A package of federal health care programs has been in limbo since September 2023, when a slew of programs were extended as part of the government funding bill. These programs were extended again (in November 2023) and again (on January 19, 2024). The next deadline for these “Health Care Extenders” is March 8, 2024. In the meantime, providers wishing to understand what, if anything, might come together before March 8 should consider (i) the major programs that have been extended (and extended and extended) to March 8, and (ii) the bills that have been sponsored by the relevant House and Senate Committees with jurisdiction over health care issues (and, thus, that may form the basis of new health care legislation).
Programs Included in the March 8 Extension
The newest extension law includes funding for the following major programs:
- Community Health Center Fund (CHC),
- Teaching Health Center Graduate Medical Education (THCGME) Program,
- National Health Services Corps (NHSC), and
- Special Diabetes Programs.
The law also (i) delayed significant cuts to Medicaid disproportionate share hospital (DSH) payments and (ii) extended the Medicare work geographic index floor.
Other congressional priorities, however, were left on the cutting room floor, including:
- a fix for the 3.37% Medicare physician payment cut that went into effect on January 1, 2024;
- a continuation of Medicare alternative payment model bonus payments;
- funding that supports outreach and assistance for low-income Medicare beneficiaries; and
- an extension of the Children’s Hospitals Graduate Medical Education (CHGME) program.
Major House and Senate Health Care Bills
After a rocky start earlier in the year, in December 2023, the House passed H.R. 5378, the Lower Costs, More Transparency Act, by a 320-71 vote. The bill would extend and increase funding for the CHC, THCGME, NHSC, and Special Diabetes Programs through the end of CY 2025, and eliminate two years of scheduled Medicaid DSH cuts (increasing Medicaid spending by $3.7 billion, according to the bill’s CBO score). The legislation also includes provisions requiring hospitals, other providers, and PBMs to make certain charges and fees public (while excluding MA plans and private equity firms from similar public disclosures). To partially offset the cost of eliminating the scheduled Medicaid DSH cuts, the bill would (i) reduce Medicare payments to hospital outpatient departments (HOPDs) for physician-administered drugs (saving an estimated $3.7 billion), and (ii) require unique NPIs for HOPDs (saving an estimated $400 million).
In November 2023, the Senate Finance Committee reported S. 3430, the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act, out of committee with bipartisan, unanimous support. The bill would eliminate two years of Medicaid DSH cuts and extend other expiring Medicare and Medicaid programs, including outreach funding for low-income Medicare beneficiaries, the Medicare work geographic index floor, and the Medicare Independence at Home demonstration. The bill also includes (i) a Medicare physician pay increase that addresses a portion of the cuts referenced above, (ii) a package of PBM reforms that were debated over the summer, and (iii) other policies meant to improve mental health care services in Medicare and Medicaid. Notably, the bill does not include cuts to hospitals, but it also omits the Health Care Extenders, as those policies are under the Senate HELP Committee’s jurisdiction.
Finally, the Senate HELP Committee advanced S. 2840, the Bipartisan Primary Care and Health Workforce Act, out of committee in September 2023 after Chairman Bernie Sanders (I-VT) reached agreement with Sen. Roger Marshall (R-KS) to increase funding by over $26 billion for CHCs, THCGME, and NHSC, and to increase health care workforce funding. The additional funding is offset through policies that prevent commercial insurers from contracting with providers that:
- restrict plans from directing or steering enrollees to other providers,
- restrict plans from offering certain enrollee incentives,
- require plans to contract with affiliates of the provider,
- do not have unique NPIs for their HOPDs,f and/or
- charge facility fees for telehealth and E&M services.
This approach would ostensibly reduce government spending by providing government-sponsored plans (i.e., Medicare Advantage plans, Medicaid managed care plans, CHIP plans, etc.) additional leverage in their negotiations with providers, but the extent of those savings has not yet been confirmed by CBO.
The Senate HELP bill also reduces the Prevention and Public Health Fund—a popular source for offsets—by $980 million. Despite advancing out of committee by a 14-7 vote, this approach was more controversial and was not blessed by HELP Committee Ranking Member Bill Cassidy (R-LA), who sits on both the HELP and Finance Committees and is a leading voice on health care policies in the Senate Republican conference.
Conclusion
The Health Care Extenders in the most recent extension law are the skeleton of a potential compromise agreement that could include legislation addressing key congressional health care priorities and offsets that reduce reimbursement for certain services provided in HOPDs. The question now becomes how will the House and Senate reconcile the differing approaches in their recent bills, and will hospital reimbursement be cut to offset new spending?
