In this update:
- Legislative Update
- Joint Committee on Taxation Says Reconciliation Bill Will Add $4 Trillion to Deficit
- Federal Agencies
- FDA Advisory Panel Recommends Monovalent Covid Vaccine for Fall
- CDC Ends Covid Vaccine Recommendation for Healthy Kids and Pregnant Moms
- CMS Updates and Extends Kidney Care Choices Model
- CMS Announces Increased Oversight on State Funding for Health Care for Undocumented Immigrants
- CMS Launches Oversight of Hospitals Offering Pediatric Transgender Care
- HHS Cancels Nearly $600 Million Moderna Contract for Pandemic Preparedness
- New York State Updates
- DOH Issues Guidance to Covered Health Care Entities Regarding Electronic Reporting of Material Transactions
Legislative Update
Joint Committee on Taxation Says Reconciliation Bill Will Add $4 Trillion to Deficit
On May 28th, the Joint Committee on Taxation, a non-partisan congressional committee that assists the House and Senate with tax legislation, released its updated cost estimate for the Republican reconciliation bill. The legislation is now expected to add $3.94 trillion to the national deficit over the next decade. That is an increase over the $3.8 trillion estimate provided before Republicans made last-minute changes to secure necessary votes in the House. Much of the cost increase ($129 billion) is due to raising the SALT cap – the amount of state and local taxes that can be deducted from federal taxes – from $30,000 to $40,000 in the final version of the bill. The SALT cap is currently $10,000.
The JCT estimate is available here.
Federal Agencies
FDA Advisory Panel Recommends Monovalent Covid Vaccine for Fall
On May 22nd, the Food and Drug Administration (FDA)’s Vaccines and Related Biological Products Advisory Committee (VRCPAC) met to discuss and make recommendations on the 2025-2026 formula for Covid-19 vaccines. VRCPAC members voted unanimously to recommend a monovalent JN.1-lineage vaccine. The FDA therefore advised manufacturers that vaccines should be “monovalent JN.1-lineage-based Covid-19 vaccines (2025-2026 Formula), preferentially using the LP.8.1 strain.” JN.1 is not itself circulating in the United States right now, but its subvariants are the dominant circulating strains, with LP.8.1 making up about 70% of cases.
The FDA announcement is available here.
CDC Ends Covid Vaccine Recommendation for Healthy Kids and Pregnant Moms
On May 27th, Department of Health and Human Services (HHS) Secretary Robert F. Kennedy announced that the Centers for Disease Control and Prevention (CDC) will no longer recommend Covid-19 vaccines for healthy children or healthy pregnant women. The change alters the currently-recommended immunization schedule for children, while also dismissing the usual process for changing such recommendations. Typically, changes to the immunization schedule are made by CDC advisers, and then accepted or overruled by the CDC’s Director. For those who still opt for vaccination, insurance companies are unlikely to continue paying for the shots without the recommendation.
Following the announcement, the American College of Obstetricians and Gynecologists (ACOG) put out a statement saying they were “concerned about and extremely disappointed by the announcement,” noting that “Covid-19 infection during pregnancy can be catastrophic and lead to major disability” and that “the vast majority of hospitalized infants less than six months of age—those who are not yet eligible for vaccination—[are] born to unvaccinated mothers.”
The ACOG statement is available here.
CMS Updates and Extends Kidney Care Choices Model
On May 27th, the Centers for Medicare and Medicaid Services (CMS) Innovation Center revised the financial methodology and participation options for the Kidney Care Choices (KCC) Model, and extended the model through December 31, 2027. Noting that the model has shown significant improvements in quality of care – including an increase in home dialysis and home dialysis training – the announcement also reports that the model increased net losses by $304 million. The changes therefore focus on reducing model cost, including discounts for participants that meet certain benchmarks, reducing the quarterly capitation payment, and eliminating the kidney transplant bonus.
More information on the model changes are available here.
CMS Announces Increased Oversight on State Funding for Health Care for Undocumented Immigrants
On May 27th, the Centers for Medicare and Medicaid Services (CMS) sent a letter to states titled, “Ending Taxpayer Subsidization of Open Borders,” outlining the Administration’s plan to increase oversight to “identify and stop improper spending” by states “misusing federal Medicaid dollars to cover health care for individuals who are in the country illegally.” The announcement acknowledges that federal Medicaid dollars may be used for emergency medical services for noncitizens, but urges states to “immediately examine and update internal controls, eligibility systems, and cost allocation policies to ensure full compliance with federal law.” Such oversight will include: evaluations of select state Medicaid spending reports, in-depth reviews of select states’ financial management systems, and assessing existing eligibility rules and policies to close loopholes and strengthen enforcement.
The letter is available here.
CMS Launches Oversight of Hospitals Offering Pediatric Transgender Care
On May 28th, the Centers for Medicare and Medicaid Services (CMS) sent letters to select hospitals expressing “serious concerns with medical interventions for gender dysphoria in children” including surgical procedures, as well as the use of puberty blockers and sex hormones. CMS writes that these interventions were “initiated with an underdeveloped body of evidence, lack reliable evidence of benefits for minors, and are now known to carry serious risks of long-term and irreparable harm.”
The letter requests that hospitals respond within 30 days to report on: (1) the adequacy of informed consent protocols for children; (2) changes to clinical practice guidelines and protocols “in light of the recent comprehensive review of medical evidence and corresponding guidance released by the Department”; and (3) any adverse events related to the procedures. The letter also asks for financial data for all such services performed at the institution, paid – in whole or in part – by the federal government. Such data should include billing codes, revenue, operating and profit margins for each procedure type, and projected revenue forecasts for the service lines.
The CMS letter is available here.
HHS Cancels Nearly $600 Million Moderna Contract for Pandemic Preparedness
On May 28th, the Department of Health and Human Services (HHS) notified mRNA vaccine developer Moderna that it would be cancelling a nearly $600 million contract to develop, test, and license vaccines for several subtypes of flu that could trigger a pandemic, including H5N1 and H7N9 bird flu viruses. The funding had been authorized through the Biomedical Advanced Research and Development Authority (BARDA). BARDA had given such funding to three other vaccine manufacturers in the past, creating incentives for the companies to work on projects of strategic national interest, but without a current commercial market.
In responding to the cancellation, HHS stated that the Department could not “scientifically or ethically” justify the contract, given that “mRNA technology remains under- tested.” The decision is a sharp turn from the first Trump Administration, authors of Operation Warp Speed, which the National Institutes of Health estimated saved 140,000 lives by accelerating vaccines by five months.
Moderna had already conducted a Phase 1/2 H5N1 clinical trial, in which 97.8% of participants showed protective antibody levels within three weeks of a second dose. Moderna says it will explore alternate paths for continuing the program.
New York State Updates
DOH Issues Guidance to Covered Health Care Entities Regarding Electronic Reporting of Material Transactions
On May 15th, the New York State (NYS) Department of Health (DOH) issued guidance to covered entities regarding the new electronic reporting process for “material transactions.” This follows the Fiscal Year 2024 Enacted Budget, which implemented new disclosure requirements under Article 45-A of the Public Health Law. These requirements apply to certain health care transactions—such as mergers, acquisitions, affiliations, and partnerships—not already subject to existing review under Article 28 or other provisions of Public Health Law.
Under the law, covered health care entities must provide notice to DOH at least 30 days before closing a material transaction. A “material transaction” is defined as a transaction (or series of related transactions within 12 months) resulting in at least $25 million in increased total gross in-state revenues for a health care entity.
Starting May 15th, entities must submit the Material Transaction Reporting Form (here) to report a material transaction to DOH. Email submissions will no longer be accepted. The form requires submission of detailed information, including but not limited to:
- Parties to the transaction, such as where they do business and any history of wrongdoing;
- Data related to the transaction’s anticipated impact on cost, quality, access, health equity, and competition in any impacted New York markets;
- Financial statements from each party and transaction documents on behalf of all parties; and
- Public notice to be posted for public comment by DOH.
DOH strongly encourages entities and their legal counsel to review the form questions in advance of the required 30-day notice period to allow sufficient time for internal review, information exchange, and outreach to DOH with any questions or clarifications. There will be no exceptions to the 30-day notice requirement due to lack of familiarity with the new form or the time it takes to complete the form.
The guidance is available here. Instructions are available here. Reporting form questions are available here. Additional details are available on the material transactions webpage here. Questions may be submitted to MaterialTransactionsDisclosure@health.ny.gov.