The first few weeks of the next Trump administration will be busy ones for the Centers for Medicare and Medicaid Services, which must work through a sizable catalog of policy priorities.
President-elect Donald Trump's incoming CMS team will need to tackle pending regulations, navigate new executive orders, lay a path for innovation and handle workaday agency operations to ensure the business of healthcare doesn't grind to a halt.
Related: How Trump may erase Biden's health policies
Here are some key items on the second Trump administration's to-do list:
Regulatory review
Trump and top health officials such as Robert F. Kennedy Jr., his choice for Health and Human Services secretary, and Dr. Mehmet Oz, his pick for CMS administrator, will have to comb through a slew of rules, then determine whether to keep them, tweak them or toss them.
As presidents including Barack Obama, Joe Biden and Trump himself did at the start of their administrations, the White House will likely issue a memorandum on Inauguration Day to suspend draft regulations that originated under Biden and to postpone final rules that aren’t yet in effect, said Kelly Cleary, a partner at Akin Gump Strauss Hauer & Feld.
From there, policymakers can handle regulations in a few ways.
Proposed rules can be shelved or tweaked, Cleary said. The agency could also opt to craft new versions of draft regulations, although that would trigger a new 180-day notice-and-comment period.
A key example is the Medicare Advantage and Part D proposed rule, through which CMS seeks Medicare and Medicaid coverage of glucagon-like peptide-1 receptor, or GLP-1, drugs such as Ozempic to treat obesity.
“It does kick the can to the next administration and present them with some difficult questions to have to answer, because they're going to have to own whatever they finalize,” Cleary said.
Congress, which will be under Republican control next year, can block rules issued in the latter part of the year during the "lookback" period under the Congressional Review Act of 1996, which empowers lawmakers to overturn recent regulations. This year, the nonpartisan Congressional Research Service estimates that would cover final rules published on or after Aug. 1, depending when Congress formally adjourns.
Executive orders
Trump heavily relied on executive orders to direct policy during his first term and plans to issue as many as 25 on his first day back in the Oval Office, including moves to restrict immigration and to impose sizable tariffs on products from China and Mexico, according to Reuters.
CMS will have to determine how those orders affect the healthcare sector and act accordingly, said Morgan Health CEO Dan Mendelson, who was associate director of the White House Office of Management and Budget under President Bill Clinton.
“If you put tariffs on Chinese goods, you’re going to increase costs in hospitals, because a lot of what is on a crash cart in the hospital is made in China,” Mendelson said. “If you deport a couple million people from the United States, you're going to be reducing the supply of low-wage labor, and you're going to be making life more difficult, in all likelihood, for nursing homes, other caregivers, assisted living and the like.”
Innovation Center
The incoming administration will also need to chart a course for the Center for Medicare and Medicaid Innovation and its 40 alternative payment models. For instance, CMS may reassess the Biden administration goal to have all fee-for-service Medicare beneficiaries in value-based care programs by 2030.
The agency will likely focus on initiatives that could further Kennedy's “Make America Healthy Again” goals, such as reducing chronic illness, said Aisha Pittman, senior vice president of government affairs for the National Association of Accountable Care Organizations.
CMS also must decide how to manage ongoing payment models, such as whether to extend or modify the popular ACO Realizing Equity, Access and Community Health, known as ACO REACH. That initiative started out as the Global and Professional Direct Contracting Model during the first Trump administration.
The agency may favor episode- and population-based models and direct primary care payments, as it did during Trump's first term. “It just goes back to their core principles,” Pittman said.
Operations
CMS will be busy hiring for open positions and weighing how to deploy private contractors.
The agency employs around 6,700 people and relies on a network of contractors to carry out functions such as claims processing, audits and appeals.
The number of full-time CMS employees will likely decline and some vacancies will go unfilled, said Tom Scully, who was CMS administrator during President George W. Bush's first term.
Political appointees will probably be in place within weeks, but vacated civil service jobs may take longer to fill, said Scully, a general partner at the private equity firm Welsh, Carson, Anderson & Stowe and a lobbyist for Federal Health Policy Strategies.
Mendelson said the administration will closely scrutinize contracts as part of Elon Musk and Vivek Ramaswamy's "Department of Government Efficiency," which Trump tasked to cut back on government spending deemed "wasteful." From a practical standpoint, CMS will continue to depend on contractors, he said.
“There's going to be a lens towards governmental efficiency,” Mendelson said. “It is very often the case that it's very efficient and necessary to use contractors. It's often also the case that CMS doesn't have the technical capabilities to do certain types of work and, in those cases, contractors are necessary.”
