THIS WEEK’S DOSE

• Senate Finance, HELP Committees Hold RFK Jr. Nomination Hearings. The Senate Finance Committee must vote on Robert F. Kennedy (RFK) Jr.’s nomination before it moves to the full Senate for confirmation.
• Senate VA Committee Holds Oversight Hearing on Community Care. The hearing followed a House Veterans’ Affairs (VA) Committee hearing on the same issue last week, covering many similar topics.
• Senate Aging Committee Holds Hearing on Fiscal Health for Seniors. The hearing focused on the causes of inflation, and health-related discussion centered mostly on prescription drugs and Medicaid.
• Trump Issues EOs and Actions Focused on Abortion, Care for Transgender Children. The actions were highly anticipated and follow themes from his campaign.
• White House Issues, Rescinds Memo Freezing Funding for Federal Assistance Programs. The original memo, now rescinded, directed agencies to temporarily pause all federal financial assistance funding that could be implicated by Trump’s executive orders (EOs).
• Trump Administration Offers Deferred Resignation to All Federal Employees. The offer is in place through February 6 and states that employees who take advantage of this offer would be paid through September 2025.

CONGRESS

Senate Finance, HELP Committees Hold RFK Jr. Nomination Hearings. RFK Jr., nominated for Secretary of Health and Human Services (HHS), testified before the Senate Finance Committee on January 29 and before the Senate Health, Education, Labor, and Pensions (HELP) Committee on January 30. Some senators serve on both committees and therefore were able to question him twice. Republicans largely asked RFK Jr. about his positions and plans for issues such as Medicaid, rural health, food safety, transparency, and abortion. RFK Jr. noted that he would work with Members of Congress on such issues, if confirmed. While some Democrats agreed that the healthcare system was broken, they noted disagreement with several of RFK Jr.’s positions. Democrats on both committees largely questioned his qualifications and alleged that he had inconsistent views on issues such as abortion and vaccines. RFK Jr. defended his past statements and noted his belief that Democrats were misrepresenting his positions.

The next step for RFK Jr.’s nomination is a Senate Finance Committee vote, which has yet to be scheduled. His nomination would then move to the Senate floor. If every Democrat on the floor opposed him, he could only lose three Republican votes and still be confirmed.

Senate VA Committee Holds Oversight Hearing on Community Care. During the hearing, members heard from veterans, family members, and experts about how veterans continue to lack access to timely mental health and healthcare services in the Community Care program. Witnesses unanimously agreed that the VA fell short in providing access to timely and quality care for its veterans, and that the VA often restricted the use of the Community Care program. Democratic members focused on the recent firing of federal inspectors general and how federal funding cuts would impact these health programs, while Republican members focused on accountability and the inappropriate management of the VA.

Senate Aging Committee Holds Hearing on Fiscal Health for Seniors. The hearing included a panel of economic and social security experts to discuss how inflation has affected the lives of seniors. The hearing focused widely on what is causing inflation, and healthcare discussion centered on Medicaid, high prescription drug costs, and the Inflation Reduction Act (IRA). Republicans largely blamed inflation on government spending and welfare programs, while Democrats focused on the impact that inflation will have on housing, prescription drug, and retirement costs for older Americans.

ADMINISTRATION

White House Issues, Rescinds Memo Freezing Funding for Federal Financial Assistance Programs. Late on January 27, the Office of Management and Budget (OMB) released a memo directing federal agencies to pause all activities related to obligations or disbursement of all federal financial assistance and other relevant agency activities that may be implicated by President Trump’s recent EOs. The memo explicitly excluded Medicare and Social Security but caused widespread confusion as to the breadth of programs that could be impacted. Concerns were exacerbated by the release of an internal OMB listing of programs being investigated, which was far broader than the programs many stakeholders considered likely to be impacted by the EOs issued to date.

In the health arena, Medicaid was not given the protection that Medicare and Social Security received and also appeared on the OMB listing. Many organizations dependent on government funding were unable to access their funds on January 28, and the website used to track and disburse Medicaid funding was not operating correctly either. A lawsuit was immediately filed, and OMB released a Q&A factsheet noting that any program providing direct benefits to individuals was exempt from the pause, including Medicaid and the Supplemental Nutrition Assistance Program. OMB’s factsheet also noted that the only programs implicated were those impacted by seven specific Trump EOs, including those that address government diversity, equity, and inclusion programs; the Hyde Amendment; and gender ideology. Despite this communication, it remained unclear who would determine the scope of the temporary pause and how long the pause would last.

These actions from the Trump Administration were met with concern and criticism from impacted stakeholders and congressional Democrats, who noted that Congress approved these funds and that they are not optional. In response to the lawsuit, a federal judge granted an administrative stay that temporarily paused the order until February 3. On January 29, the Trump Administration rescinded the original OMB memo. Confusion remains, however, as Trump Administration officials stated that the rescission only applies to the memo, and that they will continue to proceed with freezing federal funds implicated by the EOs. In response, another federal judge has indicated that he may intervene with a broader action to prohibit the freeze in payments.

Trump Issues EOs and Actions Focused on Abortion, Care for Transgender Children. The anticipated actions provide further insight on the new Administration’s direction in these areas:

• Enforcing the Hyde Amendment. This EO directs OMB to issue guidance ensuring that agencies comply with the Hyde Amendment, which is passed by Congress annually and prohibits federal funding for abortion.
• Memo on the Mexico City Policy. This memorandum reinstates the so-called Mexico City Policy that prohibits foreign organizations that receive US federal funding from providing or promoting abortions. The policy has consistently been revoked by Democratic presidents and reinstated by Republican presidents, dating back to President Reagan.
• Ending Gender-Affirming Care for Children. Entitled “Protecting Children from Chemical and Surgical Mutilation,” this EO states that federal agencies shall not “fund, sponsor, promote, assist, or support the so-called ‘transition’ of a child from one sex to another.” It defines a child as an individual under 19 years of age, and it defines “chemical and surgical mutilation” to include a range of services and medications, including certain applications of puberty blockers, sex hormones, and surgery. The EO directs agencies that provide research or education grants to medical institutions to ensure that grantees do not perform any care that is prohibited under this EO. It directs HHS, TRICARE, and the federal employee health benefits program to not cover this care, and it directs HHS to take action through vehicles such as Medicare or Medicaid conditions of participation, Section 1557, and mandatory drug use reviews.
• Reinstating Service Members Discharged Under the Military’s COVID-19 Mandate. This EO reinstates service members who were discharged for refusing to comply with the COVID-19 vaccine mandate that was imposed in August 2021 and rescinded in January 2023.

Additional EOs are reportedly forthcoming as early as today. We will continue to provide updates on EOs impacting healthcare.

Trump Administration Offers Deferred Resignation to all Federal Employees. Federal employees have until February 6 to decide if they would like to accept the offer. The offer states that employees who accept will receive pay and benefits through September 30. The notice has caused widespread confusion and concern among federal employees, and labor representatives are urging federal employees to reject the offer, as it may not be enforceable. The administration subsequently released a frequently asked questions document with further information. The Trump Administration’s goal is to reduce the size of the federal workforce through voluntary means, but officials have indicated an intention to go further in the future, noting in the offer that they cannot provide assurance on the certainty of positions. Reductions in the federal workforce could have implications for federal healthcare programs.

QUICK HITS

• Date Set for Trump Address to Joint Session of Congress. On March 4, President Trump will address both chambers for the first time since returning to office.
• Trump Administration Removes Inspectors General. The Trump Administration fired 18 inspectors general across federal agencies, including the previous HHS Inspector General Christi Grimm. The action received broad criticism for violating a required 30-day notice to Congress to dismiss inspectors general. Senate Judiciary Chairman Grassley (R-IA) and Ranking Member Durbin (D-IL) issued a joint inquiry seeking “a lawfully-required substantive rationale behind his recent decision to dismiss Inspectors General (IGs) from 18 offices.”
• CMS Issues Statement on IRA Medicare Drug Price Negotiations. The brief statement indicates that the Trump Administration is committed to incorporating stakeholder feedback and increasing transparency in the IRA drug price negotiation program.

NEXT WEEK’S DIAGNOSIS

The Senate Finance Committee has yet to schedule a vote on RFK Jr.’s nomination, but it could occur next week, before moving to the full Senate floor. The Senate will be in session all of next week, and the House will be in session starting on Tuesday. The House Energy & Commerce Committee Health Subcommittee will hold a hearing on combatting existing and emerging illicit drug threats. In addition, the House Budget Committee reportedly plans to mark up a budget resolution to formally begin the reconciliation process, although it has not yet been formally announced.