WHITE HOUSE:

It’s hard to believe we’re only 26 days into the new Administration. The Presidential actions continue to rain down, as the White House seeks to revamp vast swaths of the federal government and US policy. They focused this week on a new “National Energy Dominance Council”, prohibiting federal funding for Covid vaccine mandates in schools, and implementing a “fair and reciprocal plan” for trade. 2 items of specific interest for us:

• • Following the confirmation of RFK Jr. as the new Secretary for Health & Human Services, the President signed an Executive Order creating a new “Make America Healthy Again” commission. Although the EO is mainly focused on children, chronic illnesses, and medications used to treat anxiety, it’s important to be aware of the way the department is trending.

• • More below on DOGE, but the President signed an Executive Order on the euphemistically named federal “workforce optimization initiative” with the express goal of shrinking the federal workforce. This is in addition to the previously issued buyout offer and will work across the federal agencies. While every federal agency will be treated differently, the ultimate goal remains eliminating as many federal positions as possible (even as the process is a bit rocky…).

CONGRESS:

Congress is finally starting to get some traction on the major Reconciliation bill that Republicans will be using to pass the President’s agenda as both the Senateand the House completed their first step of the process: the release of a budget “resolution” that sets goals for budgetary targets within every Congressional committee. Politically, the main benefit of a Reconciliation bill is that it allows for the passage of a significant financial bill along strict party lines. For more background on the technical aspects of Reonciliation, here’s a good primer on how it works.

The House version is far more ambitious than the Senate version with the House’s price tag at ~$4.5 trillion vs. the Senate’s $345 billion. The key difference is that the House wants to accomplish the President’s full agenda in one “big, beautiful bill” as opposed to the Senate’s piecemeal, 2-bill process. For our purposes, all Republicans agree that the main place to find the money for the full $4.5 trillion bill is from Medicaid reform, which leads us to the difficult political calculus for House Speaker Mike Johnson: Conservatives Republicans want deeper cuts while moderates don’t want to touch the social safety net. With a one-vote majority, he can’t afford to lose any votes. It sets up for a tough week ahead for the Speaker. Elsewhere in the political world:

• • It’s taken a little while, but as the depths of cuts that the Administration are making become clear, Republicans are starting to push back against the cuts. The reality is that almost all red states receive more funding from the federal government than they send, meaning that cuts will disproportionately impact Red states, highlighting the political challenges mentioned above.

• • A good recap of yet another hectic week for the Administration.

• • Politico put together a good tracker highlighting how the Administration’s actions mirror the game plan laid out in Project 2025.

• • With the margins so narrow in Congress, representatives thinking about running for other races, such as Governor, can seriously upset the balance of power.

• • You thought we were too early last week on the 2026 Congressional races? How about a look at potential 2028 Republican nominees to replace the President?

• • One helpful CRS report from the week highlighted how funding from the federal government impacts state and local budgets. You can download a copy here (PDF).

AGENCIES:

Late Friday, CMS issued a notice that they are suspending the Hospice Special Focus Program to “further evaluate” it.

As federal agencies remain mostly dark, DOGE continued its workforce reduction efforts. They began their work on HHS late Friday, although they appear to be more thoughtful in how they are approaching the HHS workforce. Even as the lawsuits pile up, and the courts consistently side against the agency, DOGE continues its run through the federal bureaucracy in its efforts to trim the workforce. DOGE is also pushing the GSA to cut any “non-essential” consulting contracts. With little official public presence, we’re left to a deep dive the Washington Post did on who and what’s next for DOGE to get a better sense of where the agency is going.

Although nothing official has been issued, CMS does appear to be slowly updating their public facing data, with Care Compare refreshed last week.

FROM THE NOTEBOOK:

• • A class action lawsuit against United Healthcare for their use of AI in claim denials was allowed to continue by a court this week. The Guardian had a heartbreaking personal account of how these prior authorization practices play out for the beneficiaries.

• • The most popular target for Medicaid cuts would likely be on the expansion population, not traditional Medicaid beneficiaries. To that end, the Kaiser Family Foundation looked at the impact on state budgets if the feds tackled the FMAP percentages for the expansion population.

• • McKnight’s looked at which states are exploring new regulations against for private equity transactions in healthcare.

• • Add Oregon to the list of states that are having significant challenges in staffing their survey offices.

• • Work requirements for eligible beneficiaries are a significant part of Republican plans to curtail Medicaid spending. Real world experience with the programs shows the shortcomings in work requirements as an actual source of savings.