Congress reaches landmark health policy deal on Medicare, Medicaid

UASHINGTON — Congressional leaders have reached a sweeping deal to ease pay cuts for Medicare doctors, make major changes to Medicaid policy after a pandemic and help prepare for future pandemics.

Lawmakers are aiming to pass a package of health care policies along with funding legislation for the federal government by Friday. Details of the omnibus spending package were confirmed by two lobbyists and two congressional aides.

The text of the bill has not yet been finalized and the deal is subject to change.


Medicare policy

Doctors faced 4.5 percent pay cuts in Medicare at the end of the year and had pleaded with Congress to reverse the cuts entirely. Lawmakers met them halfway: In 2023, doctors would face a 2 percent cut, and in 2024 the amount would increase to 3.5 percent, two lobbyists said.

Lawmakers are also expected to drop a rule that would have led to further cuts to Medicare. The Medicare Hospitals at Home program is also to be extended for two years.


Part of the package will be paid for by extending future Medicare payroll cuts until 2032. Leftover Medicare funds from the gun safety bill that Congress passed earlier this year were also used to pay for part of the policy.

Some behavioral health policies could also be included, as well as two-year extensions to programs that support safety net and rural hospitals.

Medicaid policy

Lawmakers also agreed to allow states to begin kicking non-eligible people off their Medicaid rolls in April, regardless of when the Covid-19 public health emergency ends. Previously, states had to agree to delay reassessing people’s eligibility in exchange for more federal Medicaid money, and the end date depended on the end of the public health emergency.

In addition, lawmakers are expected to expand Medicaid eligibility for postpartum mothers through a provision called the MOMMA Act and extend the Children’s Health Insurance Program through 2029. Medicaid children are expected to receive one year of continuous eligibility, meaning that they will not lose insurance even if their circumstances change.

Advocates have long argued that expanded coverage could help reverse staggering maternal and child mortality rates, among the worst for high-income countries. Thirty-three states had already extended care by a year after Congress passed the option in last year’s U.S. bailout, but among the 17 abstentions are some of the states with the highest maternal mortality rates in the country, numbers that only increased during a pandemic.

More stable federal Medicaid funding for Puerto Rico and other territories will be extended for five years, offering some certainty for territorial governments and providers, according to one congressional aide and one lobbyist.


Pandemic-era telehealth flexibility is expected to be extended by two years, which was a major request from the healthcare industry.

Pandemic preparedness

The pandemic preparedness package negotiated by Senate health committee leaders Patty Murray (D-Wash.) and Richard Burr (RN.C.) also made it into the deal, although it was somewhat watered down, according to one lobbyist and one aide at Congress. It’s unclear exactly which policies made the final cut.

The package includes a policy that would require Senate confirmation for the director of the Centers for Disease Control and Prevention.

There is no reform in diagnostics

A provision that would have given the Food and Drug Administration more power to regulate in-house tests developed at clinical laboratories such as academic medical centers and hospitals was stripped from the agreement. While the device industry and federal regulators supported the measure, arguing it would close an oversight gap that helped Theranos thrive with unproven tests, the labs argued it would hinder their ability to quickly diagnose patients.

Those labs eventually found sympathy with some Republicans, namely Rep. Cathy McMorris Rogers (Wash.), who will head the powerful House Energy and Commerce Committee next year, said two sources familiar with the deliberations. In addition to hesitating whether to give the FDA more authority, Rogers argued that the bill, called the VALID Act, had not gone through any hearings or markups, these two people said. FDA Commissioner Robert Califf said that if the legislation fails to make it into the omnibus, the agency will begin rulemaking to bring those labs under its regulatory umbrella.

The package is also expected to include some FDA reforms related to extending several regulatory flexibilities that Congress put in place this month to bring negotiators back to the table after they failed to reach a deal in September. At the very least, reforms to the FDA’s expedited approval process, the FDA’s authority to regulate cosmetics and a policy to promote diversity in clinical trials are expected to succeed, two lobbyists said.

Paying off nursing school

Nursing schools are also expected to get some relief from the fees they had to pay back to the government after a government blunder.

The federal government has been miscalculating funding for hospital nursing schools for nearly two decades, and now the Biden administration is forcing them to pay during the worst health care workforce crisis in decades.

Coverage of emergency use authorization products

The government is buying Covid-19 vaccines and providing them for free to everyone, but this arrangement is likely to end once the supply of government-bought vaccines runs out. As it became clear that the Biden administration would have difficulty getting Republicans to agree to more funding for pandemic preparedness, White House officials began preparing the public for commercial coverage.

To help with this transition, the bill would allow Medicare Part D plans to cover coronavirus products through 2024 that are authorized for emergency use but not approved.

Physician education about the use of opiates

The year-end package is expected to include a bipartisan bill that would require doctors to be trained to treat people with opioid use disorder, despite opposition from the American Medical Association.

John Wilkerson contributed reporting.

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