Looking Ahead: Reconciliation Package Negotiations
The U.S. Senate is in session for three days this week while the U.S. House of Representatives is in recess all week. Both chambers will return for a week before breaking for the July 4 recess. Negotiations on the reconciliation bill continue, with a continued aim for finalization and passage by July 4, 2025.
Week in Review: Dr. Jay Bhattacharya Testifies
Dr. Jay Bhattacharya, the director of the National Institutes of Health (NIH), testified before the Senate Committee on Appropriations' Subcommittee on Labor, Health and Human Services (HHS), Education, and Related Agencies. The Senate Committee on Health, Education, Labor and Pensions (HELP) and Senate Committee on Finance released their sections of reconciliation text. The House Committee on Appropriations held several subcommittee and full committee markups of bills to fund federal agencies, including the bill to fund the U.S. Food and Drug Administration (FDA). Engrossment corrections were adopted on a nearly party-line vote of 213-207. These corrections primarily involved technical edits across several sections of the bill, particularly in health-related provisions. No broader changes to the health provisions were included at that time.
Administrative Updates
Executive Order Updates
The Trump Administration has continued to release wide-ranging executive orders (EOs). For brief overviews of the numerous orders published by the Trump Administration, see our "Trump's 2025 Executive Orders: Updates and Summaries" tracking chart.
Legislative Updates
Senate Finance Committee Reconciliation Text Released
On June 16, 2025, Republicans on the Senate Committee on Finance released revised tax and healthcare provisions of the reconciliation bill. Significant changes have been made to the health-related provisions from the House-passed "One Big Beautiful Bill."
Key differences include:
- The Senate version eliminates several notable provisions, including physician payment reform, Health Savings Account (HSA) expansion, Accelerating Kids Access to Care Act and Orphan Cures Act.
- The House version proposed grandfathering current provider tax rates for all states and banning new or increased provider taxes. The Senate bill would go further, but only in states that have expanded Medicaid under the Affordable Care Act (ACA). It would lower the current 6 percent cap on provider tax rates to 3.5 percent. The cap would be phased in by lowering it 0.5 percent annually, starting in 2027 until 2031.
- Though the House bill froze existing state directed payments (SDPs) and capped new ones, the Senate version sets a new cap: 100 percent of Medicare rates for expansion states and 110 percent for non-expansion states. Existing SDPs would be reduced by 10 percent annually until they reach the new thresholds. The White House has added to the complexity by directing HHS to ensure that Medicaid payment rates do not exceed those of Medicare.
- Related to work requirements, the Senate bill allocates $150 million to implement work requirements – $100 million in grants to states and $50 million to HHS. The Senate bill also would require parents with children 15 and older to work or do community service for 80 hours per month to qualify for Medicaid. The House plan exempted all people with dependents from the work requirements.
- Though most Pharmacy Benefit Manager (PBM) provisions from the House version were retained, the Senate bill omits the provision that would delink PBM compensation from drug prices in Medicare Part D.
Otherwise, both bills contain similar healthcare provisions, including measures to increase the frequency of eligibility checks and prohibit federal matching funds for gender-affirming care. In addition, both versions would prevent the implementation of Biden-era rules designed to streamline Medicaid enrollment and eligibility, as well as a regulation requiring minimum staffing levels in nursing homes. A significant Medicare-related provision in the Senate bill remains largely consistent with the House version: both would bar asylum seekers, refugees and individuals with protected status from accessing Medicare.
As House and Senate leaders enter negotiations – and with the Byrd Rule process still underway – the final bill that reaches the Senate floor could differ significantly from the committee text released to date.
For more details, see the bill and the section-by-section.
House Passes Rescissions Package
The House passed the Rescissions Act of 2025 (H.R. 4) in a 214-212 vote on June 12, 2025. The legislation would revoke $8.3 billion in foreign aid, including rescinding the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), and $1.1 billion for public broadcasting. The package now heads to the Senate, where Republicans are in discussion about whether the legislation can be amended.
Senate HELP Committee Releases Reconciliation Text
The Senate HELP Committee released the draft text of its portion of the Senate budget reconciliation. The draft is primarily focused on higher education but includes one healthcare section on Cost Sharing Reduction (CSR) payments under the Patient Protection and ACA. The provision is identical to the House-passed reconciliation bill (H.R. 1) and appropriates funding for cost-sharing reduction subsidies, ending the practice of "silver loading" in most states. The provision would prohibit any money from going to any qualified health plan that provides coverage of abortion other than if necessary to save the life of the mother or if the pregnancy is a result of an act of rape or incest.
For more details, see the bill and the section-by-section.
Reps. Fitzpatrick and Sewell Introduce Bipartisan Bill to Address Physician Shortage
Reps. Brian Fitzpatrick (R-Pa.) and Terri Sewell (D-Ala.) introduced the Resident Physician Shortage Reduction Act of 2025, aimed at expanding the physician workforce. The bill proposes adding 2,000 new Medicare-supported residency slots annually from fiscal year (FY) 2026 through FY 2032. Priority for these new positions would be given to hospitals located in rural and underserved communities, Health Professional Shortage Areas (HPSAs), states with new or expanding medical schools, and hospitals currently training residents above their Medicare cap.
Sens. Mullin and Booker Reintroduce Legislation to Modernize Prescription Drug Information
Sens. Markwayne Mullin (R-Okla.) and Cory Booker (D-N.J.) reintroduced the Prescription Information Modernization Act of 2025. The bipartisan legislation would authorize the FDA to finalize a rule permitting drug manufacturers to distribute prescribing information electronically. The measure aims to reduce paper waste, enhance efficiency and ensure healthcare providers have timely access to the most up-to-date drug information.
Sen. Hyde-Smith Reintroduces Bipartisan Bill to Ensure Smaller States Stake in NIH Research
Sen. Cindy Hyde-Smith (R-Miss.), alongside Sens. Shelley Moore Capito (R-W.Va.) and Maggie Hassan (D-N.H.), reintroduced legislation to reauthorize and strengthen a NIH program to improve U.S. biomedical research capacity by distributing funding more broadly around the country. The Institutional Development Award (IDeA) Reauthorization Act would amend the existing NIH program and update eligibility guidelines for states and territories to participate in NIH biomedical research projects. The press release and bill are available to view online.
Regulatory Updates
Secretary Kennedy Picks Eight New Members of CDC Vaccine Panel
Following the dismissal of all 17 members of a Centers for Disease Control and Prevention (CDC) vaccine advisory panel on June 9, 2025, HHS Secretary Robert F. Kennedy announced the selection of eight new members just two days later. The Advisory Committee on Immunization Practices (ACIP) meets at least three times per year to review scientific literature and make determinations on which vaccines are recommended based on age group. Under the ACA, health insurers are required to cover all ACIP-recommended vaccines. Further, the recommendations determine coverage through the Vaccines for Children program, a federally funded initiative that provides free vaccines to low-income and underinsured children. Several physician groups have expressed concern that the newly announced members, many of whom have drawn national attention for vaccine criticism, will reduce access.
MedPAC June 2025 Report to Congress
The Medicare Payment Advisory Commission (MedPAC) released its June 2025 report to Congress on June 13, 2025, which included several recommendations including Physician Fee Schedule payment updates. In MedPAC's March 2025 report, MedPAC recommended that Congress tie physician payment rates to the Medicare Economic Index (MEI) minus one percentage point in 2026. However, these recommendations solely applied to 2026.
Beyond 2026, MedPAC recommends "replacing the current-law updates to the PFS with an annual update based on a portion of the growth in the MEI, such as MEI minus 1 percentage point, based on the historical evidence suggesting that updates of full MEI have not been necessary to maintain beneficiary access to care." The report also reviewed Medicare Advantage (MA) Supplemental Benefits, MA beneficiary utilization of home health, the role of institutional special-needs plans (SNPs) in improving care quality, rural provider quality measurement and cost sharing at Critical Access Hospitals (CAHs).
FDA Commissioner, CBER Director Publish Article Outlining FDA Priorities
FDA Commissioner Dr. Martin Makary and FDA's Center for Biologics Evaluation and Research (CBER) published an article in a peer-reviewed medical journal titled "Priorities for a New FDA" on June 10, 2025. The article outlines priorities the FDA will seek to accomplish under the leadership of Dr. Makary, including the following:
- speeding the time it takes for the FDA to complete product reviews by reducing paperwork burdens, improving application processes and potentially creating new approval pathways
- improving innovation by reassessing product monographs, integrating the use of artificial intelligence (AI)-based technologies and harnessing cloud computing and health data
- limiting conflicts of interest by removing industry members from FDA advisory committees
- providing healthier food to children by conducting a comprehensive review of ingredients used in products in the U.S. that aren't used in other nations, including dyes and other additive ingredients
- implementing "Most-Favored Nation" policies and reducing healthcare costs by speeding the approval of new generic medicines and biosimilars
FDA Announces Public Meeting on MDUFA
The FDA announced on June 11, 2025, that it will hold a hybrid meeting on Aug. 4, 2025, to discuss proposed recommendations for the reauthorization of the Medical Device User Fee Amendments (MDUFA) for FY 2028 through FY 2032. MDUFA authorizes the FDA to collect certain fees, which can be used to process the review of device applications. The current authority for the FDA to collect those fees expires on Sept. 30, 2027, and this initial meeting is the first step in a months-long process to prepare for the reauthorization process.
Interested stakeholders may also submit written comments on the public meeting by Sept. 4, 2025. More information can be found online.
Medicaid Data Sharing
Last week, after initial failed attempts to block the request, the Centers for Medicare & Medicaid Services (CMS) handed over personal data that included immigration status of Medicaid enrollees to HHS. HHS maintains it acted within its authority, with HHS Spokesperson Andrew Nixon stating, "With respect to the recent data sharing between CMS and DHS, HHS acted entirely within its legal authority – and in full compliance with all applicable laws – to ensure that Medicaid benefits are reserved for individuals who are lawfully entitled to receive them."
Commissioner Makary Suggests Additional FDA Reorganization Imminent
In an email to FDA staff on June 11, 2025, Dr. Makary said he wants to consolidate many of the FDA's operations to streamline its work. Specifically, Dr. Makary said he wants to consolidate operations, including human resources, acquisitions, travel, budget, Freedom of Information (FOIA) operations, facilities management and communications. Dr. Makary framed the continued consolidation of the agency in stating, "(b)y aligning these services under a unified approach, we seek to eliminate duplicative services, increase cross-communications across the FDA and deliver more consistent, efficient and responsive support – empowering the FDA's Centers, Offices and Programs (COP) to focus more directly on their mission critical work."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
