Weekly Health Care Policy Update – August 1, 2025

August 8, 2025

In this update: 

  • Trump Administration
    • White House and Tech Leaders Announce CMS Health Tech Ecosystem Initiative
    • Government Agrees to Short Pause in New Federal Public Benefit Interpretation
    • President Trump Issues Executive Order on Homelessness
    • Personnel Updates
  • Federal Agencies
    • CMS Issues 2026 Hospital Inpatient Payment System Final Rule
    • CMS Issues 2026 Skilled Nursing Facility Payment System Final Rule
    • Secretary Kennedy Bans Thimerosal in Vaccines
    • NIH Caps Grant Applications Researchers Can Submit Annually
    • SAMHSA Launches Hepatitis C Elimination Initiative Pilot
    • Medicare Drug Plan Premiums on Path to Rise Substantially for 2026
  • Other Updates
    • AMA Sends Open Letter to Secretary Kennedy on USPSTF Reports
    • U.S. News Publishes Best Hospitals List
    • Joint Commission to Update Standards for Children’s Hospitals

Trump Administration

White House and Tech Leaders Announce CMS Health Tech Ecosystem Initiative 
On July 30th, the Trump Administration announced commitments from major health care and information technology firms to begin developing a next-generation digital health ecosystem. Amazon, Anthropic, Apple, Google, and OpenAI joined Epic, Athenahealth, eClinicalWorks and most of the largest insurers in a pledge to aid the Administration across two broad areas: promoting the Centers for Medicare and Medicaid Services (CMS) Interoperability Framework and increasing the availability of personalized health data tools. Of the over 60 pledges, 21 data networks (including those from EHR firms) pledged to meet the Interoperability Framework to become CMS Aligned Networks, 11 health systems and  7 EHR firms have pledged to participate and support patient use, and 30 companies have pledged to use secure digital identity credentials to obtain medical records from CMS Aligned Networks to generate health outcomes data. These efforts build on recent CMS developments including piloting an enhanced plan finder, a Fast Healthcare Interoperability Resources (FHIR)-based Application Programming Interface (API) provider directory, faster blue button data facilitation, and updates to Medicare.gov.

The announcement is available here, and additional information on the initiative is available here.

Government Agrees to Short Pause in New Federal Public Benefit Interpretation 
On July 25th, plaintiffs in the State of New York, et al. v. USDOJ, et al. announced that the government had agreed to stay any enforcement of its new federal public benefit interpretation in plaintiff states through September 3rd. Earlier this month, the Department of Health and Human Services (HHS) announced the formal rescission of a 1998 notice of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) that extended certain federal public benefits regardless of citizenship status, barring access to Head Start, community health centers, community behavioral health clinics, and the Title X family planning program, among other benefits. Soon after this announcement, New York Attorney General Letitia James filed a suit against the Trump Administration with 20 other attorneys general. These plaintiffs will receive temporary relief from the enforcement of HHS’ new public benefit interpretation.

President Trump Issues Executive Order on Homelessness 
On July 24th, President Trump issued an executive order titled Ending Crime and Disorder on America’s Streets. The order largely aims to manage homelessness by involuntarily placing more homeless individuals into mental health or drug treatment centers. Though the issue is largely the jurisdiction of states, the Attorney General will move to end consent decrees that limit localities’ ability to involuntarily commit individuals. Additionally, the order moves to divert funding from “housing first” programs towards programs that require sobriety and treatment. It directs the Departments of Health and Human Services, Housing and Urban Development, and Transportation to prioritize federal grant programs in localities that actively “enforce prohibitions on open illicit drug use, urban camping and loitering, and urban squatting, and track the location of sex offenders.” Many advocates have vocalized their concern over a loss of civil liberties and implications for medical privacy.

The executive order is available here, and the fact sheet is available here.

Administration Personnel Updates
Over the last few weeks, a number of important Trump Administration personnel updates have been announced, including: 

  • Top FDA Official Forced to Resign: Director of the Center for Biologics Evaluation and Research Dr. Vinay Prasad has resigned from his post after three months. He drew recent criticism after denying a series of new treatments for rare diseases and ordering a pause on Sarepta Therapeutics’s therapy for Duchenne muscular dystrophy. Dr. Prasad resigned under pressure from the White House and a campaign by right-wing influencer Laura Loomer. Dr. George Tidmarsh, who heads the Center for Drug Evaluation and Research, will serve as acting director.
  • White House Head of Pandemic Preparedness and Response Resigns: Gerald Parker, a top official within the National Security Council’s biosecurity and pandemic response directorate, has resigned. With his departure, both the biosecurity directorate and the Office of Pandemic Preparedness and Response Policy are leaderless, with one part-time employee between the two. Many experts are raising the alarm at this loss of White House expertise, though the Administration has stated that this portfolio has been moved to the Homeland Security Council.
  • Senate Confirms Susan Monarez as CDC Director: On July 29th, the Senate voted to confirm Susan Monarez as the director of the Centers for Disease Control and Prevention (CDC), by a vote of 52-47. She is the first CDC director to be confirmed by the Senate; previous directors were appointed to their posts.

Federal Agencies

CMS Issues FY2026 Hospital Inpatient Prospective Payment System Final Rule
On July 31st, CMS issued the final rule for the fiscal year (FY) 2026 Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS. Overall, the rule will result in a 2.6% increase in payments under the IPPS for acute care hospitals, which reflects a hospital market basket percentage increase of 3.3% reduced by a 0.7 percentage point productivity adjustment. This will increase total hospital payments by $5 billion, including an increase in Medicare uncompensated care payments to disproportionate share hospitals of approximately $2 billion. The rule will result in a 2.7% increase for LTCHs, which reflects a market basket percentage increase of 3.4% reduced by a 0.7 percentage point productivity adjustment.

Additional key provisions of the rule include:

  • Low Wage Index Hospital Policy: CMS is discontinuing the low wage index hospital policy for FY 2026 and subsequent years, but will be adopting a transitional exception to the calculation of FY 2026 IPPS payments for hospitals significantly impacted by the discontinuation.
  • Inpatient Quality Reporting Program: CMS is removing four measures related to equity, Covid-19 vaccination, and social drivers of health. CMS is also modifying measures related to hip and knee arthroplasty; 30-day, all-cause, risk-standard mortality following acute ischemic stroke; and hospital-wide readmission and mortality.
  • Medicare Promoting Interoperability Program: CMS is redefining the EHR reporting period as a minimum of any continuous 180-day period, and modifying the Security Risk Analysis and the Safety Assurance Factors for EHR Resilience Guides measures.
  • Hospital Readmissions Reduction Program: CMS is modifying the six readmission measures to add Medicare Advantage (MA) data; shortening the applicable period for measuring performance from three to two years; excluding MA data in the calculations of aggregate payments for excess readmissions; extending the length of time to submit an Extraordinary Circumstance Exception (ECE) request from 30 to 60 days; and removing Covid-19 exclusions and risk-adjustment covariates from the six readmission measures.
  • Hospital-Acquired Condition Reduction Program: CMS is extending the length of time to submit an ECE request from 30 to 60 days.
  • Transforming Episode Accountability Model (TEAM): CMS is making several changes to the TEAM Model including capturing quality measure performance using outpatient patient-reported outcomes without increasing participant burden, improving target price construction, and broadening the three-day Skilled Nursing Facility Rule waiver.

The rule also includes a Request for Information seeking input on approaches and opportunities to streamline regulations and reduce burdens on those participating in the Medicare program.

The final rule is available here and the press release is available here. The RFI on streamlining regulations is available here.

CMS Issues FY2026 Skilled Nursing Facility Prospective Payment System Final Rule
On July 31st, the Centers for Medicare & Medicaid Services (CMS) issued a final rule updating payment policies and rates under the fiscal year (FY) 2026 Skilled Nursing Facility Prospective Payment System (SNF PPS). These updates will result in a net increase of 3.2% in Medicare Part A payments to SNFs in FY 2026, or approximately $1.16 billion total. The increase is the result of a 3.3% SNF market basket increase, a 0.6% forecast error adjustment, and a negative 0.7% productivity adjustment. Notably, the net increase in payments to SNFs does not incorporate reductions for certain SNFs due to Value-Based Purchasing (VBP), estimated at $208 million.

Additional key provisions of the rule include:

  • PDPM ICD-10 Code Mappings: CMS finalized 34 changes to the Payment-Driven Payment Model ICD-10 code mappings to allow providers to provide more accurate, consistent, and appropriate primary diagnoses that meet the criteria for skilled intervention during a Part A SNF stay.
  • SNF VBP: CMS finalized several operational and administrative changes to the SNF VBP program including finalizing scoring methodology for one measure and performance standards for FY 2028 and 2029 program years, adopting a reconsideration process for SNF appeals of certain CMS decisions, and removing the Health Equity Adjustment from the scoring methodology.
  • SNF QRP: CMS finalized several changes to the SNF Quality Reporting Program (QRP) including removing four patient assessment data elements from the Resident Assessment Instrument Minimum Data Set (MDS), beginning with admissions on or after October 1st, and amending the reconsideration policy and process. CMS also summarized feedback received on several requests for information (RFIs) included in the proposed rule.

The final rule is available here and a fact sheet is available here.

Secretary Kennedy Bans Thimerosal in Vaccines 
On July 22nd, Department of Health and Human Services (HHS) Secretary Kennedy formally approved last month’s Advisory Committee on Immunization Practices’s (ACIP) recommendation to rescind federal recommendations for all flu vaccines containing thimerosal. Thimerosal is a preservative, containing mercury, used to prevent contamination in multidose vaccine vials. This move aligns the U.S. with Europe. Most companies have removed thimerosal from their vaccine supplies, with the exception of Sanofi and CSL Seqirus, though Sanofi will make the adjustment in time for the upcoming flu season. Last year, fewer than 5% of flu vaccines administered contained thimerosal, so the decision will likely not have a large impact on industry and availability.

The announcement is available here.

NIH Caps Number of Grant Applications Researchers Can Submit Annually 
On July 17th, the National Institutes of Health (NIH) announced a new policy to limit the number of applications researchers can submit annually and restrict how AI is used in the drafting of proposals. The NIH has observed instances of Principal Investigators (PIs) submitting a large volume of applications, likely using AI. Moving forward, NIH will only accept six new, renewal, resubmission, or revision applications from an individual Principal Investigator in a calendar year. The number of PIs that submit more than six applications per year is “relatively low.” Moreover, the NIH will not consider applications that “are either substantially developed by AI, or contain sections substantially developed by AI.” This policy is effective for applications submitted to the September 25th receipt date and beyond.

The announcement is available here.

SAMHSA Launches Hepatitis C Elimination Initiative Pilot
On July 28th, the Substance Abuse and Mental Health Services Administration (SAMHSA) announced a pilot to address Hepatitis C among individuals with substance use disorder (SUD) and/or serious mental illness (SMI). The pilot program is designed to support homeless populations by investing in population prevention, identifying patients, and facilitating treatment. SAMHSA anticipates funding between 13 and 40 awards totaling $100,000,000 for the proof-of-concept program. The program will run for up to three years and is open to states, territories, and tribes/tribal organizations.

The announcement is available here.

Medicare Drug Plan Premiums on a Path to Rise Significantly for 2026 
On July 28th, the Centers for Medicare and Medicaid Services (CMS) released preliminary data and bid information for Medicare Part D plans for contract year (CY) 2026. Overall, Part D premiums will likely increase next year; the average monthly bid submitted for CY2026 was $239.27, up 33% from last year, and the base beneficiary premium was $38.99, up 6% from last year, the maximum amount allowed by law. The direct subsidy, which CMS pays to plans to cover the gap between the average benchmark and base premium, will be $200.28, up from $142.67. CMS also announced that it would make some changes to the Part D Premium Stabilization Demonstration, which was introduced for CY2025 to ensure more predictable options for enrollees. CMS will decrease the uniform reduction to the base beneficiary premium from $15 to $10, increase the year-over-year premium increase limit from $35 to $50, and eliminate narrowed risk corridor thresholds to align the program with “regular market conditions.”

The announcement is available here.

These increases move in the opposite direction of President Trump’s Executive Order from May 12th demanding most favored nation status for American purchases of pharmaceuticals. On July 31st, Trump sent letters to 17 drug manufacturers escalating the demands and setting a deadline of September 29th, but with little additional guidance on compliance.

The executive order fact sheet is available here.

Other Updates

AMA Sends Open Letter to Secretary Kennedy on USPSTF Reports
On July 27th, the American Medical Association (AMA) sent an open letter to Department of Health and Human Services (HHS) Secretary Kennedy, following a recent Wall Street Journal report on his plans to remove the remaining members of the U.S. Preventive Services Task Force (USPSTF). The Wall Street Journal reports that Secretary Kennedy plans to dismiss all 16 panel members because he views them as too “woke.” HHS has reiterated that no final decisions have been made concerning the membership of the USPSTF. The AMA’s letter reiterates the role that the USPSTF plays in “guiding physicians’ efforts to prevent disease” and expand access to preventative care. Earlier this month, Secretary Kennedy called off a scheduled USPSTF meeting.
 
The letter is available here, and the original story is available here.
 
U.S. News Publishes Best Hospitals List 
On July 29th, the U.S. News & World Report released the 2025-2026 edition of Best Hospitals. This edition includes the regional evaluation of hospitals at both a state and metro level and ranks the 504 best regional hospitals. Hackensack University Medical Center at Hackensack Meridian Health, Mount Sinai Hospital, New York-Presbyterian Hospital-Columbia and Cornell and NYU Langone Hospitals tied for #1 out of the 25 best hospitals in New York. These four institutions also made the Best Hospitals Honor Roll, a list of the 20 best health centers in the country. U.S. News evaluated over 4,400 hospitals on measures including risk-adjusted mortality rates, preventable complications, and level of nursing care.
 
The announcement is available here, and the rankings by region are available here.
 
Joint Commission to Update Standards for Children’s Hospitals 
On July 29th, the Joint Commission announced a new children’s health strategy to advance the accreditation and certification of children’s hospitals. The Joint Commission has formed a Children’s Healthcare Advisory Committee to advise on the development of appropriate accreditation standards for the care rendered in children’s hospitals, creating needed distinctions between clinical expectations for children and adults. Beyond developing standards, this effort will also explore how the accreditation process can spur the development of family-centered practices, innovative policy, and new clinical insights.
 
The announcement is available here.