Workplace Strategies Watercooler 2025: The Election Is Over, What’s Next? Part I [Podcast]
In part one of this two-part Workplace Strategies Watercooler 2025 podcast series on changes employers can expect from the new administration, Jim Plunkett (shareholder, Washington, D.C.) sits down with Scott Kelly (shareholder, Birmingham) to discuss the current status and challenges faced by federal contractors following changes at the Office of Federal Contract Compliance Programs (OFCCP) due to President Trump’s Executive Order 14173, including the revocation of EO 11246, compliance options, and ongoing obligations under federal anti-discrimination laws. Next, Jim speaks with John Merrell (shareholder, Greenville) regarding expected changes in traditional labor policy, including the makeup of the National Labor Relations Board (NLRB), the role of the general counsel, and the NLRB’s case priorities, standards, and decisions. Finally, Jim talks with Wayne Pinkstone (shareholder, Philadelphia) about anticipated changes within the Occupational Safety and Health Administration (OSHA) during President Trump’s second term, including the administration’s regulatory agenda, the fate of the heat stress rule proposed under the previous administration, and the overall leadership and enforcement of the agency.
Cal/OSHA Standards Board Considers Subcommittee in Response to NIOSH Cuts
The California Occupational Safety and Health Standards Board (OSHSB) is considering the formation of a subcommittee to tackle challenges arising from the dismantling of the National Institute for Occupational Safety and Health (NIOSH).
During the OSHSB meeting on April 17, 2025, board members discussed reports of significant layoffs within NIOSH due to federal government budget cuts. These cuts would “eliminate 92% of the NIOSH’s workforce,” effectively leading to a shutdown of the agency. Earlier this month, NIOSH was hit with even more layoffs.
NIOSH conducts occupational safety and health research, recommends safety standards, and provides training and educational resources. The near elimination of NIOSH is expected to disrupt these essential services and create a gap, particularly affecting the certification of personal protective equipment (PPE). Federal regulations require the use of NIOSH-approved respirators and mandate certain comprehensive respiratory protection programs.
Without NIOSH certification, California faces challenges in protecting workers, especially in high-risk industries such as fire protection, healthcare, and mining. The absence of a certifying body could impede the development and sale of new respiratory protection technologies, which the OSHSB is concerned would pose significant risks to worker safety. The board expressed urgency regarding potential risks to firefighters’ health and safety, given recent wildfire and urban interface fires within the state.
The proposed subcommittee would explore NIOSH’s overall functions and consider alternatives, including potential legislation, partnerships with other states, and leveraging existing expertise in the field. The subcommittee would also investigate the current situation in Washington D.C., assess the impact on California workers, and evaluate actions the state or OSHSB can take to mitigate these issues. The OSHSB plans to continue these discussions with Cal/OSHA during its upcoming meeting in Redding.
Healthcare Preview for the Week of: May 12, 2025 [Podcast]
Reconciliation Text Is Here
Late Sunday night, May 11, 2025, the House Committee on Energy and Commerce released the much-anticipated budget reconciliation bill text ahead of its scheduled markup on May 13, 2025.
While the Congressional Budget Office (CBO) has not yet released a score, we expect that it will do so before the markup. In the meantime, CBO provided a letter to Energy and Commerce Chairman Guthrie confirming that the committee exceeds the $880 billion in federal savings that the House budget resolution instructed the committee to find. The vast majority of the bill’s policies and savings are in the Medicaid program, some of which were expected, including:
Establishing new work requirements in Medicaid (called “community engagement requirements” in the legislative language)
Repealing the Biden-era eligibility rules and nursing home staffing rule
Additional Medicaid policies include:
Prohibiting gender transition procedures, focused on minors
Restricting coverage of undocumented immigrants by reducing the federal match for the expansion population to 80% if the state covers undocumented immigrants with state-only funds, and checking immigration status sooner than 90 days
Implementing new cost-sharing requirements and verifying eligibility every six months for the expansion population
Banning spread pricing by pharmacy benefit managers (PBMs) and prohibiting PBM compensation based on the price of a drug as a condition of entering into a contract with a prescription drug plan in Medicare
The legislation also includes versions of policies that remain highly contested among many stakeholders, including:
Implementing a moratorium on new state directed payments (SDPs) that exceed the Medicare rate, as opposed to adjusting existing SDPs that go up to the average commercial rate
Introducing a moratorium on new or increased provider taxes, as opposed to reducing or removing existing provider taxes
Closing the managed care organization (MCO) provider tax “broad based” loophole, which is expected to impact seven of the 20 states that use MCO provider taxes (California, Illinois, Massachusetts, Michigan, New York, Ohio, and West Virginia)
You can brush up on these policies and more in our Medicaid Restructuring Options document.
The bill includes additional provisions outside of Medicaid. For example, it would codify the March 2025 Affordable Care Act program integrity proposed rule, which includes provisions to roll back certain special enrollment periods, impose new premium payments for certain individuals, prohibit states from providing coverage for sex-trait modification as an essential health benefit, and exclude Deferred Action for Childhood Arrivals recipients from the definition of “lawfully present.” It proposes a short term “doc fix,” which would establish a single conversion factor for clinicians who are qualifying participants in Advanced Alternative Payment Models and those who aren’t, and would set the update to the single conversion factor at 75% of the Medicare Economic Index (MEI) in calendar year (CY) 2026 and at 10% of the MEI for CY 2027 and future years. The bill would also prevent disproportionate share hospital payment cuts until 2029.
This bill is still in the early stages of committee processes, and we still need to see CBO estimates for federal savings and coverage changes (likely decreases). The committee markup will likely last well into the evening on Tuesday, with Democrats offering amendments and critiques. Assuming the bill passes committee, it will then need to be stitched together with the other bills that make up reconciliation for consideration on the House floor.
We are also waiting for additional language and official notice of a markup from the House Committee on Ways and Means, which has jurisdiction over the Medicare program. Its early release of language was incomplete. House Speaker Mike Johnson has indicated a desire to get the reconciliation package through the House by the Memorial Day recess.
Outside of reconciliation, the Senate Committee on the Judiciary will hold a hearing on PBMs, and the House Committee on the Judiciary, Subcommittee on Administrative State, Regulatory Reform, and Antitrust will hold a hearing on graduate medical education and evaluating the medical residency antitrust exemption.
US Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. will testify on Wednesday, for the first time as the HHS Secretary, before the House Appropriations Committee and the Senate Committee on Health, Education, Labor, and Pensions on the president’s fiscal year 2026 proposed HHS budget.
Secretary Kennedy along with Centers for Medicare & Medicaid Services Administrator Mehmet Oz participated in a press conference on Monday morning as President Trump signed a new executive order requiring the establishment of “most-favored-nation” pricing for prescription drugs.
Today’s Podcast
In this week’s Healthcare Preview, Debbie Curtis and Rodney Whitlock join Maddie News to discuss the released text of the House Energy and Commerce Committee’s reconciliation language and what comes next.
Appeals Court Rejects AstraZeneca’s Challenge to Medicare Drug Price Negotiation Program
A federal appellate court has handed down the first appellate-level decision addressing the merits of drug manufacturers’ challenges to the Inflation Reduction Act of 2022’s (IRA) Medicare Drug Negotiation Program (Negotiation Program). On Thursday, May 8, 2025, a three-judge panel of the Third Circuit affirmed the district court’s rejection of AstraZeneca’s constitutional and regulatory challenge to the Negotiation Program. The Third Circuit’s decision is significant because that court has appellate jurisdiction over five of the nine cases challenging the Negotiation Program. The three-judge panel in AstraZeneca has also been assigned to each of the four remaining cases in that circuit. Although AstraZeneca’s case was the narrowest of the five Third Circuit cases, the court’s opinion could shed light on what is to come in the remaining cases.
Constitutional Violation
The Third Circuit rejected AstraZeneca’s sole constitutional claim arguing that the Negotiation Program violates AstraZeneca’s procedural-due-process rights under the Fifth Amendment. AstraZeneca had argued that the Negotiation Program unconstitutionally deprived AstraZeneca of its property right to sell its drugs at a market rate. The Third Circuit, in line with the district courts that have addressed the issue, disagreed, holding that AstraZeneca has no property right to sell its products nor demand government reimbursement at specific prices. The court also dismissed AstraZeneca’s argument that the Negotiation Program does not allow sufficient judicial review of the government’s price-setting decisions. The court was unpersuaded by AstraZeneca’s analogy to a Supreme Court case analyzing the scope of judicial review for a World War II-era rent-control law. The fact that Part D plans, which are private parties, are the recipients of the drugs, the Third Circuit said, does not mean that the government is setting prices for private-market transactions here.
APA Violations
The court of appeals also dismissed AstraZeneca’s Administrative Procedures Act (APA) challenges to CMS’s Negotiation Program Guidance. AstraZeneca argued that CMS guidance outlining the bona fide marketing standard and choosing to aggregate different products approved under different NDAs and BLAs is unlawful. The Third Circuit agreed with the district court that it lacked jurisdiction over AstraZeneca’s claims because AstraZeneca had not adequately shown that it has or will imminently suffer a cognizable Article III injury in fact as a result of CMS’s guidance. Unlike Novo Nordisk, who had multiple products grouped together for negotiation based on the same active moiety, AstraZeneca faced only an alleged risk that its products would similar be grouped together. Further, the Third Circuit said that AstraZeneca failed to submit concrete evidence that CMS’s guidance has or is currently causing AstraZeneca to change anything about how it is operating its company. The court therefore did not address the merits of the alleged APA violations.
What Comes Next?
Five other challenges are pending before appeals courts in the Third and Second Circuits. AstraZeneca was argued on the same day, and before the same three-judge panel, as Bristol Myers Squibb’s and Johnson & Johnson’s appeals. The same panel earlier this spring also heard appeals from Novo Nordisk’s and Novartis’s challenges, which were also both rejected by the district courts on similar grounds to those in AstraZeneca. The opinions in those cases may follow shortly. Once those rulings are issued, the Third Circuit will have weighed in on nearly all the arguments manufacturers have lobbed at the Negotiation Program. The Second Circuit heard arguments in Boehringer Ingelheim’s challenge in April and will likely issue a ruling the coming months.
Meanwhile, we expect that AstraZeneca will seek the Supreme Court’s review. Even if the high court agrees to take up the case, it will likely not hear arguments and issue a decision until late in 2025 or even in 2026 because it will soon enter its summer recess. That timing may also allow the justices to consolidate AstraZeneca with the remaining cases, offering them the opportunity to address all the various challenges at once. Because the Supreme Court has discretion to review only parts of a case, we may also see the manufacturers begin to whittle down their claims to home in on only those arguments that manufacturers believe are most likely to persuade the justices.
Tips for Staying Legally Compliant in Summertime Hiring
As many employers are hiring summer staff, now is a good time to brush up on new developments in child labor, wage and hour, and workplace safety laws. These legal compliance matters may be particularly relevant to employers in the hospitality, retail, and tourism industries, since they tend to hire a lot of seasonal employees for the summer months.
Quick Hits
Some states have changed their laws regulating child labor in the past two years.
Overtime and minimum wage laws typically apply to part-time, seasonal workers.
Seven states (California, Colorado, Maryland, Minnesota, Nevada, Oregon, and Washington) have a heat regulation for workplaces.
Child Labor Considerations
State laws vary on details like the number of hours minors are allowed to work per week, the nighttime hours permitted, and the definitions of hazardous work prohibited for minors.
In the past two years, some states have enacted more restrictive child labor laws, and other states have loosened child labor restrictions. Illinois increased limits on the hours that minors can work. Colorado, Nebraska, Oregon, and Virginia passed laws to heighten penalties on employers that violate existing child labor laws. Florida, Indiana, Iowa, New Hampshire, New Jersey, and Ohio loosened rules related to the hours that minors can work.
Wage and Hour Considerations
Many seasonal employees are hourly workers who qualify for overtime pay and minimum wage, which varies by state. However, the minimum wage and overtime provisions of the federal Fair Labor Standards Act (FLSA) do not apply if the employer is an amusement or recreational establishment that does not operate for more than seven months in any calendar year, or if the employer’s average receipts for any six months during the preceding calendar year were less than one-third of its average receipts for the other six months. Examples of this may include amusement parks, summer camps, and beachside concessions.
The FLSA does not require meal and rest breaks, but some states mandate meal and rest breaks that may be paid or unpaid, depending on the state.
Some employers partner with local universities to work with summer interns who receive academic credit for their work. These internships may be paid or unpaid, if the internship meets the “primary beneficiary test” under the FLSA, which generally requires the internship to provide training related to the academic program.
Workplace Safety Considerations
Summertime heat can pose health risks for workers, whether they work outside or inside. The federal government does not have a workplace safety regulation on heat, but the Occupational Safety and Health Act has a general duty clause that requires employers to provide a workplace free of hazards that could cause death or serious harm.
Some states have their own workplace heat standards. Nevada recently implemented a heat illness prevention regulation that applies to employers with more than ten employees. Likewise, California has a new heat illness prevention regulation for indoor workplaces.
Next Steps
Employers that have started summer hiring may want to consider:
reviewing the state-level maximum hours and time-of-day restrictions applicable to minors;
ensuring that tasks assigned to minors do not fall into the category of “hazardous” occupations, such as driving, cooking with hot oil, meat processing, and operating heavy machinery;
keeping accurate records of minor employees’ dates of birth;
keeping the employee manual and employee training materials up to date;
clearly communicating that a worker is a full-time, part-time, or temporary employee;
ensuring that seasonal workers are adequately trained in workplace safety and heat illness prevention; and
ensuring that independent contractor agreements have been reviewed and updated, if plans include hiring independent contractors.
Two New AI Laws, Two Different Directions (For Now)
Key Takeaways
Colorado legislature rejects amendments to the Colorado AI Act (CAIA).
Proposed amendments sought multiple exemptions, exceptions and clarifications.
Utah legislature enacts amendments that include a safe harbor for mental health chatbots.
Utah’s safe harbor provision includes a written policy and procedures framework.
In Colorado last week, highly anticipated amendments to its AI Act were submitted to the legislature. But, in a surprising turn of events this week, every single one of the proposed amendments was rejected, setting the stage for a sprint to February 1, 2026, the effective date of Colorado’s first-of-its-kind law impacting how AI is to be used with consumers.
Meanwhile, in Utah, which enacted an AI law last year that increases consumer protection but also encourages responsible innovation, amendments to its AI Policy Act (UAIP) took effect this week. The amendments are due in part to guidance found in the Best Practices for the Use of AI by Mental Health Therapists, published in April by Utah’s Office of AI Policy (OAIP).
We recently highlighted how a global arms race may mean U.S. states are best positioned to regulate AI risks, as evidenced by Colorado and Utah’s approaches, and how other states are emphasizing existing laws they say “have roles to play.” While there is still a lot of uncertainty, the outcome of the amendments in Colorado and Utah is instructive.
Colorado’s Rejected Amendments
A lot can be learned by what was rejected in Colorado this week, especially as other states, such as Connecticut, are considering adopting their own versions of an AI law for consumer protection, and as those that have already rejected such laws, such as Virginia, prepare to reconsider newer versions with wider input.
In some ways, it is not surprising that the amendments were rejected. They included opposing input from the technology sector and consumer advocates.1 This included technical changes such as exempting specified technologies from the definition of “high risk” and creating an exception for developers that disclose system model weights (e.g., parameters, biases).
The amendments also included non-technical changes, such as eliminating the duty of a developer or deployer of a high-risk AI system to use reasonable care to protect consumers. This was always going to be untenable. But there were others that made sense, such as providing exemptions for systems below certain investment or revenue thresholds ($10 and $5 million), which is why it is surprising that all the amendments were rejected, including an amendment that would have delayed the attorney general’s authority to enforce CAIA violations until 2027. Given the scope of the proposed amendments that have now been considered and rejected, it appears extraordinary circumstances would be needed for CAIA’s effective date to be delayed.
Utah’s AI Amendments
As previously noted, the UAIP endeavors to enable innovation through a regulatory sandbox for responsible AI development, regulatory mitigation agreements, and policy and rulemaking by the OAIP. Recently, the OAIP released findings and guidance for the mental health industry that were adopted by the legislature as amendments to the Act.
The guidance comprises 54 pages, the first 40 of which describe potential benefits and important risks associated with AI. It then examines use cases of AI in mental health therapy, especially in relation to inaccurate AI outputs, and sets forth best practices across these categories:
Informed consent;
Disclosure;
Data privacy and safety;
Competence;
Patient needs; and
Continuous monitoring and reassessment.
Emphasis is placed on competence. For example, the guidance states that therapists must maintain a high level of competence, which “involves continuous education and training to understand these AI technologies’ capabilities, limitations, and proper use.” This is consistent with how the UAIP specifies that businesses cannot blame AI for errors and violations.2
The guidance further states that mental health therapists should know “how frequently and under what circumstances one should expect the AI tool to produce inaccurate or undesirable outputs,” thus seeming to create a duty of care not only for AI system developers and deployers but also users. The guidance refers to these as “digital literacy” requirements.
Also, through its emphasis on continuous monitoring and reassessment, the guidance states that therapists, “to the best of their abilities,” should regularly and critically challenge AI outputs for inaccuracies and biases and intervene promptly if the AI produces incorrect, incomplete or inappropriate content or recommendations.
Based on the guidance, House Bill 452 was enacted and includes provisions relating to the regulation of mental health chatbots that use AI technologies, including the protection of personal information, restrictions on advertising, disclosure requirements and the remedies available for enforcement by the attorney general.
House Bill 452 includes an affirmative defense provision for mental health chatbots. In other words, a safe harbor from litigation initiated due to alleged harm caused by a mental health chatbot. To qualify for safe harbor protection, the supplier must develop a written policy that states the purpose of the chatbot and its abilities and limits.
In addition, the supplier must implement procedures that ensure mental health therapists are involved in the development of a review process and that the chatbot is developed and monitored consistent with clinical best practices, is tested to ensure that there is no greater risk to a user than there would be with a therapist and about ten other requirements.
As early best practices, the guidance may become industry standards that establish legal duties that can inform the risk management policies and programs contemplated by new laws and regulations, such as CAIA and UAIP. If so, these can form the basis for enforceable contract provisions.
Final Thoughts
We have previously provided recommendations that individuals and organizations should consider to mitigate risks associated with AI, both holistic and specific, emphasizing data collection practices. But, as shown through the rejected amendments in Colorado and the enacted AI amendments in Utah, AI literacy might be the most essential requirement.
[1] For an insightful description of how the amendments died, see journalist Tamara Chuang’s excellent reporting here https://coloradosun.com/2025/05/05/colorado-artificial-intelligence-law-killed/#
[2] Utah Code. Ann. section 13-2-12 (2).
McDermott+ Check-Up: May 9, 2025
THIS WEEK’S DOSE
Republicans Advance Reconciliation Debate. Work continued behind the scenes among Republicans to reach consensus on Medicaid policies, with a House Energy and Commerce Committee markup announced for May 13, 2025.
Senate Committees Hold HHS Nomination Hearings, President Trump Withdraws Surgeon General Nomination. Committees considered the nominations of James O’Neill for US Department of Health and Human Services (HHS) deputy secretary and Gary Andres for HHS assistant secretary for legislation. President Trump withdrew Janette Nesheiwat’s nomination for surgeon general and nominated Casey Means in her place.
President Trump Signs Additional Healthcare EOs. The executive orders (EOs) seek to increase domestic drug manufacturing, as President Trump continues to hint at forthcoming pharmaceutical tariffs, and halt federal funding of certain infectious agents research. The president also previewed a forthcoming EO to tie Medicare drug pricing to lower prices abroad, often called the “most favored nation” policy.
Administration Defends FDA in Mifepristone Case. The decision may reflect efforts to protect the executive branch from state intervention.
CONGRESS
Republicans Advance Reconciliation Debate. After key House reconciliation markups expected to occur this week were postponed, Republicans held internal meetings to hash out Medicaid, nutrition, and tax policies to be included in reconciliation. Moderate Republicans continued to urge the House Energy and Commerce Committee not to enact Medicaid policies that could cut coverage or reduce funding for the expansion population. Policies rumored for potential inclusion include work requirements for able-bodied adults, repeal of Biden-era regulations, restrictions on state coverage of undocumented immigrants, and increased eligibility checks. Conservative Republicans led by House Budget Committee Vice Chair Smucker (R-PA) sent a letter to Speaker Johnson stating that if net savings targets aren’t met, tax cuts must be reduced. Senate Majority Leader Thune (R-SD) and Senate Finance Committee Chair Crapo (R-ID) also joined the debate, stating that the House is not pursuing enough spending cuts, including in Medicaid.
The Energy and Commerce Committee announced its markup for May 13, 2025, at 2:00 pm EDT. It is important to remember that just because a markup is announced, it doesn’t mean it has to happen. If it goes forward as planned, the markup will likely last all evening and into May 14, 2025. Language will need to be released by 2:00 am EDT on Monday. While nothing is officially off the table, Republicans do not appear to have support for policies that target states, such as provider taxes, state directed payments, or a cap on the expansion population. Once bill text and a Congressional Budget Office (CBO) analysis are released, we will see if the Energy and Commerce Committee has been able to meet its $880 billion savings target. Democrats will focus on offering amendments to try to undermine the legislation.
As Democrats work to prevent significant Medicaid cuts from moving forward, the CBO, in response to a request from Senate Finance Committee and House Energy and Commerce Committee Ranking Members Wyden (D-OR) and Pallone (D-NJ), released savings estimates for five Medicaid policies that have been under consideration in reconciliation, along with estimates of Medicaid coverage losses attached to those policies. The policies scored include reducing the expansion population federal match, limiting state provider taxes, capping federal spending for all enrollees, capping federal spending for the expansion population, and repealing the Biden-era eligibility and enrollment final rule. CBO previously scored most of these policies, but the figures are now updated. Estimates of Medicaid coverage losses for each proposed policy range from 2.3 million to 8.6 million people.
Senate Committees Hold HHS Nomination Hearings, President Trump Withdraws Surgeon General Nomination. Both the Senate Finance Committee and the Health, Education, Labor, and Pensions (HELP) Committee held hearings for key HHS personnel. The Finance Committee considered the nominations of James O’Neill to be HHS deputy secretary and Gary Andres to be HHS assistant secretary for legislation. Republicans on the committee focused mostly on nominees’ views on rural health and pharmacy benefit managers (PBMs) and their previous experiences at HHS and on Capitol Hill. Democrats questioned nominees on the measles outbreak, HHS staffing cuts, and recent statements made by Secretary Kennedy regarding autism. Sen. Cassidy (R-LA) similarly expressed concerns about HHS’s restructuring and the agency’s stance on vaccines.
The evening before the HELP Committee hearing to consider O’Neill for deputy secretary and Janette Nesheiwat, MD, for surgeon general, President Trump abruptly withdrew Nesheiwat’s nomination and instead named Casey Means, MD, for surgeon general. Means is the sister of Calley Means, special government employee for HHS. Both Casey and Calley Means have worked closely with HHS Secretary Kennedy for years and were actively involved in his presidential campaign. The committee will consider Means’ nomination at a later date. During the HELP Committee nomination hearing, Republicans focused on the importance of regulatory oversight and safety of drug approvals and expressed interest in preventing the misuse of artificial intelligence (AI). Chair Cassidy continued his focus on the measles outbreak from earlier in the week and asked questions about vaccine mandates for immigrants. Democrats focused on the impact HHS staffing and funding reductions will have on programs, including Medicaid and Head Start.
ADMINISTRATION
President Trump Signs Additional Healthcare EOs. The EO “Regulatory Relief to Promote Domestic Production of Critical Medicines” aims to make the United States more competitive in producing safe and effective medicines. It directs the US Food and Drug Administration (FDA) and the US Environmental Protection Agency, within 180 days, to accelerate domestic pharmaceutical manufacturing inspections and approvals of new and expanded manufacturing capacities. It also directs the FDA to advance improvements within 90 days to the inspection regime of foreign manufacturing facilities involved in the supply of US medicines, funded by increased fees on foreign manufacturing facilities. Read the fact sheet here. The day after the EO was issued, the FDA announced it would increase unannounced inspections at foreign food and drug manufacturing facilities.
The gain-of-function research EO “Improving the Safety and Security of Biological Research” directs federal agencies to halt funding of dangerous gain-of-function research, as defined in the EO, conducted in foreign countries. It directs HHS to include new enforcement terms in research contracts or grants, including a requirement that recipients do not operate or fund dangerous gain-of-function research in foreign countries, with revocation of funding and a ban on HHS funding for up to five years for violations. The Office of Science and Technology Policy will track domestic gain-of-function research under the EO. Read the fact sheet here.
The administration announced that another healthcare-related EO is expected as soon as next week that will pursue “most favored nation” pricing for prescription drugs in the Medicare program. This is a policy the president pursued in his first term and recently promoted to Congress for inclusion in reconciliation for Medicaid.
COURTS
Administration Defends FDA in Mifepristone Case. Idaho, Kansas, and Missouri brought the lawsuit in Texas and challenged the FDA’s review and approval of mifepristone, an abortion medication. In 2024, the US Supreme Court ruled that the original plaintiffs in the case – doctors and medical associations – lacked standing to bring the case. The Biden administration previously defended the FDA in this new iteration of the case, a posture the Trump administration is continuing. In a filing to the Texas court, the Trump administration alleged that the plaintiff states lack standing and requested that the case be dismissed. In other words, the administration is avoiding the merits of the case and pursuing dismissal on procedural grounds. Some commenters suggest that this action is intended to more broadly protect federal authority, although during his presidential campaign, President Trump said that he wouldn’t restrict access to abortion medications.
QUICK HITS
HHS OCR Sends Letter on Race-Based Discrimination to Medical Schools. The HHS Office for Civil Rights (OCR) issued a letter stating that medical schools cannot use race-based criteria or racial stereotypes in admissions, campus life, or hospital operations. OCR notes such actions violate Section 1557 of the Affordable Care Act, Title VI of the Civil Rights Act, and the Equal Protection Clause of the US Constitution. Read the press release here.
ACL Announces $1 Billion in OAA Funding. The Administration for Community Living (ACL) released $1.1 billion in state funding through Older Americans Act (OAA) programs to complete fiscal year (FY) 2025 funding.
NIH, CMS Announce Autism Research Partnership. The National Institutes of Health (NIH) and Centers for Medicare & Medicaid Services (CMS) partnership continues HHS’s focus on researching the root causes of autism. CMS will provide data on Medicare and Medicaid enrollees with autism, in compliance with privacy laws, to the NIH to examine trends, health outcomes, access to care, and the economic burden of autism.
FTC, DOJ Continue Anticompetitive Regulation Emphasis. The Federal Trade Commission (FTC) and US Department of Justice (DOJ) sent a letter to federal agencies instructing them to develop a list of regulations that reduce competition. The action follows an FTC request for information on anticompetitive regulations, with comments due May 27, 2025.
FDA Will Adopt AI in Review Process by June 2025. FDA completed its first AI-assisted scientific review pilot and aims to accelerate review processes by having all centers integrate AI by the end of June 2025.
Trump Administration Fires Acting FEMA Administrator After Congressional Hearing. Acting Federal Emergency Management Agency (FEMA) administrator Cameron Hamilton testified before the House Appropriations Committee that FEMA should not be eliminated, after which he was fired. The Trump Administration aims to eliminate or reduce FEMA and shift disaster response to states.
BIPARTISAN LEGISLATION SPOTLIGHT
Sens. Hawley (R-MO) and Welch (D-VT) reintroduced the Fair Prescription Drug Prices for Americans Act, which was also introduced in the 118th Congress. The legislation would prohibit pharmaceutical companies from setting drug prices above the international average, and violating companies would be subject to civil monetary penalties. Read the press release here. This topic is receiving increased attention from the Trump administration, as noted above.
NEXT WEEK’S DIAGNOSIS
HHS Secretary Kennedy will be on Capitol Hill on May 14, 2025, testifying in front of the House Appropriations Committee and the Senate HELP Committee on the FY 2026 skinny budget proposal released last week. It will be his first appearance in Congress as HHS secretary. Democrats will likely question Kennedy on his response to the measles outbreak and HHS restructuring and reductions in force. HELP Committee Chair Cassidy may echo some of those concerns, as he did in the HHS nomination hearings this week, and may continue his focus on vaccines. On May 13, 2025, the Senate Judiciary Committee will examine pharmacy benefit managers, and the House Energy and Commerce Committee plans to hold its reconciliation markup.
What’s At Stake When it Comes to Medicaid Cuts?
As we are well into the 2nd quarter of 2025, Medicaid policymakers face a significant challenge: staring down the 800-pound gorilla in the room. The proposed budget released by President Trump focuses on areas of discretionary funding, rather than the mandatory spending in programs like Medicare and Medicaid.
The recently passed House budget resolution proposes federal Medicaid cuts of up to $880 billion over the next decade. The Healthcare Budget Reconciliation mark-up will likely take place the second week of May, with Speaker Johnson suggesting he would like to take a vote before Memorial Day.
To put that number into perspective, $880 billion represents 6% of state taxes per resident and nearly one-fifth (19%) of what states spend per student on education. For states, which must balance their budgets, this would be a substantial fiscal burden.
Two key proposals still in play to address spending levels in Medicaid include:
1. Reducing or eliminating supplemental Medicaid payments, and
2. Placing caps on the federal share of funding for the 40 states that expanded Medicaid under the Affordable Care Act (ACA).
This analysis focuses on the first issue—supplemental payments—because Florida did not expand Medicaid under the ACA and is therefore more directly affected by potential changes to supplemental funding.
All states except Alaska use provider taxes to help fund Medicaid. Ambulances, health plans, hospitals, intermediate care facilities for people with developmental disabilities (ICF/DDs), and nursing homes are the common beneficiaries. Florida uses provider taxes in numerous categories, including nursing homes and hospitals. The state also uses local government tax bases to support specific programs to draw down additional federal dollars for hospital funding, including for the Low-Income Pool (LIP), which supports hospital uncompensated care, and the Hospital Directed Payment Program (DPP), which helps offset some of the unfunded costs of caring for more than four million Florida Medicaid enrollees. The state benefit to use these types of funding mechanisms is to reduce the Medicaid burden on state revenue and shift that to local government or the providers themselves instead.
As more states transition to managed care and reliance on supplemental payments increased, the Centers for Medicare and Medicaid Services (CMS) updated its rules. CMS required directed payments be tied to the use and delivery of services under the managed care contract, be equally distributed to specified providers under the managed care contract, advance at least one goal in the state’s managed care quality strategy, and not be conditioned on provider participation in intergovernmental transfer (IGT) agreements.
However, even with these changes to the supplemental payment programs, Federal concerns over whether “states are covering their fair share of Medicaid” remain. Drastically altering or removing these programs all together could drastically impact the State.
If the Federal government cuts or removes these programs, Florida could lose up to $6 Billion in its healthcare economy. However, the increasing difficulty in accessing care is a growing concern, leading to higher costs. Access to care is already getting harder in many areas. Just this year, 15 hospitals have closed across the country. In 38 states, people are on waitlists for Medicaid home and community-based services.
There is undoubtedly waste in the Medicaid program nationwide. US healthcare spending increased by 7%, the overall inflation rate is 3.8%, and the pace is unsustainable. Practical considerations for the legislature will be complex if there is a drastic cut, as the state did not expand Medicaid, leaving options like eliminating optional benefits (e.g., pharmacy benefits) or reducing provider payment rates.
Over the 15 years since the ACA passed, healthcare costs have continued to rise while access to care remains problematic. One important lesson from the past decade should be that access to insurance does not equate to access to care. Instead, we need to examine where costs have ballooned over the past decade and explore systematic change, rather than simply cutting provider funding in an entitlement program to deliver care at lower costs.
CFPB Withdraws Medical Debt Rule After Legal Challenge from Industry Groups
On May 1, the CFPB filed a joint motion with two financial trade groups to vacate a Biden-era rule barring most medical debt from appearing on consumer credit reports. The motion comes after lender groups filed a lawsuit in January, arguing that the rule unlawfully exceeded the CFPB’s statutory authority under the Fair Credit Reporting Act (FCRA).
The vacated rule would have removed an estimated $49 billion in medical debt from credit reports. The rule would have also barred creditors from considering medical debt in credit decisions and prohibited consumer reporting agencies (CRAs) from furnishing coded medical debt data for such purposes.
According to the joint filing, the CFPB’s rule contradicted express statutory permission by not allowing CRAs to furnish, and creditors to use, medical debt data if it coded to conceal health details. In addition, the rule allegedly rested on outdated and limited evidence, and would have imposed significant compliance costs and degrade the utility of consumer credit reports by suppressing accurate, non-identifying information about borrowers obligations.
Putting It Into Practice: The CFPB’s request to vacate its own medical debt reporting rule marks another example of the Bureau narrowing its regulatory focus under new leadership (previously discussed here and here). Credit reporting agencies should continue to monitor CFPB related developments and assess whether compliance updates are needed.
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EPA Seeks Public Comment on Candidates for Peer Reviewers for Several Phthalates
The U.S. Environmental Protection Agency (EPA) announced on April 30, 2025, that it is requesting public comments on candidates who are interested and available to serve as ad hoc reviewers assisting its Science Advisory Committee on Chemicals (SACC) in the peer review of the Agency’s data, methods, models, and approaches for the draft Toxic Substances Control Act (TSCA) risk evaluations of dibutyl phthalate (DBP), di(2-ethylhexyl) phthalate (DEHP), and dicyclohexyl phthalate (DCHP). According to EPA, “[t]his includes the cross-phthalate technical support documents for human health benchmark dose analysis, cancer analysis, and cumulative risk analysis.” EPA states that the final selection of the ad hoc peer reviewers will depend upon the scientific expertise needed to address the SACC peer review charge and “obtaining a breadth and balance of different scientific viewpoints.” The peer review will take place at a virtual public meeting in August 2025. Comments are due May 15, 2025.
EPA notes that it is also working on risk evaluations for two other phthalates, benzyl butyl phthalate (BBP) and diisobutyl phthalate (DIBP). EPA plans to use SACC’s recommendations from the review of DBP, DEHP, and DCHP to inform the risk evaluations of BBP and DIBP because the science approaches used in the BBP and DIBP risk evaluations are consistent with the approaches used in DBP, DEHP, and DCHP. As a result, EPA does not expect to need an additional peer review.
DEA Proposed Rule for Special Registrations for Telemedicine and Limited State Telemedicine Registrations
On January 17, 2025, the Drug Enforcement Administration (DEA) released the proposed rule, “Special Registrations for Telemedicine and Limited State Telemedicine Registrations.” The proposed rule marks a significant first step in the DEA’s functional establishment of the Special Registration set forth in the Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (RHA). The DEA’s goal in proposing the Special Registration’s framework is to “ensure patient access to care, while maintaining sufficient safeguards to prevent and detect diversion of controlled substances.”
The Special Registration History
The RHA requires that all prescription drugs that are dispensed by means of the internet be issued via a valid prescription, which generally requires an in-person medical evaluation, and that the prescription be issued for a legitimate medical purpose in the usual course of professional practice. The RHA provides distinct circumstances in which the practice of telemedicine is permitted, and in turn, the in-person evaluation is not required in order to properly prescribe a controlled substance. The Special Registration is one of these circumstances, and while the Special Registration exception to the in-person requirement was included in the RHA in 2008, it was not developed beyond the text of the RHA until this year, with the promulgation of the proposed rule. The Special Registration was a common topic of presentation in the DEA Listening Sessions in April 2024, and its development has been called for by a variety of stakeholders in the telemedicine industry.
The Special Registration Framework
The proposed rule is organized by category of Special Registration and conditions for the registration’s maintenance. Specifically, the proposed rule conceptualizes a unique type of practitioner – a “covered online telemedicine platform.” A covered online telemedicine platform means an entity that facilitates connections between patients and clinician practitioners, via an audio-video telecommunications system, for the diagnosis and treatment of patients that may result in the prescription of controlled substances and meets one of four enumerated criteria.
If met, the four criteria reflect that the platform is “integral intermediary in the remote dispensing of controlled substances.” The criteria address platform advertising, associated pharmacy ownership, prescribing guidelines, and handling of medical records. In this way, the proposed rule sets detailed standards, highlights issues that were actively discussed during the DEA Listening Sessions, and defines factors the DEA identifies as indicative of potential diversion or unsafe prescribing. Notably, hospitals, clinics, local in-person medical practices, and insurance providers are excepted from the definition.
Categories of Special Registration
The proposed rule delineates between “clinician practitioners” and “platform practitioners” and sets forth four categories of registration for which a practitioner may apply. Clinician practitioner refers to properly registered physicians and mid-level practitioners. Platform practitioner means a covered online telemedicine platform that dispenses controlled substances by virtue of its central involvement as an intermediary in the remote prescribing of controlled substances by an individual practitioner. Platform practitioners are subject to the requirements imposed upon non-pharmacist practitioners under the Controlled Substances Act, 21 U.S.C. 801-904, and its regulations. The four categories of registration are:
The Telemedicine Prescribing Registration would authorize the prescribing of Schedule III through V controlled substances by clinician practitioners.
The Advanced Telemedicine Prescribing Registration would authorize certain specialized clinician practitioners (i.e., certain categories of “specialized” clinicians defined by the rule) to prescribe Schedule II controlled substances in addition to Schedule III through V controlled substances.
The Telemedicine Platform Registration would authorize covered online telemedicine platforms to dispense Schedule II through V through a clinician practitioner possessing either category of clinician Special Registration above.
The State Telemedicine Registrations, which would be required to prescribe across states, would allow practitioners issued any of the three categories of registration above to obtain a state registration for every state in which patients to whom special registration prescriptions will be issued are located, with certain exceptions.
The proposed rule sets forth eligibility and requirements for each category of Special Registration, although notably application for a certain registration does not guarantee that it will be granted, as each requirement for Special Registration is lined with agency discretion. Ultimately, the DEA Administrator will issue a Special Registration to an applicant when the applicant meets all eligibility requirements set forth in the proposed rule, which includes a practitioner presenting “legitimate need” for the Special Registration, and the Administrator determines that the Special Registration is consistent with the public interest factors stipulated in 21 U.S.C. 823(g)(1) (i.e., the public interest factors considered for conventional practitioner DEA registrations).
Altogether, engaging in the practice of telemedicine under the proposed rule, the practitioner must possess a conventional DEA registration under 21 U.S.C. 823(g), one of the three types of Special Registration for practitioners, and a State Telemedicine Registration for each state in which a patient prescribed a controlled substance is located.
Other Requirements of the Proposed Rule
The proposed rule also requires certain operational standards for special registrants, including:
Disclosure of a Special Registered Location. Special Registration applicants must designate a location as the physical address of the Special Registration.
Certain Disclosures. Platform practitioners, in their application for Telemedicine Platform Registration, must disclose all employment, contractual relationships, or professional affiliations with any clinician special registrant and online pharmacy.
Certain Attestations. Special Registration applicants must attest that they have a legitimate need for a Special Registration for Telemedicine and to the facts and circumstances that form the basis for their “legitimate need” for the Special Registration.
Changes to Special Registration information must be updated within 14 business days of the change.
Patient Verification. The proposed rule provides patient identity verification standards, including patient verification requirements for the first telemedicine encounter and a practitioner’s storage of patient identification information.
Special Registration Prescription Data Reporting. Special registrants must report to DEA on an annual basis the total number of new patients in each state where at least one special registration prescription has been issued and the total number of special registration prescriptions issued by a registrant across states, among other information.
Telecommunications Standards. The proposed rule requires all prescriptions issued via a Special Registration to be through the use of an audio-video telecommunications system, with only limited circumstances allowing for the issuance of a special registration prescription with audio-only technology.
State Law. The proposed rule explicitly requires compliance with state laws and regulations where the patient is located during the telemedicine encounter, the state where the special registrant is located during the telemedicine encounter, and any state in which the special registrant holds a DEA registration.
PDMP Check. Prior to issuing a special registration prescription, a special registrant must perform a check of the state PDMPs in the state the patient is located, the registrant is located and any state with reciprocity agreements with these states.
Prescription Requirements. Special registration prescriptions must contain certain information specific to the Special Registration number, with liability imposed on a pharmacist for filling a special registration prescription that may be missing information.
Moving Forward
The proposed rule acknowledges the expansive nature of telemedicine post-PHE, addresses key players in the telemedicine industry – from popular telemedicine platforms to local practitioners and pharmacists – and attempts to wrangle these diverse interests into a workable Special Registration. Further, it proposes comprehensive application and reporting requirements to facilitate the tracking of special registration prescription information and telemedicine activities by the DEA, which had traditionally been confined to the state level.
Certain aspects of the proposed Special Registration appear clear, such as the form that will be required for the Special Registration and the patient verification requirements. Other elements, such as the practical threshold for “legitimate need” and the DEA’s discretion to grant or deny the Special Registration itself, render logistical aspects of the Special Registration framework unpredictable. Clinician practitioners, platform practitioners, and other telemedicine participants should continue to monitor the development of the proposed rule as, if finalized, a Special Registration will become a key component required for continued telemedicine operations involving the prescription of controlled substances. The written comment period for the proposed rule ended March 18, 2025, and comments are currently under consideration.
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CMS’s 2026 Final Medicare Advantage Rule Focuses on Implementing the IRA and Deregulation
In April, CMS finalized its Contract Year (CY) 2026 Medicare Advantage and Part D Final Rule (Final Rule). With CMS releasing the 2026 Medicare Advantage and Part D Proposed Rule in December under the Biden Administration, the Final Rule provides our first insight into how the new Administration may approach Medicare Advantage (MA) and Part D policies. As expected, the Trump administration’s Final Rule elected to not finalize a significant amount of the changes proposed by the Biden Administration. Some proposals were expressly not adopted, others are continuing to be considered, and still others were not mentioned at all.
CMS finalized changes relating to risk adjustment data, excluded supplemental benefits, and certain organizational determinations and administrative appeal processes, but most of the major provisions adopted by the Final Rule relate to implementing the Inflation Reduction Act of 2022 (IRA). CMS also adopted changes relating to dual eligibles that we will cover in a separate blog post.
In addition to the changes that were considered during the rulemaking process, CMS also noted that it is continuing to review Medicare regulations and policies as a result of Executive Order 14192 which is titled “Unleashing Prosperity Through Deregulation.” The areas currently under review primarily relate to measures concerning health equity, social determinants of health, and providing culturally and linguistically appropriate services.
Below we have summarized key provisions that were adopted in the Final Rule and those that the Trump administration expressly declined to adopt.
Risk Adjustment Data
The Final Rule adopted changes to the definition of Hierarchical Condition Categories (HCCs) and codified the requirement that PACE organizations and Cost plans must submit risk adjustment data. The changes to the definition of HCC were made to more closely track language used in the International Classification of Diseases (ICD) and to avoid CMS from having to amend the definition when the version of ICD is updated in the future. CMS’s decision to adopt a regulation requiring that PACE organizations and Cost plans submit risk adjustment data is interesting as both categories of entities are small and not growing. That CMS felt the need to adopt this begs the question, why now?
Excluded Supplemental Benefits
CMS has allowed Medicare Advantage Organizations (MAOs) relative flexibility when designing supplemental benefits offered to chronically ill members. But based on its review of certain supplemental benefit packages submitted by MAOs for review over the years, CMS concluded that it needed to adopt in regulation a non-exhaustive list of items and services that cannot be offered as supplemental benefits. That list includes:
Solely cosmetic procedures (not already covered by Medicare)
Alcohol, tobacco, and cannabis products
Funeral planning and expenses
Life insurance
Hospital indemnity insurance,
Broad membership-type programs (ex. Costco), and
Non-healthy food
The category for non-healthy food was added through the Final Rule, but not included in the Proposed Rule. CMS elected to add it to clarify that CMS would not consider a benefit that covered non-healthy food to have a reasonably expectation of improving or maintaining the health or overall function of the member. CMS cited its 2019 guidance and confirmed that it continues to allow such benefits to cover food and produce that could assist chronically ill members in meeting nutritional needs.
Organizational Determinations and Administrative Appeal Processes
CMS adopted a few changes relating to organizational determinations and the appeals process:
CMS added a provision to 42 CFR 422.566 that clarifies that an MAO’s decisions that take place pre-, during, or post-service, including those that relate to the level of service that the MAO will cover are considered “organization determinations.” CMS explained that it made this change because MAOs were not applying the required processes that attach to organizational determinations to certain decisions most often relating to hospital-based care.
CMS finalized a change to Section 42 CFR 422.562 that clarifies that the MAO’s determination regarding a request for payment from a contract provider is not appealable when a member has no further liability to pay for services provided under their MA plan (e.g., when the MA plan’s determination will not impact the member’s cost share obligation). CMS reported that it made this change because MAOs had been claiming that other types of organizational determinations were not subject to appeal.
CMS amended 42 CFR 422.616 to limit when MAOs are permitted to reopen favorable organization determinations on inpatient hospital admissions. Specifically, under the Final Rule, once an MAO approves an inpatient hospital admission based on the 2 mid-night rule, the MAOs may not seek to reopen that determination for “good cause” based on clinical information that the MAO receives after the determination.
Lastly, CMS also amended 42 CFR 422.568 to require that MAOs provide notice of standard organization determinations to a member’s involved provider, not just the member.
IRA Related Provisions and Decisions
The Final Rule codifies and effectuates various provisions of the Inflation Reduction Act of 2022 (IRA) and related subregulatory guidance within the MAand Part D Programs. Below, we highlight the provisions of the Final Rule relevant to the IRA, as well as a number of key policy proposals that the Trump administration chose not to finalize.
The Final Rule implemented the following IRA requirements for MA prescription drug (MA-PD) plans and stand-alone Part D plans (PDP) beginning January 1, 2026 (except as otherwise noted below):
Vaccine Cost-Sharing. CMS codified that Part D plans may not apply co-insurance, other cost sharing or deductibles to adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) that are covered under Part D, as required by Section 11401 of the IRA.
Insulin Cost-Sharing. CMS also codified, as required by Section 11406 of the IRA, that the Part D deductible shall not apply to covered insulin products, and the Part D cost-sharing amount for a one-month supply of each covered insulin product must not exceed the applicable cost-sharing amount for all enrollees.
As previously reported in the Mintz IRA Update, the applicable copayment amount for 2023, 2024, and 2025 was $35.
Beginning January 1, 2026, and each subsequent plan year, the applicable cost-sharing amount is the lesser of
$35
An amount equal to 25% of the maximum fair price (MFP) established for the covered insulin product under the Medicare Drug Negotiation Program (Negotiation Program); or
An amount equal to 25% of the negotiated price of the covered insulin product under the applicable MA-PD plan or PDP.
Medicare Prescription Payment Program. As a quick recap, the Medicare Prescription Payment Plan (MPPP) went into effect January 1, 2025, and requires each MA-PD and PDP sponsor to allow Part D beneficiaries to pay for their out-of-pocket prescription drug costs in monthly capped payments over the course of a given plan year instead of at the pharmacy point-of-sale. In the Final Rule, CMS implements these requirements as proposed with a few minor modifications, including:
Automatic Renewal. CMS finalized its proposal to create an automatic renewal process that renews a Part D beneficiary’s participation in the MPPP for the next calendar year, unless the enrollee opts out. The Final Rule included a minor modification to change the timing requirement for plan sponsors to send the MPPP renewal notice to participants—the renewal notice must be sent after the end of the annual coordinated election period but prior to the beginning of the plan year to account for beneficiaries who may switch plans and are thus not eligible for automatic renewal.
Voluntary Termination. CMS finalized its proposal to require plan sponsors to send a notice confirming a beneficiary’s voluntary termination within ten (10) calendar days of receipt of the beneficiary’s request. However, CMS modified its proposal to require plan sponsors to effectuate the termination within three (3) calendar days of receipt of the request, rather than 24 hours, to reduce the burden on plan sponsors.
Grace Period and Notice of Nonpayment. CMS finalized its proposal to adjust the start date for the grace period to start the first day of the month following the date the initial notice of non-payment is sent to the beneficiary.
Participant Billing Rights. CMS also finalized its proposal that in the event a plan sponsor bills an MPPP participant over the maximum monthly cap, sponsors should work with the participant to determine whether they should refund the difference back to the beneficiary or apply the overpayment to the remaining OOP costs owed by the beneficiary. CMS indicates that plan sponsors should follow their normal processes for adjustments and issuing refunds, and apply their existing coverage determination, grievance, and appeals procedures to any MPPP participant disputes.
Payment to Pharmacies. CMS finalized its requirement that the MPPP does not affect the amount or timing of payment to pharmacies; plan sponsors cannot impose any fees or costs related to implementation of the MPPP to pharmacies and pharmacies cannot be held responsible for any unpaid balances or collecting unpaid balances from a Part D beneficiary on behalf of the sponsor.
Notably, CMS did not finalize its proposal requiring plan sponsors to ensure pharmacies are prepared to inform Part D beneficiaries of the actual OOP cost of a Part D drug processed under the MPPP at the point of sale since this information is already provided to pharmacies through claims processing methodology. In the Final Rule, CMS encourages pharmacies to provide OOP costs to beneficiaries upon request and will consider additional requirements in the future.
Medicare Drug Negotiation Program. CMS also finalized a handful of proposals related to the IRA’s Negotiation Program:
Negotiation Program’s Medicare Transaction Facilitator Data Module. CMS finalized its requirement that Part D sponsors’ pharmacy network participation agreements, including any contracts with first tier, downstream, and related entities, include a provision requiring such contracting pharmacy to be enrolled in the Negotiation Program’s Medicare Transaction Facilitator Data Module (MTF DM). Additionally, the network participation agreements must require the contracting pharmacies to certify the accuracy and completeness of their enrollment information in the MTF DM.
Timely Submission for Prescription Drug Event (PDE) Record. In the Final Rule, CMS adopted PDE submission timeliness requirements, one for Selected Drugs and one for all other drugs.
Selected Drugs: PDP sponsors must submit initial PDE records for Selected Drugs within 7 calendar days from the date the PDP sponsor receives the claim.
All Other Drugs: PDP sponsors must submit initial PDE records for non-Selected Drugs within 30 calendar days from the date the PDP sponsor receives the claim, and adjust, delete or resolve rejected PDE records within 90 calendar days of identifying the issue or receiving the rejected record status from CMS.
Other Provisions That Were Expressly Not Finalized
Anti-Obesity Medications. The Trump administration declined to finalize the Biden administration’s proposal to reinterpret the Social Security Act’s statutory exclusion of drugs used for “weight loss” to permit Medicare Part D coverage and require Medicaid coverage of anti-obesity medications for individuals with obesity. However, the Trump administration noted that it may “consider future policy options” as Medicare and state Medicaid programs struggle to cover the rising cost of popular GLP-1 drugs. Stay tuned for our next issue of the Mintz IRA Update where we will provide in-depth of the ongoing issue.
Ensuring Access to Generics and Biosimilars. In the Final Rule, CMS declined to implement its proposal to add a step to its formulary review process to ensure compliance with requirements relating to prioritizing generics and biosimilars and will revisit formulary requirements in future rulemaking as necessary.
Health Equity Provisions. The Trump administration declined to finalize provisions concerning conducting annual health equity analyses of utilization management policies, and provisions relating to the intersection of ensuring equitable access to services and using AI.