Supreme Court allows almost $800M in cuts to NIH grants

In June, U.S. District Judge William Young blocked almost $800 million in NIH funding cuts following lawsuits filed by health groups, as well as 16 Democratic state attorneys general. The funding cuts targeted research that included diversity, equity, and inclusion (DEI) initiatives, which the Trump administration has sought to eliminate.

In his ruling, Young said the cuts were based on "no reasoned decision-making" and that NIH broke "a historical norm of a largely apolitical scientific research agency."

However, the Supreme Court last week ruled 5-4 to overturn Young's decision, allowing the Trump administration to implement the NIH funding cuts. Five of the court's conservative justices voted in favor of halting the lower court ruling while Chief Justice John Roberts sided with the three liberal justices.

In a dissent, Justice Ketanji Brown Jackson criticized the majority decision, saying that it amounted to an "abrupt cancellation of hundreds of millions of dollars allocated to support lifesaving biomedical research."

At the same time, the Supreme Court upheld a portion of the lower court's ruling that threw out NIH's original guidance documents outlining the policies that led to the funding cuts. In another 5-4 split, Chief Justice Roberts and Justice Amy Coney Barrett aligned with the court's three liberal justices on this matter.

In response to the Supreme Court's ruling, the legal team for the plaintiffs said that it was "a significant setback for public health." However, they said the Supreme Court upholding the lower court's decision on NIH's guidance "means that NIH cannot terminate any research studies based on these unlawful directives."

(Schonfeld, The Hill, 8/21; Totenberg/Ononye, NPR, 8/21; Jouvenal/Hawkins, Washington Post, 8/21; Vogel, Healthcare Dive, 8/25)

HHS to form external committee on Medicare, Medicaid

HHS last week announced plans to form the Healthcare Advisory Committee, an external group that will provide strategic guidance on government insurance programs.

According to HHS, the committee will seek to "improve how care is financed and delivered" across Medicare, Medicaid, the Children's Health Insurance Program, and Affordable Care Act exchanges. The committee will also offer recommendations to HHS Secretary Robert F. Kennedy Jr. and CMS Administrator Mehmet Oz.

The committee will focus on several tasks, including:

• Creating actionable policies to promote chronic disease prevention and management
• Establishing a regulatory framework to promote patient safety while reducing "unnecessary red tape"
• Identifying "structural opportunities" to improve the Medicaid program
• Examining the sustainability of Medicare Advantage and building a more modern approach to risk adjustment and quality measurement in the program

Currently, CMS is accepting nominations for committee members, specifically those who are experts in chronic disease management, federal health program financing, and delivery system reform. Organizations can submit a nomination, or an individual may nominate themselves. The full list of committee members will be published later this year.

"This is a moment for action," Oz said. "This committee will help us cut waste, reduce paperwork, expand preventive care and modernize CMS programs with real-time data and accountability, all while keeping patients at the center."

(Minemyer, Fierce Healthcare, 8/21)

AFGE has harshly criticized the decision, saying that HHS announced it to the media first instead of the affected unions.

"This administration's illegal and immoral assault on federal workers and their labor unions is punishing hundreds of thousands of dedicated public servants who serve our veterans, ensure the safety of the food we eat and the air we breathe, and now those who protect our public health," said AFGE national president Everett Kelley.

"Tearing up our contracts is a disservice to every American who benefits from the programs and services our members deliver. But let me be clear: our union isn’t going anywhere," Kelley added.

(Choi, The Hill, 8/22)

Federal judge blocks part of Trump administration's ACA rule

In June, CMS finalized a rule that eliminated special enrollment periods that allowed people who earned 150% or less of the federal poverty level to secure health coverage through Affordable Care Act (ACA) exchanges.

According to CMS, these special enrollment periods allowed insurance brokers to unlawfully enroll people in ACA coverage or switch them to different plans to earn higher commissions. The rule also includes several other changes to ACA exchanges.

In July, several large cities, including Baltimore and Columbus, Ohio, and organizations like Main Street Alliance sued to block the rule, arguing that it could lead to at least 1.8 million people losing coverage and increase premiums and out-of-pocket costs.

On Friday, Judge Brendan Hurson from the Maryland District Court issued an injunction against seven of the rule's provisions, including a $5 premium penalty on auto-enrollments and requirements for pre-enrollment eligibility checks for special enrollment periods.

Hurson applied his ruling nationwide, saying that it would be "impractical" for it to apply only to the plaintiff cities and organizations.

"The complicated interplay between the ACA and numerous market actors would make it exceedingly difficult if the challenged provisions went into effect for some of the population served by the exchange but were stayed as to others," Hurson wrote.

The plaintiffs in the case celebrated Hurson's decision and said they would continue to push back against CMS' rule.

"Today's decision is a positive step to block the Trump-Vance administration's bad deal that jacks up costs and guts healthcare coverage for millions of working people and families," said Columbus City Attorney Zach Klein. "We will continue to leverage every legal tool we have to protect access to quality, affordable healthcare for every American."

(Minemyer, Fierce Healthcare, 8/25)

CMS to disenroll noncitizens from Medicaid and CHIP

CMS last week announced that it will begin providing states with new eligibility information for Medicaid and the Children's Health Insurance Program (CHIP).

Going forward, CMS will send monthly enrollment reports that include lists of people with unconfirmed citizenship and immigration. According to the agency, these individuals were not found in other federal databases, including the Department of Homeland Security’s Systematic Alien Verification for Entitlements program.

This new process will ensure Medicaid or CHIP enrollees are U.S. citizens, U.S. nationals, or have a "satisfactory immigration status," CMS said. After reviewing cases highlighted by the federal government, states are required to enforce eligibility rules and change an individual's coverage if necessary.

"Medicaid is a lifeline for vulnerable Americans—and I will protect it from abuse," said HHS Secretary Robert F. Kennedy Jr. "We are tightening oversight of enrollment to safeguard taxpayer dollars and guarantee that these vital programs serve only those who are truly eligible under the law."

However, health organizations have criticized the decision.

"As a physician, I know that even if the rule changes are ultimately challenged by the critical work of advocates and litigators, any action like this will have a chilling effect on people presenting for basic lifesaving healthcare," said Jamila Perritt, president and CEO of Physicians for Reproductive Health.

"All people, regardless of immigration status, deserve access to quality healthcare and access to health benefits like Medicaid," Perritt added. "Access to resources, care, and support services are basic human rights. The fear tactics, xenophobic rhetoric, and harassment that the Trump administration is engaging in show us that they will stop at nothing to deny people access to the healthcare they need."