthcare Common Procedure Coding System (HCPCS) codes being considered for Medicare payment under the clinical laboratory fee schedule for calendar year 2026.  This meeting provides a forum for those who submitted certain reconsideration requests regarding final determinations made last year on new test codes and for the public to provide comments on the requests.  The meeting will be held on Friday, June 27 from 10:00 to 4:00 and will be available both virtually and in person on the CMS campus in Baltimore.  Learn more about the meeting and its purpose and how to submit written comments from this CMS announcement.  Registration is only required for individuals giving a presentation during the meeting or attending the meeting at the CMS campus; go here to register.

CMS – CMS Quality Conference – July 1-2

CMS will hold a quality conference on Tuesday, July 1 and Wednesday, July 2.  Further information is not yet available but when it is it will be posted here and elsewhere.