The House of Representatives and Senate recently passed an omnibus spending bill that funds the Federal government through Fiscal Year 2023 and contains various provisions affecting healthcare providers. Among other things, the bill ameliorates planned Medicare provider cuts. The legislation also allows states to resume Medicaid eligibility determinations and extends telehealth flexibilities first authorized under the COVID-19 public health emergency (PHE).
Medicare payments for physicians, while reduced under the bill, will not be cut as much as anticipated. Originally, physicians faced an 8.5% total Medicare payment reduction beginning on January 1, 2023. This reduction was in addition to a 2% payment cut phased back in earlier this year. The bill waives the 4% Statutory Pay-As-You-Go (PAYGO) sequester cuts scheduled for 2023 and partially reduces the physician fee schedule cuts scheduled for 2023, limiting the expected reduction in Medicare physician pay to 2% in 2023. The cuts would increase to 3.5% in 2024.
Medicaid eligibility assessments (known as Medicaid redeterminations), which involve states checking to ensure that Medicaid beneficiaries meet program requirements before renewing benefits, were put on hold during the COVID-19 pandemic and were expected to restart at the end of the declared PHE. The bill allows states to resume these eligibility assessments at the beginning of April 2023. Providing this date certain and delinking the Medicaid eligibility assessments from the PHE declaration has been estimated to save the Federal government billions of dollars. Congressional negotiators used that savings to pay for expanding women’s postpartum coverage and extending funding for the Children’s Health Insurance Program for two years, until 2029.
The bill includes a two-year extension to telehealth waivers, through December 31, 2024, including the waivers on geographic site restrictions and audio-only telehealth. The bill allows continued flexibility in providing telehealth services and mental health treatment. The omnibus bill also includes several mental health and addiction treatment provisions that facilitate prescription of addiction treatment medications and the expansion of Federal mental health programs. Rural hospital programs, such as the Medicare-dependent hospital program and the low-volume hospital program, originally set to expire on December 23, 2022, are extended for two years, until December 31, 2024.
The omnibus bill includes several provisions to address workforce issues. Beginning in 2026, the bill provides an additional two hundred Medicare Graduate Medical Education (GME) residency positions, half of which would be reserved for psychiatry and psychiatry-subspecialty residencies. The bill waives the cap on annual payments for nursing and allied health education from 2010–2019.
Reforms to help the government prepare for the next pandemic are included in the omnibus bill. The reforms include enhancing the White House’s ability to coordinate the Federal government’s response to infectious outbreaks and requiring Senate confirmation of the Director of the Centers for Disease Control and Prevention.
The omnibus bill also includes a one-year delay of implementation of the clinical lab fee schedule provisions previously included in the Protecting Access to Medicare Act (PAMA).
Not included in this legislation was a proposal to give FDA authority to regulate diagnostic tests. In addition, the Verifying Accurate Leading-Edge IVCT Development (VALID Act) was ultimately dropped from the final bill, meaning that laboratory-developed tests will continue to be regulated under the Clinical Laboratory Improvements Amendments (CLIA).
President Biden is expected to sign the bill soon.
A copy of the bill is available here.
