Looking Ahead
Extending funding for the federal government beyond Sept. 30, 2025, will be at the top of the U.S. Congress' agenda this week. Republicans in the U.S. House of Representatives are expected to release the text for a continuing resolution (CR) to fund the government through mid- to late November 2025, with the goal of considering the bill on the floor before the week of Sept. 16, 2025, is over. While there has been much discussion about the potential for inclusion of healthcare provisions in the CR – such as an extension of the Affordable Care Act (ACA) advanced premium tax credits (APTCs) – the CR is expected to be a "clean" extension and will not include additional provisions.
At the same time, congressional committees will continue holding hearings to advance healthcare legislation and hear testimony from recently departed leaders at the Centers for Disease Control and Prevention (CDC).
Hearings This Week
The House Committee on Veterans' Affairs (VA) Subcommittee on Technology Modernization held an oversight hearing on Sept. 15, 2025, titled "Advancing VA Care Through Artificial Intelligence."
The House Committee on Ways and Means Subcommittee on Oversight held a hearing on Sept. 16, 2025, titled "Virtue Signaling vs. Vital Services: Where Tax-Exempt Hospitals are Spending Your Tax Dollars."
The U.S. Senate Committee on the Judiciary Subcommittee on Crime and Counterterrorism held a hearing on Sept. 16, 2025, titled "Examining the Harm of AI Chatbots."
The Senate Special Committee on Aging will hold a hearing on Sept. 17, 2025, titled "Prescription for Trouble: Drug Safety, Supply Chains, and the Risk to Aging Americans."
The Senate Committee on Health, Education, Labor and Pensions (HELP) will hold a hearing on Sept. 17, 2025, titled "Restoring Trust Through Radical Transparency: Reviewing Recent Events at the Centers for Disease Control and Prevention and Implications for Children's Health." Dr. Susan Monarez, former director of the CDC, and Dr. Debra Houry, the CDC's former deputy director for Program and Science and Chief Medical Officer, will testify.
The Senate VA Committee will hold a hearing on Sept. 17, 2025, titled "Strengthening Services for Veterans with Spinal Cord Injury and Disorder."
The House Committee on Energy and Commerce Subcommittee on Health will hold a markup on Sept. 17, 2025, to consider the following:
- H.R. 2493, Improving Care in Rural America Reauthorization Act of 2025 (introduced by Rep. Buddy Carter (R-Ga.))
- H.R. 3419, to amend the Public Health Service Act to reauthorize the telehealth network and telehealth resource centers grant programs (introduced by Rep. David Valadao (R-Calif.))
- H.R. 2846, to amend title II of the Public Health Service Act to include as an additional right or privilege of commissioned officers of the Public Health Service (and their beneficiaries) certain leave provided under Title 10, U.S. Code to commissioned officers of the Army (or their beneficiaries) (introduced by Rep. Chrissy Houlahan (D-Penn.))
- H.R. 1262, Give Kids a Chance Act of 2025 (introduced by Rep. Michael McCaul (R-Texas))
- H.R. 1843, to amend the Federal Food, Drug, and Cosmetic Act to increase transparency in generic drug applications (introduced by Rep. Neal Dunn (R-Fla.))
- H.R. 3302, Healthy Start Reauthorization Act of 2025 (introduced by Rep. Alexandria Ocasio-Cortez (D-N.Y.))
- H.R. 979, AM Radio for Every Vehicle Act of 2025 (introduced by Reps. Gus Bilirakis (R-Fla.) and Frank Pallone (D-N.J.))
The House Committee on Energy and Commerce Subcommittee on Health will hold a legislative hearing on Sept. 18, 2025, titled "Chairmen Guthrie and Griffith Announce Legislative Hearing to Discuss Legislation Expanding Seniors' Access to Innovative Medical Care." The following bills will be considered during the hearing:
- H.R. 842, Nancy Gardner Sewell Medicare Multi-Cancer Early Detection Screening Coverage Act (introduced by Rep. Jodey Arrington (R-Texas))
- H.R. ____, Ensuring Patient Access to Critical Breakthrough Products Act of 2025
- H.R. ____, a bill to amend title XVIII of the Social Security Act to ensure transparency in the national coverage determination process under the Medicare program and make certain adjustments to Medicare local coverage determinations
- H.R. 3826, Expanding Access to Diabetes Self-Management Training Act of 2025 (introduced by Rep. Kim Schrier (D-Wash.))
Week in Review
The House Committee on Appropriations advanced its fiscal year (FY) 2026 U.S. Department of Health and Human Services (HHS) spending bill in the early hours of the morning on Sept. 10, 2025, adding amendments explicitly allowing Biomedical Advanced Research and Development Authority (BARDA) funds to support mRNA vaccine research and defunding the Centers for Medicare & Medicaid Services' (CMS) Wasteful and Inappropriate Service Reduction (WISeR) program that promises to use artificial intelligence (AI)-driven prior authorization to stem alleged fraud in traditional Medicare. The House Appropriations Committee's HHS spending bill would also prohibit any potential future CMS efforts to revive the defunct nursing staff mandate rule. It also urges the Substance Abuse and Mental Health Services Administration (SAMHSA) to study the potential of GLP-1 drugs such as semaglutide for addiction treatment. Overall, the bill would fund HHS at $108 billion, nearly $7 billion below FY 2025, and less than the Senate Committee on Appropriations' $116.6 billion.
Republican members of the Senate Appropriations Committee delivered their steepest cut to the CDC, proposing to slash the agency's budget by 19 percent. One of the only healthcare-related Democratic amendments that the committee adopted bars CMS from using funds to implement its new WISeR Model, a Medicare pilot in six states that would introduce prior authorization into traditional Medicare for the first time. However, the CMS may draw upon funding from the CMS Innovation Center, which receives its own $10 billion mandatory appropriation through the ACA.
Upcoming Events
Holland & Knight's Hospitals and Health Systems Team will host its second annual Hospital Horizons Symposium, where attendees will hear from an impressive list of speakers who will provide healthcare regulatory, legislative and policy updates that are impacting hospitals and health systems. The event will begin with a reception on Oct. 6, 2025, and will continue with a full day of programming on Oct. 7, 2025.
Administrative Updates
Executive Order Updates
The Trump Administration has continued to release wide-ranging executive orders (EOs). For the latest updates, see our "Trump's 2025 Executive Orders: Updates and Summaries" tracking chart.
Legislative Updates
House Appropriations Committee Advances HHS Funding Bill
The House Appropriations Committee advanced the Labor, Health and Human Services, Education, and Related Agencies funding bill on Sept. 10, 2025, on a party line 35-28 vote. While many amendments were considered yet not adopted, one amendment was ultimately adopted with bipartisan support prohibits funding for the WISeR Model. Funding for mRNA projects is also retained by the bill, in contrast to the Trump Administration's recent cancellation of funding for mRNA projects at HHS. The bill now awaits consideration on the House floor; however, the bill's future is unclear given discrepancies between the House and Senate funding bills, as well as timing for the bill to be considered on the floor. In previous years, the bill was not ultimately considered by the full House given controversial provisions that have historically been included.
340B Bill Introduced in House By Reps. Carter, Harshbarger
Reps. Earl "Buddy" Carter (R-Ga.) and Diana Harshbarger (R-Tenn.) introduced the 340B ACCESS Act, aiming to restore integrity to the 340B drug pricing program. The bill proposes transparency, patient affordability requirements and stricter eligibility for hospitals and contract pharmacies. It responds to concerns raised by the Congressional Budget Office (CBO) about taxpayer costs and lack of patient benefit. Key reforms include codifying patient definitions, restricting pharmacy benefit managers (PBMs) profiteering and establishing a federal clearinghouse for 340B claims data.
Government Funding Deadline on Horizon
House Republicans are expected to release the text of a CR this week with the intent to consider and pass the bill before the week is over. The CR is expected to be "clean" and therefore not include any policy riders. With recent elections to fill seats left vacant by members that passed away – such as the recent election and swearing in of Rep. James Walkinshaw (D-Va.), who won a special election on Sept. 9, 2025, to fill the seat of the late Rep. Gerry Connolly (D-Va.) – Speaker Mike Johnson (R-La.) is operating under increasingly tight margins. The Senate must pass a CR at a 60-vote threshold, necessitating the support of at least seven Democratic senators to pass any CR.
Meanwhile, conferees from the Senate and House will also meet to iron out differences in the chambers' bills for the 2026 Military Construction and Veterans Affairs, Agriculture, and Legislative Branch Appropriations Acts, marking the first time in several years that there would be a formal conference on certain spending bills between the two chambers. However, it is worth noting that the three bills selected for conference are among the least controversial of the 12 subcommittee bills, and those three are historically slated for early consideration during the appropriations processes. It is possible the three bills could, if agreed to in conference, serve as a vehicle for which the CR may be combined with. However, should a CR pass, it is highly unlikely that all 12 appropriations bills will be considered and passed individually by the next government funding deadline.
Regulatory Updates
CDC ACIP Meets Sept. 18-19, 2025
The CDC Advisory Committee on Immunization Practices (ACIP) will meet on Sept. 18-19, 2025, for two full-day sessions. During the sessions, the ACIP will provide updates on its various workgroups and is slated to discuss vaccines for measles, mumps, rubella and varicella (MMRV), hepatitis B and COVID-19. Proposed recommendations will be voted on, which may lead to changes in the eligibility for various vaccines heading into the fall and winter when certain viruses are expected to impact higher rates of patients. Some reporting suggests that the Trump Administration plans to link COVID-19 vaccines to the deaths of two dozen children at some point during the meeting. On Sept. 15, 2025, HHS and CDC announced the appointment of five new members to ACIP.
- Catherine M. Stein, Ph.D., is a professor and infectious disease epidemiologist at Case Western Reserve University with more than 100 publications and extensive research on tuberculosis and genetics.
- Evelyn Griffin, M.D., is a board-certified OB-GYN at Baton Rouge General Hospital, known for her work in maternal health and robotic assisted surgery.
- Hilary Blackburn, PharmD, M.B.A., leads medication access initiatives at AscensionRx and hosts a pharmacy-focused podcast.
- Kirk Milhoan, M.D., Ph.D., is a pediatric cardiologist and medical director of a free clinic in Hawaii with global mission experience.
- Raymond Pollak, M.D., F.A.C.S., F.R.C.S., is a transplant specialist with leadership roles in national transplant organizations and has served as principal investigator on National Institutes of Health (NIH) transplant biology grants and numerous drug trials.
Two appointees have drawn scrutiny for their positions on COVID-19: Stein has publicly questioned the accuracy of pandemic data and criticized mandates, including testimony that challenged public health reporting practices, and Milhoan has promoted alternative treatments such as ivermectin and hydroxychloroquine, which federal health agencies have warned against due to lack of efficacy and safety concerns.
The full agenda for the sessions is available online.
CMS Issues Guidance on Implementation of State Directed Payment Program
CMS released eagerly awaited guidance on Sept. 10, 2025, regarding how it would implement the provisions in the One Big Beautiful Bill Act (H.R. 1 or OBBB) impacting Medicaid State Directed Payment (SDP) programs. The guidance clarifies some questions and ambiguities in the bill text.
Many states utilize SDP programs to increase provider payment rates up to 100 percent of average commercial rates (ACR). OBBB mandates that these payments be brought down to 100 percent of Medicaid rates in an expansion state (or 110 percent in non-expansion states) in the first annual rating period beginning after July 4, 2025, unless the SDP program meets certain grandfathering requirements. Grandfathered SDP programs may maintain higher spending levels, capped at the grandfathered amount until the rating period that begins on or after Jan. 1, 2028, whereupon the cap will be reduced by 10 percentage points per year until they reach the lower 100/110 percent Medicaid caps.
States annually submit to CMS for approval of their proposed SDP programs for the applicable annual rating period on a form known as a "438 preprint." The guidance clarifies that SDPs in rating periods that "occur" within 180 days before or after July 4 (the date of enactment of OBBB) qualify for grandfathering if they were approved before July 4 or if the 438 preprint was submitted to CMS before that date and the applications were "complete" – meaning the preprint at its addendum data tables were completed in full.
CMS has also indicated that it is preparing to issue a notice of proposed rulemaking (NPRM) to revise the SDP program regulations in 42 C.F.R. Part 438 as directed by Congress in OBBB to implement these changes, and it is considering changes to the total payment rate limit for state directed payment programs for services beyond inpatient hospital services, outpatient hospital services, nursing facility services and qualified practitioner services.
Questions about any part of the guidance may be sent to CMS via email.
CMS Announces Rural Health Transformation Program Details
CMS announced details on the Rural Health Transformation Program (RHTP) on Sept. 15, 2025, which revealed that states must submit applications to CMS by Nov. 5, 2025. There is only one application window for this program, and awardees will be announced by Dec. 31, 2025.
Unlike targeted Provider Relief Fund payments designed to cover expenses related to COVID-19, RHTP is intended to drive innovative solutions to transform rural health. As the largest federal investment in rural health in more than two decades, the program encourages creative, out-of-the-box approaches to sustaining access to quality healthcare and improving health outcomes in rural communities. As part of the application, each state must present a rural health transformation plan that outlines the specific initiatives it intends to pursue with RHTP funds. Several states were already soliciting stakeholder feedback as they developed their plans in anticipation of CMS' formal request for applications.
CMS will host informational webinars with additional details:
- Sept. 19, 2025, 3:00 p.m. ET
Register here: CMS Webinar Registration - Sept. 25, 2025, 5:00 p.m. ET
Register here: CMS Webinar Registration
Section 71401 of the OBBB amended 42 U.S.C. 1397ee by adding a new subsection (h) detailing the RHTP. The statute directs the CMS administrator to implement the program "by program instruction or other form of program guidance" as opposed to notice-and-comment rulemaking. Congress has appropriated $200 million to CMS to operate the program. For five years beginning in 2026, the administrator will allot $10 billion to states annually to carry out specified activities. All funds allotted to a state in a given year must be expended by the end of the following FY (e.g., funds allotted in 2026 must be expended by Sept. 30, 2027). The statute directs the administrator to determine the amount of unobligated or unexpended funds each year available for redistribution. The statute does not specify how such redistributions are to be accomplished, other than the date by which redistributed funds must be expended by the state receiving such funds.
For each program year, the HHS secretary is required to allot $5 billion equally among all states with an approved application. "Equally" is interpreted to mean without adjustment for size or need – thus, if every state's application was approved, each would receive $100 million, regardless of the number or financial condition of its rural health facilities. The statute further directs the Trump Administration to distribute an additional $5 billion each program year among no fewer than 25 percent of the states with approved applications. In making these allotments, the administrator must take into account:
- the percentage of the state's population residing in a rural census tract of a metropolitan statistical area (as determined under the most recent Goldsmith modification)
- the proportion of rural health facilities in the state relative to the nationwide total
- the condition of hospitals in the state that serve a disproportionate number of low-income patients with special needs (as referenced in 42 USC 1396a(a)(13)(A)(iv))
- any additional factors the administrator deems appropriate
MACPAC September Meeting
The Medicaid and CHIP Payment Access Commission (MACPAC) will hold its September 2025 annual meeting on Sept. 18-19, 2025, and it will be streamed online. Sessions will go into detail on various provisions from OBBB, including Medicaid Community Engagement Requirements, as well as general Medicaid payment policies to support the Home and Community-Based Services (HCBS) workforce, behavioral health and Medicaid, children and youth with special needs health coverage, including youth in foster care and justice-involved youth.
Make Children Healthy Again Strategy
The Make America Healthy Again (MAHA) Commission released its long-awaited report on Sept. 9, 2025, which details more than 120 recommendations for addressing chronic childhood diseases. The recommendations span various offices within HHS, as well as the U.S. Department of Agriculture (USDA) and U.S. Environmental Protection Agency (EPA). While many of the recommendations would be significant, additional regulatory or legislative action would be needed to facilitate their accomplishment. For a detailed analysis of the report, see Holland & Knight's client alert, "MAHA Commission Report Details Federal Response to Childhood Chronic Disease," Sept. 15, 2025.
FDA Launches Enforcement Efforts on Direct-to-Consumer Advertising
FDA announced new enforcement efforts on Sept. 9, 2025, aimed at direct-to-consumer advertisements on pharmaceutical products. As part of the announcement, FDA sent warning letters to pharmaceutical companies to warn them that their advertisements may be out of compliance and request the removal of "misleading" advertisements. The announcement adds that 100 cease-and-desist letters were also issued to companies with "deceptive" advertisements. Included in the announcement is a template letter FDA sent to companies; however, the specific companies that received the letters have not yet been identified and, instead, seem to be general letters to companies showcasing stepped-up enforcement efforts may be coming. FDA also announced it will initiate rulemaking to close the "adequate provision" created in 1997 that requires companies to provide a summary of a prescription drug's safety information in certain types of advertisements, rather than a comprehensive detailing of all items. The press release cites this effort as part of HHS' broader "radical transparency" push and follows the push for restrictions on pharmaceutical advertisements sought by HHS Secretary Robert F. Kennedy Jr., including through recommendations made in the MAHA Commission Report.
cGAO Calls for Greater Transparency in NCD Process
Republican leaders of the House Energy and Commerce Committee, along with the House Ways and Means Committee, are urging increased transparency in CMS' national coverage determination (NCD) process, following a new report from the U.S. Government Accountability Office (GAO).
The GAO found that although CMS met the specified timeframes for issuing determinations in 83 percent of cases, the agency does not consistently track or report the causes of delays when deadlines are missed. The report recommends that CMS systematically identify the reasons for delays to improve timeliness and publicly share the criteria it uses to prioritize coverage analyses. "Seniors should never be left waiting without clear answers about whether Medicare will cover the treatments and services their doctors recommend," said Committee Chairs Brett Guthrie (R-Ky.) and Jason Smith (R-Mo.). "Greater openness in the NCD process is essential to ensure trust, timely access to care, and confidence that decisions are being made fairly and consistently."
Ways and Means Committee Sends Letter on No Surprises Act Implementation
The House Ways and Means Committee issued a letter on Sept. 5, 2025, to HHS, U.S. Department of Labor and U.S. Department of the Treasury, urging full implementation of the No Surprises Act (NSA) consistent with congressional intent. The letter identifies several areas of concern, including the lack of rollout for the Advanced Explanation of Benefits (AEOB), which is intended to provide patients with upfront pricing information. It also argues inefficiencies in the Independent Dispute Resolution (IDR) process, particularly around batching and inconsistent use of the Qualified Payment Amount (QPA). The committee references oversight hearings held in 2023 and recommends that agencies prioritize AEOB deployment, improve IDR consistency and ensure transparency in NSA rulemaking to better protect patients from surprise medical bills.
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.
