Lawmakers have unveiled a sweeping government funding deal containing a significant healthcare package that would extend Medicare telehealth flexibilities, increase physician reimbursement rates and implement new regulations targeting pharmacy benefit managers, among other provisions.
Congress is working to pass the 1,547-page continuing resolution to prevent the federal government from shutting down after funding runs out Dec. 20. The package includes authorization for the government to keep running through March 14, 2025.
Key components of the bipartisan healthcare package include:
- Delaying the Medicaid disproportionate hospital share pay cuts for FY 2025 until Jan. 1, 2027.
- Extending certain Medicare telehealth flexibilities until Dec. 31, 2026.
- Temporarily increasing the Medicare physician fee schedule by 2.5% for 2025. The temporary pay bump would significantly offset the 2.83% pay cut that CMS recently finalized for 2025.
- Prohibiting "spread pricing" in the Medicaid program, which occurs when pharmacy benefit managers retain a portion of the amount paid to them for prescription drugs. Other major PBM reforms include a full rebate pass-through to plan sponsors in the commercial market and a "delinking" of the price of a drug from PBM compensation in Medicare Part D.
- Expanding acute-hospital-at-home flexibilities through Dec. 31, 2029.
- Extending CMS coverage of multi-cancer early detection screen tests through Jan. 1, 2029.
- Extending the Medicare low-volume hospital payment adjustment through Dec. 31, 2025.
Notably, the healthcare package excludes legislation to reform prior authorization, particularly as it relates to Medicare Advantage, which many hospitals cited as a growing pain point in 2024.
National hospital groups applauded Congress for various measures outlined in the healthcare package, such as the extension of Medicare telehealth flexibilities, delaying Medicaid DSH pay cuts and raising Medicare physician pay, and have urged lawmakers to get the deal passed to ensure access to high-quality care for the patients and communities they serve.
Here are some reactions from national hospital and medical group associations:
Chip Kahn, President and CEO, Federation of American Hospitals: Congress's health package hits the spot — it protects rural healthcare and assures seniors continued telehealth services while preventing cuts to hospitals serving the most vulnerable. Together, these provisions will sustain critical patient care at the right time, in the right setting. We urge Congress to swiftly pass the health package and larger government funding bill, and we'll continue to work with lawmakers to preserve 24/7 care.
Stacey Hughes, Executive Vice President, American Hospital Association: The House filed the continuing resolution, which includes significant bipartisan and bicameral health provisions. The legislation contains a number of critical policies that the AHA strongly advocated for, including preventing cuts in Medicaid disproportionate share hospital payments, reducing cuts to physicians, and extending Medicare programs that increase access to rural health care. Importantly, the bill also extends telehealth and hospital-at-home programs that expand access to care.
The AHA appreciates the House and Senate working together on this bipartisan healthcare package and urges Congress to pass this health care package that will ensure hospitals and health systems can continue to care for their patients and communities.
Bruce Siegel, MD. President and CEO, America's Essential Hospitals: We thank congressional negotiators for promising language in their developing year-end spending package that would avert devastating cuts to Medicaid support for essential hospitals, extend telehealth flexibility and the hospital-at-home program, and take other steps to strengthen safety net care.
We enthusiastically support eliminating the looming $8 billion cut to Medicaid disproportionate share hospital funding and delaying the next fiscal year's $8 billion cut. Our hospitals face enormous financial pressures due to their safety net mission, so cuts of this magnitude — two-thirds of all federal Medicaid DSH funding — simply would be unsustainable.
We also applaud a measure, consistent with our recommendation, to correct a harmful policy that removed the cost of care for dually eligible patients from the calculation of a hospital's Medicaid DSH uncompensated care limit. This fix is crucial to the stability of our hospitals.
Other provisions in the package important to our hospitals and that we call on Congress to pass include, among others, reauthorization of the Pandemic and All Hazards Preparedness Act; extension of the Substance Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act; and establishing studies on the costs of providing maternity, labor, and delivery services in hospitals that serve a high proportion of Medicaid beneficiaries, along with rural hospitals.
However, we are concerned about a provision that would require each hospital outpatient department to have a unique identifier and to bill using this separate identifier. This will be costly, burdensome, and resource-intensive, and it will affect staff workflows. Imposing this new requirement will force hospitals to invest significant time and money into updating billing and IT systems and pull an already stretched workforce away from providing care.
Anders Gilberg, Senior Vice President of Government Affairs, Medical Group Management Association: The health provisions in the proposed CR represent a mixed bag for medical groups. On one hand, MGMA is pleased that Congress heeded our call to extend telehealth flexibilities through the end of 2026, increase APM incentive payments to 3.53%, and extend the 1.0 Medicare work GPCI floor. These are big wins for medical groups. On the other hand, we are deeply disappointed that Congress failed to fully remedy the looming 2025 Medicare payment cut to physician practices. Any cut, however fractional, is unacceptable. Finally, not including legislation to reform prior authorization, which has the support of a bipartisan majority of the House and Senate, nearly 500 endorsing stakeholder organizations, a CBO score of zero, and little to no opposition, represents a huge congressional end-of-year failure and another win for big insurance to the detriment of America's patients.