Blog | 7/18/2025

Trump Administration Healthcare News: July 18, 2025

Health Advances weekly healthcare tracker focused on top level government administration news.

NOTE: All words/analysis are those from the source noted, opinions are those of the original authors and not reflective of Health Advances in general nor any individual. All sources are non-confidential and in the public domain (but some may be behind paywalls).

This issue reflects news as of 11 AM on July 17, 2025. The details and broad themes may have changed.

KEY FEDERAL GOVERNMENT NEWS

Medicare plans to cover more than a thousand new procedures in outpatient settings, despite concerns about safety

  • The Trump administration is opening the floodgates for more surgeries to be done in outpatient facilities like ambulatory surgery centers, proposing a Medicare policy that could accelerate the shift away from hospital-based care.
  • The administration is aiming to scrap Medicare’s list of 1,700 procedures that the program will only pay for in inpatient settings. Medicare officials unveiled their decision to eliminate the so-called inpatient only list in a proposed rule on Tuesday, reprising an effort from the first Trump administration.
  • The agency had already removed common surgeries like hip and knee replacements from the list in recent years, but it said that getting rid of it entirely will give patients more choices and allow doctors to use their professional judgment to decide where procedures should take place.
  • https://www.statnews.com/2025/07/17/medicare-officials-propose-scrapping-inpatient-only-list/   (subscription required for full text)

CMS Releases CY 2026 Medicare Physician Fee Schedule Proposed Rule

  • The Centers for Medicare & Medicaid Services (CMS) has released the calendar year (CY) 2026 Medicare Physician Fee Schedule Proposed Rule aimed at payment policies and other outpatient services covered under Medicare Part B.
  • Among adjustments from the previous year, the CY 2026 Qualifying Alternative Payment Model (APM) conversion factor is projected to increase by $1.24, or 3.83 percent. This is the first payment increase for physicians in five years.
  • In a groundbreaking move, CMS is proposing its first-ever efficiency adjustment. Specialties that rely more heavily on time-based codes, such as family medicine and psychiatry, could see small RVU increases, while procedural or diagnostic specialties, such as radiology and some surgical fields, may see slight reductions. CMS anticipates that most specialties would see no more than a 1 percent change in total RVUs.
  • CMS proposes implementing ASM [Ambulatory Specialty Model] to improve specialty care for heart failure and low back pain by incentivizing early detection and reduced hospitalizations.
  • CMS proposes to permanently allow direct supervision via real-time audio/video for lower-risk services and extend telehealth billing flexibilities for federally qualified health centers (FQHCs) and rural health clinics (RHCs) through 2026.
  • CMS emphasizes chronic disease prevention and behavioral health integration.
  • CMS seeks to clarify that units of selected drugs sold at the maximum fair price (MFP) under the Medicare Drug Price Negotiation Program must be included in average selling price (ASP) calculations.
  • CMS proposes treating skin substitutes as incident-to supplies rather than biologicals in an effort to curb Medicare spending.
  • Analysis: https://www.hklaw.com/en/insights/publications/2025/07/cms-releases-cy-2026-medicare-physician-fee-schedule-proposed-rule
  • Proposed Rule: https://www.cms.gov/newsroom/press-releases/cms-proposes-physician-payment-rule-significantly-cut-spending-waste-enhance-quality-measures-and

CMS officially names participants in Cell and Gene Therapy Access Model [for Sickle Cell Disease]

A Closer Look at the $50 Billion Rural Health Fund in the New Reconciliation Law

  • On July 4, 2025, President Trump signed a budget reconciliation bill into law that includes significant reductions in federal health care spending, large tax cuts, and other changes. The new law will reduce federal spending relating to Medicaid and the Affordable Care Act (ACA) Marketplaces by more than $1 trillion over ten years and lead to nearly 12 million more people becoming uninsured by 2034 according to a preliminary estimate from the Congressional Budget Office (CBO). While this legislation was being debated, Members of Congress from both parties raised concerns about the potential impact on rural hospitals, particularly given the ongoing trend of rural hospital closures. In response, and just prior to passage, the Senate added $50 billion in funding for a new “rural health transformation program,” referred to here as the “rural health fund.”
  • This brief describes the rural health fund, explains what the law says about the allocation of funds, and highlights outstanding questions about how the funds will be distributed across and within states to pay rural hospitals and for other purposes.
  • Based on the statutory language, it is not yet clear:
    • what specific criteria the Centers for Medicare and Medicaid Services (CMS) will ultimately use to approve or deny state applications and distribute funds across states
    • what share of the $50 billion fund will go to rural areas
    • what share will go to the nearly 1,800 hospitals in rural areas or be used for other providers or purposes
    • whether funds will be targeted to certain types of rural hospitals, such as the 44% of rural hospitals with negative margins
    • to what extent the CMS Administrator will be able to influence how states use their funds prior to approving an application.
  • https://www.kff.org/medicaid/issue-brief/a-closer-look-at-the-50-billion-rural-health-fund-in-the-new-reconciliation-law/

NIH director is replacing his top outside advisory board

  • In yet another shake-up at the world’s largest biomedical research agency, President Donald Trump’s administration has disbanded the top advisory committee to National Institutes of Health (NIH) Director Jayanta “Jay” Bhattacharya, Science has learned.
  • The Advisory Committee to the Director (ACD) will be reconvened with new membership, NIH says.
  • The decades-old ACD, a body of outside experts who advised the director on topics ranging from genetic engineering to sexual harassment, last met in December 2024 with then–NIH Director Monica Bertagnolli, who stepped down just before Trump took office in January.
  • NIH’s parent agency, the Department of Health and Human Services (HHS), told its 10 members in late May that their service had concluded, according to several members.
  • An NIH official speaking on background said ACD “continues its operations, and new members are being selected.”
  • https://www.science.org/content/article/nih-director-replacing-his-top-outside-advisory-board

Kennedy dismisses two top HHS aides

  • Two top aides to Health and Human Services Department Secretary Robert F. Kennedy Jr. were dismissed from their roles this week after just months on the job.
  • Both Heather Flick Melanson, chief of staff, and Hannah Anderson, deputy chief of staff for policy, were let go, HHS confirmed. Matt Buckham, Kennedy’s White House liaison, will be acting chief of staff. CNN first reported Wednesday that Kennedy had fired Anderson and Melanson.
  • “Secretary Kennedy thanks the outgoing leadership for their service and looks forward to working closely with Mr. Buckham as the Department continues advancing its mission to Make America Healthy Again,” an HHS spokesperson told STAT in a statement.
  • https://www.statnews.com/2025/07/16/kennedy-fires-top-hhs-aides-in-abrupt-leadership-shakeup/    (subscription required for full text)

KEY HEALTH NEWS (Global)

US senators exempt HIV/AIDS funding from planned spending cuts

  • Republicans in the US Senate have said they will spare the US-backed HIV/AIDS programme PEPFAR from cuts, amid a larger effort to reduce government spending.
  • Senators said they would end a plan to cut $400m (£300m) from the President's Emergency Plan for AIDS Relief programme, leaving total proposed cuts at $9bn.
  • The proposition was made in a Senate amendment to a rescissions package - meaning a bill that allows lawmakers to cancel previous funding approved by Congress. The planned cancellations also include funds for international aid and public broadcasting.
  • If the PEPFAR amendment is approved, the bill will go back to the House of Representatives for another vote ahead of a Friday deadline.
  • https://www.bbc.com/news/articles/c0q8ypew5l0o

KEY REVERSALS – RESCINDED ITEMS

Judge grants CFPB, trade groups' request to toss Biden-era medical debt rule

  • A federal judge has granted trade associations and the Trump administration’s request to vacate a Consumer Financial Protection Bureau (CFPB) regulation that would remove medical debt from credit scores.
  • The Prohibition on Creditors and Consumer Reporting Agencies Concerning Medical Information final rule was issued by the CFPB on Jan. 7 under the Biden administration and initially set to go into effect in March. Plaintiff trade groups Cornerstone Credit Union League and the Consumer Data Industry Association sued to block it later that same day.
  • CFPB initially opposed the lawsuit. After Trump reentered the Oval Office, the regulator requested and received a three-month pause on the litigation so that it could review its position. In an April 30 joint motion filing with the plaintiffs, CFPB and its acting director, Russell Vought, wrote that they agreed with the argument that CFPB’s rule exceeded the bureau’s authority and should be pulled.
  • https://www.fiercehealthcare.com/regulatory/judge-grants-cfpb-trade-groups-request-toss-biden-era-medical-debt-rule

KEY BIOPHARMA NEWS

FDA chief calls for lower user fees as negotiations begin for eighth round of PDUFA

  • FDA Commissioner Marty Makary said that PDUFA, the every-five-years law that governs agency-industry interactions, has largely been working as intended, though he would like to lower user fees.
  • Known as PDUFA VIII, the next iteration of the prescription drug user fee program will run from 2028 through 2032. Monday’s session, hosted by Makary, was a public meeting to kick off the process and hear from different stakeholders. Makary said that the “tried-and-true system has been working,” though he called for a reduction in the share companies pay when they submit a drug application — and possible changes to some other aspects of the fee program.
  • “I’d like to see lower user fees,” Makary said, adding it would lower barriers for small companies and individual investors. The FDA currently relies on industry user fees for more than half of its budget while Congress fills in the rest.​​​​​​​
  • https://endpoints.news/makary-pushes-for-lower-user-fees-as-agency-kicks-off-pdufa-negotiations/   (subscription required for full text)

Bipartisan legislators revive PBM reform debate on the Hill

  • While major pharmacy benefit management reform was stripped out of the Big Beautiful Bill, a bipartisan group of representatives has introduced legislation that takes aim at the industry.
  • The PBM Reform Act, led by Republican Rep. Buddy Carter of Georgia, seeks to ban spread-pricing models in Medicaid and instead move to a more "transparent" system that the legislators say will more fairly reimburse pharmacies for the services they provide.
  • In addition, the bill would delink PBM compensation from medication costs within Part D, and establish semi-annual reporting that provides further detail on spending, rebates and formulary decisions for plan sponsors and members.
  • https://www.fiercehealthcare.com/payers/bipartisan-legislators-revive-pbm-reform-debate-hill

RFK Jr. and other Trump officials embrace psychedelics after FDA setback

  • For decades, proponents of psychedelic drugs have come to Washington with a provocative message: Illegal, mind-altering substances like LSD and ecstasy should be approved for Americans grappling with depression, trauma and other hard-to-treat conditions.
  • “This line of therapeutics has tremendous advantage if given in a clinical setting and we are working very hard to make sure that happens within 12 months,” Health Secretary Robert F. Kennedy Jr. recently told members of Congress.
  • Under President Joe Biden, the FDA rejected MDMA as a treatment for post-traumatic stress disorder, citing flawed data and questionable research. Regulators called for a new study, likely taking several years. It was a major setback for Doblin and other advocates hoping to see the first U.S. approval of a psychedelic for medical use.
  • But the agency appears ready to reconsider. FDA chief Marty Makary, who reports to Kennedy, has called the evaluation of MDMA and other psychedelics “a top priority,” announcing a slate of initiatives that could be used to accelerate their approval.
  • A spokesperson for HHS did not respond to a request for comment.
  • https://apnews.com/article/psychedelics-rfk-jr-kennedy-ibogaine-mdma-4e59a3eb2d23d98f2579d25c73c34e9b

KEY DIAGNOSTICS – LIFE SCIENCE RESEARCH NEWS

Positive news as CMS proposes to make virtual supervision of contrast studies permanent; but the good news from CMS is offset by new obstacles created by ACR and ASRT

KEY HEALTH INFORMATION TECHNOLOGY (HIT) NEWS

Remote patient monitoring gets boost in CMS proposal

KEY MEDTECH NEWS

Medicare plans to cover more than a thousand new procedures in outpatient settings, despite concerns about safety

  • See story above in Key Federal Government News

Key Acronyms

  • ACA = Affordable Care Act
  • ACD = Advisory Committee to the Director
  • ACR = American College of Radiology
  • APM = Alternative Payment Model
  • ASP = average selling price
  • ASRT = American Society of Radiologic Technologists
  • CDC = Centers for Disease Control and Prevention
  • CFPB = Consumer Financial Protection Bureau
  • CMS = Centers for Medicare & Medicaid Services
  • FDA = Food and Drug Administration
  • FQHCs = federally qualified health centers
  • HHS = Department of Health and Human Services
  • LSD = lysergic acid diethylamide
  • MDMA = 3,4-Methylenedioxymethamphetamine
  • MFP = maximum fair price
  • MPFS = Medicare Physician Fee Schedule
  • NIH = National Institutes of Health
  • PBM = pharmacy benefit managers
  • PDUFA = Prescription Drug User Fee Act
  • PE = practice expense
  • PEPFAR = President's Emergency Plan for AIDS Relief
  • RHCs = rural health clinics
  • RVUs = relative value units

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