Dentons’ earlier Congressional Check-Up discussed how Congress created the outline of a potential compromise agreement on key health care policies by extending certain health care programs through December 31, 2024.1 That happens to be the same day that Medicare telehealth flexibilities first implemented during the COVID-19 pandemic expire, and the day on which waivers and flexibilities needed for the Acute Hospital Care at Home (Hospital at Home) program end.2 Further, on January 1, 2025, a 2.83% cut in reimbursement under the Medicare Physician Fee Schedule (PFS) for physicians and other clinicians will go into effect.3
The combination of these expirations and payment cuts naturally begs the following question: what, if any, federal policies can hospitals, physicians, and other providers expect Congress to address during the “lame-duck” session? To answer this question, we need to take a closer look at (i) must-pass extensions and authorizations, (ii) bipartisan policies with momentum, (iii) and policies that need more work and will be considered during the 119th Congress.
Must-Pass Extensions and Authorizations
Health care “extenders”—i.e., certain health care programs with expiring authorizations and funding that regularly are renewed by Congress—generally are considered “must-pass” by lawmakers and relevant committee staff. This year, the relevant programs include authorization and funding for:
- Community Health Centers (CHCs),
- National Health Services Corps (NHSC),
- Teaching Health Center Graduate Medical Education Program (THCGME),
- Special Diabetes Programs,
- Rare Pediatric Disease Priority Review Vouchers,
- Medicare Low-Volume Payment Adjustments,
- Medicare-Dependent Hospital (MDH) Program,
- Medicare Work Geographic Index Floor, and
- Delays to Medicaid Disproportionate Share Hospital (DSH) Cuts.
Extending the Medicare telehealth flexibilities—particularly those related to waiving originating site and geographic location requirements so Medicare beneficiaries can receive telehealth services anywhere, including their homes—is widely considered a “must-pass” policy and received bipartisan support this year in the House Ways & Means4 and Energy & Commerce Committees.5 Along with the telehealth extensions, the House committees also approved a five-year extension of the Hospital at Home program with broad bipartisan support.
Bills aimed at mitigating or eliminating cuts to physician payments finalized by CMS, and increasing bonus payments associated with participation in alternative payment models, also are widely considered to be “must-pass.” By way of example, a bipartisan group of 233 House lawmakers sent Speaker Mike Johnson (R-LA) and Minority Leader Hakeem Jeffries (D-NY) a letter explaining how Medicare payment rates have not kept up with rising costs and urging them to mitigate the PFS cut, among other policy proposals. Shortly thereafter, a bipartisan bill was introduced that would give physicians a 4.73% payment increase in 2025, fully offsetting CMS’s 2.83% cut and increasing payments to account for inflation estimated by the Medicare Economic Index. While mitigating (or partially mitigating) the finalized payment reductions is viewed as “must-pass,” increasing payments beyond that point is unlikely this year.
Bipartisan Policies with Momentum
How Congress decides to address government funding will dictate the length and anticipated cost of the health care extenders passed during the lame-duck session. If, for example, Congress chooses to pass a short- or long-term continuing resolution (CR) that extends current government funding into 2025, the health care programs included in that bill would most likely be extended along the same timeline, and would not require a significant amount of offsetting policies. If, however, Congress chooses to pass some or all of the FY 2025 appropriations bills, the health care programs noted above could be extended for two years or longer. The longer these programs are extended, the more they would cost from a congressional budgeting perspective, and additional policies that reduce government spending maybe required.
To that end, measures aimed at reducing health care spending appear to be gaining bipartisan support in Congress. For example, Congress is looking to pull funds from the Medicare Improvement Fund to support the health care extenders noted above. A group of bipartisan lawmakers in the House also approved certain site-neutral reforms—unique identifiers for hospital outpatient departments (HOPDs)6 and reductions to payments for physician administered drugs in HOPDs—that are projected to save around $3.7 billion.7 Senate and House committees with health care jurisdiction also have proposed reforms to pharmacy benefit management (PBM) practices8 and changes aimed at pharmaceutical patent thickets.9
Other potential funding avenues being considered by Congress include blocking (or delaying) CMS’s implementation of the nursing home minimum staffing rule, which is projected to save up to $22 billion10 over the budget window, and delaying a review of Medicare rates for clinical laboratories, which review is expected to result in rate increases.11 Both of these blocking/delay efforts are supported by national hospital associations.12
Policies for the 119th Congress
Health care policies introduced relatively recently, like the “legislative framework” focused on site-neutral reforms released jointly by Senators Bill Cassidy (R-LA) and Maggie Hassan (D-NH), likely will not be considered until the 119th Congress. Other longer-term efforts that have not yet resulted in agreed-upon legislation, like those led by the Senate 340B Bipartisan Working Group, also will continue into the next Congress.
In addition, because Republicans have officially secured both chambers of Congress, other significant health care policies likely will be considered next year as part of an expected “budget reconciliation” bill that would extend expiring provisions of the Tax Cuts and Jobs Act of 2017 and address other tax priorities discussed throughout the 2024 election. If enacted, these priorities would reduce government revenue, and Republicans are expected to cut federal spending elsewhere to account for at least some of those reductions.
While President-Elect Trump has said he will not “touch” Medicare or Social Security, he did not make similar promises with respect to Medicaid. Thus, policies that reduce the federal matching percentage for Medicaid expenditures, either by focusing on the enhanced match associated with the Medicaid expansion population or by eliminating the current matching percentage floor, likely will be on the table. Significant payment reductions to all HOPDs (both on-campus and off-campus) through broad site-neutral policies, similar to those included in President-Elect Trump’s FY 2021 Budget Proposal,13 also will be considered.
See Table S-6, page 116, reducing spending by a combined $164.4 billion by reducing payment to the physician office rates. ↩︎
See Pub. L. No. 118-42, Div. G, tit. I (extending certain public health, Medicare, and Medicaid programs). ↩︎
See Pub. L. No. 117-328, Div. FF, tit. IV, Sections 4113 (telehealth) and 4140 (hospital at home). The Hospital at Home program allows approved Medicare-certified hospitals to provide acute care in a beneficiary’s home. CMS and the provider agree to waive some of Medicare’s hospital conditions of participation and add other requirements, such as two daily in-home visits by clinical staff. ↩︎
Medicare and Medicaid Programs; CY 2025 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; Medicare Prescription Drug Inflation Rebate Program; and Medicare Overpayments, CMS-1807-F and CMS-4201-F5 (scheduled to be published in the Federal Register on Dec. 9, 2024), https://public-inspection.federalregister.gov/2024-25382.pdf. ↩︎
See H.R. 8261, the Preserving Telehealth, Hospital, and Ambulance Access Act (reported favorably by the Ways & Means Committee to the full House by a vote of 41 to 0). ↩︎
See H.R. 7623, the Telehealth Modernization Act of 2024 (reported favorably by the Energy & Commerce Committee to the full House by a vote of 41 to 0). An outstanding question is whether the Drug Enforcement Agency (DEA) also extends the use of telehealth for prescribing controlled substances beyond December 31, 2024 by regulation, or if Congress also needs to address that issue. ↩︎
The Congressional Budget Office (CBO) estimates that this provision would reduce the deficit by $403 million over the ten-year budget window because it would assist insurers who have a policy of not paying for facility fees for off-campus providers in identifying exactly where specific services were provided. It also might encourage more private health insurers to adopt such a policy. See CBO, Estimated Direct Spending and Revenue Effects of H.R. 5378, the Lower Costs, More Transparency Act, Sec. 204 (Dec. 8, 2023). ↩︎
CBO, Estimated Direct Spending and Revenue Effects of H.R. 5378, the Lower Costs, More Transparency Act, Sec. 203 (Dec. 8, 2023). ↩︎
CBO, Estimated Budgetary Effects of the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act and Certain Provisions of the Modernizing and Ensuring PBM Accountability (MEPA) Act (Nov. 6, 2023). ↩︎
S. 150, the Affordable Prescriptions for Patients Act of 2023 (passed Senate by unanimous consent on July 11, 2024). The bill aims to limit the number of certain types of patents that the innovator of an approved biologic drug can assert against the manufacturer of a biosimilar version of that drug in a patent dispute. Bill sponsors claim these limits will lower drug prices by accelerating biosimilar market entry. ↩︎
H.R. 7513, the Protecting America’s Seniors’ Access to Care Act (reported favorably by the Ways & Means Committee to the full House by a vote of 26-17). ↩︎
The Protecting Access to Medicare Act (PAMA) (Pub. L. No. 113-93) consolidated the Medicare clinical laboratory fee schedule (CLFS) into a single national fee schedule based on private market data from all types of labs that serve Medicare beneficiaries. Rates are based on a weighted median rate of private payor payments for lab tests. Sampling issues related to the first round of private market data collection led to a significant payment reduction for labs. Congress has since intervened to freeze rates and delay the next CLFS reporting period. CBO projects that these delays actually will increase revenue because it assumes the next private payor payment survey will include hospital outreach labs, and that inclusion will lead to higher CLFS rates and thus higher Medicare spending. ↩︎
See, e.g., American Hospital Association, AHA urges Senate, House members to halt enforcement of nurse staffing mandate (June 25, 2024). ↩︎
