| By Miranda Franco, Senior Policy Advisor, Holland & Knight LLP
On April 1, 2025, the U.S. Department of Health and Human Services (HHS) began implementing a significant reduction in force (RIF) following an announcement by HHS outlining a “dramatic restructuring” of the department. The restructuring plan includes several major changes, though many details remain unclear. One of the changes is the reduction of HHS regional offices, from ten to five. In addition, HHS plans to consolidate its 28 divisions into 15 new entities, centralizing core functions. Another key component of the restructuring is the creation of the Administration for a Healthy America (AHA), which will combine multiple agencies—the Office of the Assistant Secretary for Health (OASH), Health Resources and Services Administration (HRSA), Substance Abuse and Mental Health Services Administration (SAMHSA), Agency for Toxic Substances and Disease Registry (ATSDR), and National Institute for Occupational Safety and Health (NIOSH)—into a new consolidated entity. However, it remains unclear how certain programs like the 340B Drug Pricing Program, organ donation regulation, and vaccine injury compensation will be integrated or excluded. It’s speculated that the 340B program may be transferred to the Centers for Medicare & Medicaid Services (CMS), though this has yet to be confirmed. Additionally, the Food and Drug Administration (FDA) will reduce its workforce, and the Centers for Disease Control and Prevention (CDC) will narrow its mission to focus solely on epidemic and outbreak preparedness. The Administration for Strategic Preparedness and Response (ASPR) will move under the CDC’s jurisdiction. Notably, the recently announced restructuring is not effective immediately (unless Congress extends presidential reorganization authority that expired in the Reagan era). Historically, the Administrative Procedure Act (APA) establishes procedures for the issuance of rules and regulations, including on agency reorganization initiatives. However, on March 3, 2025, HHS rescinded the “Richardson Waiver,” which had required HHS to use APA requirements and invoke the good cause exception “sparingly.” Thus, it is likely that HHS will attempt to effectuate the reorganization outside the Federal Register. Stakeholders should closely monitor the administration’s ongoing initiatives to streamline operations and reduce the federal workforce, as these efforts could have significant implications. |
