Our colleagues from Axios Pro: Health Tech Deals are here to ask industry experts why congressional scrutiny of hospital acquisitions is getting so much attention among dealmakers.

Why it matters: That's something you won't get anywhere else: Deals world talking to policy world.

Pro Deals: In increasingly concentrated markets, lawmakers argue there's merit in encouraging providers to compete on quality while prices are regulated. Fair or flawed?

• "In a perfect world, that is a very good and proper approach, but right now, we're living in an imperfect world," says KPMG national health care lead Ash Shehata.
• Hospital performance has become increasingly difficult to assess post-pandemic, and a health staffing crisis alongside a squeeze in Medicare Advantage reimbursement rates are putting pressure on systems.
• "When you look at the regulations, it's more of a hammer than a scalpel," says Ropes & Gray partner Torrey McClary, noting there's often an uptick in cost after a deal to pay for integration.
• "If you're looking at an immediate post closing period, as opposed to a longer-term trajectory, are you really kind of capturing accurately what the benefit of the deal is?" McClary adds.

Pro Deals: How is the bipartisan push for Medicare site-neutral policies to pay hospitals the same as independent physicians impacting private equity investment in providers?

• "It's hard to separate the site neutrality discussion from the overall reimbursement issues of health systems," Shehata says.
• A push to remove the differential payment for site neutrality "will have a detrimental impact to health systems in net," unless that can be made up in other reimbursement programs like 340B, he adds.
• Yes, but: As Medicare Advantage grows, site neutrality could become less of an issue from a reimbursement standpoint, Shehata says.

Pro Deals: To what degree are big corporate buyers like Amazon or CVS increasing consolidation and reducing competition?

• Retail's health care play relies on having a profitable pharmacy business, according to Shehata.
• "And if we look through that lens, then we can get a sense of where we think the transactions and the deals are going to flow, but they have to be linked to pharmacy," Shehata says.
• Meanwhile, vertically integrated "payviders," all of which have different approaches, continue to invest in programs likely to drive consolidation or pricing in the market, he adds.

Pro Deals: How much are cross-market mergers between providers in, say, different parts of a state, going to dominate the health deals space?

• McClary says she expects continued cross-geography M&A, noting these types of deals are often more transformational and involve stronger, more stable health systems.
• "The balancing act is going to be: If we don't have these consolidations, will hospitals close?" Shehata says. "Access is going to need to be the big discussion of the day"
• "You have transactions that can preserve necessary healthcare in a community where otherwise those services might not be available," says McClary. "There's sometimes an advantage to operating at scale."

Go deeper

House appropriators advanced an FY25 State-Foreign Operations bill with several anti-abortion riders, including an expansion of the so-called Mexico City policy that blocks funding to NGOs that promote or perform abortions overseas.

Why it matters: Yesterday's move by the full Appropriations Committee was in contrast to the House Ag-FDA subcommittee's decision this week to omit controversial abortion language in its draft bill and stay silent on issues like FDA rules for abortion pills.

What's inside: The State-Foreign Ops bill includes a 12% year-over-year cut in global health funds, per KFF.

• The Trump administration put in place an expanded Mexico City policy, which the Biden administration then rolled back.
• This bill would implement that expanded policy again, which under Trump was applied to most global health programs, and not just those that participate in family planning.
• The legislation also includes a long-standing amendment prohibiting the use of U.S. foreign assistance funds for abortion.

Even if the expanded Mexico City provision is stripped out of the funding bill later in the legislative process, it could be revived administratively if Trump is elected president again.

• There is also a provision in the draft bill that bans any foreign NGO from receiving funding if it provides gender-affirming care.
• And there's language requiring the secretary of state to submit a report to the Appropriations Committee on the origins of COVID.

Democrats were united in opposition to the bill during the committee markup. It was approved by a vote of 31-26.

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House Energy and Commerce Republicans grilled the head of Medicare's Innovation Center today over how efforts to eke out savings through new payment models actually drove up health spending.

Why it matters: It turns out that voluntary participation in arrangements to make providers more financially accountable for delivering efficient care may be slowing progress.

Driving the news: The Energy and Commerce health subcommittee focused on the the Center for Medicare and Medicaid Innovation and value-based care arrangements after CBO reported last year that CMMI actually increased federal spending by $5.4 billion between 2011 and 2020.

• That amounts to 0.1% of net Medicare spending.

Where it stands: In most cases, providers can drop out of a model if they start losing money, which can lead to risk selection, Liz Fowler, the center's director, told lawmakers.

• CMMI proposed two new mandatory models this year, including one that tests a new payment system for certain kinds of surgical care.

What they're saying: "Every model, the ones that predated my time here and the models that we've announced and are implementing, all go into the field with an expectation of potential savings," she said.

Zoom out: GOP lawmakers remain skeptical that CMMI lives up to its mission, but they aren't calling for it to be dismantled.

• "While I have concerns on the overall direction and lack of results with CMMI, there have been a few positive outcomes that deserve to be recognized," Energy and Commerce Chair Cathy McMorris Rodgers said.

More here

1. Trump's advice: Former President Trump told Hill Republicans today to adopt a measured tone on abortion on the campaign trail and to embrace exceptions to restrictions on the procedure, per Axios' Andrew Solender.

2. IVF vote: Senate Republicans blocked a bill that would have ensured federal protections for in vitro fertilization, part of Democrats' push to showcase reproductive health issues, Axios' Stephen Neukam reports.

3. Abortion pills: The Supreme Court tossed a closely watched challenge to FDA rules for dispensing the widely used abortion pill mifepristone, without ruling on the merits of the case, Axios' Sareen Habeshian and April Rubin report.