| | | | |  | | By Chelsea Cirruzzo and Ben Leonard | With David Lim PROGRAMMING NOTE: We’ll be off starting Wednesday for the holidays but back to our normal schedule on Monday, Jan. 6, 2025.
| | |  FCC Chair Jessica Rosenworcel criticized the Fifth Circuit's July ruling that found the agency's Universal Service Fund unconstitutional. | Kevin Dietsch/Getty Images | THE HEALTH CARE ANGLE — An under-the-radar case being considered by the Supreme Court could have a significant impact on rural health care, Ben reports. The court is set to weigh the constitutionality of the FCC’s Universal Service Fund, which Congress authorized decades ago but a lower court found unconstitutional. The background: The fund has used revenue from cell phone providers to help subsidize rural internet access for consumers and health care providers like hospitals, community health centers, rural health clinics and local health departments. It also benefits schools and libraries. The FCC, which charges carriers a small percentage of revenues often passed to customers, created the nonprofit Universal Service Administrative Company to run the program. In July, the conservative-leaning U.S. Fifth Circuit Court of Appeals found the funding mechanism unconstitutional, saying the FCC doesn’t have the power to levy what the court saw as a tax. The court raised the issue of whether the FCC improperly delegated the power to USAC. Consumers’ Research, a right-leaning nonprofit, brought the case but said that, while it’s not opposed to the funds’ goal, the agency lacks the authority from Congress. “We aren’t suing to get rid of the USF,” Will Hild, executive director of Consumers’ Research, told Pulse. “Our fight is about returning control to the American people over the taxes they pay. … Currently, the USF is administered by a private corporation run by telecom industry insiders and funded by a tax rate that is effectively set by that same corporation.” The FCC and the nonprofit group Schools, Health & Libraries Broadband Coalition are challenging the decision before the high court. The program has bipartisan support from Congress. The rural health concerns: FCC Chair Jessica Rosenworcel called the Fifth Circuit’s decision “misguided and wrong” and said it would upend the program’s ability to “help communications reach the most rural and least-connected households in our country, as well as hospitals.” Michael Romano, executive vice president at NTCA-The Rural Broadband Association, said if the Supreme Court upholds the lower court decision, there could be a significant spike in internet prices for rural customers. That could make telehealth — a tool lawmakers often say is a “lifeline” for rural patients — more difficult to use. “There are millions of locations out there in rural America today that are connected to broadband only really by virtue of the assistance of the [USF],” Romano said. “There would be no business case to operate in those areas.” John Windhausen, executive director of the SHLB Coalition, said a ruling sustaining the lower court ruling could mean rural providers operating on thin margins will cut back on broadband or health care spending. That means “one way or the other, it’s going to mean less quality health care in rural areas,” he said. “It would be significant — potentially devastating for some rural health care providers,” said broadband policy attorney Jeffrey Mitchell, saying he expects Congress might step in. “It’s unfortunate, but perhaps the current moment is the opportunity we need to put the USF on the firmer foundation that it deserves.” WELCOME TO TUESDAY PULSE. Thank you all for your readership, tips, feedback and questions this year! Have a happy holiday season, and we’ll be back in inboxes next year. Send your tips, scoops and feedback to ccirruzzo@politico.com and bleonard@politico.com and follow along @ChelseaCirruzzo and @_BenLeonard_.
| | |  Sen.-elect Jim Banks, a former House representative who supports repealing the Affordable Care Act, will serve on the HELP committee. | Francis Chung/POLITICO | NEW COMMITTEE MEMBERS IN TOWN — Two key Senate committees that will oversee the confirmation process of incoming HHS officials will have new Republican members in 2025. On the Senate Finance Committee, which will be chaired by Mike Crapo (R-Idaho), the newest Republican member will be Sen. Roger Marshall (R-Kan.). Marshall, who also sits on the Senate Health, Education, Labor and Pensions Committee, is a doctor who’s worked closely with Sen. Bernie Sanders (I-Vt.) in introducing legislation to boost community health center funding. He also worked with Sanders on a proposal to reorganize primary care with a focus on community health centers. Marshall is the co-lead of the Senate caucus to promote the Make America Healthy Again agenda by President-elect Donald Trump’s choice to lead HHS, Robert F. Kennedy Jr. Marshall, who recently met with, said he looks forward to supporting Kennedy’s confirmation. On the HELP Committee, which will be chaired by Bill Cassidy (R-La.), the newest Republican members are Sens. Jim Banks (R-Ind.), Marsha Blackburn (R-Tenn.), Crapo, Josh Hawley (R-Mo.) and Tim Scott (R-S.C.). Banks, who will be new to the Senate, was previously a House member. While there, he supported repealing the Affordable Care Act and establishing a 20-week federal abortion ban. He’s also opposed military health plans covering gender-affirming care. Blackburn, Crapo, Hawley and Scott — all new to the committee but not the Senate — recently met with Kennedy while he was on the Hill, where he seemingly made a positive impression.
| | | | You read POLITICO for trusted reporting. Now follow every twist of the lame duck session with Inside Congress. We track the committee meetings, hallway conversations, and leadership signals that show where crucial year-end deals are heading. Subscribe now. | | | | | What their priorities next year could include: Telehealth and AI: Blackburn has been a proponent of permanent telehealth flexibilities, introducing legislation last year to allow doctors to permanently prescribe medication for substance use disorder virtually. Scott has also been behind proposals to extend telehealth flexibilities. Artificial intelligence: Both Blackburn and Crapo have been looking into AI regulation within the health care sector, though Crapo has cautioned against a one-size-fits-all solution. PBM reform: As part of the Senate Finance Committee, Blackburn and Crapo were both part of bipartisan efforts on pharmacy benefit manager reform. Hawley also has targeted reforming the practices of the drug-pricing middlemen. What’s next? Both committees will likely hold confirmation hearings for Kennedy, though the Finance Committee is the only voting committee. SENATORS BASH MEDICARE PRICE SUIT — A group of Democratic senators wants a judge to turn away an appeal filed by a drugmaker challenging the Medicare price negotiation policy. Context: Last year, the Biden administration began negotiating Medicare prices with drugmakers as part of a policy in the Inflation Reduction Act. Novo Nordisk filed the lawsuit against the administration in October, alleging that the program, which includes drugs the company makes, is beyond the statutory authority of the White House and violates its First Amendment rights. Other drugmakers have also sued the administration over the policy. This summer, a New Jersey judge, who had previously ruled against two other drugmakers challenging the policy, ruled against Novo, saying the program was voluntary. Novo has since appealed. In their amicus brief, thirteen senators, including Sens. Amy Klobuchar (D-Minn.), Richard Blumenthal(D-Conn.), John Fetterman (D-Pa.) and Elizabeth Warren (D-Mass.) contend that the drugmakers’ arguments to discredit the misrepresent the law and the policy was written with industry input. “According to [the drugmaker], what Congress has done, it cannot undo so long as it profits the pharmaceutical industry. Adopting [Novo’s] position would turn the constitutional scheme on its head. The Court should decline the invitation,” the amicus brief reads.
| | | | HHS WITHDRAWS CONTRACEPTIVE RULE — On Monday, HHS withdrew a rule it had proposed last year, which would have made it easier for more people to buy contraceptives without cost-sharing, expanding rules under the Affordable Care Act. HHS, alongside the Labor and Treasury departments, initially proposed the rules in February as part of the White House’s push to protect reproductive care access. However, in a notice posted Monday on the Federal Register, the departments said they would “withdraw the proposed rules at this time to focus their time and resources on matters other than finalizing these rules.” The proposed rule received more than 44,000 comments, according to the notice. “Additionally, in light of the volume and breadth of scope of the comments received, the Departments want to further consider the proposals made in the proposed rules. Moreover, should the Departments decide in the future that it is a priority to move forward with rulemaking in this area, the Departments want to ensure that they will have the benefit of the most up-to-date facts and information,” the notice said. CMS QUIETLY DROPS REPORTS — The Biden administration is clearing the policy decks before President-elect Donald Trump takes office, releasing its explanation of the first Medicare drug price negotiations months ahead of schedule, David reports. The release was quickly panned by the PhRMA, who slammed the price explanations as “opaque.” The documents include redacted data submitted by each pharmaceutical company and a second document explaining how CMS came to a maximum fair price for each of the first 10 drugs. Those prices, unveiled in August, kick into effect in 2026. The Biden administration said at the time the price talks would save the government $6 billion when the prices take effect and Medicare beneficiaries roughly $1.5 billion in out-of-pocket costs.
| | | | POLITICO Pro's unique analysis combines exclusive transition intelligence and data visualization to help you understand not just what's changing, but why it matters for your organization. Explore how POLITICO Pro will make a difference for you. | | | | | | | | | The New York Times reports on debunked claims linking vaccines to autism and what could explain rising autism rates. STAT reports on how the growing demand for gender-affirming care and subsequent challenges impact providers and patients.
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