Summary
Last night, the House Energy and Commerce (E&C) Committee released its draft text (section-by-section) for its portion of the budget reconciliation package, which will be marked up tomorrow. Impact Health is preparing a full summary of the Health Subtitle, which includes the following:
- Establishing Medicaid work requirements for able-bodied adults without dependents;
- Sunsetting the 5 percent Federal Medical Assistance Percentage (FMAP) increase provided to states that expanded Medicaid under the American Rescue Plan Act;
- Freezing states’ provider taxes at the current rates and prohibiting states from establishing new provider taxes;
- Limiting state directed payments from exceeding the total published Medicare payment rate;
- Allowing for more frequent Medicaid eligibility redeterminations for the expansion population;
- Delaying the implementation of the Biden era Medicaid eligibility and enrollment final rules;
- Providing a “doc fix” by updating the conversion factor under the physician fee schedule to a new single conversion factor based on a percentage of medical inflation; for 2026 the conversion factor would be increased by 75% of the annual increase in the Medicare Economic Index (MEI);
- Codifying the requirements of the Trump Administration’s ACA marketplace rule improper enrollments;
- Prohibiting spread pricing in Medicaid, along with pharmacy benefit manager (PBM) transparency and delinking reimbursement from drug price in Medicare Part D; and
- Expanding and clarifying the orphan drug exclusion under the Medicare Drug Price Negotiation Program.
The Congressional Budget Office (CBO) estimates that the Health Subtitle would reduce the deficit by $715 billion and increase the number of people without health insurance by at least 13.7 million in 2034.
Additionally, the House Ways and Means Committee released an incomplete draft text on Friday, with an updated version expected to be released later today, and will also convene its markup tomorrow. The House Agriculture Committee is also expected to markup its portion of the package tomorrow, beginning at 7:30 pm. Draft text is not yet available, but Supplemental Nutrition Assistance Program (SNAP) spending cuts are expected to be included.
Following the House Committee markups this week, Republican leadership is aiming for the House Budget Committee to vote on the full reconciliation package Friday morning, followed by Rules Committee consideration on Monday and floor vote later next week. While, leadership is still pushing for Congressional passage by July 4th, Republicans view the August “x-date” as the ultimate deadline, as the Treasury Department indicated that the “federal government’s cash and extraordinary measures will be exhausted in August while Congress is scheduled to be in recess.”
Regulatory Update
The Office of Management and Budget competed its review of a proposed rule titled, “Preserving Medicaid Funding for Vulnerable Populations – Closing a Health Care-Related Tax Loophole,” which could impact provider taxes, such as those in California and New York. CBO is also reviewing the following:
- Proposed CY 2026 payment updates for physicians, hospital outpatient departments and ambulatory surgical centers, home health agencies, and end-stage renal disease facilities. These proposed rules are typically published in June or July.
- ACA Marketplace. A final rule with a series of proposals intended to address improper enrollments in Marketplace coverage and reduce improper federal spending on advanced premium tax credits (IHPP summary). If finalized as proposed, 750,000 to 2 million fewer individuals would enroll in Marketplace coverage in 2026.
- A prerule titled “Transparency in Coverage,” likely with proposed changes to health plan price transparency requirements. The prerule would implement President Trump’s executive order directing the Departments of Treasury, Labor, and Health and Human Services to strengthen price transparency requirements (IHPP summary). At the prerule stage, agencies typically submit an “Advanced Notice of Proposed Rulemaking” to allow the public the opportunity to comment on whether or not a rulemaking should be initiated.
- Health Technology. A request for information on the “health technology ecosystem.’