Health Care

Congress faces breakneck pace to address Medicare pay, telehealth this year

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Congress faces a lengthy to-do list when it returns from recess later this month, with action needed on major issues affecting healthcare providers.

From dealing with the threat of Medicare payment cuts to trying to pass a $3.5 trillion “human infrastructure” bill that seeks to extend healthcare coverage to millions of Americans, there will be a mad scramble to get it all done by the year-end.

Here are the most important healthcare issues on the agenda:

Medicare payment cuts

One of the highest priorities for provider groups is getting Congress to waive 4% cuts to Medicare payments that will go into effect next year, triggered by the deficit-busting COVID-19 relief law Democratic lawmakers and President Joe Biden enacted in March.

Under a budgetary rule known as PAYGO, legislation that raises the deficit must be paid for with automatic cuts to Medicare and other programs.

In the past, Congress waived PAYGO cuts before they took effect, but the politically fraught atmosphere in Washington has raised fears that $36 billion in Medicare cuts could kick in next year.

“Right now, it is going to be difficult to separate the broader politics from our reality but we need to get this solved,” said Chip Kahn, president and CEO of the Federation of American Hospitals. “On the other hand, these kinds of things usually find a way to be solved. So I’m cautiously optimistic that they’ll find a way to do it.”

The Federation of American Hospitals is urging Congress to include a PAYGO waiver in the government spending bill that needs to pass before the fiscal year ends Sept. 30.

The American Rescue Plan Act passed along party lines with no Republican support and the GOP has pushed back on waiving PAYGO despite its potential impact on healthcare providers.

The House passed a bill waiving PAYGO earlier this year, but it stalled in the Senate, where Democrats have a 50 seat majority but need 60 votes to overcome a Republican filibuster and enable a vote on the measure.

Congressional Democrats seem optimistic the issue will be resolved before cuts take effect. Democrats supported waiving PAYGO after Republicans passed a partisan tax reform bill in 2017.

“Even in the wake of contentious legislation like the Tax Cuts and Jobs Act, Congress has come together to prevent sequestration and protect Medicare, farm supports, social services, resources for students and individuals with disabilities, and other programs Americans rely on,” House Budget Committee Chairman John Yarmuth (D-Ky.) said. “I anticipate that this time will be no different.”

Hospitals also want Congress to extend a pause on the 2% across-the-board provider reimbursement cuts established under budget sequestration in 2013, which were supposed to end in 2021. As part of its COVID-19 pandemic response, Congress pushed this year’s 2% cut, valued at $18 billion, into next year. Without further congressional action, those pay reductions will take effect in January.

In addition, the bipartisan infrastructure bill under consideration partially finances its new spending by extending the sequestration cuts through 2023.

Separately, specialty provider groups are again asking Congress to for a 3.75% pay rise to offset a change in the conversion factor the Centers for Medicare and Medicaid Services proposed.

CMS increased pay for primary care doctors last year, which would have led to cuts in specialists’ reimbursements because of Medicare’s budget neutrality requirements Congress stepped in and boosted payment rates to give all Medicare physicians a 3.75% pay boost.

Telehealth expansion

Early in the pandemic, CMS expanded telehealth coverage under Medicare, but some of those temporary rules are set to expire when the public health emergency ends.

Lobbyists and patient advocates are pushing Congress to ease access to telehealth for Medicare enrollees, and they have broad support from Democratic and Republican legislators.

Providers are particularly eager for lawmakers to permanently eliminate a requirement that Medicare patients in rural areas to visit healthcare facilities to acess telehealth services. CMS waived that rule last year, vastly expanding access to telehealth, but it will return when the public health emergency is over.

“It’s important for Congress to act sooner rather than later, just to provide some certainty around the policy,” said Dan Jones, vice president of federal affairs for Alliance of Community Health Plans.

Congress likely will follow the Medicare Payment Advisory Commission’s recommendation to extend telehealth flexibilities for another few years while more data are collected.

Congress has already taken some steps toward making some telehealth expansions permanent, including passing a law in December requiring Medicare permanently cover telemental health.

But providers and advocates want Congress to eliminate a requirement that Medicare patients see a behavioral health practitioner in person before starting virtual treatment, arguing it is an unnecessary barrier to care.

Providers also want Congress to establish permanent Medicare coverage of audio-only care and to reimburse them at the same rate as for video visits.

“Human infrastructure”

Democratic leaders hope to pass a $3.5 trillion “human infrastructure” bill, which is expected to include Affordable Care Act subsidies for households with incomes over 400% of the poverty level, which is about $51,000 for a single person.

The American Rescue Plan Act offered health insurance subsidies to these higher-income earners for the first time, but the assistance expires in 2023. The new bill is expected to extend them or make them permanent.

The infrastructure measure is also expected to close the Medicaid coverage gap, most likely by providing heavily subsided private insurance to two million low-income adults living in the 12 states that haven’t adopted the ACA’s Medicaid expansion.

Higher rates of health coverage among low-income patients would be a boon for rural hospitals in those dozen states, which include Florida and Texas. Rural hospitals in non-expansion states are more likely to suffer negative margins or even to close than their counterparts in densely populated areas.

The legislation could also address healthcare provider shortages by expanding the Medicare Graduate Medical Education program, according to a memo the Senate Budget Committee sent to Democratic senators.

Democrats also want to add dental, vision and hearing benefits to Medicare, fund an expansion of Medicaid home- and-community-based services and strengthen pandemic preparedness programs.

Provisions to lower drug prices, and federal spending on prescription medicines, are expected to generate budgetary savings that will partly offset the cost of the new Medicare benefits.

The American Hospital Association wants Congress to include several items in the bill addressing the health workforce, including by lifting the cap on Medicare-funded residency positions, adding Medicare residency slots for addiction medicine, expanding nursing schools and training programs, and expediting the visa authorization process for foreign nurses. The AHA outlined its goals in a letter sent to to congressional leaders Thursday.

The AHA also asks Congress to provide temporary relief to hospitals that had to leave the 340B Drug Pricing Program due to changes in their patient mix caused by COVID-19 and to fund capital investments through grants to hospitals.

The prospects for the entire legislative package were dampened, however, when Sen. Joe Manchin (D-W.V.) called for a “pause” in negotiations Thursday and questioned enacting a $3.5 trillion bill without finding budgetary offsets to finance the new spending.

Funding the government

In addition to all of that, Congress still has to avoid a government shutdown by passing a funding bill before Oct. 1. The House passed several appropriations bills on which the Senate hasn’t acted.

Congress likely will pass a continuing resolution to keep the government open until lawmakers can agree on a spending package for fiscal 2022.

The House-passed HHS appropriations bill includes several provisions of importance to providers, including $367 million in earmarks to finance the construction and renovation of healthcare facilities The legislation also includes increased funding for workforce development, rural health, medical student education and pandemic preparedness for hospitals.

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