4 days ago
CMS Innovation Center plans hiring spree after cuts
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With Simon Levien
Driving the Day
HELP WANTED — CMS's Innovation Center plans to expand its workforce as it prepares to launch new health care payment models, POLITICO's Ruth Reader and Robert King report.
The decision comes after CMS cut nearly 300 people, about 5 percent of its workforce, earlier this year as part of a massive HHS reorganization.
'The CMS Innovation Center is hiring passionate leaders eager to make meaningful change in the healthcare delivery and outcomes in Medicare and Medicaid,' Sarah Fogler, director for the center's Patient Care Models Group, wrote on LinkedIn recently.
The Innovation Center wants to fill roughly 100 positions, according to former and current staffers at CMS granted anonymity to discuss internal operations.
'There will be a mix of new hires with subject matter expertise in economics, clinical and data,' according to an official granted anonymity to speak freely on the hiring blitz.
Although the center didn't lose staff in the reduction-in-force, it lost probationary employees in February.
Two former CMS workers fired as part of the reduction-in-force said they tried to apply for the new positions but were told the agency can't hire RIF-ed employees.
One shared an email from Fogler with POLITICO.
'We aren't able to hire individuals who were affected by the reduction in force,' Fogler wrote to one of the former employees who attempted to submit their resume. 'We'll have two postings for direct hire (economist and nurse) otherwise we'll be hiring through the CMS Fellow pathway.'
Fellowships are intended to be temporary; the center's payment models are time-limited and sometimes end early. Fellows stay on for at least one year.
CMS said in a statement that all hiring decisions follow federal guidelines and 'reflect CMS commitment to program integrity and fiscal responsibility.'
Background: The Innovation Center was established under the Affordable Care Act in 2010. It has long promoted creative models of preventive care and has piloted some 50 payment models.
Why it matters: The hiring blitz, which will occur in phases, comes as the center is developing new payment models to implement agency policies, with chronic disease prevention a major priority.
WELCOME TO MONDAY PULSE. An Indiana Amish community is 'considered one of the least allergic populations ever measured in the developed world,' The Washington Post reports. I'm Carmen Paun, POLITICO's global health reporter, filling in today for Kelly Hooper and Sophie Gardner.
Send your surprise reaction, tips, scoops and feedback to cpaun@ khooper@ sgardner@ and follow along @carmenpaun, @kelhoops and @sophie_gardnerj.
In Congress
DEMS DIG IN THEIR HEELS — Congressional Republicans seek to pass a bipartisan health care package by year's end.
But Democrats are playing hardball, suggesting that Republicans poisoned the well with their party-line domestic policy megabill, POLITICO's Ben Guggenheim reports.
One demand they're making as a condition of engagement: a costly extension of expanded tax credits for Affordable Care Act insurance premiums set to expire at the end of the year.
The tax credits, which Democrats enacted over Republican objections during the Biden administration, reduced insurance costs on the 2010 health law exchanges for millions of middle- and upper-income people for the first time. Extending them will be a tough pill to swallow for Republicans, particularly in the House, where Ways and Means Chair Jason Smith of Missouri recently suggested it could be a nonstarter for his conference.
Why it matters: There's been chatter for months about reviving a sweeping bipartisan health care package that was on track for passage last December as part of a larger government funding bill, but House GOP leaders dropped the health care provisions after President Donald Trump and billionaire Elon Musk said the funding bill was overly broad and threatened to tank it.
A major part of the health package included proposals to crack down on pharmacy benefit managers, which critics accuse of charging health plans more for drugs than the reimbursements they send to pharmacies, among other things. PBMs negotiate drug prices among manufacturers, pharmacies and health plans.
It remains to be seen whether Republicans want a PBM overhaul badly enough to trade an extension of the subsidies.
RURAL HOSPITAL LIFELINE? Republicans clinched a $50 billion fund to blunt blowback from a near $1 trillion Medicaid rollback — but some rural health experts say it's not nearly enough.
The Rural Health Transformation Program, tucked in President Donald Trump's One Big Beautiful Bill Act, aims to offset deep Medicaid cuts with allotments of $10 billion per fiscal year from 2026 through 2030. Rural communities are expected to lose $155 billion in Medicaid support over the next decade, according to KFF.
The program's rollout, however, remains murky, POLITICO's Amanda Friedman reports.
CMS will administer the grants, with half the funds distributed equally to states with approved plans. The other half will be allocated at the discretion of CMS Administrator Mehmet Oz, based on each state's rural population, number of rural facilities and the overall 'situation' facing a hospital.
In a statement to POLITICO, CMS didn't provide requested details about how Oz would assess which states receive more money and how the agency will remain impartial throughout the approval process.
'The program is under development, and CMS is working in coordination with whole-of-government partners,' CMS spokesperson Alexx Pons said via email. 'Additional details will be shared as implementation advances.'
Michael Topchik, a national leader of the Chicago-based consulting firm Chartis Center for Rural Health, which counts hospitals among its clients, told POLITICO the grant program will bring hospitals 'closer to whole,' though he doubts most will escape unscathed.
Eligible providers include rural hospitals, clinics, community mental health centers and federally qualified health centers. But because funding must be shared among them, rural hospitals — which bring in more than $12 billion a year from Medicaid, according to Chartis — are expected to face major shortfalls.
States have a Dec. 31 deadline to submit a 'detailed rural health transformation plan' outlining how they'll improve rural health access and outcomes, use technology and recruit health care workers.
OZ ON THE HILL — CMS Administrator Mehmet Oz is scheduled to meet with members of the House Ways and Means Committee on Wednesday, Ben reports.
A meeting notice viewed by POLITICO says committee members are invited 'to discuss the priorities' of CMS on July 23, including issues 'involving health care matters' that fall within the panel's jurisdiction.
Hospitals
'TOUGH TIMES AHEAD' — NASHVILLE — The American Hospital Association announced the head of a large rural hospital system will become board chair in 2027 at what was likely the largest gathering of health care leaders since President Donald Trump signed into law his 'big, beautiful bill' — which drives deep cuts into Medicaid, Simon reports.
The mood among some attendees was understandably dour.
The AHA Leadership Summit, which drew about 1,200 hospital C-suite executives and managers, began with a commiseration. Tina Freese Decker, the group's board chair, said they 'did everything they could' to stop the cuts, noting her team's sleepless nights working to blunt the bill's impacts.
'There are very tough times ahead,' she said, calling the current health care system unsustainable and then rallying members to reform it.
One health care executive in attendance granted anonymity to speak candidly gave their read on the opening speeches, which featured dire predictions of health care under the cuts. 'AHA must show it recognizes that bad shit happened,' the executive told POLITICO. 'But now we have work to do.'
A new leader: Bill Gassen, president and CEO of Sanford Health in Sioux Falls, South Dakota, will be the AHA's board chair-elect, taking over in 2027, Decker announced. Gassen, who says he leads the largest rural health system in the U.S., will begin his tenure as hospitals — particularly those in remote areas with slim margins — could suffer huge financial hits when many cuts take effect after the 2026 midterms.
Trump's law will disburse around $50 billion to rural health providers, but many industry groups say the fund isn't enough to offset the cuts. Rural clinics rely on Medicaid to a greater degree than other providers.
In his remarks Sunday, Rick Pollack, AHA president, warned to expect potential clinic closures, a slimmer workforce, fewer patients and fewer services if Medicaid cuts aren't negotiated down or repealed.
PHARMA WATCH
THE TARIFF EFFECT ON DRUGS — If President Donald Trump implements the tariffs on foreign-made drugs he's been threatening, the U.S. could see a shortage of critical medicines, the generic drugs sector and analysts have warned.
Trump said he'll impose a low tariff on drugs coming from abroad as of next month and give drugmakers a year to build up production capacity in the U.S. After that, tariffs could rise to 200 percent, he's warned.
But while the higher-value, branded pharmaceutical sector might gradually adapt, Europe's generics manufacturers — operating on razor-thin margins and cheaper competition from India and China — face a stark choice: absorb massive costs or abandon the U.S. market entirely, POLITICO's Giedre Peseckyte reports.
Why it matters: The U.S. relies heavily on imported generic drugs. Generics account for 92 percent of all prescriptions filled in the U.S., dominating by volume but not by revenue due to their low cost.
Tariffs would worsen ongoing U.S. shortages for essential hospital medicines and injectables and deepen America's reliance on Chinese and Indian suppliers, according to Medicines For Europe, Europe's generics drug lobby.
Public Health
MAHA CELEBRATES — HHS Robert F. Kennedy Jr. and other proponents of his Make America Healthy Again movement celebrated over the weekend the latest announcements from food companies about eliminating artificial food dyes and other ingredients considered harmful over the next few years.
Kennedy posted a Reuters report to the social platform X about PepsiCo planning to remove artificial dyes and flavors from its potato and tortilla chips, which it sells under the brands of Lay's and Tostitos.
WK Kellogg, the maker of Froot Loops cereals, said Friday it would remove artificial dyes from its cereals by the end of 2027.
WHAT WE'RE READING
The New York Times' Brian M. Rosenthal and Julie Tate report about how a push for more organ transplants is putting donors at risk.
Reuters' Bhanvi Satija reports that Sarepta Therapeutics won't comply with the FDA's request to stop shipping its Duchenne muscular dystrophy gene therapy after the death of a clinical trial patient.
