Health Care Matters | March 28, 2025
Health Policy Tracker: Trump’s First 100 Days
HHS to Undergo Sweeping Reduction in Force and Restructuring
On March 14, the Senate Finance Committee held a confirmation hearing for Dr. Mehmet Oz's nomination as administrator of CMS. His confirmation is expected to pass with significantly less controversy than his future boss, HHS Secretary Robert F. Kennedy Jr. During the hearing, Oz outlined key priorities if confirmed, and noted support for Medicaid work requirements, limiting undocumented individuals from receiving Medicaid benefits and did not rule out cuts to the program. Somewhat surprising was his agreement with some of Senator Elizabeth Warren's comments about the need to improve Medicare Advantage (MA) as many suspect that he will be a promoter of MA over traditional Medicare. The committee will soon schedule a vote to decide whether to advance his nomination to the full Senate. For more, read the following.
Oz Avoids Promise to Oppose Medicaid Cuts at Senate Hearing (Washington Post)
Dr. Oz Questioned Over Medicaid Cuts, Promises Medicare Advantage Scrutiny (Fierce Healthcare)
HHS to Undergo Sweeping Reduction in Force and Restructuring
The Senate Finance Committee voted Tuesday to advance the nomination of Mehmet Oz, MD, to serve as administrator of CMS. The nomination will now be scheduled for a vote by the full senate in the coming days or weeks. For more, read the following:
Medicare's Anti-Obesity Medication Dilemma
The Biden-era proposed rule to cover anti-obesity medications (AOMs) under Medicare and Medicaid has ignited a heated policy debate. Stakeholders are divided, with Eli Lilly and the Obesity Care Advocacy Coalition arguing that covering these medications could provide critical treatment for obesity. They contend that proactive treatment could ultimately save the health care system money by preventing more expensive medical interventions.
However, as reported by Inside Health Policy and Axios, pharmacy benefit managers and insurance lobbies are pushing back, raising significant legal and financial concerns. Organizations like the Pharmaceutical Care Management Association (PCMA) and America's Health Insurance Plans (AHIP) argue that the proposed rule could subvert Congressional intent and dramatically increase health care costs. Read more here and here.
Why It Matters
The Trump administration stands at a critical decision point. HHS Secretary Robert F. Kennedy Jr. called these drugs "miracle drugs" at his Senate confirmation hearing while simultaneously expressing concerns about their side effects and long-term sustainability. The Supreme Court's 2024 Loper Bright Enterprises v. Raimondo decision has added legal complexity, potentially making administrative reinterpretations of statutes more challenging and the Congressional Budget Office further complicates the picture, noting that while AOM coverage has potential benefits, the budgetary effects remain highly uncertain.
In its proposed rule, the Centers for Medicare & Medicaid Services (CMS) took a cautious approach. The agency anticipated higher costs associated with the proposal but refrained from estimating potential savings due to the substantial uncertainty surrounding both the amount and timeline of such savings.
The impact of finalizing this proposal is substantial, especially in the context of potential Medicaid cuts. CMS may instead opt to consider comments received and potentially revisit this reinterpretation at a later time. The proposed rule left the timing of implementation for Medicare Part D ambiguous, suggesting that even if the Trump administration moves forward, full implementation might not occur in CY 2026. Should the proposal not be finalized, there is still likely to be continued uptake of GLP-1 medications for other approved indications, though not specifically for obesity treatment.
AI Action Plan: Stakeholders Weigh In on Future Regulation
The Trump administration's Office of Science and Technology Policy (OSTP) has received 8,755 comments in response to its Request for Information about the upcoming AI Action Plan, revealing complex dynamics around AI policy. Key stakeholders presented divergent perspectives on critical issues, including the use of copyrighted materials for AI training, federal versus state regulation, and technology export controls. Tech companies largely advocated for a unified federal approach that would preempt state-level regulations, arguing that a patchwork of state laws could hamper innovation.
The comments highlighted several priority areas for the AI Action Plan, including potential loosening of export controls, increased investments in AI research and development, and addressing energy infrastructure challenges. Tech companies emphasized the need for public-private research partnerships and suggested that energy supply could be a significant constraint for AI infrastructure expansion. While the final AI Action Plan remains to be seen, the breadth of comments suggests a nuanced approach will be necessary to balance innovation, national security, and responsible technological development. Read here and here.
Why It Matters
The forthcoming AI Action Plan will significantly impact health care, where AI holds transformative potential but also significant risks. While broader tech discussions focus on data usage and regulation, health care faces unique challenges related to patient care, data privacy, and clinical decision-making. Stakeholders are pushing for a risk-based regulatory approach that balances innovation with safety. The plan will likely create distinct regulatory pathways for low-risk tools, like scheduling assistants, and high-risk clinical applications, such as diagnostic algorithms. The final framework will emphasize oversight for clinical AI while allowing flexibility for technological growth, potentially setting a model for other industries.
What We Are Reading
Letting Patients Lead The Way To Effective Value-Based Payment
Mai Pham, Lauren Erickson, and Richard Gilfillan published a Health Affairs Forefront article exploring how involving patients more directly in value-based payment models can enhance the effectiveness of these systems by improving care quality and reducing costs. Read here.
Patients, Providers, and Researchers Agree: The Agency for Health Research and Quality is Critically Important
With AHRQ facing funding cuts from the Trump administration, the Friends of AHRQ have sent to Congress a letter signed by 194 organizations on the importance of supporting the agency in FY26 and beyond. Read here.
The State of Postpartum Care Data Report
United States of Care reviewed existing literature and conducted listening sessions and interviews on the postpartum experience. Their recent report and 100 Weeks Journey Map highlight the critical need for a multifaceted approach to postpartum care, including addressing policy shortcomings, expanding access to perinatal health workers, and improving data collection. Read more here and here.
What We Are Writing
Building Strong Relationships with CMS & CMMI
Alternative payment models demand more than participation—they require strategic, credible relationships with the policymakers shaping them.
Our new eBook dispels common myths and offers practical guidance on becoming a trusted partner in value-based care. Learn how to engage meaningfully with CMS and CMMI, align with trade associations, bring forward compelling stories and data, and contribute to policy that reflects on-the-ground realities. Download here.
Pop health podcast
Want to join us on an upcoming episode of the Pop Health Podcast?
Apply now!