Blog | 7/3/2025

Trump Administration Healthcare News: July 3, 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 2, 2025. The details and broad themes may have changed.

KEY FEDERAL GOVERNMENT NEWS

US Senate passes Trump's sweeping tax-cut and spending bill, setting up House battle

  • U.S. Senate Republicans passed President Donald Trump's massive tax-cut and spending bill on Tuesday by the narrowest of margins, advancing a package that would slash taxes, reduce social safety net programs and boost military and immigration enforcement spending while adding $3.3 trillion to the national debt.
  • The legislation now heads to the House of Representatives for possible final approval, though a handful of Republicans there have already voiced opposition to some of the Senate provisions.
  • The measure would extend Trump's 2017 tax cuts, give new tax breaks for income from tips and overtime pay and increase spending on the military and immigration enforcement.
  • It also would cut about $930 billion of spending on the Medicaid health program and food aid for low-income Americans and repeal many of Democratic former President Joe Biden's green-energy incentives.
  • Press:  https://www.reuters.com/world/us/senate-vote-a-rama-pass-trumps-33-trillion-bill-extends-into-second-day-2025-07-01/
  • KFF Analysis of Health Provisions: https://www.kff.org/tracking-the-health-savings-accounts-provisions-in-the-2025-budget-bill/

DOJ announces largest-ever $14.6B healthcare fraud takedown

  • The Department of Justice (DOJ) announced charges against 324 individuals the law enforcement agency said were behind more than $14.6 billion of healthcare fraud.
  • The charges were spearheaded by the Health Care Fraud Unit of the DOJ Criminal Division’s Fraud Section and more than double law enforcement’s prior $6 billion record for a coordinated healthcare fraud takedown, according to a Monday release.
  • Included in the effort were more than $245 million seized by the government during enforcement along with civil settlements with 106 defendants totaling $34.3 million.
  • Further, the Centers for Medicare & Medicaid Services (CMS) said the enforcement effort prevented the payout of more than $4 billion of false and fraudulent claims, with 205 associated providers having their billing privileges pulled in recent months.
  • The Department of Health and Human Services Office of Inspector General (HHS-OIG), as well as the Drug Enforcement Administration, the FBI and other federal and state law enforcement, collaborated with the DOJ’s Health Care Fraud Unit.
  • https://www.fiercehealthcare.com/regulatory/doj-announces-largest-ever-146b-healthcare-fraud-takedown

DOGE Loses Control of Process for Awarding Billions in Federal Funds

  • The U.S. DOGE Service has lost the power to control the government’s process for awarding billions of dollars in federal funds, the latest sign of the team’s declining influence following Elon Musk’s high-profile exit from Washington, according to two people familiar with the situation and emails obtained by The Washington Post.
  • Three months ago, DOGE employees wrested control of a key federal grants website, grants.gov, which serves as a clearinghouse for more than $500 billion in annual awards, The Post reported.
  • For most of the program’s existence, federal agencies including the Defense Department posted their funding opportunities directly to the site, where thousands of outside organizations could see and apply for them — until April, when DOGE staffers changed the website’s permissions to give themselves power to review and approve all grants across the government
  • https://www.washingtonpost.com/politics/2025/06/27/doge-loses-control-federal-grants/  (subscription required for full text)

New CMMI model injects 'enhanced technologies' in Medicare prior authorization to limit fraud

  • The Centers for Medicare & Medicaid Services (CMS) rolled out an Innovation Center model Friday to test new prior authorization requirements in traditional Medicare.
  • Called Wasteful and Inappropriate Service Reduction (WISeR), the model comes just days after the CMS boosted and endorsed industrywide commitment to alleviate prior auth burden in commercial insurance.
  • It’s expected the agency will continue its broad push to modernize efforts through “enhanced technologies,” the CMS said in a news release.
  • Model participants must include clinicians to complete medical reviews and confirm coverage determinations. Final decisions are made by healthcare professionals, the CMS assured. It will launch Jan. 1 and conclude at the end of 2031.
  • WISeR participants will use artificial intelligence to expedite prior auth for certain services deemed “vulnerable” to waste, fraud and abuse.
  • https://www.fiercehealthcare.com/payers/new-cmmi-model-injects-enhanced-technologies-medicare-prior-authorization-limit-fraud

CBER chief Prasad suggests Covid vaccine harms may outweigh benefits in 'low-risk populations'

  • CBER Director Vinay Prasad says the benefits of Covid-19 vaccination have depreciated and may no longer outweigh the risks in adults who aren’t prone to more severe illness.
  • “Even rare vaccination-related harms, both known and unknown, now have a higher chance of outweighing potential benefits in non-high-risk populations,” Prasad wrote in a decisional memo regarding Novavax’s Covid vaccine, adding that “some harm-benefit analyses suggested net harm of ongoing vaccination of low-risk populations.”
  • The memo, dated May 16 and posted on the FDA’s website earlier this month, sheds light on why Prasad overruled a panel of agency reviewers that recommended approval of Novavax’s shot for all people 12 and older. The company ultimately received FDA approval for all adults 65 and older, and younger people 12 to 64 who are at higher risk of severe disease from Covid-19 infection.
  • Spokespeople for Novavax and HHS did not immediately respond to requests for comment.
  • https://endpoints.news/cber-chief-prasad-details-why-he-overrode-novavax-reviewers  (subscription required for full text)

CMS study: Healthcare spending likely to grow by 7.1% in 2025

HHS to continue funding cancer prevention, tracking work in states after uncertainty

  • The Department of Health and Human Services will renew funding to states for cancer prevention and tracking efforts, alleviating anxieties among local officials about the future of their work.
  • Over 50 notices had gone out as of Monday, an HHS spokesperson said. The rest of the awards will be sent to states, tribes, and other contractors “no later than early next week,” press secretary Emily Hilliard told STAT in an email.
  • State and local officials had been bracing for bad news in recent weeks because they had received little to no information from federal health agencies about key cancer programs. For many states, money from last year ran out over the weekend.
  • https://www.statnews.com/2025/06/30/hhs-resumes-funding-cancer-screening-state-level-tracking/

CDC expands RSV vaccine recommendations, siding with previous panel of agency advisors

  • The CDC will recommend RSV vaccines for all at-risk adults in their 50s, expanding its current guidance on the shots and siding with the agency’s former panel of vaccine experts.
  • HHS Secretary Robert F. Kennedy Jr. has now adopted recommendations that the Advisory Committee on Immunization Practices (ACIP) made in April. He fired and replaced all of its members in June. An update on CDC’s website said that Kennedy adopted the recommendations on June 25 in the absence of an agency director.
  • Kennedy also adopted ACIP’s recommendation in favor of GSK’s pentavalent vaccine against meningococcal infection.
  • https://endpoints.news/cdc-expands-rsv-vaccine-recommendations-siding-with-previous-panel-of-agency-advisors/   (subscription required for full text)

KEY REVERSALS – RESCINDED ITEMS

US judge blocks Trump administration move to overhaul health agencies

  • A federal judge on Tuesday blocked the Trump administration from moving forward with plans to overhaul the U.S. Department of Health and Human Services by reorganizing several of its agencies and substantially cutting their workforce.
  • U.S. District Judge Melissa DuBose in Providence, Rhode Island, issued an injunction, at the behest of a group of Democratic-led states who challenged a plan HHS Secretary Robert F. Kennedy Jr. announced in March to consolidate agencies and fire 10,000 of the department's employees.
  • The layoffs, in addition to earlier buyout offers and firings of probationary employees, reduced the number of full-time HHS employees to 62,000 from 82,000 and left key offices unable to perform statutory functions, the states alleged.
  • The 19 states that sued, along with the District of Columbia, challenged HHS' implementation of its restructuring plan, which also called for collapsing 28 divisions into 15 and closing half of its 10 regional offices.
  • While the states argued that the entire plan was unlawful, they focused on having DuBose block firings and restructurings at four agencies within HHS, including the U.S. Centers for Disease Control and Prevention and the Office of Head Start.
  • https://www.reuters.com/legal/litigation/us-judge-blocks-trump-administration-move-overhaul-health-agencies-2025-07-01/

KEY LAWSUITS

20 states sue after the Trump administration releases private Medicaid data to deportation officials

  • The Trump administration violated federal privacy laws when it turned over Medicaid data on millions of enrollees to deportation officials last month, California Attorney General Rob Bonta alleged on Tuesday, saying he and 19 other states’ attorneys general have sued over the move.
  • Health secretary Robert F. Kennedy Jr.’s advisers ordered the release of a dataset that includes the private health information of people living in California, Illinois, Washington state, and Washington, D.C., to the Department of Homeland Security, The Associated Press first reported last month.
  • All of those states allow non-U.S. citizens to enroll in Medicaid programs that pay for their expenses using only state taxpayer dollars.
  • The unusual data sharing of private health information, including addresses, names, social security numbers, immigration status, and claims data for enrollees in those states, was released to deportation officials as they accelerated enforcement efforts across the country. The data could be used to help the Department of Homeland Security locate migrants in its mass deportation campaign, experts said.
  • Bonta said the Trump administration’s data release violates federal health privacy protection laws, including the Health Insurance Portability and Accountability Act (HIPAA).
  • https://apnews.com/article/trump-medicaid-immigrant-california-161f7e1b9087512d674258f32f822878

Democratic states sue Trump administration over school mental health funding cuts

  • Sixteen Democratic-led states filed a lawsuit against the Trump administration Monday challenging the Department of Education’s cuts to mental health funding for schools.
  • In April, the Education Department announced the $1 billion cut to mental health funding, citing concerns with diversity, equity and inclusion (DEI) initiatives embedded in the contracts.
  • The states allege the contracts were unlawfully terminated under the Administrative Procedure Act and that the cancellation goes against congressional mandates. The lawsuit says the cuts would cause “immediate and devastating harm” to schools.
  • The lawsuit was filed by New York, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, New Mexico, Nevada, Oregon, Rhode Island, Washington and Wisconsin.
  • https://thehill.com/homenews/education/5379011-democratic-states-sue-trump-school-mental-health-funding-cuts/

Cities sue RFK Jr. over rule gutting Affordable Care Act coverage

  • The city of Baltimore and a coalition of health care professionals and small businesses sued the Trump administration on Tuesday, challenging a new Health and Human Services rule under the Affordable Care Act they warn will force nearly 2 million Americans off health insurance.
  • Baltimore — joined by the city governments of Columbus and Chicago, along with Doctors for America and the Main Street Alliance — filed the suit in the U.S. District of Maryland and requested a federal judge block the rule before it take effect on August 25.
  • They asked a federal judge to declare provisions of the new rule arbitrary and capricious under the Administrative Procedure Act and block President Donald Trump’s administration from implementing the provisions. Alongside U.S. Department of Health and Human Services and its secretary, Robert F. Kennedy Jr., the cities and groups also named the Centers for Medicare and Medicaid Services and its administrator, Mehmet Oz.
  • According to the coalition, the rule would impact the ACA’s health insurance marketplaces, which allow individuals otherwise not eligible for Medicare or Medicaid to obtain insurance independent of their employment.
  • https://www.courthousenews.com/cities-sue-rfk-jr-over-rule-gutting-affordable-care-act-coverage/

KEY BIOPHARMA NEWS

Orphan Cures Act re-added to Trump tax bill

  • The Orphan Cures Act has been added back into the Senate version of President Donald Trump’s “big, beautiful bill” after being left out in the chamber’s first rendition.
  • The massive domestic policy bill that passed a Senate procedural vote Saturday night now includes provisions that would allow drugs with multiple rare disease indications to be exempt from Medicare price negotiations. Currently, under the Inflation Reduction Act, such exemptions are only available to drugs that treat just one rare disease.
  • The bipartisan Orphan Cures Act was designed to fix what the biopharma industry views as one of the many unintended consequences of the IRA. By offering exemptions exclusively to drugs with just one rare indication, the original IRA disincentivizes companies from conducting follow-on tests of rare disease therapies, the industry has argued.
  • Press: https://www.fiercepharma.com/pharma/orphan-cures-act-makes-back-trump-tax-bill-senate-begin-vote-rama?
  • Bill: https://www.congress.gov/bill/119th-congress/house-bill/946

PBM reforms fail to make the cut as Senate passes Trump’s megabill

  • Efforts to rein in pharmacy benefit managers, for which drugmakers have been building bipartisan support over the years, were left out of the Senate-passed version of President Donald Trump’s megabill.
  • The Senate version of the One Big Beautiful Bill Act, which passed Tuesday with Vice President JD Vance as the tie-breaking 51-50 vote, excludes all PBM provisions from the House version. The Senate Finance Committee had already taken a scalpel to some of those provisions when it released text of the bill last month.
  • The new version of the bill will now be considered by the House, where leadership is hoping to quickly advance it.
  • https://endpoints.news/pbm-reforms-fail-to-make-senate-version-of-trumps-megabill/  (subscription required for full text)

U.S. Supreme Court declines review of Oklahoma law regulating PBMs

  • The U.S. Supreme Court on Monday declined to review a lower court’s decision regarding an Oklahoma pharmacy law.
  • A 2023 ruling by the 10th Circuit U.S. Court of Appeals will stand after the nation’s highest court denied certiorari in the legal dispute over Oklahoma’s Patient’s Right to Pharmacy Choice Act, which regulates pharmacy benefit managers (PBMs).
  • The Oklahoma Legislature passed the Patient’s Right to Pharmacy Choice Act in 2019, as House Bill 2632, to protect access to pharmacy providers and define compliance standards for retail pharmacy networks. The bill’s authors and other proponents said the act allows small-town pharmacies to compete with the likes of OptumRx and CVS Caremark.
  • The Pharmaceutical Care Management Association (PCMA), a lobby for PBMs, sued Oklahoma later that year. In April 2022, the U.S. District Court for the Western District of Oklahoma ruled favorably for Oklahoma Insurance Commissioner Glen Mulready, upholding a majority of the provisions of the Patient’s Right to Pharmacy Choice Act against a preemption challenge by the PCMA, which subsequently appealed the decision to the 10th Circuit U.S. Court of Appeals, asserting that the four remaining provisions out of 13 are preempted by Medicare Part D and ERISA.
  • The federal appellate court decided in 2023 that parts of the Oklahoma law were preempted by ERISA and Medicare Part D, striking down the law regulating PBMs. Mulready appealed, and the U.S. Supreme Court in May 2024 accepted it, but on Monday announced it would not review the case. At the request of the highest court, the U.S. Solicitor General weighed in on the case earlier in June, urging the court not to review the 10th Circuit’s ruling.
  • https://journalrecord.com/2025/06/30/supreme-court-declines-review/

KEY HEALTH INFORMATION TECHNOLOGY (HIT) NEWS

Senate Reconciliation Text Includes Permanent Telehealth HSA Coverage

KEY MEDTECH NEWS

FDA replaces cybersecurity guidance for medical devices, again

  • With the goal of robust security controls amid emerging and potentially hazardous threats, the US Food and Drug Administration (FDA) has updated final guidance for demonstrating cybersecurity of medical devices in premarket submissions.
  • The guidance document, Cybersecurity in Medical Devices: Quality System Considerations and Content of Premarket Submissions, was released on 26 June. It covers design, labeling and documentation that should be included in premarket submissions of devices with cybersecurity risks to the Center for Devices and Radiological Health (CDRH) or the Center for Biologics Evaluation and Research (CBER).
  • It also clarifies security recommendations for cyber devices under the amended Food, Drug & Cosmetic Act (FD&C Act) section 524B, including procedures, tracking software bill of materials to show the origin of components (off-the-shelf or open source), and safely managing product updates.
  • FDA stressed the need for robust controls to ensure device safety due to the greater integration of wireless products and electronic exchange of health information.
  • https://www.raps.org/News-and-Articles/News-Articles/2025/6/FDA-replaces-cybersecurity-guidance-for-medical-de

 

KEY ACRONYMS

  • ACA = Affordable Care Act
  • CBER = Center for Biologics Evaluation and Research
  • CDRH = Center for Devices and Radiological Health
  • CMS = Centers for Medicare & Medicaid Services
  • DOGE = Department of Government Efficiency
  • DOJ = Department of Justice
  • ERISA = Employee Retirement Income Security Act of 1974
  • FBI = Federal Bureau of Investigation
  • FDA = Food and Drug Administration
  • HDHP = high-deductible health plans
  • HHS = Department of Health and Human Services
  • HHS-OIG = Department of Health and Human Services Office of Inspector General
  • HSA = heath savings accounts
  • PBMs = pharmacy benefit managers
  • PCMA = Pharmaceutical Care Management Association
  • WISeR = Wasteful and Inappropriate Service Reduction

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