THIS WEEK’S DOSE

• House Committees Organize, Senate Committees Begin Nomination Hearings. House healthcare committees held organizing meetings and announced subcommittee assignments, while Senate committees held nomination hearings for President-elect Trump’s appointees, although none (yet) in the healthcare space.
• Senate Committee on Homeland Security & Governmental Affairs Holds OMB Director Nomination Hearing. The Office of Management and Budget (OMB) director confirmation hearing focused on Russell Vought’s previous positions, and mentions of healthcare issues were mostly related to veterans.
• Senate Special Committee on Aging Holds Hearing on Improving Wellness Among Seniors. The hearing highlighted programs and policies that can improve seniors’ quality of life.
• CMS Announces Next 15 Drugs to be Negotiated in Medicare Part D. The prices for the 15 drugs, which include the anti-obesity medications Ozempic, Rybelsus, and Wegovy, must be negotiated and announced by September 1.
• HHS, DEA Issue Two Regulations on Telemedicine Prescribing of Controlled Substances. The regulations, one final and one proposed, from the US Department of Health and Human Services (HHS) and the US Drug Enforcement Administration (DEA) address requirements and pathways for certain providers to prescribe controlled substances via telehealth.
• CMS Finalizes NBPP for 2026. The Centers for Medicare & Medicaid Services (CMS) finalized much of what was proposed, including enhanced enforcement against agents and brokers.
• CMS Releases Advance Notice for 2026 MA and Part D Payment Policies. The annual Medicare Advantage (MA) and Part D payment update would increase MA revenue by 4.33% in 2026 compared to 2025.

CONGRESS

House Committees Organize, Senate Committees Begin Nomination Hearings. Various committees, including House Ways and Means and House Energy and Commerce, held organizational meetings this week and solidified subcommittee assignments. Reps. Buchanan (R-FL) and Doggett (D-TX) will continue as chair and ranking member, respectively, of the Ways and Means Health Subcommittee. Reps. Carter (R-GA) and DeGette (D-CO) are the new chair and ranking member, respectively, of the Energy and Commerce Health Subcommittee. The Senate Finance and Health, Education, Labor, and Pensions (HELP) Committees have not yet released subcommittee assignments.

The Senate held nomination hearings for Trump appointees this week, including hearings for secretary of defense nominee Pete Hegseth and attorney general nominee Pam Bondi. Nomination hearings for healthcare appointees, including HHS secretary nominee RFK Jr. and CMS administrator nominee Mehmet Oz, are not yet scheduled. RFK Jr. will testify before both the Senate Finance and HELP Committees, although only the Finance Committee will vote to advance his nomination. Committees typically provide a week’s notice before a nomination hearing, so health-related hearings will likely begin no earlier than the week of January 27.

Senate Committee on Homeland Security & Governmental Affairs Holds OMB Director Nomination Hearing. During the hearing, Republicans predominately praised nominee Russell Vought’s previous work as OMB director under Trump’s first Administration and emphasized that they looked forward to working with him again. Democrats pressed Vought on some of his previous positions. With respect to health-policy-focused questions, Democrats asked if he would commit to distributing funds appropriated for SUPPORT Act programs, because they stated that he previously supported withholding funds for funded programs that required reauthorization. Democrats also raised concerns about potential cuts to Veterans Affairs disability benefits.

Senate Special Committee on Aging Holds Hearing on Improving Wellness Among Seniors. The hearing included witnesses from a local police department, research centers, and nonprofits who highlighted that physical and dietary interventions at an earlier age can improve health and longevity and lower costs. Democratic members focused on how lowering prescription drug costs and implementing food programs would benefit seniors, while Republican members focused on addressing financial scams and the costs of implementing programs for older Americans.

ADMINISTRATION

CMS Announces Next 15 Drugs to be Negotiated in Medicare Part D. On the Biden Administration’s last full business day, CMS announced the second round of 15 drugs that will be negotiated in Medicare Part D starting in 2027. Notably, Medicare will negotiate prices for Ozempic, Rybelsus, and Wegovy. Per the Inflation Reduction Act, drugs were selected based on total gross covered prescription drug costs under Medicare Part D. Drug companies with a selected drug will have until February 28 to decide if they will participate in negotiations. However, if a company opts to not participate in the negotiation process, they will face a significant penalty in the form of an excise tax on the sales of that drug, potentially reaching up to 95% of the drug’s U.S. sales.

It is unclear how the incoming Trump Administration will handle both these negotiations and the MA/Part D Technical Rule, released in late November, that proposes to expand coverage of anti-obesity medications in Medicare and Medicaid. Under the Inflation Reduction Act, the final prices for these 15 drugs must be negotiated and announced by September 1, 2025. A fact sheet can be found here, and information about the first round of negotiated drug prices can be found here.

HHS, DEA Issue Two Regulations on Telemedicine Prescribing of Controlled Substances. The agencies released a final rule, Expansion of Buprenorphine Treatment via Telemedicine Encounter, which establishes requirements for the prescription of certain controlled substances via telemedicine and audio-only telemedicine for treatment of opioid use disorder. The final rule requires a DEA-registered practitioner to review the patient’s prescription drug monitoring program data for the state in which the patient is located during an audio-only telemedicine encounter. Additional prescriptions can be issued via other forms of telemedicine as authorized under the Controlled Substances Act, or after an in-person medical evaluation is conducted.

The DEA also released a proposed rule, Special Registrations for Telemedicine and Limited State Telemedicine Registrations, which would establish three special registrations that create a pathway for certain healthcare professionals to prescribe certain controlled substances via telemedicine. The special registration would only apply where the prescribing practitioner has never conducted an in-person medical evaluation of the patient prior to the issuance of the prescription. Comments are due 60 days from publication. For more information on the special registration proposed rule, check out our +Insight.

CMS Finalizes NBPP for 2026. The Notice of Benefit and Payment Parameters (NBPP) finalizes changes to health plans participating on the Affordable Care Act (ACA) Marketplace, as well as new requirements for Marketplaces themselves, agents, brokers, web-brokers, direct enrollment entities, and assisters that help Marketplace consumers. Most proposed policies were finalized and include the following:

• Agents and Brokers: CMS enhanced enforcement, including to suspend an agent’s or broker’s ability to transact information with the Exchange. CMS also updated the model consent form that agents, brokers, and web-brokers can use to obtain and document consumer consent.
• Grace Periods: CMS will allow health plans to adopt a fixed-dollar payment threshold of $10 or less, adjusted for inflation, under which plans would not be required to trigger a grace period or terminate enrollment for enrollees who fail to pay the full amount of their portion of premium owed.
• Failure to File and Reconcile: CMS will require Exchanges to provide notice to consumers and tax filers who have failed to file and reconcile their advanced premium tax credit for two consecutive years.
• Plan Options: CMS finalized updates to standardized plan options and non-standardized plan option limits, including requiring issuers to offer multiple standardized plan options within the same product network type, metal level, and service area to better differentiate these plans from one another to reduce the risk of duplicative offerings.

It is unclear how the incoming Trump Administration will handle these policies and whether any will be altered prior to the start of 2026. The final notice was effective January 15, 2025. A fact sheet is available here.

CMS Releases Advance Notice for 2026 MA and Part D Payment Policies. The Advance Notice is released on an annual basis and includes proposed updates to the capitation and risk adjustment methodologies used to calculate payments to MA plans, as well as other payment policies that impact Part D. Key proposals include:

• Overall Payment Update: CMS proposed payment updates that would result in an estimated 4.33% increase in MA revenue in 2026 compared to 2025. CMS noted that this percentage translates to an increase of more than $21 billion in MA plan payments from 2025 to 2026.
• Risk Adjustment: CMS proposed to complete the three-year phase-in of the Part C Risk Adjustment Model by calculating 100% of the risk scores using only the 2024 CMS-HCC model.
• Part C and D Star Ratings: CMS provided a list of eligible disasters for adjustment and lists measures that will be included in the Part C and D improvement measures and Categorical Adjustment Index for the 2026 Star Ratings. CMS is considering additional ways to simplify and refocus the measure set on clinical care, outcomes, and patient experience of care measures, and is considering adding geography to the Health Equity Index reward.

Comments are due by February 10, 2025, which is after President-elect Trump’s inauguration. It is unclear how the incoming Trump Administration will handle the rate notice and whether these policies and payment rates will ultimately be implemented for 2026. The fact sheet can be found here, and a press release can be found here.

QUICK HITS

• ASPE Issues Report on Medicare Part D Out-of-Pocket Cap. The HHS Assistant Secretary for Planning and Evaluation (ASPE) found that about 11 million Part D enrollees are expected to reach the $2,000 annual out-of-pocket cap enacted by the Inflation Reduction Act. Read the full report here.
• FTC Releases Second Interim Report on PBMs. The Federal Trade Commission (FTC) report on pharmacy benefit managers (PBMs) focuses on specialty generic drug costs and follows the July 2024 first interim report on PBMs. Read the press release here.
• HHS Summarizes Public Comments on Consolidation in Healthcare Markets RFI. The report highlights themes from public comments in response to a March 2024 request for information (RFI). The report calls for more ownership transparency and greater disclosures of private equity acquisition activity in healthcare markets; more enforcement action to inhibit mergers and acquisitions; and increased data sharing across federal, state, and local agencies.
• CMS Releases Snapshot of Accountable Care Initiatives. The snapshot highlights that 53.4% of traditional Medicare enrollees are in an accountable care relationship in 2025, an increase of 4.3% from 2024. Read the fact sheet here.
• CMS Issues Draft 2026 Part D Redesign Program Instructions. The instructions provide information about changes to the structure of the Part D standard benefit that were mandated by the Inflation Reduction Act. Comments are due by February 10, 2025. A fact sheet is available here.
• CMS Releases Updated Guidance on Medicaid/CHIP Children’s Continuous Eligibility. The guidance replaces previously issued guidance on the topic, clarifying policies related to implementation in the Children’s Health Insurance Program (CHIP) and for incarcerated youth. The requirement to provide 12 months of continuous eligibility to children under the age of 19 was effective January 2024.
• OIG Raises Concerns About FDA Accelerated Approval Pathway. An HHS Office of Inspector General (OIG) report recommended that the US Food and Drug Administration (FDA) modify the accelerated approval pathway to define specific factors that would require the accelerated approval council to advise on certain drug applications, and ensure appropriate documentation of meetings with sponsors in drug approval administrative files.
• CMS Releases Guidance on Improving HIV Testing, Prevention, and Care Delivery in Medicaid/CHIP. The guidance provides strategies and opportunities for state Medicaid programs based on the latest scientific evidence and aims to help address access issues raised by two recent OIG reports.
• HHS Declares Public Health Emergency, Provides Resources in California. In response to wildfires in southern California, HHS and CMS will provide resources and flexibilities, including extending the Marketplace Open Enrollment period and compiling a Medicaid disaster toolkit for states. Read the press release here.
• MedPAC Holds January 2025 Meeting. The Medicare Payment Advisory Commission (MedPAC) meeting included votes on draft recommendations for updating payments for physicians, hospital inpatient and outpatient services, skilled nursing facility services, home health agency services, inpatient rehabilitation facility services, outpatient dialysis services, and hospice services. Sessions also discussed coverage limits on stays in freestanding inpatient psychiatric facilities; cost-sharing for outpatient services at critical access hospitals; and status reports on Part D, MA, and ambulatory surgical center services.

NEXT WEEK’S DIAGNOSIS

President-elect Trump will be inaugurated on January 20. With the new Administration, we expect immediate executive orders and other actions that may impact healthcare. The House and Senate will be in session next week. The Senate HELP Committee will hold an organizational meeting on January 21. Nomination hearings for Trump’s healthcare appointees could begin the week of January 27.