THIS WEEK’S DOSE

• House Passes Concurrent Budget Resolution for Reconciliation Process. Passage of the resolution didn’t resolve the policy differences between the House and the Senate. Those still need to be addressed as the reconciliation package is developed.
• House Ways and Means Health Subcommittee Discusses Lowering Costs of Biosimilars. Witnesses included physicians and biosimilar manufacturers, and members discussed their views on the biosimilar market.
• House Oversight Committee Examines FDA Reform. Democrats criticized the Trump administration’s restructuring of the US Food and Drug Administration (FDA), while Republicans pushed for further FDA reform.
• CMS Releases Two MA Final Rules. The regulations increase plan payments for 2026 but omit several significant proposals.
• Trump Administration Takes Further Deregulation Actions. The administration directed federal agencies to repeal, without notice and comment, regulations that do not comply with Loper Bright, and sought public comment on which regulations to repeal.
• CMS Notifies States of Intent to Deny Future Funding of DSHPs and DSIPs. The Centers for Medicare & Medicaid Services (CMS) believes providing federal funding for designated state health programs (DSHP) and designated state investment programs (DSIP) is not in line with the mission of Medicaid.
• Federal Judge Strikes Down Biden-Era Nursing Home Staffing Rule. The ruling could impact ongoing reconciliation discussions as Republicans look for policies that would save money.
• Supreme Court, Fourth Circuit Rule on Firing of Probationary Workers. Both rulings held that the plaintiffs lacked legal standing to bring the cases.

CONGRESS

House Passes Concurrent Budget Resolution for Reconciliation Process. Over the weekend, the Senate passed the concurrent budget resolution by a 51 – 48 vote, with Sens. Paul (R-KY) and Collins (R-ME) joining Democrats in voting no. The resolution includes differing instructions for House and Senate committees, requiring the committees to continue debating spending and savings levels. Democrats introduced 800 amendments, including a bipartisan amendment from Sens. Wyden (D-OR) and Hawley (R-MO) to strike instructions for the House Energy and Commerce Committee to find at least $880 billion in savings, likely to come from Medicaid. The amendment failed, but Sens. Collins, Hawley, and Murkowski (R-AK) voted with Democrats in support.

House Republican leadership’s plan to pass the resolution before leaving for the two-week Easter recess was complicated by opposition from multiple members of the party, including House Budget Committee Chairman Arrington (R-TX). Those members were opposed to separate spending cut instructions for the House and Senate, as they wanted to stick with the House’s version of a budget resolution, which called for at least $1.5 trillion in federal spending cuts. Leadership repeatedly postponed a Rules Committee meeting to discuss the resolution, and President Trump met with House Republicans to urge them to support the concurrent resolution. Ultimately, a vote on the concurrent resolution was brought to the House floor Wednesday night but was cancelled amid strong opposition.

Senate Majority Leader Thune (R-SD) stated on Thursday that the Senate is “aligned with the House . . . in terms of savings,” noting that some senators believe the $1.5 trillion threshold is a minimum and that the Senate will “do everything we can to be as aggressive as possible to see that we are serious about the matter.” While this still leaves wiggle room as reconciliation continues, the House passed the resolution by a 216 – 214 vote. Reps. Spartz (R-IN) and Massie (R-KY) were the only Republicans to oppose it. As the vote was happening, Senate Democrats issued a letter to the public criticizing the budget resolution, arguing that it would provide a tax cut for the wealthy while cutting Medicaid. In related news, the Congressional Budget Office (CBO), in response to a request from Sen. Merkley (D-OR), released a report showing that if the Trump-era tax cuts were made permanent, the federal deficit would increase by $6 trillion over the next 10 years.

House Ways and Means Health Subcommittee Discusses Lowering Costs of Biosimilars. During the hearing, Democrats continued to express their concerns about National Institutes of Health grant reductions and the US Department of Health and Human Services (HHS) reorganization and reductions in force. Democrats were concerned about the implications of these actions for biosimilar market research and approvals. Republicans discussed disincentives and barriers to the development of new life-saving drugs, as well as issues with the current reimbursement system in Medicare and the role of pharmacy benefit managers (PBMs) in the biosimilar market. Witnesses included physicians and biosimilar manufacturers who discussed the importance of biosimilars and threats to a healthy biosimilar market, including actions from insurance companies and PBMs, cuts to federal research grants, and federal regulations.

House Oversight Committee Examines FDA Reform. Republicans in the hearing expressed the need for FDA reform, while Democrats criticized the Trump administration’s current efforts to restructure the agency. Members from both parties emphasized that relying on foreign countries for drug manufacturing poses dangers to the domestic supply chain. Witnesses provided suggestions for how to improve FDA product review and regulation of products such as hemp, e-cigarettes, and anti-obesity medications.

ADMINISTRATION

CMS Releases Two MA Final Rules. CMS released the Medicare Advantage (MA) and Part D contract year 2026 policy and technical changes final rule late on April 4, 2024. The Biden administration had issued the proposed rule in November 2024. CMS did not finalize proposals from the Biden administration to expand coverage of anti-obesity medications in Medicare and Medicaid, modify health equity policies, or increase guardrails on artificial intelligence. CMS noted that it may consider future rulemaking on these issues. Read the fact sheet here.

On April 7, 2024, CMS released the 2026 MA capitation rates and Part C and D payment policies, known as the final rate announcement. Released on an annual basis, the rate announcement is used to calculate MA plan payments and includes other payment policies that impact Part D. CMS projects that the payment policies and updates in the final rate announcement will result in a net 5.06% increase in payments to MA plans in 2026. This percentage is an increase from the advance notice, which proposed a 2.23% increase. After accounting for expected trends in coding, CMS projects a net payment increase of 7.16%. This projection is an average across the industry and will vary for each plan. Read the press release here and the fact sheet here. 

Trump Administration Takes Further Deregulation Actions. The Office of Management and Budget (OMB) issued a Deregulation Request for Information (RFI) asking for suggestions for rules and regulations that can be rescinded that are unnecessary, unlawful, or unduly burdensome, along with reasons to support the rescission. OMB particularly seeks information on regulations that are inconsistent with statute, unconstitutional, or have costs that exceed benefits. Comments are due May 11, 2025. This follows the January 2025 executive order (EO) “Unleashing Prosperity Through Deregulation,” which states that the Trump administration will repeal 10 regulations for every new regulation issued.

President Trump also sent a memo to federal agencies in follow-up to the February 2025 EO “Ensuring Lawful Governance and Implementing the President’s Deregulatory Initiative,” which directed agencies to identify unlawful and potentially unlawful regulations and begin efforts to repeal them by mid-April. The memo directs federal agencies to prioritize repeal of regulations that do not comply with various US Supreme Court decisions, including Loper Bright. The memo directs agencies to take such actions without notice and comment where doing so is in line with the “good cause” exception of the Administrative Procedure Act. That means that rules could begin being rescinded without any public input as soon as April 19, 2025.

On April 9, 2025, President Trump issued a new EO, “Reducing Anti-Competitive Regulatory Barriers,” which directs agencies to identify regulations that create monopolies, impose unnecessary barriers to market entry, or limit competition, and to recommend recission or modification. The EO also directs the Federal Trade Commission to issue an RFI within 10 days seeking public input on anticompetitive regulations, and to create within 90 days a list of anticompetitive regulations to be rescinded or modified.

CMS Notifies States of Intent to Deny Future Funding of DSHPs and DSIPs. In a State Medicaid Director Letter, CMS notes it will not approve new requests or extend existing requests for federal matching funds for Section 1115 waivers that authorize DSHPs and DSIPs. The letter notes that CMS takes issue with federal matching funds being provided to support DSHP and DSIP which have not necessarily been tied directly to services provided to Medicaid beneficiaries, unlike traditional Medicaid matching funds. Specific examples cited include funding housekeeping for individuals not eligible for Medicaid and internet for rural providers. CMS notes it will conduct direct outreach to states with existing DSHP and DSIP authority to emphasize that it will not be extended beyond the currently approved period. Read the press release here.

COURTS

Federal Judge Strikes Down Biden-Era Nursing Home Staffing Rule. A US District Court for the Northern District of Texas judge ruled that the Biden administration’s CMS exceeded its authority when issuing the regulation, citing the Supreme Court’s Loper Bright decision. The final rule in question required nursing homes to have a registered nurse onsite 24 hours a day, seven days a week, and to implement a nurse staffing standard so that each resident received 3.48 hours of nursing care per day. Plaintiffs argued that the staffing mandate would close nursing homes because they face workforce shortages. Repealing the regulation through congressional action would save an estimated $22 billion, and House Republicans have considered it as a cost-saver in the budget reconciliation process. It is unclear if the Trump administration will appeal the court’s decision and how it might impact Congress’ ability to capture those savings for reconciliation.

Supreme Court, Fourth Circuit Rule on Firing of Probationary Workers. The Supreme Court’s ruled, in a case brought by multiple nonprofits, that the nonprofits lacked legal standing to sue over the firing of probationary employees at the US Departments of Defense, Treasury, Energy, Interior, Agriculture, and Veterans Affairs. In a separate case, the US Court of Appeals for the Fourth Circuit ruled that the plaintiff states lacked legal standing to sue against firings at 18 federal agencies, including HHS. The Fourth Circuit’s decision overrules a lower court’s decision this month that the agencies must reinstate fired probationary employees in plaintiff states.

QUICK HITS

HHS Secretary Kennedy Visits Southwestern States in MAHA Tour. The Make America Healthy Again (MAHA) tour made stops in Utah, Arizona, and New Mexico, where Secretary Kennedy met with state, tribal, and local leaders about their initiatives to improve nutrition and food supply, reform the Supplemental Nutrition Assistance Program, and ban fluoride in drinking water.

Trump Pauses Tariffs, Signals Potential Pharmaceutical Tariffs. President Trump announced a 90-day pause on his administration’s reciprocal tariffs for all countries, except China, which will now be subject to a 145% tariff. Although pharmaceuticals were exempt from the original tariff policy, President Trump indicated that they may soon be subject to a separate tariff. Twenty-six Democratic representatives sent a letter to the administration expressing concern about the impact of tariffs on the medical supply chain.

HHS Secretary Kennedy Publishes Op-Ed Defending HHS Reforms. In the New York Post opinion article, he discusses the Trump administration’s goal of addressing chronic diseases and outlines the HHS restructuring announced in March.

CMS Administrator Oz Publishes Vision for the Agency. The vision notes CMS will implement President Trump’s EO on healthcare transparency, reduce unnecessary paperwork for providers, eliminate fraud, waste, and abuse, and focus on chronic disease prevention and management.

MedPAC Holds Final Meeting of 2024 – 2025 Cycle. The Medicare Payment Advisory Commission (MedPAC) meeting included a vote on a draft recommendation to reform and improve the physician fee schedule. Additional sessions focused on Part D plans, MA supplemental benefits, rural hospitals, software technologies, hospice services, and nursing home quality.

MACPAC Holds Final Meeting of 2024 – 2025 Cycle. The Medicaid and CHIP Payment and Access Commission (MACPAC) meeting included a vote on recommendations for the June 2025 report to Congress, along with sessions focused on home- and community-based services, substance use disorder and mental health, artificial intelligence in prior authorization, Medicare-Medicaid plans, and children’s healthcare.

GAO Releases Report on Drug Shortages. The US Government Accountability Office (GAO) report describes trends in drug shortages since the COVID-19 pandemic and includes two recommendations for HHS to improve its coordination of drug shortage activities across agencies.

Senate Homeland Security and Governmental Affairs Committee Advances OPM Director Nomination. Scott Kupor’s nomination for director of the Office of Personnel Management (OPM) advanced to the full Senate floor by a party-line vote of 7 – 4.

House Energy and Commerce Democrats Send Letter on HHS Hire. Ranking Member Pallone (D-NJ), Health Subcommittee Ranking Member DeGette (D-CO), and Oversight and Investigations Subcommittee Ranking Member Clarke (D-NY) posed seven questions to HHS and expressed concern about the hiring of David Geier to lead a study on the link between vaccines and autism.

NEXT WEEK’S DIAGNOSIS

The first series of proposed Medicare payment regulations are expected soon, including the Inpatient Prospective Payment System proposed rule. Both chambers have left town for the annual Easter and Passover recess and are scheduled to return on April 28, 2025. The M+ Check-Up will be on hiatus next week and will return April 25, 2025, to recap the two-week recess.