The following is the latest health policy news from the federal government for May 9-15.  Some of the language used below is taken directly from government documents.

Congress:  Reconciliation

House Energy and Commerce Committee

Charged with finding $880 billion in federal spending cuts over the next ten years, the House Energy and Commerce Committee this week produced legislative language to be included in a House reconciliation bill that would achieve that objective.  The committee’s cost-cutting provisions include:

  • Freezing state Medicaid provider taxes at their current level, prohibiting the establishment of new provider taxes, modifying the criteria CMS uses to determine whether such taxes are redistributive, and requiring uniformity in the levy of such taxes.
  • Introducing new limits on states’ use of state-directed Medicaid managed care payments by freezing existing programs, preserving those that have already been approved or submitted.
  • Ending the temporary five percent increase in federal Medicaid matching funds that were offered to states to expand Medicaid eligibility under the American Rescue Plan Act.
  • Requiring budget neutrality as a condition for approval of future section 1115 demonstration projects.
  • Establishing work or “community engagement” requirements for able-bodied adults without dependents as a condition of Medicaid eligibility.
  • Requiring states to impose Medicaid copayments of up to $35 per service for Medicaid expansion participants whose incomes exceed 100 percent of the federal poverty level.
  • Limiting retroactive Medicaid coverage.
  • Increasing the frequency with which states must review Medicaid participants’ eligibility.
  • Prohibiting federal Medicaid matching funds for beneficiaries whose citizenship, nationality, or immigration status have not been verified.
  • Reducing the rate of federal Medicaid matching funds for states that expanded Medicaid eligibility and provided coverage for illegal immigrants.

Other provisions adopted by the Energy and Commerce Committee include:

  • A three-year delay of long-delayed Medicaid disproportionate share (Medicaid DSH) payments.
  • Relief from Medicare’s reduction of Medicare payments to physicians.
  • A ten-year delay of minimum staffing requirements for long-term-care facilities.
  • Changes in pharmacy benefit managers’ Medicaid pricing practices.
  • A prohibition against Medicaid payments to non-profit providers that are primarily engaged in family planning and reproductive services.
  • A series of changes for those enrolled in Affordable Care Act plans involving income eligibility and verification, a reduction of special enrollment periods, and more.

Learn more from the text of the health care portion of the Energy and Commerce Committee budget reconciliation package as amended here and from a committee memo offering a section-by-section explanation of the entire package.  Note that the committee memo was written before the bill was amended and does not reflect a change in the state-directed payments provision.

House Ways and Means Committee

The focus of the Ways and Means Committee’s reconciliation work has been on tax cuts and includes only a few health care provisions, including:

  • Specifying that only certain individuals – either citizens or individuals with legal immigration status – may be covered by Medicare.
  • Directing the Secretary of HHS to employ artificial intelligence to reduce and recoup improper Medicare payments starting no later than January of 2027.
  • Proposing a targeted provision permitting certain hospitals to qualify as rural emergency hospitals.
  • Providing for expanded use of health savings accounts.

Next Steps

The House Budget Committee will combine and mark up all the reconciliation bills reported from House committees on Friday, May 16 and will seek to advance a single bill to the floor for consideration and a final vote.  Speaker Johnson has been driving an aggressive timeline for the House to complete its action, hoping to pass the bill next week, before the Memorial Day recess.  Passage is not guaranteed at this point; House Republicans can only afford to lose the votes of three of their members if the bill is to advance to the Senate.

If passed by the House, the Senate will work to advance its own reconciliation proposal.  Some senators have expressed concern over the House approach:  some are unhappy with the proposed deep cuts to Medicaid while others believe the House bill does not save enough money.  The House bill also will face procedural hurdles in the Senate.  Senate Majority Leader Thune has not set a timeline for Senate action on the bill but with the Secretary of the Treasury announcing that the debt limit needs to be addressed by the end of July, this creates pressure for timely action by Congress.

The White House

The White House has issued an executive order designed to reduce prescription drug prices by conferring on American consumers what is being referred to as “most favored nation status” in prescription drug prices.  The key points of the executive order are:

  • “The Secretary of Commerce and the United States Trade Representative shall take all necessary and appropriate action to ensure foreign countries are not engaged in any act, policy, or practice that may be unreasonable or discriminatory or that may impair United States national security and that has the effect of forcing American patients to pay for a disproportionate amount of global pharmaceutical research and development…”
  • “Enabling Direct-to-Consumer Sales to American Patients at the Most-Favored-Nation Price.”
  • “Establishing Most-Favored-Nation Pricing.”

Learn more about how the administration proposes implementing this policy from the executive order and this accompanying fact sheet.

Centers for Medicare & Medicaid Services
  • CMS has issued a proposed rule that would change a Medicaid tax provision that states use to gain additional federal Medicaid matching funds.  Under current law, states can tax stakeholders and use that as part of their state share for Medicaid if those taxes are uniform and broad-based and if they pass certain regulatory tests.  Now, CMS proposes prohibiting states from taxing Medicaid business at higher rates than non-Medicaid business – such as when a managed care entity has both Medicaid and non-Medicaid components and states tax its Medicaid business more than its non-Medicaid business.  As CMS explains in the proposed regulation, a tax on a managed care organization in which Medicaid members are taxed $200 per member per month but non-Medicaid members are taxed $20 per member per month would violate the revised regulation as proposed.  CMS also proposes barring the use of vague language to disguise Medicaid-specific taxes; maintaining statistical testing while adding safeguards to prevent system gaming; and providing a transition timeline based on the age of existing waivers.  According to CMS, changing this provision would reduce Medicaid spending by $30 billion five years.  As a practical matter, CMS notes that last year, CMS approved waiver applications from four states – California, Massachusetts, New York, and Michigan – that engaged in the practice it now proposes banning and that together those waivers accounted for 95 percent of the additional federal Medicaid funding for states that this proposed change would eliminate.  Learn more about CMS’s proposal from this news release and this formal CMS notice.  The deadline for submitting comments is July 14.
  • CMS’s Center for Medicare and Medicaid Innovation has announced a shift in its strategy that “… takes a comprehensive approach to preventive care …”  The Innovation Center intends to pursue its objectives through three interrelated pillars:  promoting evidence-based prevention, empowering people to achieve their health goals, and driving choice and competition.  The agency also intends to ensure that all model tests are fiscally sound and have a pathway to certification; prioritize high-value care and services and establish incentives to reduce unnecessary utilization; require all models to have downside financial risk and require providers, and not just conveners, to assume some of the financial risk; move Medicare and Medicaid beneficiaries to accountable care arrangements with providers that assume global downside financial risk; reduce the role of state government in rate-setting for health care services; refine and simplify model benchmarking methodology; and seek to ensure that “… funds reach those most in need through proper and non-discriminatory provision of funds for health care services.”  Learn more about the agency’s plans from this CMS Innovation Center announcement; this CMS news release; the white paper “CMS Innovation Center Strategy to Make America Healthy Again;” and this FAQ.  The agency also held a webinar this week during which Innovation Center officials explained that they will be proposing changes in existing models and proposing new models, encouraging participation from providers in rural areas and home-based providers, increasing patient choices, and introducing site-neutral cost-sharing.  They also said they will hold listening sessions in the coming months to announce changes in existing models.
  • CMS has issued draft guidance for public comment on the third cycle of negotiations under the Medicare Drug Price Negotiation Program.  The draft guidance includes policies that seek to improve the transparency of the program, prioritize the selection of prescription drugs with high costs to the Medicare program, and minimize any negative effects of the negotiated maximum fair price on pharmaceutical innovation.  It also proposes introducing Part B-covered drugs to the program.  Learn more from this CMS news release, this CMS fact sheet, the draft guidance itself, and this formal CMS notice.  The deadline for submitting comments is June 26.
  • CMS has posted a bulletin updating its list of waived tests under the Clinical Laboratory Improvement Amendments (CLIA) with additions to that list, some of which took effect on January 1 and others that will take effect on July 1.  Find that bulletin here.
  • CMS has published CMS-10538, “Hospice Information for Medicare Part D Plans,” explaining the distinction between Medicare Part A and Medicare Part D financial responsibility for prescription drugs for hospice patients.  Find that CMS notice here; note that clicking the link downloads a zip file.
  • CMS and its Assistant Secretary for Technology Policy/Office of the National Coordinator for Health Information Technology (ASTP/ONC) have issued a request for information seeking input from patients, caregivers, providers, payers, technology developers, and other stakeholders on how the agency can drive the development and adoption of digital health management and care navigation applications; strengthen interoperability and secure access to health data through open, standards-based technologies; identify barriers preventing the seamless exchange of health information across systems; and reduce administrative burden while accelerating progress toward value-based, patient-centered care.  Learn more from this CMS news release and this preview version of the formal notice for the request for information.  The deadline for submitting comments is June 16.
  • CMS has developed a set of model documents to help Part D plan sponsors and Medicare Advantage organizations offering Part D coverage to meet the requirements of the Inflation Reduction Act of 2022 that established the maximum monthly cap on cost-sharing that is part of the Medicare Prescription Payment Plan.  Go here for a link to a direct download of a zip file that includes the documents.
  • CMS has added the following documents, as direct downloads of zip files, to its Quality Payment Program resource library:
  • CMS has re-published and updated the document “2025 CMS Quality Reporting Document Architecture Category I Implementation Guide Hospital Quality Reporting.”  The updated document outlines requirements for hospitals to report electronic clinical quality measures (eCQMs) for the calendar year 2025 reporting period for the Hospital Inpatient Quality Reporting Program, the Medicare Promoting Interoperability Program, and the Outpatient Quality Reporting Program.  Learn more from this announcement from CMS’s ECQI Resource Center.
Department of Health and Human Services
  • HHS and the FDA have issued a public request for information to help them identify and eliminate outdated or unnecessary regulations as part of a broader federal effort to reduce regulatory burdens and increase transparency.  Under the directive, HHS Secretary Kennedy has committed the agency to a “10-to-1” deregulatory policy:  for every new regulation proposed, at least ten existing regulatory actions will be rescinded.  Learn more about the initiative from this HHS news release and this brief video of Secretary Kennedy discussing his department’s approach to this initiative.  Written comments are due by July 11.
  • HHS has published a notice announcing that it is rescinding four regulations:
    • Extension of Designation of Scarce Materials or Threatened Materials Subject to COVID-19 Hoarding Prevention Measures; Extension of Effective Date With Modifications, 86 FR 35810 (July 7, 2021).
    • Opioid Drugs in Maintenance and Detoxification Treatment of Opiate Addiction; Repeal of Current Regulations and Issuance of New Regulations: Delay of Effective Date and Resultant Amendments to the Final Rule, 66 FR 15347 (March 19, 2001).
    • Practice Guidelines for the Administration of Buprenorphine for Treating Opioid Use Disorder, 86 FR 22439 (April 28, 2021).
    • Notification of Interpretation and Enforcement of Section 1557 of the Affordable Care Act and Title IX of the Education Amendments of 1972, 86 FR 27984 (May 25, 2021).

Learn more from this HHS notice.  These rescissions take effect immediately.

  • HHS has indicated that it does not intend to enforce part of the 2008 Mental Health Parity and Addiction Equity Act.  In a lawsuit challenging implementation of that law, HHS and its co-defendants in the case have sought a delay in the case “…pending the Departments’ reconsideration of the rule challenged in this litigation.”  HHS’s filing states that “Because the Departments do not intend to enforce parts of the rule and have indicated that they intend to reconsider the regulation challenged in this litigation, the government respectfully submits that it would be appropriate to place this case in abeyance pending the completion of that reconsideration process.”  Learn more from HHS’s filing in this case.
  • HHS’s Office for Civil Rights has initiated a compliance review of a hospital to investigate the hospital’s compliance with federal law that safeguards conscience rights in health care.  The agency opened the review based on information that ultrasound technicians employed by the hospital allegedly faced potential termination because they have religious objections to conducting ultrasounds in abortion procedures.  Learn more about this situation and HHS’s intentions from this HHS news release.
Approved Medicaid State Plan Amendments and State-Directed Medicaid Payments

CMS has approved the following state plan amendments for Medicaid and CHIP programs.

  • To Colorado, barring liable third-party payers from refusing to reimburse the Medicaid program for an item or service solely on the basis of no prior authorization.
  • To Colorado, updating community health worker and community health representative provider qualification language and establishing hard limitations on services under the preventive benefit.
  • To Iowa, adding a Recovery Audit Contractor (RAC) exemption for two years beginning July 1, 2024.
  • To Delaware, implementing an extension of the exception from participation in the Recovery Audit Contractor’s (RAC) Program.
  • To Minnesota, updating the nursing facility rate increases to property rates for four nursing facilities.
HHS Newsletters, Reports, and Videos
Centers for Disease Control and Prevention (CDC)
  • Last week the CDC held a virtual clinician update on its surveillance of human cases of bird flu and influenza A.  Go here for a video and transcript of that event, slides, information about obtaining continuing education credits, and a list of resources.
  • As of May 8, 2025, 31 states have reported 1001 confirmed cases of measles as part of 14 outbreaks (defined as three or more related cases).  Learn more about measles and responding to and treating it from this CDC update.
  • The CDC has released provisional data showing a nearly 27 percent decrease in predicted drug overdose deaths in 2024 compared to 2023.  Learn more about this development and find a link to the data in this CDC news release.
Congressional Research Service

The Congressional Research Services has published the new report “Medicaid: Selected Resources for National, State, and Local Enrollment Data.”  Find it here.

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.