How HHS gets DOGE’d

Feb 10, 2025

Presented by the Coalition for Medicare Choices

Driving The Day

Elon Musk shakes hands with Donald Trump.

Elon Musk, appointed by President Donald Trump to lead DOGE, has HHS in his crosshairs. | Anna Moneymaker/Getty Images

MUSK INFILTRATES HHS — Staffers of a government effort to cut federal spending have been targeting HHS programs over the past few days — and are poised to target more of the agency’s programs.

On Friday night, the Trump administration dramatically cut NIH grants that support research institutions, with the change taking effect today, POLITICO’s Irie Sentner reports.

The cuts stem from the plans of the so-called Department of Government Efficiency, led by billionaire Elon Musk, which wants to cut the fat in federal programs.

The NIH, which said it sent more than $35 billion in grants to over 2,500 institutions in fiscal year 2023, announced it would cap the rate the grants pay for “indirect funding,” which can cover universities’ overhead and administrative costs, at 15 percent — down from an average of nearly 30 percent, with some universities spending more than 60 percent.

The change will save about $4 billion annually, the NIH said.

The move alarmed some lawmakers and universities: Sen. Patty Murray (D-Wash.), ranking member of the Senate Appropriations Committee, called the directive “illegal” and blasted it for “forcing an indiscriminate funding cut for research institutions across the country that will be nothing short of catastrophic.”

Alabama Republican Sen. Katie Britt said she’d work with the new administration to protect innovation and research. She told AL.com, “A smart, targeted approach is needed in order to not hinder life-saving, groundbreaking research at high-achieving institutions like those in Alabama.”

The Association of American Medical Colleges warned in a statement that the decision is “harmful and counterproductive” and would “diminish the nation’s research capacity,” and it urged the Trump administration to rescind it.

Musk’s efficiency panel has also been rummaging around HHS in other ways. On Friday, DOGE posted on X that it had canceled HHS contracts worth $182 million, which it said were entirely for administrative expenses, not health care programs.

Last week, DOGE staffers were on-site at various HHS agencies, including CMS, which confirmed they had access to systems at the federal agency responsible for disbursing Medicare and Medicaid payments. It’s unclear what they’ll do with that data.

According to internal emails obtained by POLITICO’s Adam Cancryn, the Trump administration has tasked two top political appointees with monitoring the group’s access to those federal health payment systems.

Federal judges have slowed down Musk and the Trump administration in some ways: A judge on Saturday temporarily blocked the employees from accessing sensitive Treasury documents, which could include Medicare records.

Another judge forced the Trump administration to pause a plan to offer many federal workers the chance to preemptively resign — or risk layoffs — with a hearing scheduled for today.

Spokespeople for Trump’s nominee to lead HHS, Robert F. Kennedy Jr., did not respond to requests for comment.

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In Congress

Robert F. Kennedy Jr. at his HHS secretary confirmation hearing

It looks as if Robert F. Kennedy Jr. has the votes he needs to be confirmed as HHS secretary, which could happen as soon as this week. | Francis Chung/POLITICO

KENNEDY GETS HIS VOTE — The Senate could vote to confirm Robert F. Kennedy Jr. as soon as this week after a key procedural vote last week.

The Senate voted 52-47 to move to executive session on Kennedy’s nomination Thursday, but Kennedy still must clear two more votes in the coming days under Senate rules to become HHS secretary.

Still, it’s been all but certain Kennedy will be confirmed as HHS secretary since last week when Republican senators on the Finance Committee, including Sen. Bill Cassidy (R-La.) who has said he was “struggling” with the nominee’s views on vaccines, united to move his bid forward in a party-line vote.

It’s likely all Democrats will vote against Kennedy, including Pennsylvania Sen. John Fetterman, who initially signaled openness to Kennedy but said he would vote against him last week. It’s also still possible that former Senate Majority Leader Mitch McConnell (R-Ky.), a polio survivor who’s warned against efforts to undermine polio vaccines, could vote no, though it’s unlikely to make a difference on Kennedy’s confirmation.

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AROUND THE AGENCIES

BACK TO WORK — All HHS employees must be back in the office by April, according to a memo the agency sent to them Friday and viewed by Pulse.

The return to office follows President Donald Trump’s executive order requiring federal agencies to bring their workforce back in person.

According to the memo:

— Political and senior employees must report to an HHS facility by Feb. 24.

— Non-union and union members who live within 50 miles of an HHS facility must report back by March 17.

— All other employees living outside 50 miles of an HHS facility must report back by April 28.

The plans mirror those communicated to FDA employees Thursday, POLITICO’s Ruth Reader and David Lim report.

HHS did not respond to a request for comment.

Why it matters: Remote work has enabled the FDA to recruit and hire key talent not local to the Washington area.

And some fear the decision to require in-office work might hit the agency’s medical product review force particularly hard, who have been allowed to do certain review work from home for more than 20 years, according to a former FDA official granted anonymity to speak on the impact of the return-to-office plan.

“If those flex work rules for review-related functions are sunsetted, that will instigate the significant departures of review staff,” the former FDA official said. “And the assumptions around [Prescription Drug User Fee Amendments] goals will have to be reset, along with valuations across the entire medical products sector.”

It’s also unclear whether the administration can legally force unionized employees who bargained for remote work and telework contract provisions back into the office. The FDA’s union, the National Treasury Employees Union, didn’t return calls or email requests for comment.

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MEDICAL DEBT RULE DELAYED — A final rule that would have barred medical debt from appearing on credit reports is on hold per the instructions of the Trump administration and a federal judge.

Context: The Consumer Financial Protection Bureau finalized the ruling in the waning days of the Biden administration and is estimated to remove $49 billion in debt from 15 million American’s credit reports.

Republicans have opposed the rule, saying it would make credit reports less accurate. Last week, a federal judge appointed by Trump ordered the CFPB to pause the rule for 90 days, siding with groups representing credit unions.

And on Saturday night, Russell Vought, the recently confirmed head of the Office of Management and Budget and acting CFPB chief, sent an email to CFPB employees underscoring the halt on agency activities issued earlier this week by Treasury Secretary Scott Bessent, POLITICO’s Megan Messerly, Victoria Guida and Katy O’Donnell report.

A spokesperson for CFPB and the White House did not immediately respond to a request for comment.

In his email, Vought reiterated that staff should not approve or issue any proposed or final rules or formal or informal guidance and directed them to suspend effective dates for rules that have yet to take effect. Additionally, he ordered them to not open any new investigations, cease existing investigations and pause all investigative activities and enforcement actions.

Vought also said this weekend he was halting the flow of new funding to the agency.

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WHAT WE'RE READING

POLITICO’s Maya Kaufman reports that an NYC medical school is scrubbing DEI references.

STAT reports that the Trump administration has allowed some foreign humanitarian aid to resume.

A message from the Coalition for Medicare Choices:

Medicare Advantage helps seniors prevent and manage chronic disease. Medicare Advantage outperforms fee-for-service Medicare in preventive care and supporting seniors living with chronic disease. Seniors in Medicare Advantage experience fewer readmissions, fewer preventable hospitalizations, lower rates of high-risk medications and better outcomes. Learn more at https://medicarechoices.org/