On December 21, 2024, Congress passed a continuing resolution (CR) averting the government shutdown and funding the federal government through March 14, 2025. The bill includes several key healthcare “extenders” that either delay payment cuts that would have taken effect on January 1, 2025 or continue funding for key programs that support rural healthcare and allow for telehealth flexibilities.
However, the final package of extenders was not as robust as the initial draft CR released on December 17, 2024. Below, we highlight key provisions included in the CR that passed, as well as provisions from the initial draft that were cut from the final version of the bill.
Provisions Included in the CR Bill
The following expiring programs and pending payment cuts were addressed in the CR, extending them to a later date:
- Medicaid Disproportionate Share Hospitals (DSH): The bill eliminates the Medicaid DSH cuts through April 1, 2025.
- Medicare Dependent Hospital (MDH) & Low Volume Adjustment (LVA) Programs: The MDH and LVA programs are extended through March 31, 2025.
- Medicare Telehealth: The bill extends Medicare geographic requirement, originating site, audio-only, hospice recertification, and Rural Health Clinic (RHC) and Federally Qualified Health Center (FQHC) telehealth waivers through March 31, 2025.
- Medicare Hospital-at-Home: The bill extends the program through March 31, 2025.
- Community Health Centers (CHCs): The bill provides $1.05 billion for CHCs through March 31, 2025.
- Teaching Health Centers Graduate Medical Education (THCGME): The bill provides $43.2 million for the THCGME program through March 31, 2025.
- Medicare Pay-As-You-Go (PAYGO) Sequester: The bill prevents a 4% mandatory Medicare payment reduction from going into effect by “wiping clean” the PAYGO scorecard.
- Disaster Relief: The bill provides $29 billion in additional disaster relief funding, which will allow FEMA to continue obligating claims for hospitals and others related to the COVID-19 public health emergency and 2024 hurricanes.
To pay for these provisions, the bill includes a $1.96 billion reduction in the Medicare improvement fund.
Provisions Not Addressed by the CR Bill
The items below were initially included in a draft of the CR released December 17, 2024. However, they were omitted from the final package that was passed by Congress on December 21 and signed into law by President Biden.
- Medicare Physician Payments: On January 1, 2025, the Physician Fee Schedule conversion factor (CF) decreases from $33.29 to $32.35 (-2.8%). The draft CR included a provision that would have provided a 2.5% increase to the CF, offsetting most of the cut.
- Medicare Advanced Alternative Payment Model Bonus Extension: The draft CR included a provision that would have extended payments through the calendar year 2027 payment period at 3.53%. For the 2026 payment period, incentive payments had been reduced to 1.88% from the historic 5% (for 2025, incentive payments had been reduced to 3.5%).
- Uncompensated Care Costs for Medicaid DSH: Section 203 of the Consolidated Appropriations Act of 2021 removed costs associated with dually eligible individuals from the calculation of uncompensated care costs for Medicaid DSH. The draft CR contained a provision that reincorporated those costs into the calculation.
- Medicare Sequester Extension: The draft CR included a six-month extension (the last four months of 2032 and first two months of 2033) of the 2% Medicare sequester as a “pay-for” for the increased costs associated with the various extenders.
- Separate National Provider Identification (NPI) Number for Off-Campus Hospital Outpatient Departments (HOPDs): The draft CR included a provision requiring that off-campus HOPDs bill for services using a separate NPI number.
- Pharmacy Benefit Manager (PBM) Reform: Several reforms to PBMs were included in the draft CR as “pay-fors” for the increased cost associated with the various extenders. These included banning the use of spread pricing in the Medicaid program and preventing PBMs from getting paid based on the price of a Medicare Part D drug.
There likely will be efforts to include these omitted provisions in the next funding bill, which must be passed by March 14, 2025. However, it is uncertain at this time how successful those efforts will be.
How Forvis Mazars Can Help
Our healthcare professionals at Forvis Mazars are committed to helping healthcare organizations understand and adapt to the impact of evolving federal policies and congressional legislation. If you have questions about upcoming policy changes and how they may affect your organization, please reach out to a professional on our team.