As spring arrived in the mid-Atlantic region, the Department of Health and Human Services (HHS) under Robert F. Kennedy, Jr. followed through with a previously announced Reduction in Force (RIF) that reduced the department’s workforce by a reported 10,000 employees and started the process of restructuring the organization as a whole. Now that the dust is starting to settle, we are beginning to analyze the RIFs and how they could impact key health care stakeholders, including Medicare Advantage Plans, providers, and biopharmaceutical and medical device manufacturers. This post provides a brief overview of the restructuring to date, HHS’s reduction in workforce, and their potential impacts. We will continue to monitor these developments and provide future updates to Mintz clients and friends.
Overview of Restructuring & Workforce Reductions
As part of the department-wide restructuring plan, HHS is in the process of consolidating 28 different divisions into 15 divisions. As of April 4, 2025, it had also reduced the number of Regional Offices from ten to five. The March 27th press release initially announcing the restructuring stated that the current HHS organization contains many “redundant” units and that the restructuring plan will “centralize core functions” of the department, such as Human Resources, Information Technology (IT), Procurement, External Affairs, and Policy. Separately, on March 14th, HHS published an announcement about a reorganization with its Office of the General Counsel (HHS-OGC).
Although HHS has not released a comprehensive list of the offices directly impacted by the RIF as of the date of this post, HHS or independent news outlets have reported the following:
- HHS Regional Offices: As noted above, HHS has reduced the number of Regional Offices to five. The remaining offices include those located in Philadelphia, Denver, Kansas City, Dallas, and Atlanta. Accordingly, it appears that HHS has closed its Regional Offices in New York, Boston, Chicago, Seattle, and San Francisco. The HHS-OGC also closed its office in Dallas.
- Centers for Medicare & Medicaid Services (CMS): CMS reportedly lost approximately 300 employees. CNN reported that the RIFs included the entire Office of Equal Opportunity and Civil Rights. The Medicare-Medicaid Coordination Office lost its office of Models, Demonstrations and Analysis. At this time, it appears that the CMS central office divisions directly responsible for overseeing and setting policy for Medicare and Medicaid policy were not significantly impacted by the RIF. Further, numerous staff of the Administration of Community Living were terminated and that particular office may end up being shuttered.
- Food & Drug Administration (FDA): The HHS press release announced that 3,500 full-time employees – or about 19% of FDA’s workforce – would be cut. All of the agency’s product centers experienced staffing reductions when the RIF began, with the drug, biologic, device, and tobacco centers hit particularly hard. Many of the individuals in longstanding FDA career leadership positions either have been terminated or have departed as part of the recent RIF or in the weeks leading up to it, including directors of the Center for Biologics Evaluation and Research (CBER), the Office of New Drugs within the Center for Drug Evaluation and Research (CDER), and the Digital Health Center of Excellence within the Center for Devices and Radiological Health (CDRH). HHS also terminated the FDA Chief Information Officer, a new leadership position created by the agency through planned modernization activities. Between the recent RIFs, voluntary retirements, and the earlier firings of probationary workers, CDER has apparently lost more than 1,000 employees over the past three months. Reports emerging from affected FDA staff also indicate that artificial intelligence experts have been disproportionately affected, with approximately 40 individuals out of the over 260 fired from CDRH coming from CDRH’s recently established Digital Health Center of Excellence, where very little knowledge redundancies existed. Policy-focused offices such as CDER’s Office of Medical Policy, CBER’s Office of Regulatory Operations, the CDRH Office of Women’s Health, and the Division of Policy Development within the Office of Generic Drug Policy, have been rendered effectively non-functional and are expected to be terminated during the departmental restructuring.
- Centers for Disease Control and Prevention (CDC): Reports indicate that the CDC lost divisions related to workplace health and safety, HIV, injury prevention, reproductive health, smoking, and violence prevention, among others. All of the CDC’s staff working to process Freedom of Information Act (FOIA) requests were also terminated, per CBS reporting.
- National Institutes of Health (NIH): There were a reported 1,300 employees laid off at the NIH, with NPR reporting that most of the cuts were to individuals with support positions such as communications, IT, and human resources. Grant and contract management officers were also affected, which may make it more difficult for research grantees – including those that are part of large academic medical centers – to obtain timely responses and information from the NIH.
In addition to these recent actions taking place within HHS, detailed agency-specific restructuring plans were due to be submitted to the White House Office of Management and Budget (OMB) on April 14, 2025, per an OMB memorandum issued in late February.
Potential Near-Term Impact on Selected Stakeholders
The RIFs and large-scale restructuring of HHS will impact the entire health care industry, with certain stakeholders facing more of the brunt in the short term. We address each of those stakeholder groups briefly below.
Medicare Advantage and Part D Plans
As of the date of this post, we understand that most CMS offices addressing Medicare Part C and Part D operations remain intact and were not significantly impacted by the RIF. However, all Medicare Advantage plans’ account managers are located in the HHS Regional Offices. Many Medicare Advantage (MA) and Part D plans likely lost their account managers and will need to be assigned new ones. This will result in those remaining account managers having increased caseloads, and being responsible for more plans. This is likely to result in delays in communication with account managers.
Health Care Providers
The consolidation of the Regional Offices will likely impact provider enrollment processes, provider surveying, Change of Ownership (CHOW) determinations and approvals, and the processing of CMS-specific enforcement activities, including reasonable assurance determinations. While CMS had previously transitioned certain Regional Office enrollment and survey functions for some provider types to CMS’s Center for Program Integrity and to the Medicare Administrative Contractors (MACs), the Regional Offices still play a key role in enrollment, surveys, and CHOW functions. For example, the Regional Offices of HHS-OGC advise on challenging CHOW questions and issues. HHS Regional Offices also still process and determine reasonable assurance periods. The consolidation of Regional Offices could create delays and bottlenecks for CHOW approvals, especially with more challenging CHOWs that require input from HHS-OGC.
The Regional Office consolidation will also impact provider audits performed by MACs, Unified Program Integrity Contractors, and other contractors. HHS-OGC provides oversight and training to these contractors and helps ensure uniformity in enforcement across regions. Consolidation and reduction in legal support to these entities may result both in delays in enforcement and inconsistent enforcement across providers.
Biopharmaceutical and Medical Device Manufacturers
The cuts to date of FDA staff have caused profound disruption at the agency and, in the short term, will almost certainly result in delays and longer timelines for approving new drugs, biological products, and innovative medical devices. With the firings of staff focused on digital health and artificial intelligence, it also seems likely that FDA will become more conservative when it comes to making policy, regulatory, and enforcement decisions in that space, depending upon the level of uncertainty at play. Developers of gene therapies, cell therapies, and rare disease treatments – who had benefitted from FDA’s increasing willingness to exercise “regulatory flexibility” and approve such products in the face of scientific uncertainty – also may see a marked shift now that the agency’s institutional expertise and leadership in those areas have been decimated. This puts more cutting-edge and innovative products at greater risk of not receiving FDA marketing approvals than they had pre-RIF. Concerns about delays in medical product reviews and a potential increase in denied applications are being exacerbated by the likelihood that developers will have a more difficult time getting informal and formal feedback from the agency, as a result of fewer employees and the fact that reviewers will no longer have regulatory policy, research, or administrative colleagues (among others) to support that complex work. Indeed, around April 11, 2025 a nonpartisan and highly experienced group of investors and executives from the medical products research and development enterprise sent a letter to Senate leadership expressing their alarm at what is occurring at FDA and describing slowdowns and bottlenecks that are already manifesting as a result of the RIF.
In addition, although HHS’s restructuring announcement stated that “those with roles in drug, medical device or food reviews or inspections” would not be adversely affected, in reality, the continuity and timeliness of both review activities and inspections will be harmed by the loss of nearly 25% of FDA’s workforce since January 2025. For example, inspections of manufacturing facilities cannot take place if the teams can’t get to the site – but press reports indicate that support staff in the Office of Inspections and Investigations that handle travel and other logistics have been terminated. Facility inspections occur not only to monitor the safety of American foods, medicines, and devices but also to support new product approvals, so delays in the agency’s inspectional functions may negatively affect the approval and launch of medical products. The ability to convene advisory committee meetings, which in some cases are required by law prior to a new product approval, is also likely to be adversely impacted without support staff to organize such large-scale events.
Finally, from a general FDA mission standpoint, the apparently haphazard nature of the RIF also means that industry complaints about non-compliance by competitors will likely go un-investigated and enforcement actions will decrease across the board. While the possibility of less enforcement may sound good to a regulated company, in practical effect a weaker FDA will make patient injuries, tort lawsuits, and expensive legal challenges by competitors much more likely. And the significant loss of FOIA and public communications staff from the agency will make obtaining documents about competitors, similar products, FDA’s analyses of certain regulatory issues, and other such valuable information much slower, if not impossible, for industry and the public alike.