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February 6, 2025 – It is relatively quiet on the healthcare regulatory front. The Trump administration is currently filling out its leadership team within the US Department of Health and Human Services (HHS), with the confirmation process of Robert F. Kennedy Jr. for HHS Secretary well on its way. Many external HHS communications and stakeholder engagements have been paused. Once the administration gets its team into place, however, we could see more regulatory and de-regulatory activity.
But, how much activity, and when would we start to see it? Great questions, if I do say so myself!
While we don’t have a crystal ball, here are three factors that might shape the regulatory world over the next few months:
Last week, President Trump issued an executive order requiring that “whenever an agency promulgates a new rule, regulation, or guidance, it must identify at least 10 existing rules, regulations, or guidance documents to be repealed.” The Trump administration states that this order builds on the deregulatory efforts under President Trump’s first term, when agencies were required to eliminate two regulations for each new regulation issued. The administration states that “not only was this 2-for-1 goal achieved, the first Trump administration eliminated five and a half regulations for everyone new regulation issued.” That first effort, according to the administration, was the most “successful regulatory reduction effort in history” – and this new initiative is supposed to be even more aggressive.
So what does this mean exactly? It is unclear what this 10 – 1 ratio means in practice. A rule, regulation, or guidance document can be 1,000 pages or one paragraph. It can represent a significant policy, or it can be a minor technical requirement. The Office of Management and Budget (OMB) is responsible for overseeing the order, so we will monitor how different agencies comply with the requirement and how OMB reports the results to the public.
The Trump administration has already identified several Biden-era regulations that it would like to repeal, as we detailed in a recent Regs & Eggs blog post and McDermott+ Insight. The deregulation order thus reiterates what we already knew: the Trump administration is prioritizing the elimination of regulations that it believes to be costly, burdensome, and duplicative.
For more on the deregulation executive order, see this FierceHealthCare article.
After seeing this new executive order, one might expect the Trump administration to act quickly to eliminate Biden-era regulations once its HHS leadership team is in place. However, because the 119th Congress also has goals for repealing Biden regs, the Trump administration will have to work with Congress to determine which regs it will eliminate and which Congress will address. Eliminating certain regs would produce savings that Congress could use in its budget reconciliation process. Getting rid of the Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting reg, for example, is estimated to save $22 billion over 10 years.
If Congress winds up eliminating a substantial number of regs, two questions to consider are:
It may be a while until we understand the full extent of the Trump administration’s regulatory and deregulatory agenda – perhaps until after the congressional budget reconciliation process is complete.
There are two overarching types of regs:
Some mandatory regs fall on a schedule and must be issued by a certain date. For example, since the Medicare PFS final reg must be issued by November 2 (60 days before the start of the next calendar year), the PFS proposed reg usually comes out in late June or early July. Discretionary regs, however, don’t need to follow a schedule. Typically, administrations issue both discretionary and mandatory regs throughout the year – and while it is easier to plan for mandatory regs since we generally know when they come out, it is harder to predict the timing of discretionary regs.
As stated in a previous Regs & Eggs blog post, one of the first major healthcare regs the Trump administration must issue is the contract year 2026 Medicare Advantage (MA) and Part D final reg. Since bids from MA plans are due June 2, 2025, the Trump administration will need to act relatively quickly to lock down final policies. After that, the administration will issue proposed regs for Medicare facility payment systems, such as the Inpatient Prospective Payment System. Those proposed regs are typically released in April.
While the Trump administration could sprinkle in some discretionary regs between these mandatory regs, it may decide to mostly carry out its regulatory and deregulatory agenda through the mandatory regs – at least initially in 2025. It could take a while for the administration to decide which discretionary regs it wants to release and establish a timeline for doing so. Since the mandatory regs must be issued on a specific schedule, they are the likely “vehicle” to include new policies or eliminate existing policies. For example, if the Trump administration decides to eliminate the obstetrics and emergency readiness conditions of participation that the Biden administration established, it would likely do so in the calendar year 2026 Outpatient Prospective Payment System reg (proposed reg issued in June or July 2025 and final reg issued in November 2025).
Although it may seem like an oxymoron, the Trump administration will likely need to issue new regs in order to deregulate and eliminate policies. And since these new regs (likely mandatory regs) will both add new policies that align with the Trump administration’s priorities and eliminate policies that don’t, it may be challenging to parse out all the rules and regulations that count toward the 10 – 1 deregulation target. But that’s what we, and OMB, are here for!
These are just some of the factors to consider when it comes to evaluating possible regulatory and deregulatory actions from the Trump administration in the coming months. Stay tuned for updates as the administration’s regulatory agenda and priorities become more defined!
Until next week, this is Jeffrey saying, enjoy reading regs with your eggs.
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