The following is the latest health policy news from the federal government for May 16-22.  Some of the language used below is taken directly from government documents.

Congress:  Reconciliation

Early Thursday morning the House of Representatives passed its version of an FY 2025 budget reconciliation bill by a vote of 215-214.  The bill underwent a number of changes during the hours before its passage and its health care provisions now include $800 billion in Medicaid cuts over the next ten years.  The Congressional Budget Office projects that the bill, mostly because of the Medicaid cuts, will lead to 8.6 million people losing their health care coverage over the next ten years.  The bill now goes to the Senate, where leaders already have indicated that they expect to take a different approach on some issues.

DeBrunner & Associates sent its clients a detailed memo about the House reconciliation bill yesterday; you can find that memo here.

Department of Health and Human Services
  • HHS has announced its first steps toward implementing President Trump’s executive order “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.”  The agency will identify specific target prices that it expects pharmaceutical manufacturers to meet to satisfy the requirements of the executive order.  Under HHS’s approach, it expects each manufacturer to commit to aligning its U.S. prices for all brand products across all markets that do not currently have generic or biosimilar competition with the lowest price of a set of economic peer countries.  The most-favored nation target price is the lowest price in an Organization for Economic Co-operation and Development (OECD) country with a GDP per capita of at least 60 percent of that of the U.S. GDP per capita.  Learn more from this HHS news release and this fact sheet on the executive order on which this initiative is based.
  • HHS is launching four projects that seek to alter pharmaceutical manufacturing in the U.S. using artificial intelligence, machine learning, and informatics.  The agency believes the use of these technologies may enhance efficiency, lower production costs, reduce drug shortages, speed approval times for drugs manufactured using agile manufacturing technologies, and boost rapid response to national emergencies.  The program, called Equip-A-Pharma, is a collaboration between HHS, its Administration for Strategic Preparedness and Response (ASPR), the Defense Advanced Research Projects Agency (DARPA), and the private sector.  Over the next year, each company and its partners will seek to show how their agile technologies can potentially make active pharmaceutical ingredients and specific finished drug formulations (medications) at the point of care.  The initial projects will address U.S.-based manufacturing of eight sterile injectable or oral medications and the active pharmaceutical ingredients for these medicines.  Learn more about the project, its objectives, how it will work, and the partners in this phase of work from this HHS news release.
  • HHS, the Department of Labor, and the Treasury Department have announced that they will not enforce the final rule issued on September 24, 2024 governing the Mental Health Parity and Addiction Act or pursue enforcement litigation based on a failure to comply that occurs prior to a final decision in current litigation plus an additional 18 months.  Learn more from this CMS notice.
  • A federal court ruling has upheld the Department of Health and Human Services authority to approve rebate models pursued by pharmaceutical drug companies within the 340B drug pricing program.  At issue, numerous drug companies had announced new 340B payment models that would offer rebates after sales, rather than the current model of upfront price discounts. The ruling did not preclude a rebate model in the future. The court remanded a decision regarding one drug company’s proposed credit rebate proposal. Learn more from this ruling from the U.S. District Court for the District of Columbia.
  • CMS is not systematically tracking whether states return federal shares of Medicaid managed care medical-loss ratio remittances, HHS’s Office of the Inspector General has concluded after a recent audit.  Learn more about what the OIG found and how it recommends addressing this problem from this report.
  • HHS’s Agency for Healthcare Research and Quality (AHRQ) has proposed to the Office of Management and Budget (OMB) a new data collection for what it calls “The AHRQ Safety Program for Healthcare Associated Infection Prevention.”  In the past, AHRQ created the Comprehensive Unit-based Safety Program, which produced toolkits designed to engage clinical teams to make health care safer by combining improved teamwork, clinical best practices, and the science of safety.  Now, AHRQ plans to evaluate and update these toolkits with the help of new data it seeks to collect from hospitals.  Learn more about the AHRQ project, the data the agency seeks, the hospitals that would be required to provide it, and the anticipated burden of this data collection from this AHRQ notice.  The deadline for submitting comments about the proposed data collection is June 18.
  • HHS’s Health Resources and Services Administration (HRSA) has proposed to OMB revisions of the data reporting it requires in support of the Ryan White HIV/AIDS Program’s AIDS Education and Training Center Program.  HRSA is requesting the approval of new data collection forms to obtain more accurate data about program activities, participants, and site information and for center involvement in the HIV care and treatment workforce, knowledge gained through participating in center activities, and satisfaction with those activities.  Learn more about the changes in the data collection that HRSA proposes, the rationale for those changes, and the projected additional burden of the new data collection from this HRSA notice.  The deadline for submitting comments is July 18.
  • HHS’s Administration for Strategic Preparedness and Response (ASPR) has issued a bulletin offering information about preventing and responding to targeted violence against health care facilities.  Find that bulletin here.
  • ASPR has launched a new portable biocontainment unit for high-consequence infectious disease patients.  According to the agency, it is the only domestic capability for transporting and treating patients with high-consequence infectious disease.  Learn more from this HHS news release.
Centers for Medicare & Medicaid Services
  • CMS has announced an expansion of its auditing of Medicare Advantage plans.  Beginning immediately, CMS will audit all eligible Medicare Advantage contracts for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years 2018 through 2024.  Major elements of this undertaking include enhanced use of technology, increasing the agency’s team of medical coders from 40 to approximately 2000 by September so it can manually verify flagged diagnoses to ensure accuracy, and increased audit volume.  Learn more about CMS’s plan to audit Medicare Advantage plans more frequently and aggressively from this CMS news release.
  • CMS has announced a coordinated set of changes to the ACO REACH Model starting in performance year 2026 that it believes will improve the model test by adjusting the financial methodology to improve model sustainability based on the findings in the preview of the performance year 2023 evaluation report.  Those changes involve modifying risk score growth constraints; reducing the regional component of the benchmark for all REACH ACOs; narrowing the first risk corridors to ten percent for REACH ACOs in the global risk option; increasing the quality withhold from two percent to five percent while proportionally increasing the high performers pool bonus; updating the risk adjustment model; and adjusting performance year 2024 expenditures for significant, anomalous, and highly suspect billing.  Learn more from this CMS announcement on the ACO REACH Model web page.
  • CMS has contracted with a consultant to assist with the development, re-evaluation, and implementation of outpatient outcome/efficiency measures and that contractor is creating a technical experts panel to contribute to its work.  Specifically, it seeks experts and stakeholders to contribute direction and input to re-specify the Breast Cancer Screening Recall Rate measure (OP-39) that is currently used in Medicare’s Hospital Outpatient Quality Reporting program.  The panel will provide input on measure scoring methodologies that better reward strong performance; approaches to account for differences in patient sub-populations; and possible companion measures to provide hospitals with additional information they can use to improve their performance while avoiding potential unintended consequences.  Learn more about the technical expert panel, the specific background and experience sought among prospective panel members, and the work commitment involved from this CMS announcement, which also explains how to apply to participate.  The deadline for submitting nominations is June 10.
  • CMS has fined two hospitals – one in Arkansas and another in Louisiana – for failing to meet its requirements for price transparency.  The hospitals were fined $310,000 and $93,000, respectively, and the letters they received from CMS, in addition to describing in detail the violations at issue, warn of future fines if the shortcomings the agency found are not corrected.
  • CMS has published the 2026 CMS Quality Reporting Document Architecture (QRDA) Category I Implementation Guide, Schematron, and Sample Files for Hospital Quality Reporting (HQR).  The 2026 CMS QRDA I IG outlines requirements for hospitals to report electronic clinical quality measures (eCQMs) for the calendar year 2026 reporting period for the Hospital Inpatient Quality Reporting (IQR) Program, the Medicare Promoting Interoperability Program, and the Outpatient Quality Reporting (OQR) Program.  Go here to learn more about the new files and to find links to them.
  • CMS has added the following documents, as direct downloads of zip files, to its Quality Payment Program resource library:
Approved Medicaid State Plan Amendments and State-Directed Medicaid Payments

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

  • To Maryland, waiving the “four walls” requirement for outpatient mental health clinics in the state.
  • To Maryland, updating evaluation and management (E&M) reimbursement.
  • To Tennessee, creating a new reasonable classification of medically needy individuals under age 21.
  • To Vermont, confirming its methodology for determining household income.
  • To Vermont, removing limits on physician office visits, home visits, and nursing facility visits.
  • To Ohio, updating Ohio’s Comprehensive Primary Care (CPC) and CPC for Kids Programs under the state plan for program year 2025.
  • To Ohio, updating Ohio’s Comprehensive Maternal Care Program under the state plan for calendar year 2025.
  • To Ohio, accounting for new, amended, and/or deleted Healthcare Common Procedure Code System (HCPCS) codes in the Ohio Department of Medicaid fee schedules.
  • To Pennsylvania, adding language to the Medicaid state plan to document Pennsylvania’s process to determine when it is appropriate to approve an enrollment with a retroactive billing date.
  • To California, providing technical updates to clarify coverage of behavioral health treatment under the EPSDT benefit and updating who can supervise paraprofessionals.
  • To Colorado, reinstating prior authorization request requirements for long-term home health services effective at the end of maintenance-of-effort requirements under the American Rescue Plan Act.
  • To Colorado, removing the requirement that the provider requesting an eConsult must be a primary care medical provider.
  • To Wisconsin, updating the qualifications and duties of child care coordination providers.
  • To Oregon, adding neonatal procedure codes to the conversion factors inadvertently omitted from the current state plan.
  • To Oklahoma, expanding the hospice benefit to all Medicaid members that meet the criteria for hospice if the hospice benefit is within the scope of their categorical eligibility.
  • To Washington, updating the effective date of the fee schedule for home- and community-based services, the adult family home daily rate, the assisted living facility daily rate, the adult day health daily rate, the agency provider hourly rate, and the consumer-directed employer rate.
  • To Connecticut, memorializing new income standards for its optional state supplement program, the beneficiaries of which are eligible for Medicaid under its state plan.
HHS Newsletters, Reports, and Videos
Centers for Disease Control and Prevention (CDC)

In an article published in the New England Journal of Medicine, FDA Commissioner Martin Makary and Vinay Prasad, director of the FDA’s Center for Biologics Evaluation and Research, revealed that the federal government will provide new guidance for future COVID-19 vaccines.  In the article, they wrote that the FDA would recommend COVID-19 vaccines and boosters only for adults over the age of 65 years and for people above the age of six months with one or more risk factors that put them at high risk for severe COVID-19 outcomes.  The agency also will adopt new guidelines for the development and approval of future COVID-19 vaccines.  Learn more from the New England Journal of Medicine article “An Evidence-Based Approach to Covid-19 Vaccination,” which notes that “The views expressed in this article represent the policy position of the Food and Drug Administration.”

Food and Drug Administration (FDA)
  • To enhance state drug importation programs to help lower prescription drug prices, the FDA has announced enhancements to the pathway under section 804 of the Federal Food, Drug and Cosmetic Act that permits states and Indian tribes to import certain prescription drugs from Canada to significantly reduce the cost of these drugs to the American consumer without imposing additional risk to public health and safety.  Learn more from this FDA news release.
  • The FDA has approved for marketing the first blood test to aid in diagnosing Alzheimer’s disease.  Learn more from this FDA news release.
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.