House Passes Funding Bill, Would Reshape Medicaid
In a narrow 215-214 vote, the House passed Trump’s sweeping tax-and-spending plan. The bill includes permanent Trump-era tax cuts, eliminates taxes on tips and overtime, and slashes over $600 billion from Medicaid, likely costing millions their coverage. The bill will now head to the Senate, where significant changes are anticipated.
Key takeaways: Health systems and states should prepare for major Medicaid eligibility and funding changes, including new work requirements and reduced flexibility for expansion. Safety-net hospitals may see increased uncompensated care. Providers serving immigrant and low-income populations should closely monitor policy impacts and patient access trends.
Court Halts 340B Rebate Plans, Affirms HHS Oversight
A D.C. district court ruled that drugmakers cannot unilaterally implement rebate models for 340B drugs, reinforcing HHS’s authority to preapprove any changes to the discount program. The decision blocks rebate proposals from major manufacturers like Sanofi, Eli Lilly, and Bristol Myers for now, while ordering HHS to reconsider Sanofi’s rejected plan. Hospitals hailed the ruling as a safeguard against increased financial strain, while drugmakers saw a narrow path forward for future rebate efforts.
Key takeaways: Safety-net providers can continue relying on upfront 340B discounts, avoiding significant upfront drug costs. Manufacturers must seek HHS approval for any rebate model changes, preserving regulatory oversight. Health systems should monitor HRSA’s upcoming decisions and prepare for potential future shifts in 340B payment models given the increased attention and focus by Pharma to lobby for change.
Court Blocks HHS Grant Terminations, Preserves $11.4B in Public Health Funding
A federal judge issued a preliminary injunction halting the Department of Health and Human Services’ decision to rescind $11.4 billion in public health grants, siding with states that argued the cuts exceeded HHS authority and would cause irreparable harm. The ruling follows a temporary restraining order and rejects the agency’s justification for terminating funding tied to COVID-19, mental health, and community health programs.
Key takeaways: The court reinforced that only Congress has the authority to rescind public health funds, preserving billions meant for pandemic preparedness and behavioral health. States successfully argued the cuts would dismantle key programs and harm vulnerable communities. Health systems should prepare for prolonged legal challenges and potential reinstatement of grants.
Kennedy’s Commission Faces Key Health Decisions
Health Secretary Robert F. Kennedy Jr. is racing toward a summer deadline to define a national chronic disease strategy. His Make America Healthy Again commission is weighing where to focus on obesity, regional disparities, economic drivers, or childhood conditions. STAT’s investigation outlines nine potential pathways for prioritization, with original data revealing rising rates of obesity, hypertension, kidney disease, and mental health disorders across the U.S. As the commission considers its path, Kennedy’s mixed record on vaccines, fluoridation, and prevention adds tension to a mission that will shape the nation’s future health.
Key takeaways: Hospitals and health systems should prepare for increased federal attention on chronic disease prevention, including possible shifts in funding toward behavioral and metabolic conditions. Public health agencies may see expanded mandates or altered priorities depending on the commission’s direction. Expect renewed scrutiny of regional disparities, childhood illness trends, and social drivers as policymakers respond to mounting pressure for systemic reform.
FDA Limits COVID Vaccines to High-Risk Groups, Sparking Policy and Legal Questions
In a major shift, FDA leaders Marty Makary and Vinay Prasad announced plans to limit COVID-19 vaccine access to adults over 65 and high-risk individuals, arguing broad recommendations are no longer justified. New clinical trials will be required to assess benefits for healthy adults and children, though the policy has drawn criticism for bypassing FDA advisory input and raising legal concerns. While the move aims to restore public trust, experts warn it could reduce access and stall innovation as vaccine makers weigh the cost and feasibility of new trials.
Key takeaways: Health systems and providers should prepare for narrower FDA-approved indications for COVID-19 vaccines, potentially complicating access for healthy adults under 65. Manufacturers face new regulatory burdens, including costly trials, while advisory bodies like ACIP may see diminished influence. Public communication strategies will need to address confusion, especially as CDC guidance evolves and patient demand for boosters persists.
On the Horizon
Senate to Review OTC Drug User Fee Program June 4 – The Senate HELP Committee will hold a hearing on reauthorizing the Over-the-Counter Monograph Drug User Fee Program, which supports FDA oversight of OTC medications.
Why it matters for hospitals: This hearing could impact the availability, labeling, and reformulation timelines for widely used OTC drugs in inpatient, outpatient, and discharge care. Delays or disruptions could affect pharmacy operations, care continuity, and patient safety, especially for high-volume medications like acetaminophen, antacids, and cough suppressants.
