The AAEM Action Report

On March 8th, the House Republicans released a short term continuing resolution (CR) which extends fiscal year (FY) 2025 funding through September 30th. Congress passed the most recent CR in December which extended government funding for FY 2025 at FY 2024 funding levels. The House passed the measure on March 10th. The Senate passed the measure on March 14th and the President signed it into law right before the funding was due to expire.

Physician Fee Schedule: Congress did not include the Medicare physician fee fix in the CR. Rep. Greg Murphy, MD (R-NC) continues to push for a resolution and he was quoted as saying the Republican leadership team has agreed to include the Medicare doctor fix in the forthcoming reconciliation bill. Rep. Murphy and other policymakers pushed unsuccessfully to include the bipartisan Medicare Patient Access and Practice Stabilization Act, which would have replaced the 2.83% cut in the CR.

Sequester: The CR maintained a 2% across-the-board sequestration cut to Medicare provider payments.

While the Lorna Breen Act was not included in the recently passed CR, advocacy for the reauthorization continues. On March 18th AAEM will join other healthcare advocacy organizations in sending a letter to Speaker Johnson (R-LA), Minority Leader Jeffries (D-NY), Majority Leader Thune (R-SD), and Minority Leader Schumer (D-NY) in support of the Lorna Breen Reauthorization Act (H.R.929/S.266). The letter urges Congress to include the Lorna Breen Act in the upcoming healthcare package and to provide funding for the program.

On March 6th, Senators Ron Wyden (D-OR) and Bernie Sanders (D-VT) introduced S. 891. The bill includes the bipartisan, bicameral health package negotiated in December 2024 (S. 891, the Bipartisan Health Care Act). This package includes health extenders and also items not included in the final end of year CR such as an offset to the scheduled Medicare physician fee schedule reduction and a THCGME increase and longer authorization. The package was ultimately left out of the December 2024 CR because of Republican pushback about the overall bill’s size.

On March 6th, the Medicare Payment Advisory Commission (MedPAC) met and discussed a proposal to reform the Medicare physician fee schedule. MedPAC discussed two different proposals to address the fee schedule: (1) replacing the current system with an update on a portion of the growth in the Medicare Economic Index (MEI), such as MEI minus 1 percentage point and (2) a proposal to require the Centers for Medicare and Medicaid Services (CMS) to improve cost data used in the update process.

The budget reconciliation process, a mechanism separate from the CR which allows funding bills to pass with a simple majority, continues to take form. However, before a final budget reconciliation bill—one that would codify the Trump Administrations spending, tax, and border security vision—can be signed into law, both the House and Senate must pass identical budget resolutions. These resolutions outline the overall budget framework and budget for each congressional committee.

On February 25th, the House passed its budget resolution, which directs the Energy and Commerce Committee—responsible for overseeing the Department of Health and Human Services (HHS) and its sub-agencies—to implement at least $880 billion in cuts. While specific details have not been released, Speaker Johnson has pledged that Medicaid and Medicare will not be affected. However, many believe achieving such significant savings from the Energy and Commerce Committee would be difficult without reductions to these programs.

The Senate has yet to pass its own budget resolution, which is a necessary step before a final reconciliation package can move forward. Few expect the Senate to adopt the House’s resolution as written. Minority Leader Thune has drawn a red line, insisting on the permanent extension of the Trump tax cuts, while many Senate Republicans have expressed concerns over potential Medicaid and Medicare cuts. If the Senate alters the resolution, the House will need to hold another closely contested vote before proceeding to reconciliation.

In a recent meeting with I Street, Speaker Johnson expressed his goal of delivering the full reconciliation package to President Trump by Easter. However, Leader Thune has indicated that the Senate is working toward finalizing the package by this summer.

We will continue to monitor the process including possible reconciliation changes to programs like the Medicare physician fee schedule.

I Street continues to engage with key champions of the Physician and Patient Safety Act to strategize its reintroduction. We understand that the bill’s text has been reformatted for the 119th Congress but will remain consistent with last Congress’s text.

The letter was signed by all 47 Senators and asks Department of Health and Human Services (HHS) Secretary Robert F. Kennedy, Jr. to provide detailed information on the firings. The letter also specifically highlights how the cuts could “undercut the durability of our nation’s health care system and present grave risks to patient access, whether to hospital care, emergency room care, or needed prescription drugs.” The press release announcing the sending of the letter can be found here.

The Trump Administration has taken multiple administrative actions that impact the research and academic community such as a cap on the National Institute on Health (NIH) indirect costs. On February 7th, the NIH announced a new policy regarding indirect cost reimbursement for research grants. For all new and existing grants, the NIH set the indirect cost rate at 15%, a significant reduction for research grantees. A federal court judge issued a nationwide preliminary injunction blocking the indirect cost reimbursement cap.

AAEM opposes this policy which would significantly impact our members. AAEM has signed a physician society led coalition letter indicating joint concern with the proposal; the letter can be found at AANS letter.

On February 25th, 2025, the Energy and Commerce Committee passed its Oversight and Authorization Plan for the 119th Congress, outlining key areas of focus for federal health policy oversight and reform. The plan emphasizes biological threat preparedness, including pandemic response, NIH grant oversight, and CDC accountability. The Committee aims to examine rising healthcare costs and regulations that may contribute to market consolidation.

On February 25th, the Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing with FTC commissioner nominee Mark Meador. During the hearing, Senator Tammy Baldwin (D-WI) referenced their private meeting, where they discussed shared concerns about market consolidation in the healthcare industry. Meador emphasized the critical role of the FTC in preventing anti-competitive conduct and policing mergers to ensure no single market experiences undue consolidation.

Jayanta Bhattacharya, MD, PhD, appeared before the Senate Health, Education, Labor and Pensions (HELP) Committee as part of his confirmation process for the NIH Director. The HELP Committee voted the nomination out of Committee on March 13th. In his opening statement, HELP Committee Chair Bill Cassidy, MD (R-LA) mentioned his proposal for NIH reform. Several other Committee members raised concerns with the indirect cost cap proposal. The full Senate is expected to consider the nomination shortly.

On March 14th, Mehmet Oz, MD appeared before the Senate Finance Committee as part of his confirmation process for the CMS Administrator. When asked about private equity’s role in healthcare, Oz said there needs to be a “mechanism to disrupt the incumbents. The only way to go after the big guys is to have smaller people who are willing to put money into initiatives that could conflict with, or go after, their business models,” he said. “Private equity is one of the ways you can do that. Yes, it can be misused. I absolutely agree with the point that it has been abused.”

On March 7th, lawyers for the FTC filled petitions for a 120 day stay of the agency’s appeal of district court decisions in the Fifth Circuit and Eleventh Circuit, which had blocked the FTC’s proposed ban on non-competes Both requests cited the change in presidential administrations and the new FTC’s Chair, Andrew Ferguson, who has publicly stated that the agency should reconsider its defense of the Rule. The FTC plans to provide an update to the court on the Commission’s next steps at the end of the 120 day stay.

In a memo outlining the creation of the Joint Labor Task force, Chairman Ferguson outlined a number of “anticompetitive labor practices.” This list included no hire agreements, and non-compete clauses which he described as “unnecessary, onerous, and often lengthy restrictions on former employees’ ability to take new jobs…” While Chairman Ferguson has historically opposed his predecessor’s rule banning non-competes, this memo signals the Commission’s openness to prosecute individual abuses of non-compete agreements.

On February 7th, the NIH announced a new policy regarding indirect cost reimbursement for research grants.  For all new and existing grants, the NIH set the indirect cost rate at 15%, a significant reduction for research grantees.  The new policy was announced via a supplemental guidance document.

On February 10th, 22 state Attorney Generals brought a lawsuit against the NIH’s 15% cap.  A federal judge in Boston has issued a temporary restraining order in response. 

Senator Collins (R-ME), who sits on both the authorizing and appropriating committees which oversee NIH released a statement, opposing the cap, which is excerpted below.  “I oppose the poorly conceived directive imposing an arbitrary cap on the indirect costs that are part of NIH grants and negotiated between the grant recipient and NIH. This morning, I called Robert F. Kennedy, Jr., the nominee to head the Department of Health and Human Services, to express my strong opposition to these arbitrary cuts in funding for vital research at our Maine institutions, which are known for their excellence. He has promised that as soon as he is confirmed, he will re-examine this initiative that was implemented prior to his confirmation. Additionally, Fiscal Year 2024 Appropriations legislation includes language that prohibits the use of funds to modify NIH indirect costs.”

President Trump sought to impose a 10% cap during his first Administration.  In 2018, Congress blocked HHS from spending appropriated funds “to develop or implement a modified approach to” the reimbursement of “indirect costs” and “deviations from negotiated rates.”

HHS Secretary Kennedy has proposed ending mandatory public comment periods for department activities related to “agency management or personnel or to public property, loans, grants, benefits or contracts,” according to a Federal Register notice posted on February 28th. This proposal could significantly impact HHS rulemaking.

On February 25th, President Trump signed an executive order aimed at increasing healthcare price transparency. The order requires hospitals and insurers to disclose actual prices for medical services and prescription drugs, rather than estimates, to help patients make more informed healthcare decisions. The Administration estimates this initiative could save consumers, employers, and insurers up to $80 billion by 2025. Additionally, federal agencies will be tasked with ensuring compliance with transparency requirements to improve access to pricing information. This fact sheet summarizes the executive order.

The Trump administration is reportedly planning to withdraw from the “EMTALA lawsuit” that aimed to allow Idaho hospitals to perform emergency abortions rather than be subject to the state’s near-total abortion ban. This action is counter to Biden administration efforts to clarify that EMTALA took precedence over state abortion bans. This development was signaled by a court filing by St. Luke’s Health System that states its attorneys were told the Trump Department of Justice plans to move for a dismissal of the suit.

California SB 351 would prohibit private equity groups or hedge funds involved with physicians or dental practices from interfering with healthcare decisions. California already has strong CPoM laws on the books (lacking in enforcement), and this new bill explicitly targets private equity/hedge funds. The language does not amend the current restrictions but adds a new section to the statutes. Other than specifically addressing PE, it does not alter existing law. I Street Advocates has sent a letter supporting the bill.

Connecticut heard SB 1480 which is a CPoM bill and HB 7196 is a general noncompete bill (not specific to physicians).

The CPoM bill requires a nursing home or hospital to be free of any new ownership interests by private equity companies or real estate investment trusts recorded on and after October 1st, in order to be eligible for Medicaid reimbursement in the state for health care services. AAEM has already supported other CPoM bills in the state.

HB 1666 (CPoM) and SB 475 (Noncompete) have passed their original chambers.

H.B. 32 removes existing restrictions on the direct employment of certain medical specialists by hospitals and healthcare facilities in Tennessee, specifically for emergency physicians. TNAAEM has requested assistance opposing this legislation, and I Street launched an oppositional grassroots campaign. 75 physicians sent 217 emails to lawmakers asking them to oppose the bill. The bill is expected to be heard on March 19th.