In this update:
- Legislative Updates
- Mike Johnson Re-Elected as Speaker
- Senate Budget Committee Publishes Report on Private Equity in Health Care
- Senate Finance Chair Outlines Priorities
- Federal Agencies
- CMS Chooses 15 States for Transforming Maternal Health Model
- CMS Announces Record Marketplace Enrollment
- HHS Awards $306 Million in Avian Flu Funding
- CFPB Bans Medical Debt from Credit Reports
- SAMSHA Awards CCBHC Medicaid Demonstration Planning Grants
- FDA Issues Guidance on AI and Drug Development
- New York State Updates
- DOH Approves Hospital Regulations for Assessment and Referral of Behavioral Health Patients
Legislative Updates
Mike Johnson Re-Elected as Speaker
On January 4th, Rep. Mike Johnson (LA-04) was re-elected as Speaker of the House by a vote of 218-215. Several Republicans, including Reps. Keith Self (TX-03), Ralph Norman (SC-05), and Thomas Massie (KY-04), threatened to derail Johnson’s election, but Self and Norman ultimately switched their votes after an hour of tense negotiations with Johnson and President-elect Trump, who supported Johnson’s bid for the Speakership. Both members said they were assured that Johnson would fight to advance Trump’s agenda.
Senate Budget Committee Publishes Report on Private Equity in Health Care
On January 7th, Senate Budget Committee Chairman Chuck Grassley (R-IA) and Ranking Member Sheldon Whitehouse (D-RI) released a bipartisan staff report on private equity investment in health care, “Profits Over Patients: The Harmful Effects of Private Equity on the U.S. Health Care System.” The report mainly focuses on two private equity firms – Leonard Green & Partners and Apollo Global Management – and their operating companies – Lifepoint Health and Prospect Medical Holdings.
The report concludes that management activity at both operating companies “centered around profits, costs, acquisitions, managing labor expenses and increasing patient volume – with little or no discussion of patient outcomes or quality of care.” The report also found that the companies decreased patients’ quality of care and caused hospital financial harm while still making millions in profits as a result of their investments.
More information is available here.
Senate Finance Chair Outlines Priorities
On January 7th, Senator Mike Crapo (R-ID) was confirmed as Chairman of the Senate Finance Committee for the 119th Congress, issuing a press release outlining his policy priorities for the Committee, covering federal tax policy, the social safety net and health care programs, and implementation of foreign trade agreements. Within health care, the Senator prioritized rural health care access, pharmacy benefit manager reform, primary care, chronic-care benefits in Medicare, and long-term payment stability for doctors including alternative payment models that “reward better care at lower cost”. The press release also references working “with the Trump Administration to address America’s epidemic of chronic disease,” a potential nod to the nomination of Robert F. Kennedy, Jr. as Secretary of the Department of Health and Human Services.
More information is available here.
Federal Agencies
CMS Chooses 15 States for Transforming Maternal Health Model
On January 6th, the Centers for Medicare and Medicaid Services (CMS) announced the selection of 15 states to participate in the Transforming Maternal Health (TMaH) Model. The model is intended to support state Medicaid agencies in “the development of a whole-person approach to pregnancy, childbirth, and postpartum care that addresses the physical, mental health, and social needs experienced during pregnancy.” The goals of the model are to reduce disparities in access and treatment, improve outcomes and experiences for mothers and their newborns, and reduce overall program costs.
Participating states include Alabama, Arkansas, California, the District of Columbia, Illinois, Kansas, Louisiana, Maine, Minnesota, Mississippi, New Jersey, Oklahoma, South Carolina, West Virginia, and Wisconsin. The model launched on January 1st and will run for 10 years.
More information is available here.
CMS Announces Record Marketplace Enrollment
On January 8th, CMs announced that 23.6 million individuals had selected 2025 plan year coverage during the current open enrollment period. With a week before the end of open enrollment in most states, this year’s enrollment already exceeds last year’s record-setting open enrollment figure by more than 2 million enrollees. CMS reported State-Based Marketplace (SBM) enrollment data through December 28, 2024. At that time, New York reported 212,984 cumulative 2025 plan selections, including 141,580 individuals who were automatically re-enrolled in their previous plan. New York enrollment has not yet eclipsed the final 2024 open enrollment figure of 279,879.
A press release is available here and a fact sheet is available here.
HHS Awards $306 Million in Avian Flu Funding
On January 3rd, the Department of Health and Human Services (HHS) awarded $306 million for various H5N1 Avian Flu response activities including disease surveillance, laboratory testing, and monitoring effects. Specifically, approximately $183 million of the funding will go towards regional, state, and local preparedness programs including the Hospital Preparedness Program, the National Emerging Special Pathogens Training and Education Center, the Regional Emerging Special Pathogen Treatment Centers, and the National Disaster Medical System. An additional $111 million of the funding will go towards additional enhancements in monitoring H5N1 at the local state and national levels, including increased monitoring for individuals exposed to infected animals, as well as for manufacturing, storing, and distributing additional influenza diagnostic test kits for virologic surveillance. Lastly, $11 million in funding will go towards additional research into potential medical countermeasures.
Additional information is available here.
CFPB Bans Medical Debt from Credit Reports
On January 7th, the Consumer Financial Protection Bureau (CFPB) issued a final rule banning credit agencies from including medical debt on consumers’ credit reports. The final rule also prohibits lenders from considering medical information when evaluating borrowers. Similar rules are already in place in states such as Colorado, New York, and California, where medical debt is prohibited from being included on consumer credit reports or factored into their credit scores. The Administration estimates that the final rule will eliminate $49 billion in unpaid medical debt from the credit reports of 15 million Americans, and lift credit scores of Americans with medical debt by an average of 20 points.
More information is available here.
SAMSHA Awards CCBHC Medicaid Demonstration Planning Grants
On January 7th, the Substance Abuse and Mental Health Services Administration (SAMHSA) awarded one-year Certified Community Behavioral Health Clinic (CCBHC) Medicaid Demonstration Program planning grants to 14 states and the District of Columbia. The $1 million grants were authorized through the Bipartisan Safer Communities Act of 2022 and assist states in developing their CCBHC certification processes, establishing prospective payment systems for Medicaid-reimbursable services, and preparing an application to participate in a four-year demonstration program. The selected states include Alaska, Colorado, Connecticut, Delaware, Hawaii, Louisiana, Maryland, Montana, North Carolina, North Dakota, South Dakota, Utah, Washington, West Virginia, and the District of Columbia.
More information is available here.
FDA Issues Guidance on AI and Drug Development
On January 6th, the Food and Drug Administration (FDA) published draft guidance on the use of artificial intelligence (AI) in drug and biological product development in a document titled “Considerations for the Use of Artificial Intelligence To Support Regulatory Decision-Making for Drug and Biological Products: Draft Guidance for Industry and Other Interested Parties.” The draft guidance is intended to provide “recommendations to sponsors and other interested parties on the use of artificial intelligence to produce information or data intended to support regulatory decision-making regarding safety, effectiveness, or quality for drugs.” The document does not establish any legally enforceable responsibilities, but rather, describes the Agency’s current thinking and recommendations.
Specifically, the draft guidance offers a risk-based credibility assessment framework for use in establishing and evaluating the credibility of an AI model for a particular context of use. Such uses might include reducing the number of animal-based studies, using predictive modeling for clinical analysis, processing and analyzing large data sets, analyzing post-marketing adverse drug experience information, or facilitating the selection of manufacturing conditions. The FDA suggests that the use of AI in such circumstances can introduce challenges such as the variability in quality, size and representativeness of datasets, the need for methodological transparency, or the potential for a model’s performance to change across deployment environments.
The FDA will accept comments on the document until April 7th. The full document is available here.
New York State Updates
DOH Approves Hospital Regulations for Assessment and Referral of Behavioral Health Patients
On January 8th, the New York State (NYS) Department of Health (DOH) approved final regulations that require hospital emergency departments to develop and implement policies and procedures for identification, assessment, and referral of patients with behavioral health presentations. As proposed by the Governor in her 2024 State of the State address, the regulations codify guidance issued by DOH and the NYS Office of Mental Health (OMH) in October 2023.
In accordance with the regulations, hospitals receiving patients with behavioral health needs are required to develop policies and procedures regarding:
- Reviewing of records (e.g., PSYCKES, SHIN-NY);
- Obtaining collateral information from friends and family members with the patient’s consent;
- Screening for suicide and violence risk; and
- Screening for complex needs and including a consideration of the social determinants of health when completing discharge planning for such patients.
The regulations include additional discharge planning requirements for individuals with complex needs that present at general hospitals with inpatient psychiatric units, including referring such patients to care management programs and ensuring appropriate psychiatric aftercare within seven calendar days following discharge.
The final regulations are available here. Public comment received on the proposed regulations and DOH responses are available in the State Register here.