Congressional spending plan: What’s in it for healthcare, and what isn’t

Congress has approved a spending package to avoid a government shutdown and finance key federal programs, including healthcare programs.

Congress has passed a spending bill to avert a government shutdown. It included some key healthcare priorities, and omitted others.

Healthcare trade groups have been sweating over the package, which included key priorities for hospitals and health providers. The House passed a stopgap spending bill Friday night to finance government programs at current levels into mid-March. The Senate voted early Saturday morning to approve the package, sending it to President Biden for his signature.

The spending plan extends telehealth programs into the spring, but doesn’t block reductions in Medicare payments to physicians.

The package emerged following days of drama in Washington. Lawmakers had cobbled together a spending plan earlier this week, but it collapsed amidst criticism from President-elect Donald Trump, Elon Musk, and some congressional Republicans.

Telehealth programs

Perhaps the most pressing question for healthcare organizations centered on the fate of telehealth and hospital-at-home programs.

Healthcare trade groups pressed Congress to approve an extension of telehealth programs, and they faced a looming deadline as well. Federal waivers covering telehealth programs were set to expire at the end of the year, and healthcare groups have grown increasingly anxious in recent weeks.

The package included a short-term extension of telehealth and hospital-at-home programs through March 31.

U.S. Rep. Brian Fitzpatrick, a Pennsylvania Republican, touted the telehealth extension late Friday night. He wrote on X the telehealth measures would increase “access to care for families and seniors in our community.”

U.S. Rep. Lisa Blunt Rochester, a Delaware Democrat, said the package included a short-term telehealth provision, among other critical programs poised to expire. But she said in a news release, “We must work to find longer term solutions, like what Democrats and Republicans originally agreed on.”

An earlier version of the spending plan included a two-year extension for most telehealth programs, and a five-year extension for hospital-at-home programs.

Republican and Democratic lawmakers generally have expressed strong support for telehealth programs. A House committee passed a measure in September to extend telehealth programs with a unanimous 41-0 vote.

The American Telemedicine Association has been pressing lawmakers all week to ensure telehealth programs can continue and urged Congress to keep those provisions in the final agreement. Last week, nearly 300 healthcare organizations sent a letter to congressional leaders urging them to extend telehealth programs.

Kyle Zebley, senior vice president of public policy for the American Telemedicine Association, said the short-term extension isn't what the group hoped to see, but at least it avoids "disruptions in critical areas of telehealth access."

“Looking ahead, we will immediately begin working to ensure Congress makes Medicare telehealth flexibilities and the Acute Hospital Care at Home Program permanent—or secures a much longer extension than 90 days," Zebley said in a statement Saturday morning.

Healthcare advocacy groups hoped to secure a longer extension for hospital-at-home programs. Such programs have been growing. Nationwide, 378 hospitals in 39 states are providing acute care at home, according to data from the Centers for Medicare & Medicaid Services. Industry analysts say more health systems would likely launch hospital-at-home programs if they had more confidence in federal reimbursements.

The American Hospital Association said it was glad lawmakers signed off on an extension.

"The AHA appreciates Congress passing short-term extensions of these critical policies that support hospitals’ and health systems’ ability to care for their patients and communities before they expire. We will continue to advocate for longer-term solutions when the new Congress convenes in January," the group said in a statement Saturday morning.

Medicare payments to doctors

Healthcare lobbyists also pressed lawmakers to block planned cuts in Medicare payments to physicians, which are slated to take effect in 2025. But the spending plan doesn’t address the planned reductions.

Physicians and their trade groups fumed when the Centers for Medicare & Medicaid Services finalized a 2.8% cut in payments to doctors for 2025. On Friday, the American Academy of Family Physicians bemoaned the fact that the spending package contained no provision to block the cuts.

“The @aafp is alarmed that the House failed to avert a physician payment cut set to go into effect in 2025,” the organization said in a post on X. “This will impede access to care. We will continue to advocate for sweeping Medicare payment reform to ensure beneficiaries get the care they need.”

The American Medical Association and other healthcare groups have blasted the federal government for years of reductions of Medicare payments to doctors. They’ve argued that the cuts will hurt more practices and drive more physicians to opt against accepting Medicare patients.

The original spending plan partially addressed the Medicare payments to doctors; payments would have been cut 0.3% under that plan. But that language didn’t make it to the revised spending package.

Bruce A. Scott, MD, president of the American Medical Association, said in a statement Saturday morning that the spending package "didn’t even offer doctors a Band-Aid in the form of a cut reduction, as the cost of delivering care rises 3.5 percent next year."

“For the fifth consecutive year, Congress has adjourned and allowed Medicare cuts," Scott said. "What will be the result? Patients struggling to access health care. Physicians closing or selling their private practices while others opt to leave the profession."

Aid for safety-net hospitals

Hospitals also implored Congress to avert cuts in Medicaid Disproportionate Share Hospital Payments. The DSH program, as it’s known, was slated to be cut by $8 billion, with the cuts taking effect Jan. 1. Safety net hospitals with a high percentage of Medicaid patients rely on those payments.

The spending package did include language preventing those cuts, to the relief of hospitals.

Rural hospitals

The spending plan included extensions for two important Medicare programs that provide funding to hospitals, which were slated to expire at the end of the year. The package extended the Medicare-dependent Hospitals and Low-volume Adjustment programs, which were both scheduled to dissolve on Dec. 31.

The Medicare-dependent Hospital (MDH) program offers financial assistance to smaller hospitals with a larger percentage of Medicare patients. More than 170 hospitals benefit from the program.

Rural hospitals also rely on Medicare’s Low-Volume Hospital (LVH) program, which offers funds to hospitals with a smaller number of Medicare patients. That program supports more than 600 hospitals.

Pharmacy benefit managers

The package did not include provisions to reform pharmacy benefit managers, which had engendered bipartisan support.

Rochester bemoaned the final spending plan excluding language “holding pharmacy benefit managers accountable,” which had been part of the original agreement.

Community Health Centers

The spending plan did include funding for community health centers, which had been stripped out of a revised spending plan but was later restored, lawmakers said.

One in 10 Americans receives care at those centers, according to the National Association of Community Health Centers.

Children’s cancer research

In a separate measure Friday night, the Senate passed the Gabriella Miller Kids First Research Act 2.0, which directs money for pediatric cancer studies. The House previously passed the bill, so it heads to President Biden for his signature.

U.S. Rep. Jennifer Wexton, a Virginia Democrat who sponsored the bill, expressed relief at the passage.

“I’m so proud we’ve delivered lifesaving funding so one day no family has to face the fear and pain of their child’s cancer diagnosis,” she wrote on X.

Dodging a shutdown

With a government shutdown, some key federal health programs would have been paused, according to Healthcare Ready, a nonprofit organization that helps health organizations deal with disasters and outbreaks.

The Centers for Disease Control and Prevention would have continued its key programs to monitor outbreaks and labs would have remained open, but more than half the CDC staff would’ve been furloughed in a shutdown, Healthcare Ready said.

Similarly, the National Institutes of Health would have been affected by a shutdown, with about three-quarters of NIH staff sent homee, according to Healthcare Ready.