In this update:
- Administration Updates
- Confusion Continues Around Attempted Federal Funding Freeze
- HHS Nominee RFK Jr. Appears Before Senate Finance and HELP Committees
- Trump Attempts to Fire HHS and Other Inspector Generals
Trump Issues Executive Order on Gender-Affirming Care for Those Under 19 - Trump Administration Reinstates Global Abortion Gag Rule
- Dr. Matthew Memoli Named Acting Head of NIH
- Federal Agencies
- NIH Clarifies Limitations on Scientific Meetings
- CMS Drops Appeal of United’s Medicare Advantage Ruling
- Other Updates
- KFF Publishes Study on Claims Denials in Federal Marketplace Plans
- MACPAC Holds January Meeting
Administration Updates
Confusion Continues Around Attempted Federal Funding Freeze
The Trump Administration engaged in a series of actions this week attempting to freeze federal funds that were appropriated by Congress:
- On January 27th, the Office of Management and Budget (OMB) circulated a memo that purportedly would freeze up to $3 trillion of appropriated federal funding (as covered by SPG here). On January 28th, U.S. District Court Judge Loren AliKhan temporarily halted the order.
- On January 28th, the Trump Administration issued a second memo that sought to clarify programs carved out of the freeze, including Medicare, Medicaid, and Social Security.
- On January 29th, the Trump Administration rescinded the order in a tw0-sentence memo. However, White House Press Secretary Karoline Leavitt then posted on social media that the memo “is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB Memo. Why? To end any confusion created by the court’s injunction.”
Given the confusion surrounding these communications, a second federal Judge, U.S. District Judge John McConnell, heard arguments in a lawsuit brought by Democratic state attorneys general on January 29th to halt the order. He said he was “inclined to grant the restraining order” and mentioned Leavitt’s social media post as a cause. This week’s events are likely to be a preview of a broader constitutional debate over the separation of powers.
HHS Nominee RFK Jr. Appears Before Senate Finance and HELP Committees
On January 29th and 30th, Robert F. Kennedy, Jr., nominee for Secretary of Health and Human Services (HHS), appeared before the Senate Finance and Senate Health, Education, Labor & Pensions Committees for confirmation hearings. Senators questioned Kennedy extensively on his stances on abortion, vaccine mandates, Medicare, and Medicaid.
Based on questions and responses, many believe Kennedy has secured the votes of nearly all Republicans on the Finance Committee. However, after a disjointed exchange with HELP Committee Chair Bill Cassidy (R-LA) regarding plans for Medicare and Medicaid reform, as well as a disagreement on vaccine science, it remains uncertain whether Kennedy has adequate support in the Senate to be confirmed.
While the confirmation process for the HHS Secretary includes hearings before both the Finance and HELP Committees, only the Finance Committee votes to advance a nomination.
Trump Attempts to Fire HHS and Other Inspector Generals
On January 24th, President Trump announced the termination of the Inspectors General of 18 federal agencies, including Cristi Grimm of the Department of Health and Human Services (HHS). Trump Administration officials attributed the terminations to “changing priorities.” This action seems to be in direct contravention of a 2023 law which requires the President to provide 30 days’ notice to Congress before firing an Inspector General. On January 28th, Senators Chuck Grassley (R-IA) and Dick Durbin (D-IL) jointly authored a letter requesting that the President provide this explanation, and further legal challenges are expected.
Grassley and Durbin’s letter is available here.
Trump Issues Executive Order on Gender-Affirming Care for Those Under 19
On January 28th, President Trump issued an Executive Order (EO) entitled “Protecting Children from Chemical and Surgical Mutilation” which seeks to end gender-affirming medical care, such as puberty blockers and hormones, for children and teenagers under 19 years old. It specifically orders the federal government to not “fund, sponsor, prompt, assist, or support” such care. This order builds on a previous order that describes transgender identity as an “ideology.”
The EO directs the HHS to review the terms of insurance coverage under Medicare, Medicaid, and Affordable Care Act (ACA) plans. However, the regulation of medical care is largely within the purview of the states. Research and education grants to medical institutions may be affected as well. Agencies have 60 days to submit progress reports on the directives in the order.
The executive order is available here.
Trump Administration Reinstates Global Abortion Gag Rule
On January 24th, President Trump reinstated his 2017 expanded version of the “Mexico City Policy,” also known as the “global gag rule”. The Mexico City Policy, originally established during the Reagan Administration, prevents federal health funding from flowing to any non-governmental organization that provides access to abortion-related care or information. The Trump Administration expanded the policy in 2017, to include both global family planning programs and broader global health assistance programs. The Biden Administration had rescinded the policy in January 2021.
The Administration’s announcement is available here.
Dr. Matthew Memoli Named Acting Head of NIH
On January 22nd, the Trump Administration named Dr. Matthew Memoli as acting Director of the National Institutes of Health (NIH). Dr. Memoli is a veteran infectious disease researcher who developed a clinical/translational research program to study influenza and other respiratory viruses in the Laboratory of Infectious Diseases at NIH. He was also an outspoken critic of the national response to the Covid-19 pandemic and of Dr. Anthony Fauci, calling vaccine mandates “extraordinarily problematic.” A confirmation hearing for President Trump’s pick for NIH Director, Dr. Jay Bhattacharya, has not been scheduled.
More information is available here.
Federal Agencies
NIH Clarifies Limitations on Scientific Meetings
On January 27th, Acting Director of the National Institutes of Health (NIH) Dr. Matthew Memoli issued a memo clarifying permissible NIH activities amid the ongoing communications freeze. Regarding regular operations, staff at the NIH can continue clinical trials and research studies, with carve outs for necessary travel, contracting, and procurement. External communication is suspended for matters “not directly related to emergencies or critical to preserving public health.” This exception allows for “mission critical” announcements, reviewed on a case-by-case basis. The freeze pauses the preprinting of scientific work authored by NIH staff.
CMS Drops Appeal of United’s Medicare Advantage Ruling
On January 24th, the Centers for Medicare & Medicaid Services (CMS) withdrew its notice of appeal in the ongoing case regarding UnitedHealthcare’s Medicare Advantage (MA) star ratings. In November, a federal judge in Texas ordered CMS to recalculate United’s star ratings for plan year 2025, finding that CMS unfairly downgraded the company’s star rating over one 8-minute phone call. Under the Biden Administration, CMS immediately filed the appeal in question. Due in part to the freeze on external communications, CMS has not elaborated on its decision, but reversals of Biden-era regulatory decisions are largely expected.
Other Updates
KFF Publishes Study on Claims Denials in Federal Marketplace Plans
On January 27th, the Kaiser Family Foundation (KFF) published a study on claims denials and appeals in Affordable Care Act (ACA) marketplace plans in 2023. Specifically, the study analyzes data on denials and appeals for non-group qualified health plans (QHPs) sold in the federally-facilitated marketplace and does not include services denied through prior authorization. Key takeaways include:
- In 2023, QHPs on the marketplace denied 19% of in-network claims (3% uptick from 2022) and 37% of out-of-network claims, summing to an average of 20% of all claims;
- There was significant variation in in-network denial rates across states and plans, up to 54%;
- The in-network denial rate was highest among catastrophic level plans; and
- Fewer than 1% of denied claims were appealed.
The highest in-network denial rate was attributed to Blue Cross Blue Shield of Alabama (35%), followed by UnitedHealth Group (33%).
The study is available here.
MACPAC Holds January Meeting
On January 23rd and 24th, the Medicaid and CHIP Payment and Access Commission (MACPAC) held its monthly public meeting. The Commissioners advanced three recommendations concerning the role of external quality review (EQR) in managed care plans to be included in their March 2025 Report to Congress. The Commissioners also discussed timely access to home- and community-based services (HCBS) including how states can use provisional plans of care through existing waivers. Beyond EQR and HCBS, the Commissioners discussed medications for opioid use disorder (OUD), residential treatment and primary care for youth with special health care needs, and the Program of All-Inclusive Care for the Elderly (PACE). The next MACPAC meeting will take place virtually on February 27th and 28th.
The slides are available here.