Federal Health Policy Undergoes Significant Shifts: Continuing Resolution Funds Government, COVID Order Rescinded, CMS Nominee Advances Amidst Budget Battles and Dengue Alert

Washington, D.C. – The landscape of federal health policy saw significant movement during the week of March 14-20, 2025, marked by critical legislative action, administrative policy reversals, personnel developments, ongoing budget negotiations, and a public health alert. Key among the developments was the passage of a continuing resolution to fund the government, offering temporary stability and extending several vital healthcare provisions, while the White House and a key health agency rescinded policies tied to the COVID-19 pandemic response. Simultaneously, a nominee for a top health position underwent Senate scrutiny as lawmakers grappled with future spending priorities, and federal health officials issued a warning about rising dengue cases.

Legislative Action Secures Funding and Extends Health Programs

Congress successfully navigated a potential government shutdown by passing a continuing resolution. This legislative action is set to fund the federal government through the end of the 2025 fiscal year, providing a temporary reprieve from budgetary uncertainties that have loomed over various federal operations, including health agencies.

The continuing resolution included several critical extensions for healthcare programs and flexibilities that had been set to expire. Notably, it extends vital telehealth flexibilities, which have become increasingly important for patient access to care, particularly in rural and underserved areas. The Acute Hospital Care at Home program, allowing eligible patients to receive hospital-level care in their homes, was also extended. These and other unspecified health extenders will now remain in effect through September 30, 2025.

Furthermore, the bill addressed scheduled cuts to Medicaid disproportionate share (Medicaid DSH) payments, which provide crucial funding to hospitals that serve a high volume of uninsured and Medicaid patients. The resolution delays these cuts through September 30, 2025. However, the legislation also extends the period during which these cuts will apply, pushing their reach through the year 2028, a year longer than previously scheduled, signaling a future fiscal challenge for affected hospitals.

Despite the passage of the continuing resolution, one significant item was notably absent: an increase in Medicare payments to physicians. This omission comes amidst ongoing calls from healthcare providers for adjustments to physician reimbursement rates to account for rising practice costs and inflation.

Administrative Policies Shift Away from COVID-Era Mandates

In a move signaling a transition away from specific pandemic-focused directives, the White House officially rescinded Executive Order 13994. Issued on January 21, 2021, the order was titled “Ensuring a Data-Driven Response to COVID-19 and Future High-Consequence Public Health Threats.” Its rescission suggests a pivot in the administration’s strategy for managing residual and future public health risks, potentially decentralizing some data collection and response coordination efforts previously emphasized under the order.

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Following this action by the White House, the Centers for Medicare & Medicaid Services (CMS) also took steps to roll back related guidance. CMS formally rescinded its November 22, 2022, memo titled “The Importance of Timely Use of COVID-19 Therapeutics.” This memo had underscored the critical need for timely access to and administration of COVID-19 treatments. The rescission indicates that specific federal emphasis on this particular aspect of the pandemic response is being scaled back, though access to therapeutics remains important.

CMS Administrator Nominee Faces Senate Scrutiny

The leadership of key health agencies remained in focus as the Senate Finance Committee held a confirmation hearing for Dr. Mehmet Oz. Dr. Oz is the nominee to serve as the Administrator of the Centers for Medicare & Medicaid Services, the federal agency responsible for overseeing Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and the Health Insurance Marketplace.

During the hearing, senators raised a range of pertinent issues reflecting the complexities of the health policy landscape. Discussions included concerns about potential Medicaid cuts, which are a major area of debate in ongoing budget talks. Senators also probed Dr. Oz on his priorities for rural health, a critical access issue across the country, and the increasing role of Artificial Intelligence in healthcare delivery and administration. The future of Medicare Advantage plans, a growing segment of the Medicare program, was also a key topic of inquiry.

Despite the substantive questions raised, Dr. Oz’s nomination is widely expected to advance through the committee and potentially towards a full Senate vote, paving the way for new leadership at the helm of CMS.

Reconciliation Bill Discussions Highlight Budget Divides

Amidst the passage of the continuing resolution, intense discussions continued between the House, Senate, and the White House regarding a potential reconciliation bill. This legislative vehicle is often used to pass significant budget and policy changes with a simple majority in the Senate, making it a potential path for addressing major fiscal goals.

However, significant disagreements persist between the chambers and the administration concerning the joint budget resolution’s spending and cuts. Key programs like Medicaid and Medicare remain potential targets for significant spending reductions as lawmakers seek ways to address the national debt and reshape federal priorities.

Speaker Mike Johnson (R-LA) has expressed optimism, aiming for bill passage by Memorial Day. However, senators involved in the negotiations suggest a more protracted timeline, indicating that reaching a consensus might not occur until August. The path forward for the reconciliation bill remains uncertain, highlighting deep divisions over the nation’s fiscal future and the role of major health entitlement programs.

Notably, amidst the talk of potential cuts, Speaker Johnson has indicated that the final reconciliation bill will, in fact, include increased Medicare payments for doctors, a statement that appears to be in tension with the omission of such an increase in the recently passed continuing resolution.

Public Health Alert Issued for Dengue Virus

Adding a crucial public health dimension to the week’s events, the Centers for Disease Control and Prevention (CDC) issued a health alert regarding the ongoing risk of dengue virus (DENV) infections in the U.S. and its territories.

The alert included updated testing recommendations for healthcare providers, emphasizing the importance of timely diagnosis given the potential severity of dengue fever. The CDC noted the context of high DENV activity both domestically and globally in 2024 and 2025, underscoring the need for vigilance and preparedness among public health officials and the healthcare community.

Overall, the week demonstrated the multifaceted nature of federal health policy, with actions spanning immediate funding needs, long-term program stability, administrative policy shifts, leadership appointments, challenging budget negotiations, and emerging public health threats.