Insights^

On May 20, 2025, the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies held a hearing on the FY26 budget request for the Department of Health and Human Services (HHS). Much like Sec. Kennedy’s appearances before the House Labor-HHS and Senate Health, Education, Labor, and Pensions Committees on May 14, members asked questions about the proposed HHS reorganization, Medicaid, and rural health care. Also, like in the prior hearings, many Republican members praised Kennedy’s “Make America Health Again” (MAHA) agenda. Democrats criticized Sec. Kennedy for reducing HHS’s workforce, expressed concerns about proposed funding cuts in FY 26, and argued that Republicans were trying to cut Medicaid benefits under the reconciliation bill.

OPENING STATEMENTS

• Subcommittee Chair Shelly Capito (R-WV)

WITNESS TESTIMONY

•  Sec. Robert Kennedy Jr. 

MEMBER DISCUSSION

HHS Reorganization and Withholding Funds

As was the case with previous hearings on the FY 26 budget request, much of the focus was on HHS’s reorganization and concerns about the withholding of funds. Appropriations Committee Chair Susan Collins (R-ME) asked about the impact of the reorganization on funding for the Centers for Disease Control and Prevention’s (CDC) brain injury program. Sec. Kennedy explained that his attorneys instructed him not to comment on that matter due to ongoing legal action against the administration’s actions. Subcommittee Chair Shelly Moore Capito (R-WV) asked about the impact of the reorganization on clinical trials. Sec. Kennedy assured her that the trials were not being cut. Subcommittee Ranking Member Tammy Baldwin (D-WI) expressed concerns about specific HHS funding that had been appropriated but not yet distributed. Sen. John Kennedy (R-LA) defended the reorganization by pointing out that large companies, such as Microsoft and Meta, have continued to function after undergoing restructuring and layoffs.

FY 26 HHS Budget Request Details

Subcommittee Ranking Member Baldwin and Sen. Patty Murray (D-WA) pressed for more specifics about the President’s FY 26 HHS budget request. Specifically, Ranking Member Baldwin asked when she could expect a detailed plan for the 530 programs that currently lack designated funding amounts in the proposed budget. Sec. Kennedy replied that those decisions are being made by the Office of Management and Budget (OMB) and framed the issue as a government-wide matter rather than an HHS-specific one. Ranking Member Baldwin also raised alarm over withheld funds to the National Institutes of Health (NIH) research, particularly in immunotherapy, citing a $3 billion drop in awarded funding and a decrease in grants. She asked who was responsible for holding the grants. Sec. Kennedy responded by saying that gene therapy is a priority. When Sen. Baldwin asked if the Department of Government Efficiency (DOGE) was reviewing the cuts, he reiterated a focus on cutting waste and fraud. Sen. Patty Murray (D-WA) questioned whether HHS was required to submit an operating plan outlining how every program would be run, including funding levels. She requested a comprehensive version, citing the need to understand which programs would be cut and how taxpayer dollars were being allocated.

Medicaid

Sens. Jack Reed (D-RI) and Jeff Merkley (D-OR) raised concerns about proposed Medicaid changes in the reconciliation legislation, stating that the proposed changes would lead to millions of people losing health coverage. These Senators inquired about the rationale behind these cuts. Sec. Kennedy responded with the same arguments he made last week that the reductions were not outright cuts but rather decreases in the rate of program growth. He emphasized that the changes were intended to eliminate waste, fraud, and abuse, claiming that people are stealing from the Medicaid program. He further argued that able-bodied men who refuse to work are contributing to the strain on the program.

Rural Health Care

Subcommittee Chair Capito raised concerns about how the administration’s proposed budget cuts could impact rural health care programs, asking Sec. Kennedy how his reorganization plan would improve conditions in rural America. Kennedy acknowledged that rural health is one of the most frequently raised issues. He noted that many rural hospitals are closing and emphasized their importance as economic drivers in their communities. He mentioned ongoing discussions with leading health technology companies to help address the issue.

Sen. John Boozman (R-AR) highlighted that cancer remains a leading cause of death and pointed out the lack of designated cancer centers in rural areas. He asked how HHS could improve patient outcomes and better support rural regions. Kennedy agreed that access to cancer treatments is necessary and acknowledged the challenges. Sen. Boozman further emphasized that rural counties face serious barriers, with many providers struggling to keep their doors open. He referenced the upcoming Farm bill and asked how to help build strong health infrastructure in those communities. Sec. Kennedy pointed to several programs under the Health Resources and Services Administration (HRSA), including the 340B drug pricing program. He recognized its significance to hospitals and rural health efforts and added that a revolution in AI could bring significant advancements. This is the second time that Sec. Kennedy has expressed his understanding that the 340B program is important to rural hospitals.

Sen. Brian Schatz (D-HI) brought attention to the fact that rural Americans are less likely to receive preventive health care. He questioned whether the administration’s stance on Diversity, Equity, and Inclusion (DEI) would limit the ability to understand how different populations respond to different types of care. Kennedy replied that this was not a DEI issue, citing he is working with Sen. Tim Scott (R-SC) on the delivery of a new sickle cell treatment to all who suffer from the disease in South Carolina as an example of an effort to ensure equitable care.

OTHER TOPICS

• Sen. Jerry Moran (R-KS) raised concerns about the measles outbreak in Kansas and the need for support for individuals with mental health disabilities. He also expressed his support for the BOLD Act.
• Sen. Jeanne Shaheen (D-NH) asked for a commitment to preserving the state opioid grant program, emphasizing its importance. She was assured it remains a priority, though past efforts to address the opioid crisis were acknowledged as insufficient.
• Committee Chair Collins asked if there would be support to restore the Leadership Education in Adolescent Health (LEAH) program and aid for low-income families.
• Sen. Kennedy questioned why processed foods were allowed to be sold in America. Sec. Kennedy responded that the food industry profits on poisoning children.

On May 14, Secretary of Health and Human Services (HHS) Robert F. Kennedy Jr. testified before the House Appropriations Labor-HHS Subcommittee and the Senate Committee on Health, Education, Labor, and Pensions (HELP) about the fiscal year 2026 (FY 26) HHS budget request. These are the first hearings for the FY 26 HHS budget request. Sec. Kennedy used these hearings to outline how the budget request aims to help HHS meet its goals of reducing the high rates of chronic disease and delivering services to Americans in the most efficient way possible. Republicans generally applauded the Secretary for focusing on trying to reduce the high rates of chronic disease and on making HHS more efficient. Democrats expressed concerns about the impact of reductions in force at HHS, the impounding or freezing of already appropriated congressional funds, and the proposed cuts and reorganization within HHS outlined in the FY 26 skinny budget request. Democrats also used the hearings to argue that Republicans plan to gut Medicaid through the reconciliation legislation currently being considered in the House of Representatives, a claim that Republicans denied.

WITNESS TESTIMONY

During his testimony in both hearings, Sec. Kennedy outlined several priorities in the FY 26 budget:

• Consolidating mental health programs to make them more efficient in addressing rising rates of mental health illnesses and substance use disorders.
• Address priorities related to nutrition, exercise, and physical activity (through $94B request, including for the Administration for a Healthy America (AHA)
• Expand food safety efforts at the Food and Drug Administration (FDA)
• Funding research that is innovative, while cutting research that he said is dangerous, and research based on diversity, equity, and inclusion.
• Promoting the use of new health technologies to manage data, including AI.
• Restoring trust in public health agencies.

OPENING STATEMENTS

• House Appropriations Labor-HHS Subcommittee Chair Robert Aderholt (R-AL) 
• House Appropriations Labor-HHS Subcommittee Ranking Member Rosa DeLauro (D-CT)
• Senate HELP Chair Bill Cassidy (R-LA)

MEMBER QUESTIONS AND DISCUSSION

Allocation of Appropriated Funding and HHS Workforce Reductions

In the House hearing, Democratic representatives used much of their time to argue that the Trump administration has illegally frozen congressionally appropriated funding, including at HHS. Subcommittee Ranking Member DeLauro (D-CT) and other Democratic Representatives pressed Sec. Kennedy on this and asked if he views congressionally directed appropriations as suggestions or the law. In answer to these questions, Sec. Kennedy stated that HHS follows the law and added that if Congress appropriates funds to HHS, he will spend them. Democratic members were skeptical of Sec. Kennedy’s answers. In response to questions on this topic, Subcommittee Chair Aderholdt (R-AL) reminded members to focus on the FY 26 request.

In both the House and Senate hearings, Democratic representatives also asked for information regarding decisions to reduce the HHS workforce. In response to questions from Rep. Steny Hoyer (D-MD) and Sen. Tim Kaine (D-VA) about whether Sec. Kennedy or Elon Musk made these decisions, Sec. Kennedy said he and his staff had the final say and that Musk only provided guidance. When asked by Rep. Lois Frankel (DFL) if he had conversations with members of Congress about these decisions, Sec. Kennedy mentioned talking with Sen. Bill Cassidy (R-LA), but did not name any Representatives.

Chronic Disease

In the House hearing, Republican and Democratic representatives expressed support for addressing chronic health issues by improving nutrition and promoting physical activity. However, while Republicans mostly praised the Trump administration for what it has done so far in this area, Democratic representatives argued that the FY 26 budget request will make it harder to address chronic health issues. Representatives such as Rep. Madeline Dean (D-PA) and Rep. Watson Coleman (D-NJ) expressed concerns about proposed cuts at the Substance Abuse and Mental Health Administration and the Office of Minority Health. Sec. Kennedy expressed his view that these were not cuts, but rather about restructuring HHS to eliminate redundant programs. Democratic members rejected this answer.

In the Senate hearing, Sen. Jon Husted (R-OH) expressed satisfaction with the progress of the Make America Healthy Again (MAHA) movement and inquired about specific measures being taken. In response, Secretary Kennedy highlighted efforts to promote healthy foods through the Supplemental Nutrition Assistance Program (SNAP). Sen. Tim Scott (R-SC) expressed support for eliminating artificial dyes in food.

Medicaid

Democratic representatives and senators also took the opportunity to argue that the reconciliation legislation moving through the House of Representatives will cut Medicaid and lead to reductions in health care coverage and worse health outcomes. Rep. Josh Harder (D-CA) said that these cuts would hurt vulnerable Americans and slammed Medicaid work requirements as being overburdensome. Senate HELP Ranking Member Bernie Sanders (I-VT) said the reconciliation legislation was making these cuts to Medicaid to pay for tax cuts for the rich. Sec. Kennedy and Rep. Andy Harris (R-MD) argued that these cuts were focused on cutting waste, fraud, and abuse within the program and ensuring Medicaid does not provide coverage for illegal immigrants or non-disabled adults who are not working.

Vaccines

Many Democratic members in both the House and Senate hearings expressed concern about the ongoing measles outbreak in Texas. Sen. Patty Murphy (D-WA) questioned Sec. Kennedy about new standards for vaccine approvals and asked him to clarify remarks made in the House about vaccination, specifically whether he recommends the measles vaccine. Kennedy responded by stating that he would tell the truth, acknowledged concerns about vaccines, and claimed that people have been misled. When Sen. Roger Marshall (R-KS) asked where his vaccine recommendations come from, Kennedy said they are based on many different sources.

In response to Sen. Maggie Hassan (D-NH), he ultimately affirmed that the measles vaccine is the most effective way to prevent the spread of the disease.

OTHER TOPICS

• Reps. Andrew Clyde (R-GA) and Jake Ellzey (R-TX) expressed concerns about the whereabouts of unaccompanied immigrant children, arguing that HHS under the Biden administration failed to provide proper oversight. Sec. Kennedy said he was committed to finding these children. Rep. DeLauro (D-CT) countered that if Republicans are so concerned about this, they should start with the children who, she stated, were still missing after actions during President Trump’s term related to family separation.
• Rep. John Moolenaar (R-MI) and Sen. Jim Banks (R-IN) expressed concerns about overreliance on Chinese biotech and pharmaceutical supply chains. Sec. Kennedy agreed with these concerns.
• Rep. Chuck Fleischmann (R-TN) expressed his support for the 340B program and asked about plans to transfer the program’s oversight to the Centers for Medicare and Medicaid Services (CMS).
• Sen. Josh Hawley (R-AR) expressed opposition to pharmaceutical advertising and alluded to legislation on this topic that he is introducing.
• Reps. Aderholt (R-AL) and Julia Letlow (R-LA) expressed concerns about rural healthcare, with Rep. Aderholt (R-AL) focusing on the wage index for low-volume hospitals and Rep. Letlow (R-LA) highlighting the issue of rural health deserts. Sec. Kennedy expressed support for taking action to support rural health providers.
• Rep. Pocan (D-WI) asked Sec. Kennedy if he was committed to addressing overpayments to Medicare Advantage (MA) plans. Sec. Kennedy said he was but also expressed general support for the MA program.
• Senate HELP Committee Chair Bill Cassidy (R-LA) expressed concerns about closing the Office of Long COVID Research and reducing funding to address the prevalence of neurological diseases.

Starting on May 13, 2025, the House Energy & Commerce Committee held a markup of the Committee’s budget reconciliation committee print, which will be added to work of other committees to produce a larger budget reconciliation bill for consideration by the full House at a later date. While health policy has received much of the attention, the instructions to the Committee under the budget resolution are not confined only to health policy, and the Committee print included 4 subtitles covering energy, environment, communications, and health. Following debate on the separate titles and the consideration of amendments, the Committee approved the subtitles in party line votes, sending the committee print to the House Committee on the Budget to be incorporated with legislation from other House committees into a larger legislative package.

OPENING STATEMENTS

Before moving to the formal debate of the legislation before the Committee, several members offered opening statements. Chairman Brett Guthrie (R-KY) and Ranking Member Frank Pallone (D-NJ) began the May 13 markup with opening statements. Health Subcommittee Ranking Member Diana DeGette (D-CO) and numerous members of the Committee also made opening statements, with members on both sides of the aisle sharing personal stories of Medicaid enrollees. Committee Democrats highlighted individuals in their home states concerned about losing Medicaid coverage should the budget reconciliation legislation move forward and be signed into law. Republican statements focused on stressing that Medicaid is unsustainable as a program and that the legislation will help preserve Medicaid by addressing waste, fraud, and abuse in the program, implementing a work requirement for able-bodied Medicaid enrollees, ending Medicaid coverage for immigrants without legal status, and forbidding Medicaid coverage of transgender surgeries for minors. Democratic statements focused on estimates from Congressional Budget Office (CBO) communications that more 13 million individuals could potentially lose coverage and connected the reductions in Medicaid to Republican efforts to extend tax cuts for wealthier Americans. Not surprisingly, Republicans and Democrats disagreed about the veracity of the numbers of individuals who could lose coverage. Regarding the work requirement, Chairman Guthrie outlined specific exceptions to the work requirement to address many concerns that have been raised, while Democrats raised the objection that the work requirement would cause eligible individuals to lose coverage.

HEALTH SUBTITLE AND AMENDMENTS

For consideration of the health subtitle, Chairman Guthrie offered an amendment of the nature of a substitute to serve as the base text for consideration. During their comments, Committee Democrats continued to highlight the stories of Medicaid enrollees and the more than 13 million estimated to lose coverage in CBO communications. Following comments from multiple members regarding the health subtitle, the Committee moved to consideration of amendments.

During the debate, the Committee considered 20 separate amendments on a range of provisions and issues.

Each amendment offered was defeated on a party-line vote. Among the amendments of note and interest include the following:

• Health Subcommittee Ranking Member Rep. Diana DeGette (D-CO) offered the first amendment, which would prevent the provisions of the health subtitle from taking effect until the Secretary of Health & Human Services certifies that the legislation would not reduce benefits under state plans.
• Rep. Marc Veasey (D-TX) offered an amendment to strike the provisions setting limits on new provider taxes. Often criticized as a gimmick or loophole for states to access additional federal dollars, arguments for the amendment centered on the value to states in utilizing provider taxes to generate funding for their Medicaid programs and provide additional funds back to states.
• Rep. Kathy Castor (D-FL) offered an amendment to remove the legislation’s limits on state directed payments, which would allow existing state directed payment systems in place to continue but would cap the level of future state directed payments at Medicare levels.
• Rep. Raul Ruiz, MD (D-CA) offered an amendment requiring states to submit a report assessing the effects of the bill on rates of uncompensated care and on emergency department wait times.
• Rep. Scott Peters (D-CA) offered an amendment to strike the work and community engagement requirement for the Medicaid expansion population. Supporters of the amendment cited concerns about the administrative burden that would be imposed under the requirement, and supporters also cited past experiences in Arkansas and Georgia to demonstrate that the requirement could lead to eligible individuals losing coverage. Chairman Guthrie responded noting that the provisions were created with exceptions and provisions to help address and prevent situations like those that occurred under Arkansas and Georgia’s work requirements.
• Rep. Robin Kelly (D-IL) introduced an amendment requiring state audits of individuals who lost coverage under the legislation’s community engagement or work requirement but would otherwise have qualified for coverage under the requirement’s exceptions.
• Rep. Greg Landsman (D-OH) offered an amendment to strike the provision allowing states to assess cost-sharing of up to $35 per service on Medicaid expansion adults with incomes over 100 percent of the federal poverty level (FPL). Supporters of the amendment argued that this will lead to large numbers of enrollees forgoing care, further driving up costs of uncompensated care. Chairman Guthrie and other Republican committee members pointed out requiring enrollee “skin the game” is important and required in other health plans and that states have flexibility to impose much lower cost-sharing much lower than $35.
• Rep. Nanette Diaz Barragan (D-CA) offered an amendment to strike the provision limiting retroactive coverage under Medicaid and CHIP to one month prior to an individual’s application date, which would be a reduction from current law which allows for 3 months of retroactive coverage. Committee Democrats argued that this will reduce healthcare coverage for children and families that earn too much to qualify for Medicaid but not enough to afford coverage under the health insurance exchange under the Affordable Care Act (ACA).
• Rep. Debbie Dingell (D-MI) offered an amendment stating a sense of Congress supporting most favored nation pricing for prescription drugs. Supporters noted President Trump’s recent executive order to lower U.S. drug costs by linking prices to those paid in other developed countries. Chairman Guthrie expressed agreement with the President on the need to address American drug pricing but pointed out that Americans also benefit from pharmaceutical innovation.
• Rep. Alexandria Ocasio-Cortez (D-NY) introduced an amendment which would include the provisions to address risk adjustment in Medicare Advantage along with modifying the update to Medicare physician payments to be consistent with the Medicare economic index (MEI) ,which is an annual measure of the inflationary rise in medical practice costs. Health Subcommittee Chair Buddy Carter (R-GA) offered supportive comments regarding the amendment but stated the reconciliation legislation was not the appropriate avenue for these provisions.
• Rep. Ocasio-Cortez (D-NY) offered an amendment that would effectively undo the legislation’s provisions rescinding the nursing home staffing rule that was finalized under the Biden administration.
• Rep. Dingell (D-MI) offered an amendment prohibiting states from imposing new limitations or payment reductions for home and community-based services (HCBS).

Following the consideration and dispensing of amendments, the Committee approved the health subtitle, as amended by Chairman Guthrie’s amendment in the nature of a substitute, on a party line vote.

COMPLETION OF CONSIDERATION AND NEXT STEPS

Following approval of the health subtitle, the full Energy & Commerce Committee voted 30-24 along party lines to report and transmit the legislation and its four subtitles, consistent with the instructions received under the budget resolution, to the House Committee on the Budget.

The House Budget Committee has announced plans to meet in a markup on Friday, May 16 to consider the legislative package that incorporates the E&C Committee’s work and the work of other House committees to be considered under the budget reconciliation process.

Assuming passage by the House Budget Committee, Speaker of the House Mike Johnson (RLA) and House Republican leadership continues to assert their plans to bring up the legislative package before the full House of Representatives for consideration and passage before Memorial Day.

The Senate has not announced plans for consideration, but it is speculated that the Senate will not meet in its respective committees to consider the legislative package. Rather, there is speculation that the full Senate will take up, amend, and pass the House-passed legislation in June.

Following Senate consideration and passage, the House and Senate will need to work to reconcile their respective differences in the weeks that follow in June and July.

On April 29, 2025, the House Energy and Commerce Committee held a Markup of 6 health care bills. The health care bills focused on a variety of topics including funding for opioid recovery and treatment, research for lung cancer, regulation of human cell and tissue products, and changing the law to allow caregivers to pick up their patient’s medications. All of these bills were advanced to the House floor.

OPENING STATEMENTS

• Chairman Brett Guthrie (R-KY) praised the committee’s efforts to reauthorize and enhance programs addressing substance use disorders, protect seniors’ access to prescription medications, prevent discrimination in organ transplants for individuals with disabilities, and improve safety standards for human cell and tissue products. Guthrie highlighted the SUPPORT for Patients and Communities Reauthorization Act.
• Ranking Member Frank Pallone (D-NJ) criticized Republican colleagues for what he described as partisan approaches to health legislation. He expressed concern that certain bills under consideration lacked adequate funding increases and failed to address critical issues such as public health data improvements and medical supply chain vulnerabilities. Pallone emphasized the importance of bipartisan cooperation to effectively support public health initiatives and ensure comprehensive preparedness for future health emergencies.

LEGISLATION INCLUDED IN THE MARKUP

• H.R. 2483, SUPPORT for Patients and Communities Reauthorization Act of 2025 (Reps. Guthrie and Petterson): This bill would reauthorize key parts of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, which was signed into law in 2018. This reauthorization would include public health programs focused on prevention, treatment, and recovery for patients with substance use disorder. Passed 36-13 with amendment.
• H.R. 1520, Charlotte Woodward Organ Transplant Discrimination Prevention Act (Reps. Cammack, Dingell, Issa, and Wasserman Schultz): This bill would prohibit health care providers and other entities from denying or restricting an individual’s access to organ transplants solely on the basis of the individual’s disability, except in limited circumstances. Passed 46-1.
• H.R. 2319, Women and Lung Cancer Research and Preventive Services Act of 2025 (Reps. Boyle and Fitzpatrick): This bill would require the Department of Health and Human Services (HHS) to conduct an interagency review on the status of, and identify research related to, women and underserved populations with lung cancer. The review would include assessments of current research and access to prevention services, the availability of research opportunities regarding prevention, detection, and treatment, and recommendations for national public education and screening strategies. Passed by voice vote.
• H.R. 1669, To amend the Public Health Service Act to reauthorize the Stop, Observe, Ask, and Respond to Health and Wellness Training Program (Reps. Cohen and Buddy Carter ): This bill would reauthorize the Stop, Observe, and Respond (SOAR) to Health and Wellness Training Program for five years. The SOAR to Health and Wellness Act was originally signed into law in 2018 and authorizes resources to help build capacity in local communities to identify and respond to the various needs of individuals who have experienced trafficking. Passed by voice vote.
• H.R. 1082, Shandra Eisenga Human Cell and Tissue Product Safety Act (Reps. Moolenaar and Dingell): This bill would require the Secretary of HHS to conduct a national education campaign to increase public and health care provider awareness regarding the potential risks and benefits of human cell and tissue product transplants. It would also direct the Food and Drug Administration (FDA) to take additional steps to streamline regulatory oversight of human cell and tissue products, including by publishing educational materials, best practices, and other relevant information related to FDA’s Tissue Reference Group, as well as by conducting workshops and other educational sessions for relevant stakeholders and establish a public docket for related comments. Lastly, the bill would require the Secretary of HHS to report to Congress with recommendations for modernizing the regulation of human cell and tissue products. Passed by voice vote.
• H.R. 2484, Seniors’ Access to Critical Medications Act (Reps. Harshbarger and Wasserman Schultz): This bill would amend the physician self-referral law to permit Medicare patients to receive prescription drugs through caregivers picking up drugs on the patient’s behalf, through the mail, or by couriers delivering the drug to the patient in instances when a provider prescribes a drug to be dispensed by a pharmacy that falls under the self-referral law’s definition of an in office ancillary service. Current law prohibits such arrangements for Medicare beneficiaries. The amendments made by this bill would be implemented on January 1, 2026, and sunset on December 31, 2030. Passed 38-7.

On April 11, 2025, the Medicare Payment Advisory Commission (MedPAC) held the second day of its April 2025 public meeting, which was also the final day of the 2024-2025 cycle of public meetings. Today’s sessions focused on access to hospice care and other services under the Medicare hospice benefit and nursing home quality for Medicare beneficiaries. Today’s sessions were more informative, and no recommendations were presented to or voted on by Commissioners. That said, both topics are clearly of interest to Commissioners, and we expect them to be features of future public meeting sessions.

ACCESS TO HOSPICE AND OTHER SERVICES

The first session focused on access to hospice and certain specialized services for beneficiaries participating in Medicare’s hospice benefit. Specifically, the session focused on four specialized services: dialysis for beneficiaries with end-stage renal disease (ESRD), radiation, blood transfusions, and chemotherapy for beneficiaries with cancer. MedPAC staff shared that the motivation for examining this topic comes from findings that hospice use is substantially lower for decedents with ESRD compared to the overall population. Another motivation for the focus on this topic came from concerns that Medicare beneficiaries may not understand the policy for covering these specialized services, and concerns that the cost of providing these services is higher than the daily hospice payment rate. To examine these concerns, MedPAC conducted a literature review, analyzed available Medicare claims data, and conducted interviews with clinicians, hospice providers, dialysis providers, and family caregivers.

MedPAC staff began the review of their work by providing an overview of the role of these specialized services within the hospice benefit. They shared that Medicare permits, but does not require, hospices to offer these services if they are used for palliative purposes. Staff noted that these decisions are made at the facility level and are dependent on a facility’s governing philosophy on what services fit under the category of palliative care. MedPAC staff also noted that Medicare generally does not have data on how often hospice providers furnish certain services, and there is no data on the costs to provide these services. MedPAC did compare the hospice routine home care (RHC) rate with the average fee-for-service (FFS) payment for dialysis, transfusion, and radiation to patients not enrolled in hospice. They found the average FFS payments for these services generally exceeded the Medicare hospice benefit daily payment rate. MedPAC staff ended their presentation by presenting some potential policy considerations for Commissioners, including the potential for enhanced data reporting, changes to the hospice payment system to address possible disincentives to providing certain services, and developing a program to help beneficiaries transition into hospice care.

MedPAC staff began the review of their work by providing an overview of the role of these specialized services within the hospice benefit. They shared that Medicare permits, but does not require, hospices to offer these services if they are used for palliative purposes. Staff noted that these decisions are made at the facility level and are dependent on a facility’s governing philosophy on what services fit under the category of palliative care. MedPAC staff also noted that Medicare generally does not have data on how often hospice providers furnish certain services, and there is no data on the costs to provide these services. MedPAC did compare the hospice routine home care (RHC) rate with the average fee-for-service (FFS) payment for dialysis, transfusion, and radiation to patients not enrolled in hospice. They found the average FFS payments for these services generally exceeded the Medicare hospice benefit daily payment rate. MedPAC staff ended their presentation by presenting some potential policy considerations for Commissioners, including the potential for enhanced data reporting, changes to the hospice payment system to address possible disincentives to providing certain services, and developing a program to help beneficiaries transition into hospice care.

During the questions and discussion period, some Commissioners asked if comparing the hospice daily payment with the average FFS payments for non-hospice beneficiaries made sense, given how costs under the Medicare hospice benefit tend to be higher at certain times during the course of care. Other Commissioners discussed the uniqueness of dialysis among the services featured in MedPAC’s analysis, since it is critical for keeping ESRD patients alive. There was an agreement among several Commissioners that this could cause a beneficiary to delay entry into hospice. Other Commissioners wanted MedPAC to examine the rationale for why the hospice benefit is carved out of Medicare Advantage and paid for by FFS Medicare. Commissioners also debated having a system where access to specialized services is so dependent on the facility a beneficiary goes to. Some Commissioners expressed concerns that this system leaves many beneficiaries unable to access services that would help ease their suffering. Others countered that the current system allows for flexibility and individualized care and that Medicare should not dictate which services are offered.

MedPAC staff noted that this session will not be a topic in the June 2025 Report to Congress, but they expect it to be a continued topic of interest. The Chairman of MedPAC confirmed that the Commission will continue to look at this issue.

REGULATIONS, STAR RATINGS, AND FFS MEDICARE POLICIES TO IMPROVE NURSING HOME QUALITY

The final session of the April 2025 public meeting focused on a topic that MedPAC has long been interested in improving nursing home quality. MedPAC staff gave an overview of the different regulations and programs promulgated to address concerns about this issue. These include the inspection and certification requirements that nursing homes must meet to participate in Medicare, the star rating system, the skilled nursing facility value-based purchasing (SNF VBP) program, and a Center for Medicare and Medicaid Innovation demonstration aimed at improving nursing home quality. MedPAC staff summarized their findings that there is limited evidence that these regulations and programs have worked. Specifically, staff noted various government and academic studies to support this point.

There was broad agreement among Commissioners that current efforts to address nursing home quality have not been enough to make meaningful improvements. A few Commissioners expressed concerns that part of the star rating system for nursing home quality is based on the results of inspections of facilities, saying that those are really to ensure nursing homes are meeting the minimum standards of quality. There was also support for the standing MedPAC recommendation that the star rating system should include a category to measure beneficiary satisfaction. Other Commissioners highlighted their view that staffing, which is currently a category measured by the star rating system, was an important measurement. The recently vacated nursing home staffing mandate did not come up very much, which is unsurprising given that a federal court recently vacated it. One Commissioner expressed that she was reconsidering her opposition to staffing ratio mandates. However, another Commissioner countered that MedPAC should follow the lead of Congress, which he argued has shown interest in repealing the rule.

Regarding positive recommendations to improve nursing home quality, several Commissioners praised institutional special needs plans (I-SNPs) and high-need accountable care organizations (ACOs) for their record on improving nursing home quality. A few Commissioners also expressed an interest in considering a separate long-term care benefit under traditional Medicare to improve nursing home quality. However, another Commissioner opposed that idea, and others thought it was unlikely to be adopted as a recommendation from Congress in the current environment. The session ended with the MedPAC Chairman stating that although the Commission should be responsive to Congress, it should not shape its work based on what Congress wants to hear. He also said that MedPAC will need to consider whether improving nursing home quality will require more money and ways to improve the system without spending money.

Material from this session will be included, along with previous MedPAC work on this topic, in the June 2025 Report to Congress.