The $1.7 trillion omnibus spending package included a moderation in Medicare provider pay cuts that had been previously mandated by the 2023 Medicare Physician Fee Schedule (PFS) Final Rule (FR). The bill also contained other changes, including the extending of federal rural hospital programs. The massive bill was signed by the president on December 29, making it the law of the land.
Provider Reimbursement
The omnibus package establishes a Medicare PAYGO physician pay cut of two percent, beginning in January 2023. This will increase to 3.5 percent in 2024. The new legislation will avoid a 4.5 percent pay cut to providers that had been otherwise mandated back in November.
The American Hospital Association (AHA) announced its support for the legislative package, as it meets many of the concerns previously and intensely voiced by both its membership and other organizations representing the provider community. The AHA’s president and CEO, Rick Pollack, released the following statement:
The AHA is pleased that, on a bipartisan basis, Congress recognizes the immense pressure America’s hospitals, health systems and our caregivers are facing. This legislation will deliver critical support and resources so we can better care for our patients and create healthier communities.
The AHA’s leader went on to stress the importance of continuing to pursue greater legislative efforts on behalf of the organization’s fuller agenda, which includes addressing the following: patient discharge backlogs, provider shortages, patient safety and help for hospitals facing a disparity in payer mix.
Medicaid and CHIP
Another part of the bill signed into law affects Medicaid redeterminations. Though previously paused due to the public health emergency (PHE), the new bill requires a resumption of such redeterminations, beginning in April 2023, regardless of PHE status. HealthcareDive is reporting that the Robert Wood Johnson Foundation recently determined that “as many as 18 million Medicaid enrollees could lose their health insurance once the PHE expires.”
This somewhat comports with an August study performed by the U.S. Department of Health and Human Services (HHS), indicating that up to 15 million individuals could lose their Medicaid coverage. In an effort to mitigate such lost coverage, lawmakers extended funding for the Children’s Health Insurance Program (CHIP) until fiscal year 2029.
Rural Hospitals
The omnibus bill also extends Medicare rural hospital program funding, to include the Small Rural Hospital Improvement Grant Program. According to HealthcareDive, “Rural hospitals specifically have been hit hard by the COVID-19 pandemic, jeopardizing care access as many facilities face long-term pressures.” You may recall that HHS awarded $60 million to strengthen rural healthcare workforces back in August.
Telehealth and More
During the initial months of the PHE, the Centers for Medicare and Medicaid Services (CMS) created waivers and certain flexibilities in the telehealth arena. The recently signed legislation will extend these waivers and flexibilities for two years. This extension also applies to the hospital at home programs.
So, to recap and augment, the new law contains the following provisions:
On the whole, many in the healthcare community are receiving this late-December action by Congress and the administration as a move in the right direction.
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