THIS WEEK’S DOSE

• Senate Confirms RFK Jr. as HHS Secretary. He was approved by a vote of 52 – 48. Sen. McConnell (R-KY) joined all Democrats in voting no.
• House, Senate Budget Committees Hold Budget Resolution Markups. The House and Senate must pass a unified budget resolution for reconciliation to move forward.
• Sen. Tina Smith (D-MN) Announces She Won’t Run for Reelection. This announcement comes on the heels of Sen. Gary Peters’ (D-MI) announcement that he also will not run for reelection.
• House Ways & Means Health Subcommittee Holds Hearing on Modernizing Healthcare. Members and witnesses expressed concerns regarding the healthcare system.
• House Oversight Healthcare Subcommittee Examines Welfare Programs. Members expressed differing views on the state of US welfare programs, including Medicaid.
• House Oversight DOGE Subcommittee Holds First Hearing. The hearing discussed improper payments and fraud, with healthcare mentions focused on Medicaid.
• Senate Aging Committee Examines How to Optimize Longevity. The hearing focused on how Americans can live longer, healthier lives.
• Trump Nominates Additional Healthcare Personnel. The Trump administration’s US Department of Health and Human Services (HHS) and healthcare personnel continue to fill out, including a nomination for US Drug Enforcement Administration administrator.
• NIH Issues Guidance Capping Indirect Costs. A federal court subsequently granted a temporary restraining order.
• President Trump Issues EO to Reduce Federal Workforce. The executive order (EO) aims to drastically cut the federal workforce, including at HHS.
• Legal Challenges Continue Against Trump Administration Actions. Lawsuits have been filed over health agency webpages, the federal funding freeze, and federal employee buyouts.

CONGRESS

RFK Jr. Confirmed as HHS Secretary. In a 52 – 48 Senate vote, Robert F. Kennedy (RFK) Jr. was confirmed as the next HHS secretary. All Democrats voted no, and Sen. McConnell (R-KY) was the only Republican to join them. He issued a statement explaining that he believed RFK Jr. spreads conspiracy theories and is unfit to lead HHS. Sen. McConnell also voted no on the confirmation of Tulsi Gabbard as the director of national intelligence, and on Pete Hegseth as secretary of the US Department of Defense. With RFK Jr. now officially leading HHS, we are especially attuned to the likelihood of new healthcare EOs and other administrative actions. On the same day as RFK Jr.’s confirmation, President Trump signed an EO establishing a Make America Healthy Again Commission.

The Senate will now move forward on the confirmation process for Mehmet Oz, MD, to be administrator of the Centers for Medicare and Medicaid Services (CMS). The Senate Finance Committee confirmation hearing could be scheduled as soon as early March.

House, Senate Budget Committees Hold Budget Resolution Markups. As a first step toward reconciliation, the House and Senate must pass a unified budget resolution. That process began in earnest this week when the Senate Budget Committee passed a budget resolution on a party-line vote that would bring forth a smaller reconciliation package to include immigration, defense, and energy policies. This approach is of interest to those in healthcare, because health programs could become part of the policies that help pay for this package if it moves forward. Senate Finance Chairman Crapo (R-ID) has said that the Finance Committee would likely rescind the Biden administration’s nursing home staffing regulation, which the Congressional Budget Office has scored as saving $22 billion, as his committee’s contribution to the effort.

The House Budget Committee is taking a very different approach. On February 13, it held a markup of its budget resolution, with the goal of passing one large reconciliation bill this year to address all priorities, including immigration, energy, defense, and tax cut extensions. This differs from the Senate’s intention to pass two separate reconciliation bills. The House budget resolution includes directions to the House Energy and Commerce Committee to find at least $880 billion in savings, which would likely include Medicaid reforms. The resolution passed by a party-line vote and included two Republican-led amendments. Notably, one amendment, intended to secure votes from members of the Freedom Caucus, would decrease the amount of tax cuts that could be included if $2 trillion in spending is not cut.

Senator Tina Smith (D-MN) Announces She Won’t Run for Reelection. Sen. Smith sits on the Senate Finance and HELP Committees and is active on healthcare issues. This announcement comes on the heels of Sen. Peters’ (D-MI) recent announcement that he also won’t run for reelection. These two key Democratic seats will be open for the 2026 midterm elections. Democrats and Republicans will both work to recruit top-tier candidates to enter these races.

House Ways & Means Health Subcommittee Holds Hearing on Modernizing Healthcare. The hearing included a panel of experts who discussed ways to promote healthy living, including wellness programs, early screenings, and flexible healthcare options (such as health savings accounts and individual coverage health reimbursement arrangements for small business owners). Democrats focused their questions on the recent National Institutes of Health (NIH) guidance capping indirect costs and the impact it would have on future treatments and cures, while Republicans focused on the cost of chronic conditions and their impact on the US healthcare system.

House Oversight Healthcare Subcommittee Examines Welfare Programs. During the hearing, witnesses discussed their views on safety net and welfare programs, including Medicaid, housing benefits, and nutrition programs. Republicans expressed concerns about the growth of these programs. They specifically discussed fraud, waste, and abuse in Medicaid, citing concerns over continuous enrollment and spending on illegal immigrants. They raised policies such as Medicaid block grants and work requirements as potential solutions. Democrats expressed their views that more barriers to accessing benefits should not be added, and some shared their personal experiences with welfare programs.

House Oversight DOGE Subcommittee Holds First Hearing. The newly formed subcommittee is chaired by Rep. Green (R-GA), and Rep. Stansbury (D-NM) is the ranking member. The first hearing included a panel of witnesses who discussed improper payments and fraud in federal programs. Republicans emphasized tackling waste and improper payments in federal programs, particularly Medicaid and Medicare, while Democrats highlighted the negative impact of proposed cuts on low-income and working-class people.

Senate Aging Committee Examines How to Optimize Longevity. Witnesses at the hearing discussed their concerns regarding the rise in chronic conditions and how a focus on healthy lifestyles – including eating a good diet, exercising regularly, and taking preventive efforts – could increase lifespans and improve health outcomes among older Americans. Democrats emphasized the importance of addressing social determinants of health, such as access to affordable healthcare, stable housing, financial security, and walkable communities. Republicans focused on the inefficiency of the current healthcare system, which they believe is reactive rather than preventive, and the need for more longevity-focused care.

ADMINISTRATION

Trump Nominates Additional Healthcare Personnel. President Trump nominated Gary Andres, former staff director for key House healthcare committees, and Gustav Chiarello III, an antitrust lawyer, as HHS assistant secretaries. President Trump nominated Michael Stuart, a West Virginia state senator, to be the HHS general counsel. Trump nominated Terry Cole, the secretary of public safety and homeland security for the commonwealth of Virginia, to be administrator of the US Drug Enforcement Administration, after his first pick Chad Chronister withdrew in December 2024. These nominees will all need to be confirmed by the Senate. Tom Engels returned to the Health Resources & Services Administration, a role he held for two years in the first Trump administration. Peter Nelson, formerly with the Center for American Experiment, will lead the Center for Consumer Information and Insurance Oversight, which has jurisdiction over the Affordable Care Act. These last two positions do not require Senate confirmation, and the individuals are now working in these roles.

NIH Issues Guidance Capping Indirect Costs. Late on February 7, the NIH issued guidance capping indirect cost rates for NIH award recipients at 15%. Indirect costs support grantees’ overhead and administrative costs. The guidance stated that the policy would apply to any new grants issued and to future expenses for existing grants from February 10 onward. As a justification, the NIH stated that the average indirect cost rate has been around 27% and that many organizations’ rates are higher, reaching 50% or 60%. Stakeholders issued statements opposing the policy, including hospitals, the Association of American Medical Colleges (AAMC), and lawmakers from both parties, including Sen. Collins (R-ME), the chair of the Senate Appropriations Committee.

On February 10, when the policy was supposed to go into effect, a group of 22 Democratic state attorneys general filed a federal lawsuit arguing that the change is illegal since Congress passed legislation in 2018 to prevent changes to indirect cost rates. The court granted a temporary injunction the same day, blocking the policy from going into effect in the 22 states that filed suit. AAMC subsequently joined the suit, and on February 11 the judge broadened the injunction to apply nationwide. The American Council on Education, the Association of American Universities, and the Association of Public and Land-grant Universities filed an additional federal lawsuit on February 10. This is an ongoing issue, but it is worth noting that lawmakers could advance a similar indirect costs cap in future appropriations bills or in reconciliation.

President Trump Issues EO to Reduce Federal Workforce. The EO requires agencies to implement a workforce optimization initiative, stating:

• Each agency can hire no more than one employee for every four employees that depart.
• Agency heads, in consultation with their DOGE team lead, must develop a hiring plan that meets the following requirements:
  • New career appointment hiring decisions must be made in consultation with the agency’s DOGE team lead.
  • If the DOGE team lead determines that a career appointment vacancy should not be filled, that vacancy may not be filled unless the agency head decides otherwise.
  • DOGE team leads must provide the DOGE service administrator with a monthly hiring report.
• Agency heads should prepare for large-scale reductions in force, particularly in offices that perform functions not mandated by statute and include employees working in DEI initiatives.
• Agency heads must submit a report identifying statutes that establish the agency, or subcomponents of the agency, as required entities. Of note, the authorization for NIH expired after 2020 and has not been reauthorized by Congress, although appropriations have continued.

COURTS

Legal Challenges Continue Against Trump Administration Actions. Lawsuits continue to be filed against actions taken by the Trump administration, including EOs and other administrative actions. In addition to the lawsuits against the NIH indirect costs guidance noted above, lawsuits have been filed in relation to the following:

• Health Agency Webpages. On February 11, a federal judge issued a temporary restraining order directing HHS agencies, such as the Centers for Disease Control and Prevention and the US Food and Drug Administration, to restore certain health data on their websites.
• Federal Funding Freeze. In late January, a judge blocked Office of Management and Budget (OMB) guidance ordering agencies to pause federal funding that didn’t comply with certain Trump EOs, and OMB subsequently rescinded the guidance. On February 10, a federal judge who previously ruled on the matter granted an additional motion stating that the Trump administration was violating the previous decisions and ordering agencies to restore funding.
• Federal Employee Buyout. In the original deferred resignation offer, federal employees had until February 6 to make a decision. The federal judge who originally issued an order to extend the deadline issued an additional extension but then dissolved the temporary restraining order, putting the buyout back in place.
• Gender Affirming Care EO. In response to a lawsuit filed by the PFLAG National, GLMA, and transgender individuals and their families, a federal judge on February 13 entered a 14-day nationwide temporary restraining order that prohibits the defendants from “conditioning or withholding federal funds on the fact that a healthcare entity or health professional provides gender affirming medical care to a patient under the age of nineteen.”

QUICK HITS

• GAO Publishes Report on Medicaid Enrollment of Individuals Formerly in Foster Care. In response to a request from Senate Finance Committee Ranking Member Wyden (D-OR), the Government Accountability Office (GAO) report summarized efforts by states to enroll children who age out of foster care.
• Democratic Healthcare Leaders Urge OIG to Investigate DOGE Access to Sensitive Health Information. House Energy & Commerce Committee Ranking Member Pallone (D-NJ), Senate Finance Committee Ranking Member Wyden, and House Ways & Means Committee Ranking Member Neal (D-MA) requested that the HHS Office of Inspector General (OIG) review actions taken by DOGE when accessing data at CMS and HHS. They also wrote a letter to the acting HHS secretary and acting CMS administrator seeking responses to questions about the DOGE access.
• Republicans on Energy & Commerce Committee Announce Data Privacy Working Group. The group includes Vice Chair Joyce (R-PA) and Reps. Griffith (R-VA), Balderson (R-OH), Obernolte (R-CA), Fry (R-SC), Langworthy (R-NY), Kean (R-NJ), Goldman (R-TX), and Fedorchak (R-ND), and aims to explore a legislative framework on data privacy.
• CMS Announces Reduction in Marketplace Navigator Funding. For the next four years, navigators will receive $10 million per year, which is a cut from $98 million in 2024. This matches the funding provided in the first Trump Administration. Read the press release here, where CMS notes this will allow the agency to focus on more effective strategies to improve Exchange outcomes and reduce premiums.

NEXT WEEK’S DIAGNOSIS

The House is in recess next week. The Senate will be in session following the President’s Day federal holiday on Monday. The Senate is expected to continue working on confirmations for cabinet secretaries and may also take up the budget resolution reported by the Senate Budget Committee. The Senate Homeland Security & Governmental Affairs Committee will hold a nomination hearing for Deputy Director of OMB nominee Dan Bishop, and the Senate Judiciary Committee will markup the HALT Fentanyl Act, which passed the House in a bipartisan vote earlier this month.