Lawmakers unveiled a 4,155-page, $1.7 trillion spending bill Tuesday that includes provisions affecting the future of how healthcare is paid for and delivered across the nation, from the comfort of one’s home to hospitals in rural communities.

The omnibus bill, which requires the approval of the House and Senate, has to be approved by the end of Friday or the government faces a potential shutdown.

Here’s what’s in the bill for healthcare.

Medicare rate cuts

The legislation outlines a 2% cut for Medicare rates to doctors in 2023, increasing the following year.

The proposed cuts are an improvement from the 4.5% rate suggested earlier this year. However, Dr. Jack Resneck Jr., president of the American Medical Association, said he is “deeply worried” that providers may stop taking Medicare patients, especially given additional strain from inflation, and again urged Congress to reform physician pay rates.

“The AMA is extremely disappointed and dismayed that Congress failed to prevent Medicare cuts next year, threatening the financial viability of physician practices and endangering access to care for Medicare beneficiaries,” Resneck said in a statement.

The package also averts an additional 4% cut from taking effect in 2023 as part of the Statutory Pay-As-You-Go Act.

Winston Medical Center, a small rural hospital in Louisville, Mississippi, would not be able to sustain any Medicare cuts, especially as supplies and labor costs have increased, said Paul Black, the hospital’s chief financial officer.

“Doing any cuts is ridiculous right now,” he said. “It is like they think there are too many hospitals out there.”

Telehealth extension

Telehealth reimbursement waivers enacted as part of the CARES Act in 2020 would be extended until Dec. 31, 2024. The waivers originally were supposed to expire 60 days after the end of the public health emergency until an omnibus bill passed in March extended it to 151 days.

“I honestly was skeptical we were able to get two years,” said Krista Drobac, executive director at the Alliance for Connected Care, a telehealth lobbying group. “I feel more optimistic about our ability to make them permanent.”

Provisions include ending the requirement that providers be licensed in the same state as the patient receiving care, allowing more types of practitioners to provide telehealth services, permitting audio-only telehealth services and delaying the in-person requirement for mental health patients seeking treatment through telehealth.

The bill would also extend telehealth services through 2024 for federally qualified health clinics and rural health clinics.

The two-year extension is not without future implications. The bill instructs the Secretary of Health and Human Services to study how telehealth has affected Medicare beneficiaries’ overall health outcomes and whether there are geographic differences in use. It also calls for a review of medical claims data. The initial report is due by Oct. 1, 2024. 

Hospital-at-home/rural health

The proposal extends the Centers for Medicare & Medicaid Services’ hospital-at-home waiver through 2024. That waiver, established in November 2020 to increase capacity to accommodate COVID-19 patients, allow hospitals to handle emergency and inpatient cases outside of a facility. Hospitals nationwide embraced hospital-at-home programs as part of a larger push for virtual care options. As of November, there were 114 health systems and 256 hospitals approved to provide hospital care in a home setting.

Not everyone is fully on board, however. Some healthcare organizations have been wary of hospital-at-home programs without the guarantee of future Medicare reimbursement, and private insurers have been reluctant to reimburse that care due to a lack of outcome data. Some nurses and advocacy groups have questioned the safety of relying on remote technology in acute cases.

The legislation would extend rural hospital program funding, like the home health rural add-on payment of 1%, federal subsidies for the education of health professionals serving in rural areas and the Small Rural Hospital Improvement Grant Program. But the 3.925% rate cut for home health providers is still slated to take effect in January.

Medicaid redeterminations

States would begin reviewing members’ qualifications for Medicaid in early April, regardless of when the COVID-19 public health emergency formally ends.

Local officials promised to pause trimming their public benefit rolls during the emergency declaration period in exchange for federal COVID-19 relief. The economic effects of the pandemic and states’ halting redeterminations led Medicaid enrollment to swell to historic highs, growing to more than 90 million lower-income adults and children in August, according to a December report from the Kaiser Family Foundation.

An estimated 18 million individuals could lose coverage when states start reviewing patients’ eligibility for Medicaid and the Children’s Health Insurance Program, according to a December report from the Robert Wood Johnson Foundation.

States had expected to resume eligibility checks once President Joe Biden’s administration declared an end to the COVID-19 public health emergency. Currently, it is slated to end in April.

The proposal marks a win for the 25 Republican governors who sent a letter to the Biden administration Monday calling for the pause on Medicaid redeterminations to end in April, saying the increased federal funds were not enough to cover patients’ medical expenses and that states were incurring “hundreds of millions” in extra charges.

States would have 14 months to complete reviews of individuals’ eligibility for the public health programs, and would submit monthly progress reports to the Secretary of the Department of Health and Human Services that will be made public. The bill guarantees 12 months of continuous coverage for children on Medicaid and CHIP once they are enrolled.

Some individuals no longer eligible for Medicaid are expected to transition to exchange coverage, many of whom will qualify for the enhanced subsidies Congress passed under the Inflation Reduction Act. Insurers have been expanding their marketplace footprint over the past year in anticipation of capturing members falling from their states’ Medicaid rolls. CMS this month proposed establishing special enrollment periods for people who lose Medicaid or CHIP benefits because their income rose during the pandemic.

Unwinding federal medical assistance

The proposal also includes a playbook for winding down the increased federal funds states received for pausing redeterminations. The first federal COVID relief package increased states’ Medicaid match rate by 6.2 percentage points.

The federal government had planned to stop paying the higher rate once the public health emergency ended, which incentivized states to move as quickly as possible to shed ineligible individuals from their rolls. Ohio, for example, had given its Medicaid agency just three months to finish eligibility checks. Patient advocates worried that states rushing to remove individuals from public benefits would lead to people being mistakenly dropped from Medicaid and without time to enroll in new coverage.

The bill provides a more gradual process for winding down the increased payments. Beginning in April, the federal matching rate would decline to 5 percentage points until June; from July 1 to the end of September, the rate would drop to 2.5 percentage points; and from October to the end of 2023, the rate will decrease to 1.5 percentage points.

988 hotline funding

The bill provides funding to boost marketing and outreach efforts for the nation’s new three-digit mental health hotline, 988. It transitions other mental health hotlines, including one for veterans, to the national network.

The measure also provides funds for states and territories to expand crisis response teams and a continuum of behavioral health services that include community health clinics and crisis stabilization centers. Some of the funding would be earmarked specifically for workforce development, technical assistance and data analysis.

The bill authorizes HHS to conduct annual testing and implement quality control measures on services related to the hotline in partnership with local governments.

Also, the federal government would begin collecting demographic data alongside use data to identify disparities in access. That data will be shared with the Centers for Disease Control and Prevention to assist with epidemiological reviews.

Provider directories

The proposal also would establish federal standards around provider directories for private Medicaid carriers and other managed care companies. Provider directory requirements are currently regulated by a patchwork of state laws.

The bill would require managed care companies to publish a searchable directory of in-network providers that is updated at least quarterly. Insurers would have to specify providers’ cultural and linguistic capabilities, if the clinician is accepting new patients and whether their office can accommodate those with disabilities.

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