Nov 20, 2024

Presented by the Coalition to Strengthen America’s Healthcare

With Kelly Hooper

Driving the Day

Dr. Mehmet Oz holds microphone.

President-elect Donald Trump has selected Dr. Mehmet Oz to lead CMS. | Ryan Collerd/AP

OZ TAPPED FOR CMS — Mehmet Oz, the celebrity doctor and TV personality known as Dr. Oz, will be nominated by President-elect Donald Trump to run the Centers for Medicare and Medicaid Services, Ben and POLITICO’s Robert King report.

Oz, 64, pushed unproven theories about Covid-19 cures, including hydroxychloroquine, that caught Trump’s eye during his first term. In 2022, he ran unsuccessfully for U.S. Senate in Pennsylvania, losing to now-Sen. John Fetterman (D-Pa.).

He supports alternative remedies and holistic care, including marketing supplements from a company he partners with on his social media channels as recently as last week. And in 2013, Oz suggested that uninsured people should get 15-minute checkups, saying they “don’t have a right to health” but have a right to access.

“Dr. Oz will work closely with Robert F. Kennedy Jr. to take on the illness industrial complex, and all the horrible chronic diseases left in its wake,” Trump said in a statement Tuesday.

Oz thanked Trump in a post on X.

“I look forward to serving my country to Make America Healthy Again under the leadership of HHS Secretary [Robert F. Kennedy Jr.],” he said.

On Capitol Hill, members had mixed reactions. Sen. Lindsey Graham (R-S.C.) told POLITICO Tuesday that Oz “seems qualified to me.”

Sen. Bill Cassidy (R-La.), the incoming chair of the Senate Health, Education, Labor and Pensions Committee, said in a post on X that he’s “glad to hear” Oz had been chosen to lead the agency.

“It has been over a decade since a physician has been at the helm of CMS, and I look forward to discussing his priorities. This is a great opportunity to help patients and implement conservative health reforms,” Cassidy said.

Sen. Tommy Tuberville (R-Ala.) said that Trump “added another all-star to his list of people that are very popular and want to help the country."

Even Fetterman said in a post on X that he would support Oz if he “is about protecting and preserving Medicare and Medicaid.”

Oz might not be able to rely on getting much more Democratic support, though.

Sen. Sheldon Whitehouse (D-R.I.) told POLITICO that Oz’s lack of experience would be “one of a great number of concerns.”

“I’ll have to take a look at him. He certainly didn't enhance his credibility much in the Senate race,” Whitehouse said.

Sen. Tim Kaine (D-Va.) told POLITICO he’s “not impressed, but I’ll look forward to talking to him.”

Sen. Peter Welch (D-Vt.) called him “a great TV doctor with quack weight-loss recommendations.”

“We’ve got a ways to go before I get there,” he added.

Oz has been a vocal supporter of Medicare Advantage, the program’s private-sector alternative that’s grown in popularity but has come under intense scrutiny for care denials and alleged overbilling. During his Senate campaign, Oz pushed a “Medicare Advantage for All” plan that would expand the program.

“These plans are popular among seniors, consistently provide quality care and have a needed incentive to keep costs low,” Oz said in an AARP candidate questionnaire.

The Better Medicare Alliance, an MA advocacy group, celebrated Oz’s selection on Tuesday.

“Dr. Oz recognizes the value of Medicare Advantage and the high-quality, affordable, and comprehensive health care it provides to more than 34 million seniors and individuals with disabilities,” Mary Beth Donahue, president and CEO of the alliance, said in a statement.

What’s next? The Senate has to confirm Oz, starting with the Senate Finance Committee.

Sen. Ron Wyden (D-Ore.), committee chair, told POLITICO he would ask Oz about his attitudes toward insurers. “I will be asking him about prior authorization in detail,” he said.

Sen. Susan Collins (R-Maine) said Oz will likely be asked about his lack of experience running an agency. “It may well be helpful to have someone who has been a healthcare provider running that agency because they would have a whole different perspective,” she said.

Cassidy seemed confident in Oz’s ability to run CMS, telling POLITICO that, as a doctor, Oz “understands the practical implications and applications of CMS payment laws, as one example.”

WELCOME TO WEDNESDAY PULSE. Between the nomination of Dr. Oz to lead CMS and the early reviews of the new “Wicked” movie, the song “The Wizard and I” from the musical has been playing on repeat in my head. Send your tips, scoops and feedback to ccirruzzo@politico.com and bleonard@politico.com and follow along @ChelseaCirruzzo and @_BenLeonard_.

A message from the Coalition to Strengthen America’s Healthcare:

NEW REPORT: More than 60% of all Emergency Department visits occur after regular business hours or on weekends when other providers and care facilities are typically closed. Hospitals and health systems are indispensable, crucial access points for critical care 24 hours a day, 7 days a week, 365 days a year. ACCESS THE REPORT.

In Congress

Xavier Becerra attends a hearing on Capitol Hill.

HHS Secretary Xavier Becerra is expected to testify before Congress today about his agency's handling of finding sponsors for unaccompanied migrant children. | Mark Schiefelbein/AP

BECERRA TO TESTIFY — HHS Secretary Xavier Becerra is likely to face hostility from House Republicans today when he testifies at a House Judiciary oversight hearing on his department’s Office of Refugee Resettlement.

The House Judiciary Subcommittee on Immigration Integrity, Security, and Enforcement is expected to hold a hearing examining “the agency’s failures.”

“The hearing will also examine the agency’s prioritization of speed over safety in the placement of [unaccompanied children] with sponsors, resulting in HHS losing track of an estimated 150,000 [unaccompanied children] since January 20, 2021,” according to a hearing memo.

How we got here: The Office of Refugee Resettlement is tasked with placing unaccompanied minors with sponsors. In fiscal 2023, the office received referrals for more than 118,000 unaccompanied minors who needed sponsor placement.

However, a bombshell New York Times report at the time found that, in the Biden administration’s rush to process and place children, the agency lost immediate contact with at least a third of migrant children.

Republicans on the Hill have repeatedly criticized Becerra and HHS for not properly vetting sponsors and placing the children in unsafe situations. It’s not yet clear how the Trump administration will manage the office. The first Trump administration implemented a controversial policy of family separations.

Subcommittee leaders did not respond to requests for comment on what they plan to ask Becerra, nor did HHS respond to a request for a copy of Becerra’s planned testimony.

Full committee ranking member Jerry Nadler (D-N.Y.) will use his opening statement to blame Republicans for not adequately providing HHS with the support and funding it needs and will attack President-elect Donald Trump’s choice for HHS secretary, Robert F. Kennedy Jr.

“And do we really believe that the person nominated to be the next HHS Secretary—a man whose theories and views contributed to the preventable measles deaths of dozens of children in Samoa—would adequately protect children in this country?” reads part of his statement shared with POLITICO.

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FIRST IN PULSE: DRUG PRICE PUSH — A prominent group that includes insurers, providers, hospitals and pharmacy benefit managers is armed with new data in its push for drug patent reform, Ben reports.

The Campaign for Sustainable Rx Pricing analyzed SEC filings from 2017 to 2023 and found that pharma companies enjoy higher profit margins than other players in the drug-supply chain — including pharmacies, PBMs, insurers and distributors. CSRxP’s strategy is to use the information to convince lawmakers that pharmaceutical companies are behind high drug costs.

Lawmakers have priorities expiring at year’s end that must be paid for, including funding community health centers and extending eased telehealth rules in Medicare. They could use drug patent reform to help achieve that.

For instance, some lawmakers and activists are pushing to pass the Affordable Prescriptions for Patients Act from Sens. John Cornyn (R-Texas) and Richard Blumenthal (D-Conn.). That bill, a slimmed-down version of the original legislation, passed the Senate unanimously in July and would save close to $2 billion over a decade.

Cornyn’s bill intends to stop drugmakers from gaming the patent system to stifle biosimilar competition. The industry has argued the legislation would “upend the biopharmaceutical innovation ecosystem.” Drugmakers have generally blamed PBMs for drug costs.

Megan Van Etten, vice president of public affairs at PhRMA, called the analysis "flawed."

“Health care middlemen don’t make anything — except profits,” she said in a statement. “Medicines only make up 14% of health care spending in the United States. It’s no surprise that a front group for insurers and PBMs, some of the most profitable companies in the country, would put out a report to deflect from the bipartisan criticism.”

A message from the Coalition to Strengthen America’s Healthcare:

Hospitals

SPARRING OVER RISING HEALTH COSTS — The leading trade group for hospitals said Tuesday that the federal government is to blame for the rising health costs employers are grappling with, Kelly reports.

Because of “underpayments” from Medicare and Medicaid, hospitals must shift costs to employers who offer health benefits to their workers, said Molly Smith, the American Hospital Association’s group vice president for public policy.

“Somebody has to make up for these costs,” Smith said at the annual conference for the National Alliance of Healthcare Purchaser Coalitions, which represents large employers.

Employers’ health benefit costs are expected to rise an average of 5.8 percent in 2025, the third consecutive year of cost increases above 5 percent, according to a Mercer analysis.

Groups representing employer interests pushed back on the AHA’s claims during a panel discussion after Smith’s remarks. The panelists pointed to a lack of transparency on hospital spending and the growth in hospital consolidation as driving factors for rising hospital prices.

“Molly tried to make a case that significant underpayment by public payers justifies the need for us to pay significantly above a market rate or significantly above what we would otherwise pay. Fundamentally, we disagree,” said Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions.

A CMS spokesperson said in a statement that Medicare payments are “based on statutory requirements” and “payments are adjusted to reflect the relative cost differences that exist in different payment localities.”

Background: The AHA has repeatedly complained that CMS’ payment rates for hospitals over the last few years don’t keep up with inflation or rising labor costs. More than half of hospitals profited from Medicare patients in 2022 and about a third from Medicaid, according to a report from the left-leaning think tank Third Way.

States are adjusting their Medicaid payment rates to compensate for rising medical costs in the government health insurance program.

“I do take hesitation to the comments that Medicaid is not paying their fair share,” said Maureen Hensley-Quinn, senior program director at the National Academy for State Health Policy. “Increasingly, we’re talking to state officials — red, purple, blue — that are striving to increase their Medicaid payments right now, and they’re doing it because they know that they’re a community of payers, and they don’t want hospitals to fail.”

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WHAT WE'RE READING

POLITICO’s Meredith Lee Hill reports that Sen. Chuck Grassley wants to meet with Robert F. Kennedy Jr. on his food concerns ahead of his confirmation.

POLITICO’s Rachel Bluth reports that California has found the first suspected case of avian flu in an urban area.

CNBC reports that CVS, UnitedHealth Group and Cigna are suing the FTC over their case against pharmacy benefit managers.

A message from the Coalition to Strengthen America’s Healthcare:

NEW REPORT: In 2021 alone, Americans visited Emergency Departments more than 83 million times after hours or on weekends when other providers and care facilities are typically closed. With more than 60% of ED visits occurring on weekends or after regular business hours, when many other providers are closed, hospitals play an essential role in their communities, providing crucial access points for care 24 hours a day, 7 days a week, 365 days a year to all patients.

ACCESS THE REPORT.