Summary
The House and Senate are both out this week for President’s Day recess.
Almost two months into 2024, the focus in Washington has largely been on finishing priorities from last year including the fiscal year (FY) 2024 appropriations, creating a passable foreign aid package, and negotiating a health care package, rather than starting fresh with new initiatives. This week we highlight the must-do’s for the year, as well as areas that might not result in enacted legislation but that Congress may choose to focus on before the end of the 118th Congress. Keeping in mind that this is an election year, and Congress rarely has big legislative achievements in an election year, there are still plenty of issues to be addressed.
Appropriations: As Congress still works to wrap up FY 2024, the FY 2025 budget season is rapidly approaching. The President is scheduled to deliver the annual State of the Union address on Thursday, March 7, and his FY 2025 budget request is expected the following week. The timing coincides with the end of the current continuing resolution (CR), which ends on March 1 for four of the appropriations subcommittees and March 8 for the remaining 8. The “health extenders” (e.g., for community health centers) that have been attached to the last several CR’s will also expire on March 8. If Congress is not able to reach agreement on the FY 2024 appropriations bills, a long-term CR that will carry the government through the end of the current fiscal year is a strong possibility. Funding would be frozen at FY 2023 levels, but per the Fiscal Reduction Act, across the board cuts would go into effect for all discretionary accounts.
Health Care Package: At the end of last year, the House overwhelmingly passed the Lower Costs, More Transparency (LCMT) Act (H.R. 5378), including measures to strengthen price transparency requirements for hospitals, insurers, and pharmacy benefit managers and to require consistent Medicare payment for physician-administered drugs in hospital outpatient departments or doctors’ offices. Reauthorizations of key health programs including the Community Health Centers, the Teaching Health Center GME program, National Health Service Corps, and the Special Diabetes Program were also included, as well as a delay to Disproportionate Share Hospital (DSH) reductions under Medicaid. Senate committees advanced several bipartisan health bills aimed at providing PBM transparency, expanding substance use disorder services and reducing prescription drug costs.
While negotiations are ongoing between the House and Senate on the size and scope of a final package, the only path forward for this package will be if Congress agrees to pass a spending deal for these health reforms to hitch a ride on. Other provisions that could be included in this package include:
- A fix to the 3.4 percent cut to Medicare physician reimbursement went into effect on Jan. 1st.
- Overdue reauthorizations for the Pandemic and All-Hazards Preparedness Act and SUPPORT Act.
- Senate Finance Committee legislation to bolster the behavioral healthcare workforce.
Telehealth: COVID-19-era temporary Medicare telehealth policies that loosened geographic and originating site requirements as well as allowed telehealth reimbursement at the same rates as in-person care are set to expire at the end of 2024. There has been bipartisan support for making some of these flexibilities permanent, so Congress will need to address these policies before the end of the year. A broader measure to permanently allow employers to offer standalone telehealth plans advanced through the House Committee on Education and the Workforce largely on party lines in June.
Medicare Advantage: Members from both parties have increasingly been paying attention to reports of overpayments, prior authorization denials, and marketing abuses in the Medicare Advantage program. Rep. Dr. Larry Bucshon (R-Ind.) has stated that Congress should investigate insurers that have been accused of improper denials of care and Senate HELP Committee ranking member Dr. Bill Cassidy (R-La.) has offered a bill to crack down on overpayments. The push for increased oversight will likely continue in 2024 with possible legislative and regulatory changes proposed.
Prescription Drugs: While the Health Care package currently being negotiated is expected to include policies to tackle high prescription drug costs, primarily through increased transparency changes to pharmacy benefit management (PBMs), the final product will likely not go far enough for many Members. The cost of prescription drugs likely to continue to be an area of discussion, particularly during an election year. We can also expect that Democrats and the Administration to continue to focus on implementing the Inflation Reduction Act, which includes Medicare drug price negotiation.
Artificial Intelligence: Artificial intelligence (AI) is a policy area receiving increasing attention by both Congress and the Administration. Recent hearings, Senate AI “insight forums” led by Majority Leader Charles Schumer, and a bipartisan working group have laid the groundwork for potential legislation. House Speaker Mike Johnson is considering the establishment of a bipartisan working group to accelerate progress on AI. Th question of regulatory jurisdiction remains contentious, with differing views on whether a new dedicated AI agency or bolstered existing authorities should oversee AI regulation. Without decisive congressional action, regulatory efforts may default to other federal agencies to navigate AI’s evolving landscape under current laws.
Farm Bill: Every five years, Congress passes legislation that, among other things, sets national agriculture and nutrition policies. Known as the “Farm Bill” this legislation authorizes Supplemental Nutrition Assistance Program (SNAP), as well as other important nutrition programs at the USDA. The last Farm Bill expired on September 30, 2023, but a provision in one of the Continuing Resolutions passed last fall temporarily reauthorized the programs until September 30, 2024. There are several contentious issues to be resolved before Congress can move forward on the Farm Bill, including funding for the SNAP program and potential work requirements for participation.
Employer Sponsored Health Programs: While legislative action this year is a long shot, the House Education and the Workforce Committee is laying the groundwork on efforts to lower costs and improve access to health care in employer-sponsored coverage. The topic was the focus of a hearing convened by the Subcommittee on Health, Employment, Labor, and Pensions in January and the Committee recently issued a request for information (RFI) to inform legislative reforms to employer-sponsored health care (press release).
Regulatory Update
The Office of Management and Budget (OMB) is reviewing the following rules:
Medicare
- Alternative Payment Models – The proposed rule would implement a new Medicare payment model titled, Increasing Organ Transplant Access (IOTA) Model (was set for December 2023).
- Payment Update – The proposed rules would make policy payment updates for acute care hospitals inpatient and long-term care hospitals, and hospice (April 2024).
Medicaid
- Disproportionate Share Hospital Program – The final rule would implement requirements under section 203 of the Consolidated Appropriations Act, 2021 (CAA), which relate to Medicaid shortfall and third-party payments (February 2024).
- Eligibility and Enrollment – The final rule would implement changes to align enrollment and renewal requirements for most individuals in Medicaid and promote maintenance of coverage (February 2024).
- Access to Care – A pair of final rule intended to access to care and quality outcomes for Medicaid and CHIP beneficiaries enrolled in managed care delivery systems and fee-for-service Medicaid (April 2024).
Commercial Insurance
- ACA Marketplace – The final rule would make changes to regulations governing Affordable Care Act (ACA) Marketplace plans, insurance standards, and the risk adjustment program for plan year 2025 (not specified but likely April 2024).
Other Topics:
- Healthcare System Resiliency and Modernization – The proposed rule would revise and update national emergency preparedness requirements for Medicare- and Medicaid-participating providers and suppliers (was set for December 2023).