Policy Update – October 20, 2025

Introduction
This week: how federal dysfunction collides with Medicare Advantage's first enrollment contraction in 20 years, raising fundamental questions about healthcare system stability and access for vulnerable populations.

Other Regulatory News

Centers for Medicare and Medicaid Services (CMS)

CMS Reverses Medicare Payment Suspension After Confusion During Government Shutdown

The Centers for Medicare & Medicaid Services (CMS) initially suspended Medicare payments to healthcare providers during the government shutdown, specifically affecting telehealth services, hospital-at-home programs, and physician reimbursements. The payment freeze created significant access barriers for Medicare beneficiaries and financial strain on hospitals, medical device companies, and healthcare providers reliant on federal funding. However, CMS quickly walked back the suspension amid operational confusion and concerns about care continuity, highlighting vulnerabilities in Medicare payment systems during federal funding lapses and raising policy questions about coordination between federal agencies during budgetary impasses.
Source(s):
Medicare Payments to Doctors Paused Amid Government Shutdown (Stat)
Medicare Telehealth and Hospital-at-Home Payments on Hold (Modern Healthcare)
CMS walks back Medicare payment pause (Becker’s Hospital Review)
Medicare Aborts Apparent Plan to Pause All Physician Payments During Shutdown (MedPageToday.com – medical news for physicians)
Tags: #ALL

CMS Administrator Oz Faces Dual Controversies: Medicare Advantage Directory Failures and Healthcare Industry Conflict of Interest Concerns

CMS Administrator Mehmet Oz confronts mounting challenges as Medicare Advantage provider directory errors emerge just hours after he highlighted directory improvements as a CMS priority, while simultaneously facing scrutiny over financial ties to healthcare companies that raise potential conflict of interest issues in his regulatory oversight role. The October 2025 directory launch failures particularly impact beneficiary access to healthcare services and provider network coordination across MA plans.
Source(s):
Oz Said Making A Better MA Provider Directory Was On CMS’ ‘Vision Board,’ Hours Before Error-Filled Tool Drew Public Backlash (InsideHealthPolicy Daily News)
Dr. Oz’s Financial Ties to Healthcare Companies Raise Conflict Concerns (Meyka – “healthcare and CMS” – Google News)
Tags: #ALL

Oz Reiterates Need to Improve Medicare Advantage Payment Accuracy

During discussions, CMS nominee Dr. Mehmet Oz emphasized the necessity for improved Medicare Advantage payment accuracy to ensure proper funding for hospitals and healthcare providers. This reflects ongoing federal concerns regarding Medicare program financial sustainability, potentially affecting pharmaceutical and device reimbursements under CMS oversight.
Source(s):
Oz Reiterates Need to Improve Medicare Advantage Payment Accuracy (Healthcare Dive – “healthcare and CMS” – Google News)
Tags: #ALL

Medicare Advantage Enrollment Faces Unprecedented Cuts Amid Policy Changes

As Medicare Advantage enrollment begins, private insurers are retreating from offering plans due to CMS regulatory changes, with projections indicating potential enrollment contraction for the first time in 20 years. Major insurers like Elevance and UnitedHealthcare are slashing benefits and increasing out-of-pocket costs, while rising Part D pharmaceutical premiums compound accessibility challenges for beneficiaries. These policy shifts impact hospital networks, device coverage, and raise sustainability concerns about Medicare Advantage viability for older adults, prompting stakeholder concerns about healthcare access and CMS oversight effectiveness.
Source(s):
Medicare Advantage Enrollment Faces Unprecedented Cuts Amid Policy Changes (statnews.com)
Tags: #ALL

Medicaid DSH Payment Cuts Loom Amid Federal Budget Stalemate | Federal Workforce Challenges Amid Government Shutdown and Policy Cuts

A long-delayed cut to Medicaid Disproportionate Share Hospital (DSH) payments took effect on October 1, 2025, coinciding with the federal government shutdown. This CMS-administered cut, which Congress has postponed since 2014, could result in an $8 billion annual reduction over the next three years, significantly affecting hospitals that serve low-income and uninsured patients. With many safety-net hospitals already operating at a loss, the reduction in DSH payments threatens to exacerbate financial instability in the healthcare sector, particularly for providers reliant on these funds to cover uncompensated care costs. The policy shift may force hospital closures and reduced services in underserved communities, while potentially increasing Medicare and Medicaid reimbursement pressures as patient care shifts between programs. The federal government faces unprecedented workforce losses with 300,000 anticipated departures by 2025, critically impacting Defense, Treasury, and Agriculture departments. CDC layoffs affecting 24% of staff compound public health challenges during the shutdown, which has delayed Medicare payments and triggered $8 billion in annual Medicaid DSH cuts. These reductions threaten hospitals serving vulnerable populations and could disrupt FDA oversight of pharmaceutical and device approvals. CMS operations face strain as institutional knowledge erodes across agencies responsible for healthcare policy implementation, potentially compromising patient safety and access to essential services for Medicare beneficiaries and underserved communities.
Source(s):
Medicaid DSH Payment Cuts Loom Amid Federal Budget Stalemate (modernhealthcare.com)
Federal Workforce Challenges Amid Government Shutdown and Policy Cuts (Government Executive – All Content)
Tags: #ALL

HBO Documentary Chronicles Rural Hospital Bankruptcy

An upcoming HBO documentary follows Dr. James Graham, a family physician in Fairfax, Oklahoma, as Fairfax Community Hospital faces bankruptcy, highlighting Medicare reimbursement challenges and CMS policy impacts on rural hospital viability. The film showcases how federal healthcare policies affect local providers’ ability to maintain essential services for underserved communities, demonstrating broader implications for rural healthcare access nationwide.
Source(s):
HBO Documentary Chronicles Rural Hospital Bankruptcy (Becker’s Hospital Review)
Tags: #HOSPITAL, #PROVIDER, #PAYER

CMS slows technical support for rural health fund despite looming deadline

The Centers for Medicare & Medicaid Services (CMS) has reduced technical support for the Rural Health Fund, raising concerns among stakeholders about the impact on rural healthcare access. With a looming deadline, this slowdown could hinder efforts to improve healthcare delivery in underserved areas, exacerbating existing disparities.
Source(s):
CMS slows technical support for rural health fund despite looming deadline (Healthcare Dive)
Tags: #HOSPITAL, #PROVIDER, #PATIENT

Outpatient Joint Replacement Trends Surgeons Are Watching

Orthopedic surgeons are monitoring outpatient joint replacement trends, including FDA-approved robotic surgical devices that improve patient outcomes and same-day discharge protocols. The shift impacts hospital revenue models and Medicare reimbursement structures, as CMS evaluates cost-effectiveness while surgeons emphasize individualized patient selection criteria for safety and appropriate care delivery.
Source(s):
Outpatient Joint Replacement Trends Surgeons Are Watching (Becker’s Hospital Review)
Tags: #ALL

Oz, Private Sector Tout Progress Made On CMS Interoperability Pledge

Since the launch of the CMS Interoperability Framework in late July 2025, over 400 stakeholders—including AI developers, pharmaceutical companies, device manufacturers, and hospital systems—have committed to enhancing Medicare and healthcare data sharing. This CMS initiative streamlines interoperability across health systems, improving patient care coordination and advancing health information technology standards with significant policy implications for healthcare delivery.
Source(s):
Oz, Private Sector Tout Progress Made On CMS Interoperability Pledge (InsideHealthPolicy Daily News)
Tags: #ALL

Food and Drug Administration (FDA)

FDA Awards First Nine Priority Drug Review Vouchers Including EMD Serono Fertility Drug Price Commitment

The FDA announced the first nine recipients of National Priority Review vouchers designed to expedite drug approvals for critical health needs. EMD Serono received a voucher for fertility drug Pergoveris in exchange for price reduction commitments, improving Medicare and patient access to reproductive treatments. This pharmaceutical policy initiative demonstrates FDA’s strategic use of regulatory incentives to address healthcare affordability while accelerating drug development processes, potentially impacting CMS coverage decisions and hospital formulary policies.
Source(s):
US FDA Announces Recipients of National Priority Vouchers (Reuters – “healthcare and FDA” – Google News)
FDA Announces First Nine Recipients of Priority Drug Review Vouchers (Stat)
Tags: #DRUG, #PAYER, #PATIENT

ACOG, AMA Back Legal Challenge To COVID Vaccine Policy Changes

Medical organizations including the American College of Obstetricians & Gynecologists (ACOG) and American Medical Association have filed an amicus brief supporting a lawsuit challenging FDA COVID vaccine policy changes, highlighting concerns about regulatory shifts impacting public health, healthcare professionals, and hospital operations under federal oversight.
Source(s):
ACOG, AMA Back Legal Challenge To COVID Vaccine Policy Changes (InsideHealthPolicy Daily News)
Tags: #PROVIDER, #HOSPITAL, #DRUG

Biotech Leaders Say Uncertainty at FDA Threatens Drug Development

At the STAT Summit, pharmaceutical biotech executives from Replimune and Capricor Therapeutics raised concerns about FDA regulatory instability causing unexpected drug application rejections. Leaders emphasized need for consistent, transparent FDA processes to ensure patient access to innovative treatments, highlighting broader pharmaceutical industry challenges with federal regulatory oversight and approval timelines.
Source(s):
Biotech Leaders Say Uncertainty at FDA Threatens Drug Development (Stat)
Tags: #DRUG

FDA medical device inspections in 2025: What we’re seeing, what we expected, and why you need the right expertise now

Reviews FDA’s heightened medical device inspection scrutiny in 2025, impacting pharmaceutical and device manufacturers’ market access. New regulatory expectations require enhanced compliance strategies to prevent disruptions affecting hospitals and healthcare systems relying on these products for patient care.
Source(s):
FDA medical device inspections in 2025: What we’re seeing, what we expected, and why you need the right expertise now (www.hoganlovells.com)
Tags: #DEVICE, #DRUG, #HOSPITAL

FDA approves 1-minute HIV self-test

The FDA has approved bioLytical Laboratories’ Insti HIV self-test device, delivering results in 60 seconds from a blood drop. This pharmaceutical innovation addresses healthcare access barriers and stigma, potentially reducing hospital testing burdens while supporting CMS and Medicare coverage considerations for the national 90% HIV reduction goal by 2030.
Source(s):
FDA approves 1-minute HIV self-test (Becker’s Hospital Review)
Tags: #DEVICE, #PATIENT, #PROVIDER

Health and Human Services

Federal Workforce Crisis During Shutdown: Court Blocks Layoffs as CDC Loses 24% of Staff, 300K Departures Expected

A federal judge blocked Trump administration layoffs of federal workers during the government shutdown, protecting FDA and CMS employees amid union challenges. However, the federal government still faces unprecedented workforce losses with 300,000 anticipated departures by 2025, critically impacting Defense, Treasury, and Agriculture departments. CDC is losing nearly a quarter of its workforce (600 employees) despite earlier notices being rescinded, threatening pharmaceutical safety monitoring, medical device regulations, and hospital infection control protocols. The shutdown has delayed Medicare payments and triggered $8 billion in annual Medicaid DSH cuts, straining operations across healthcare agencies and potentially compromising patient safety, FDA oversight, and essential services for Medicare beneficiaries and underserved communities.
Source(s):
Judge Blocks Federal Worker Layoffs During Shutdown (POLITICO)
Federal Workforce Challenges Amid Government Shutdown and Policy Cuts (Government Executive – All Content)
CDC Faces Workforce Reductions Amid Criticism and Operational Challenges (reuters.com)
Tags: #ALL

Federal Health Agency Workforce Crisis Deepens as NIH, CDC, and FDA Face Mass Staffing Reductions and Leadership Turmoil

Major federal health agencies are experiencing unprecedented workforce instability, with NIH eliminating the MOSAIC program and cutting diversity research funding amid leadership chaos, CDC conducting mass employee firings followed by rapid reinstatements due to processing errors, and FDA’s CDER and CBER suffering sharp staffing reductions in FY 2025. This coordinated pattern threatens pharmaceutical approval timelines, regulatory oversight capacity, research infrastructure, and federal health policy coordination, potentially impacting drug manufacturers, Medicare coverage decisions, hospital systems, and broader healthcare stakeholder confidence during ongoing leadership transitions.
Source(s):
Former NIH Leaders Lament ‘Constant Chaos’ at the Agency, and Caution It’s Not Over (Stat)
Meet the Grassroots CDC Teams Fighting Against Firings (MedPageToday.com)
FDA Stats Show CDER, CBER Staffing Sharply Fell In FY 2025 (InsideHealthPolicy Daily News)
Tags: #ALL

Scientific Authority Under Siege: Health Agencies Face Declining Trust as Industry Leaders Warn of Systematic Assault on Medical Research

Public trust in critical health agencies including FDA and CMS has significantly declined, particularly during COVID-19, undermining pharmaceutical regulation, device approval processes, and Medicare policy compliance. Moderna co-founder Noubar Afeyan warned at the STAT Summit that attacks on mRNA technology represent a broader systematic assault on scientific integrity threatening all medical interventions. This erosion compromises hospital systems’ ability to implement guidelines, threatens future public health initiatives, and poses serious implications for FDA regulatory processes, pharmaceutical innovation, CMS reimbursement decisions, and overall patient care outcomes.
Source(s):
American trust in health agencies is falling (Stat)
Moderna Co-Founder Warns of Broader Assault on Science (Stat)
Tags: #ALL

Funding Cuts Threaten New Generation of Cancer Immunotherapies

Significant cuts to research funding, amounting to 40% of National Institutes of Health grant dollars, pose a serious threat to the development of new cancer immunotherapies. These reductions could delay FDA approvals for pharmaceutical innovations, limit hospital access to cutting-edge treatments, and ultimately impact Medicare beneficiaries who rely on these therapies, underscoring the critical impact that federal funding availability has on advancing cancer research and patient care outcomes.
Source(s):
Funding Cuts Threaten New Generation of Cancer Immunotherapies (Stat)
Tags: #ALL

Heard on the Hill

ACA Premium Crisis Emerges as Enhanced Tax Credits Face Expiration Across Multiple States

ACA marketplace premiums are rising significantly across multiple states as enhanced tax credits face Congressional expiration, creating widespread affordability challenges for 2026 coverage. The premium increases threaten to strain hospital systems, reduce pharmaceutical access, and complicate Medicare enrollment as millions face potential coverage gaps. Without subsidy extensions, healthcare access may decline as patients delay care due to cost barriers, prompting CMS to monitor market stability amid policy uncertainty affecting beneficiaries nationwide.
Source(s):
ACA Premiums Are Poised to Skyrocket (MedPageToday.com)
Higher Obamacare Prices Become Public in a Dozen States (The New York Times)
Tags: #ALL

Republicans Again Find Themselves in an Obamacare Pickle

The impending expiration of Affordable Care Act (ACA) insurance subsidies has placed Republicans in a difficult position, as they seek to balance criticism of the ACA with the need to address its benefits for constituents. While some GOP members push for repeal, leadership acknowledges the necessity of a bipartisan approach to reform the subsidies, which, if not extended, could leave millions uninsured and strain hospital systems already managing Medicare reimbursement pressures. The Congressional Budget Office warns of significant consequences if action is not taken soon, with potential impacts on CMS oversight and healthcare delivery infrastructure affecting both device manufacturers and pharmaceutical access for vulnerable populations.
Source(s):
Republicans Again Find Themselves in an Obamacare Pickle (POLITICO – TOP Stories)
Tags: #ALL

Shutdown Fight Reopens Debate in G.O.P. Over Health Care

The ongoing spending showdown has exposed the Republican Party’s struggle to present a viable alternative to the Affordable Care Act, highlighting political risks of dismantling existing healthcare policies affecting Medicare beneficiaries, hospitals, and pharmaceutical access. Internal GOP conflicts reflect broader challenges in healthcare reform amid potential impacts on CMS operations and FDA oversight during budget uncertainties.
Source(s):
Shutdown Fight Reopens Debate in G.O.P. Over Health Care (The New York Times)
Tags: #ALL

How Trump 2.0 Blew Up Lobbying

A shift in lobbying dynamics during Trump’s second term has seen healthcare CEOs from pharmaceutical, medical device, and hospital sectors becoming primary lobbyists, directly influencing FDA regulations and Medicare policies through CMS that were traditionally handled by seasoned lobbyists and trade associations. This change reshapes corporate influence over healthcare policy in Washington, potentially affecting patient access and industry compliance standards.
Source(s):
How Trump 2.0 Blew Up Lobbying (POLITICO – TOP Stories)
Tags: #ALL

Notable Notes

Democratic Governors Form Public Health Alliance

A coalition of Democratic state governors has established a public health alliance to enhance coordination and state-level collaboration in response to federal public health management under the Trump administration. The alliance aims to strengthen state healthcare infrastructure, potentially impacting hospital systems, pharmaceutical distribution, and medical device procurement while maintaining independence from federal agencies like FDA and CMS in addressing health crises and improving population health outcomes.
Source(s):
Democratic Governors Form Public Health Alliance (Stat)
Tags: #ALL

Physicians Experience Decade-High Compensation Increase

A recent survey indicates that physician compensation has seen its highest increase in a decade, with median total cash compensation rising across healthcare over the past five years. This surge in compensation is attributed to imbalances in clinician supply and demand, making the recruitment environment more competitive. The trend impacts hospital systems’ operational costs and may influence Medicare reimbursement considerations as healthcare spending pressures mount. CMS and policymakers are monitoring physician workforce dynamics amid ongoing healthcare delivery challenges, with potential implications for access to care and system sustainability.
Source(s):
Physicians Experience Decade-High Compensation Increase (Becker’s Hospital Review)
Tags: #PROVIDER, #HOSPITAL, #PAYER

The Radical Democratization of Academic Medicine

Jonathan Avery discusses academic medicine’s transformation from traditional hierarchies to inclusive models, driven by reduced public funding and AI influence. This democratization impacts hospital systems, pharmaceutical research partnerships, and FDA regulatory processes as junior faculty and nontraditional scholars gain recognition, potentially affecting Medicare reimbursement policies and CMS guidelines for academic medical centers.
Source(s):
The Radical Democratization of Academic Medicine (Stat)
Tags: #ALL

California Takes on Pharma Giants with Plans to Sell Its Own Insulin

California’s CalRx program will sell low-cost insulin pens for $55 starting January 2026, partnering with CivicaRx to directly challenge pharmaceutical pricing practices. This state-led initiative could impact Medicare beneficiaries and set precedent for government intervention in drug pricing, potentially pressuring FDA-approved manufacturers and affecting hospital procurement costs.
Source(s):
California Takes on Pharma Giants with Plans to Sell Its Own Insulin (Stat)
Tags: #ALL

AMA President Deflects Criticism of Organization’s Restrained Approach to the Trump Administration

Bobby Mukkamala, president of the American Medical Association, defended the organization’s cautious advocacy strategy towards the Trump administration, emphasizing maintaining cooperative relationships with FDA and CMS despite significant health policy concerns affecting hospitals, Medicare, and pharmaceutical sectors. He acknowledged potential risks from certain administration actions, particularly regarding vaccine schedules that could impact device manufacturers and healthcare stakeholders.
Source(s):
AMA President Deflects Criticism of Organization’s Restrained Approach to the Trump Administration (Stat)
Tags: #ALL

Implications of a New Obesity Definition Among the All of Us Cohort

The potential impacts of redefining obesity within the “All of Us” research program could influence FDA device approvals, Medicare coverage decisions, and hospital treatment protocols. Changes may affect pharmaceutical development for obesity treatments and CMS reimbursement policies, impacting healthcare providers and patient access to personalized medicine approaches.
Source(s):
Implications of a New Obesity Definition Among the All of Us Cohort (jamanetwork.com)
Tags: #ALL

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