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Odds slip for health package revival
February 20, 2025 1:22 pm

With a little more than three weeks to go, chances are dimming to revive the health care package that fell out of the year-end funding deal and add it to the next spending package.

Why it matters: Long-delayed measures that would overhaul PBM business practices, target drug company “patent thickets” and start to address Medicare hospital spending will probably remain in limbo.

Driving the news: There is disarray around the broader government funding talks ahead of the March 14 deadline, with Democrats looking to ensure President Trump doesn’t impound appropriated funds and a possible shutdown looming. Adding a health care package to the mix could further complicate things.

  • Trump and Elon Musk blew up a spending deal with the health package in December, and adding hundreds of pages of health provisions again in March could invite more outbursts on the GOP side.
  • Democrats say they are eager to revive the health package but have not seen much interest from Republicans.
  • “No vehicle, none, should be something that you pass up,” Senate Finance Committee Ranking Member Ron Wyden told Peter.
  • “This is a chance to help seniors and taxpayers and talk about health care in a real way, not a concept way, a real way that helps people,” he added.
  • A spokesman for Finance Committee Republicans said there is no update to share on the package.

Between the lines: Democrats do not want to reopen the deal and pick and choose which parts to advance.

  • “I don’t see a clamor to change it,” Wyden said.
  • Beyond the big policy changes, Congress faces deadlines at the end of March for renewing expiring provisions like community health center funding and telehealth flexibilities that were temporarily extended as part of the year-end deal.
  • Without the full health package, lawmakers will likely have to assemble a smaller, must-pass extenders package.

Yes, but: Some influential industry groups are still eager to see a more robust health package and could try to revive it.

  • Doctors are pushing for relief from Medicare payment cuts that took effect Jan. 1, and drugmakers have long made a major push for PBM changes.

But much of the GOP focus remains on the party-line reconciliation process, which could include major Medicaid or other health care changes.

  • House Republicans could, in theory, try to move the health package as a stand-alone measure if it doesn’t get wrapped into the March funding package. But it would be difficult for the Senate to find floor time for that stand-alone legislation.
 
 
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News   
02/20/25 1:22 PM EDT   
     
Odds slip for health package revival
axios.com

With a little more than three weeks to go, chances are dimming to revive the health care package that fell out of the year-end funding deal and add it to the next spending package.

Why it matters: Long-delayed measures that would overhaul PBM business practices, target drug company “patent thickets” and start to address Medicare hospital spending will probably remain in limbo.

Moderate GOPers fret over Medicaid
February 18, 2025 1:54 pm

House Republicans from competitive districts are raising concerns about the prospect of large Medicaid cuts — and are pointing to recent comments from President Trump to reinforce their case.

Why it matters: House GOP leaders’ hopes of passing a reconciliation package could be sunk with two defections, assuming Democrats are unified in opposition.

  • But it will be hard to hit targets like those laid out in the Republican budget resolution without major changes to the safety net program.

Driving the news: With the House budget calling for as much as $2 trillion in cuts to mandatory spending, moderates are sounding the alarm that they don’t want their constituents’ Medicaid benefits harmed.

  • “I think President Trump made clear it’s all right to do work requirements, it’s all right to make sure we have valid people, but any significant cuts to Medicaid as it would affect a patient, he would oppose,” Nebraska Rep. Don Bacon, who represents one of the most competitive House districts, told reporters after the budget was released last week.
  • “I think he’s got the right gut instinct on this,” Bacon added.
  • “President Trump has said he really doesn’t want to touch Medicaid, so I’m not sure how they’re gonna come up with the cuts,” said New York Rep. Andrew Garbarino.

One vulnerable freshman, Pennsylvania Rep. Rob Bresnahan, fired a public warning shot on X. “If a bill is put in front of me that guts the benefits my neighbors rely on, I will not vote for it,” he wrote.

What they’re saying: Trump made waves at the end of January by telling reporters that he wanted only to cut “abuse or waste” in Medicaid, not anything that would “affect” beneficiaries.

  • Those comments leave considerable wiggle room, though, and it’s not clear exactly what changes would meet Trump’s standard.
  • Speaker Mike Johnson similarly sought to reassure his caucus and the public last week, saying that only “non-benefit-related reforms to the program” are on the table.
  • But with a budget that calls for at least $880 billion in cuts from the Energy and Commerce Committee, which oversees Medicaid, the math could force major changes to the program that would require states to squeeze benefits or have people lose coverage.

Between the lines: The budget sets only the overall goal for cuts, so the specifics of what changes would be made to Medicaid to reach that number are not yet clear.

  • Another New York Republican, Rep. Nick LaLota, said he is waiting to see the details.
  • “It’s too early right now in this budget resolution. It doesn’t get specific on things like [Medicaid],” he told reporters. “We’re gonna see in the budget reconciliation [bill] what the specific proposals are.”
 
 
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News   
02/18/25 1:54 PM EDT   
     
Moderate GOPers fret over Medicaid
axios.com

House Republicans from competitive districts are raising concerns about the prospect of large Medicaid cuts — and are pointing to recent comments from President Trump to reinforce their case.

Why it matters: House GOP leaders’ hopes of passing a reconciliation package could be sunk with two defections, assuming Democrats are unified in opposition.

House and Senate Budget Resolutions Move Forward Under Reconciliation
February 14, 2025 12:54 pm

Introduction

Congress is currently considering budget resolutions in both the House and Senate to establish spending and revenue frameworks for fiscal year 2025 through fiscal year 2034. These resolutions will guide the development of legislation that will be advanced using the budget reconciliation process, which allows for expedited passage of certain fiscal policies. The primary motivation behind these resolutions is to accommodate the extension of the 2017 Trump-era tax cuts, which are set to expire on December 31, 2025. Republicans, who control the House, are prioritizing tax reductions, spending caps, and cuts to entitlement programs, while Democrats argue for maintaining social safety net programs and increasing revenue through corporate tax adjustments.

Senate Budget Committee Chairman Lindsey Graham (R-SC) and House Budget Committee Chairman Jodey Arrington (R-TX) are leading efforts to pass their respective resolutions, which serve as blueprints for future legislative action. The political landscape is highly contentious, as Democrats control the Senate, and any final budget reconciliation bill will require careful negotiations to secure passage. The deadline for passing a budget resolution is March 7, 2025, when committee chairs must submit their reconciliation instructions. Both the Senate and House resolutions passed on strict party-line votes.

Understanding Budget Reconciliation

Budget reconciliation is a legislative process that enables Congress to adjust spending, revenues, and the federal debt limit with a simple majority vote in the Senate, bypassing the 60-vote filibuster threshold. This process is particularly significant when controlling party leadership seeks to implement budgetary priorities without requiring bipartisan support.

The House and Senate are taking different approaches to reconciliation. The Senate is considering two separate reconciliation bills. The first will focus on border security, military funding, and energy policy, while the second, expected later in the year, will address extending tax cuts and enacting additional spending reductions. This strategy is intended to secure passage of politically favorable provisions first while allowing more time for negotiations on tax and spending policies. The House, on the other hand, is taking a more comprehensive approach by consolidating its reconciliation provisions into a single bill that covers tax cuts, spending, and deficit reduction.

Current Status of the Budget Resolutions

Senate Budget Resolution

  • The Senate Budget Committee approved its resolution on February 7, 2025, on a party-line vote.
  • The resolution proposes $85.5 billion in new spending per year, offset by corresponding spending reductions.
  • The resolution instructs Senate committees to identify budget cuts, with some committees assigned specific reduction targets:

    – Finance Committee: No specific dollar amount assigned, but expected to propose tax changes and spending adjustments.
    – Homeland Security Committee: Propose up to $175 billion in border security funding.
    – Armed Services Committee: Allowed up to $150 billion in military spending increases.
    – Energy and Natural Resources Committee: Propose at least $1 billion in reductions related to federal energy programs.
    – Health, Education, Labor, and Pensions (HELP) Committee: No specific dollar target, but tasked with proposing cost-saving measures in healthcare and education programs.
    – Agriculture Committee: Cut at least $1 billion in agricultural subsidies and nutrition assistance programs.

The resolution sets a March 7, 2025, deadline for committee recommendations.

House Budget Resolution

  • The House Budget Committee’s resolution was introduced on February 12, 2025, and was approved on a party-line vote.
  • It proposes increasing the debt ceiling by $4 trillion while allocating $4.5 trillion for tax cuts and various spending initiatives.
  • The resolution instructs seven House committees to identify at least $1.502 trillion in mandatory spending reductions over the next decade.
  • Committee Instructions:

    – Energy and Commerce Committee: Propose a minimum of $880 billion in Medicaid and Medicare cuts.
    – Ways and Means Committee: Identify revenue-neutral tax adjustments while preserving Trump-era tax cuts.
    – Armed Services Committee: Allowed up to $150 billion in defense spending increases.
    – Homeland Security and Judiciary Committees: Each allowed to propose up to $175 billion in spending increases.
    – Transportation and Infrastructure Committee: Propose up to $20 billion in spending increases.
    – Agriculture Committee: Cut $1 billion from nutrition assistance programs.

Key Budget Provisions and Policy Changes

Senate Budget Resolution

  • Health Care: No specific dollar instructions, but committees are expected to find savings through modifications to Medicaid and Medicare.
  • Defense and Border Security: Authorizes up to $150 billion in military spending increases and up to $175 billion for border security measures.
  • Energy and Infrastructure: Seeks at least $1 billion in federal energy program reductions.
  • Tax Policy: Expected to include tax reforms, though no specified amounts were provided in the resolution.

House Budget Resolution

  • Health Care: Requires the Energy and Commerce Committee to propose at least $880 billion in Medicaid and Medicare cuts.
  • Defense and Border Security: Allows up to $150 billion for defense spending increases and up to $175 billion for border security.
  • Energy and Infrastructure: Infrastructure spending allocations remain under negotiation, but energy program cuts are expected.
  • Tax Policy: Preserves Trump-era tax cuts while requiring Ways and Means Committee to identify tax adjustments that are revenue-neutral.

Proposals Under Consideration Include:

  • Federal Funding Changes
    – Reduction in federal matching rates for Medicaid expansion populations (currently 90%)
    – Implementation of per capita caps on federal spending
    – Adjustments to minimum federal match rates, particularly affecting higher-income states
  • Provider Payment Reforms
    – Modifications to state-directed payments to providers
    – Changes to supplemental payment programs
    – Review of provider tax arrangements
    – Adjustments to hospital payment rates
  • Current Payment Context
    – State-directed payments total over $110 billion for 2024
    – 29 payment arrangements exceed $1 billion annually

Next Steps

  • The Senate is expected to consider its budget resolution within the coming weeks, with committee chairs required to submit spending cut proposals by March 7, 2025.
  • The House budget resolution will likely undergo modifications before a final vote, with ongoing deliberations on Medicaid reforms and tax policy adjustments.
  • Both chambers must reconcile differences between their budget resolutions before proceeding with formal reconciliation legislation.

Next Steps in the Budget Reconciliation Process

With both the House and Senate budget resolutions approved along party lines, the focus now shifts to the reconciliation process. The next major deadline is March 7, 2025, when committees in both chambers must submit their recommendations for spending cuts and tax policy adjustments as outlined in their respective resolutions.

  • Senate Process

    – The Senate Budget Committee will begin reconciling the proposed spending and revenue frameworks to ensure compliance with procedural rules.
    – Senate committees with reconciliation instructions—including Finance, Homeland Security, Armed Services, Energy and Natural Resources, HELP, and Agriculture—must finalize and report their recommended changes by the March 7 deadline.
    – Once committee recommendations are compiled, Senate leadership is expected to introduce the first reconciliation bill focusing on border security, military funding, and energy policy by mid-March. Debate and a floor vote are anticipated before the March 14 government funding deadline.
    – A second reconciliation bill addressing tax cuts and broader spending reductions will follow later in the year, with negotiations expected to intensify in the summer and fall ahead of the December 31, 2025, expiration of Trump-era tax cuts.

  • House Process

    – The House Budget Committee will continue refining the reconciliation package, incorporating spending cuts and revenue provisions mandated by committee instructions.
    – The Energy and Commerce Committee is expected to advance proposals for $880 billion in health care-related cuts, likely triggering significant debate over Medicaid and Medicare policy.
    – The Ways and Means Committee will finalize tax policy proposals, ensuring preservation of Trump-era tax cuts while identifying potential offsets to maintain revenue neutrality.
    – House leadership aims to bring a single, comprehensive reconciliation bill to the floor by early April, with passage expected along party lines.

Reconciliation Bill Passage and Final Negotiations

  • Once both chambers pass their respective reconciliation bills, differences will need to be reconciled in conference negotiations.
  • Given the narrow Senate majority and procedural restrictions, leadership will need to ensure that the final reconciliation package meets the Byrd Rule requirements, limiting the inclusion of provisions unrelated to budgetary matters.
  • Final passage is anticipated in the late spring or early summer, with additional modifications likely if Senate and House versions diverge significantly.

The reconciliation process remains fluid, with ongoing political negotiations influencing the final scope of tax and spending measures. Both parties will be positioning for broader fiscal debates in the run-up to the 2026 elections, further shaping the legislative trajectory of budgetary policies.

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News   
02/14/25 12:54 PM EDT   
     
House and Senate Budget Resolutions Move Forward Under Reconciliation
Washington Stategic Consulting, Inc

Congress is currently considering budget resolutions in both the House and Senate to establish spending and revenue frameworks for fiscal year 2025 through fiscal year 2034. These resolutions will guide the development of legislation that will be advanced using the budget reconciliation process, which allows for expedited passage of certain fiscal policies.

House Budget Committee Releases FY 2025 Budget Resolution
February 12, 2025 1:47 pm

The House Budget Committee just released its budget resolution for Fiscal Year 2025, laying out a Republican-led fiscal blueprint aimed at advancing tax cuts, spending reductions, and debt management over the next decade. While the resolution does not contain specific policy changes, it provides broad fiscal targets and reconciliation instructions to House committees, directing them to develop detailed spending cuts and policy changes within their jurisdictions. This allows for increased spending in some areas—such as defense and border security—while mandating deep reductions in mandatory spending, particularly in health programs.

1. Massive Tax Cuts & Debt Increase

  • $4.5 trillion in tax cuts over ten years.
  • $4 trillion debt limit increase to accommodate policy changes.

2. Major Spending Reductions

  • $1.5 trillion in spending cuts over ten years.
  • House Energy and Commerce Committee is instructed to find $880 billion in savings, likely through significant Medicaid reductions.
  • The Ways and Means Committee is expected to propose changes that would increase the deficit but offset cuts elsewhere.
  • The resolution directs multiple committees to propose deficit reductions, meaning further cuts to social services, health programs, and income security programs will likely follow.

3. Health Spending Cuts and Potential Impact

  • While specific policies are not included, committees must develop proposals to achieve the required spending reductions.
  • Medicaid is expected to face substantial cuts, with reductions likely beyond work requirements that moderate Republicans previously debated.
  • Changes could force states to shoulder more of Medicaid costs, potentially resulting in reduced eligibility or fewer covered services.
  • Other health-related spending reductions could include cuts to Medicare provider payments, public health funding, and federal subsidies for healthcare programs.

4. New Defense & Border Security Spending

  • $300 billion in additional spending for border security and defense over the decade.
  • Proposed $150 billion increase in defense spending.
  • $175 billion boost for border security.

5. Budget Reconciliation Strategy

  • The resolution outlines reconciliation instructions, allowing Republicans to pass legislation with a simple majority in the Senate and bypass filibusters.
  • It directs House committees to find ways to reduce spending or raise revenue in various sectors.

6. Republican Policy Priorities

  • Cuts to regulations to promote economic growth.
  • Expanded American energy production as a key economic driver.
  • Deregulation of markets to reduce “bureaucratic red tape.”

7. Controversy & Political Dynamics

  • Senate Republicans, led by Lindsey Graham, are working on a backup plan in case the House effort falters.
  • Democrats strongly oppose the plan, warning about its potential impact on healthcare, social services, and overall economic stability.
  • The resolution’s impact on Medicaid and potential loss of benefits is expected to create backlash from moderate Republicans and GOP governors.

This one-bill House approach stands in contrast to the Senate’s two-part reconciliation strategy, setting the stage for intense negotiations between the two chambers. The resolution is expected to be marked up in committee this week before moving to the full House for a vote.

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News   
02/12/25 1:47 PM EDT   
     
House Budget Committee Releases FY 2025 Budget Resolution
Washington Strategic Consulting

The House Budget Committee just released its budget resolution for Fiscal Year 2025, laying out a Republican-led fiscal blueprint aimed at advancing tax cuts, spending reductions, and debt management over the next decade. While the resolution does not contain specific policy changes, it provides broad fiscal targets and reconciliation instructions to House committees, directing them to develop detailed spending cuts and policy changes within their jurisdictions.

GOP leans toward Medicaid work rules
February 6, 2025 9:51 am

Republicans say work requirements are the most likely Medicaid change in a reconciliation bill, though a conservative push for deeper cuts could force more changes to the safety net program.

Why it matters: Medicaid is caught in the middle as House Republicans debate the extent of budget cuts, with conservatives pushing for as much as $2.5 trillion in spending reductions. 

Driving the news: Lawmakers leaving a House GOP Conference meeting this morning said that work requirements could be the likeliest Medicaid change to make it into reconciliation and win support across the caucus.

  • House Energy and Commerce Chair Brett Guthrie said sentiment within the GOP conference was favorable to tightening eligibility criteria, requiring work for able-bodied people and equalizing payments for the Medicaid expansion population.
  • But Guthrie and some others want to go further and enact per capita caps, which he termed “a better way to go for states.”

Guthrie said his committee discussed offering up a minimum of $200 billion in savings during the recent GOP retreat in Florida.

  • Medicaid work requirements are estimated to save around $120 billion, per a recent GOP House Budget Committee document.
  • A 2023 CBO estimate of work requirements found they would save over $100 billion over 10 years and 600,000 people would become uninsured.

State of play: But hardliners are pushing for more. Conservative Budget Committee member Ralph Norman told reporters this morning that he wants $2.5 trillion in cuts, a hard target to reach.

  • He would impose work requirements in Medicaid and in SNAP. Asked if he wanted to go further and also cap Medicaid spending, Norman acknowledged the political challenge: “That would be my dream. Now the likelihood of that? We struggle with work requirements.”
  • House Freedom Caucus policy chair Chip Roy said that “there’s a lot of agreement” across the conference on Medicaid work requirements. He added that there’s some “general agreement” on dialing back federal matching payments for the expansion population, though the impact would vary across states.

Between the lines: President Trump’s comments last week about not wanting cuts to “affect” Medicaid beneficiaries are also complicating the discussion, since major cuts could lead to coverage loss.

  • “We’re still trying to determine and getting some clarification, that will come today and tomorrow with the president, about exactly what he meant with the Medicaid cuts,” Rep. Buddy Carter told reporters.
  • Adding to the challenge, Senate Republicans and some in the House are still pushing for two reconciliation bills instead of one, which would likely roll any health care cuts into the second bill.
  • Rep. Byron Donalds left this morning’s conference meeting pushing for two bills, enabling Republicans to move first on a border and energy proposal.

The bottom line: Winning over conservatives and moderates for any cuts is a major challenge.

  • Asked if he had heard moderate concerns about Medicaid cuts, Guthrie acknowledged, “Everybody’s concerned about their rural hospitals.”
  • He added further discussions will help. “It just takes a while to explain it,” he said.
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News   
02/06/25 9:51 AM EDT   
     
GOP leans toward Medicaid work rules
axios.com

Republicans say work requirements are the most likely Medicaid change in a reconciliation bill, though a conservative push for deeper cuts could force more changes to the safety net program.

Why it matters: Medicaid is caught in the middle as House Republicans debate the extent of budget cuts, with conservatives pushing for as much as $2.5 trillion in spending reductions. 

How to “cherish” Medicaid as cuts loom
February 3, 2025 1:18 pm

President Trump appeared to extend his pledge not to cut Social Security and Medicare benefits to Medicaid on Friday — a change that could complicate Republicans’ plans for a reconciliation package.

Why it matters: House Republicans are discussing significant cuts to the safety net program to pay for an extension of tax cuts. But Trump, in his remarks, left enough wiggle room to keep the option alive in some form.

What they’re saying: “We’re going to love and cherish Social Security, Medicare, Medicaid,” Trump told reporters Friday in wide-ranging remarks.

  • “We’re not going to do anything with that other than if we can find some abuse or waste, we’ll do something, but the people won’t be affected,” he added. “It’ll only be more effective and better.”

Between the lines: A lot obviously depends on the definition of “abuse or waste.”

  • But it would be hard for Republicans to make hundreds of billions of dollars in proposed Medicaid cuts under discussion through policies like per capita caps and not have beneficiaries be “affected,” as Trump put it.
  • Larry Levitt, executive vice president for health policy at KFF, wrote on X that if House Republicans followed through with the full scale of Medicaid cuts they’ve floated, “it’s hard to imagine that could be all fraud or waste and not affect beneficiaries.”

Yes, but: Much will still come down to how much of the roughly $4 trillion tax cut package Republicans look to offset.

  • House Budget Committee members are already pushing for deeper cuts, which puts a focus on Medicaid.
  • On the other hand, more moderate House Republicans are likely to be uneasy with substantial Medicaid cuts.

The bottom line: Raymond James analyst Chris Meekins wrote in a note that the definition of “abuse” and “waste” is “really in the eye of the beholder.”

  • He cited actions around state-directed payments with exponential growth as something that could be considered “abuse.”
  • “Our view remains that Medicaid will be a topic of sizable cuts from Republicans in Congress,” he wrote.
  • “The amount of those cuts likely largely will come down to how much money they feel they need to offset for the tax cuts and other spending they want to do.”
 
 
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News   
02/03/25 1:18 PM EDT   
     
How to “cherish” Medicaid as cuts loom
axios.com

President Trump appeared to extend his pledge not to cut Social Security and Medicare benefits to Medicaid on Friday — a change that could complicate Republicans’ plans for a reconciliation package.

RFK Jr.’s HHS Nomination: Key Takeaways from Senate Hearings
January 31, 2025 11:54 am

Introduction

Robert F. Kennedy Jr., President Donald Trump’s nominee to serve as Secretary of Health and Human Services (HHS), appeared before the Senate Finance Committee on January 29 for his confirmation hearing, followed by a courtesy hearing before the Senate Health, Education, Labor & Pensions (HELP) Committee on January 30. The Finance Committee holds the authority to advance the nomination, while the HELP Committee hearing served as an opportunity for senators to further question the nominee without voting on his confirmation.

Kennedy’s testimony covered a range of issues, including his commitment to addressing chronic disease, promoting transparency in healthcare, and reforming the nation’s regulatory and policy approach to public health. While some Republican senators praised his focus on patient empowerment and reducing bureaucratic inefficiencies, Kennedy’s responses to key policy questions—especially regarding Medicare, Medicaid, and vaccines—raised concerns about his preparedness for the role.

Kennedy’s Opening Remarks and Policy Focus

  • Chronic Disease and Healthcare Costs: Kennedy cited rising rates of chronic disease, particularly obesity, diabetes, and autoimmune conditions, as primary drivers of healthcare costs. He argued for increased research into environmental factors contributing to these conditions and called for policies to promote preventive care. He provided specific statistics, noting an increase from 2% to 66% in childhood chronic disease rates since the 1960s, $4.3 trillion annual spending on chronic disease management, and that 38% of teens are now diabetic or pre-diabetic according to NIH data.
  • Healthcare Transparency: He advocated for greater price transparency in medical billing and pharmaceutical costs, stating that increased transparency would lead to competition and lower costs. However, he did not specify how his approach might differ from existing transparency requirements.
  • Regulatory Reform: Kennedy pledged to eliminate inefficiencies within HHS agencies, reduce regulatory burdens on healthcare providers, and remove perceived financial conflicts of interest in federal health agencies.
  • Patient-Centered Care: He underscored the importance of shifting healthcare toward a more personalized and patient-driven approach, including alternative care models and holistic treatment strategies.

Medicare and Medicaid: Key Challenges and Concerns

The hearings revealed significant gaps in Kennedy’s understanding of fundamental Medicare and Medicaid operations. Key misstatements included:

  • Medicare Basics: Sen. Maggie Hassan (D-NH) asked Kennedy to define Medicare Part A. Kennedy incorrectly responded that it primarily covers primary care organizations.
  • Medicaid Funding and Reform: Kennedy mistakenly stated that Medicaid is entirely federally funded, whereas it is a joint federal-state program.
  • Healthcare Affordability: When asked about Medicaid beneficiaries’ financial challenges, Kennedy inaccurately described high premiums and deductibles, which are typically associated with private insurance rather than Medicaid.

Additional Medicare and Medicaid Positions:

  • Expressed strong support for Medicare Advantage while acknowledging “people can’t afford it. It’s much more expensive”.
  • Stated Medicaid “is not working for Americans” and that “the poorest Americans are now being robbed” despite increased program spending.
  • Proposed experimenting with pilot programs in each state focused on value-based care.
  • Advocated for transitioning to direct primary care systems and expanding telehealth access.

Healthcare Payment Reform

Kennedy proposed several changes to healthcare payment systems:

  • Suggested implementing “health savings accounts and cooperatives” within Medicare and Medicaid programs, though he did not provide specific details about implementation.
  • When questioned about site-neutral payments and other payment reforms, he deferred to Congress’s authority, stating that “regional price points are set by Congress and not by HHS”
  • Advocated for changes in reimbursement structures, though specific proposals were not detailed

New Administrative Initiatives:

  • Committed to implementing “radical transparency” across HHS operations
  • Plans to appoint a former prosecutor as general counsel to address Medicare fraud
  • Pledged to coordinate payment reforms with healthcare providers
  • Emphasized transitioning to value-based care while maintaining provider stability

Vaccine Policy and Public Health

  • Bill Cassidy’s (R-LA) Concerns: Cassidy repeatedly asked Kennedy to affirm that vaccines do not cause autism. Kennedy declined to make a definitive statement.
  • Republican Concerns: Moderate Republican senators Lisa Murkowski (R-AK) and Susan Collins (R-ME) expressed skepticism about Kennedy’s ability to lead HHS given his past statements.
  • Kennedy’s Commitments: Under questioning, Kennedy pledged not to change vaccine recommendations without scientific consensus and stated he would not divert funding away from vaccine programs.

Key Issues Left Unaddressed

Despite the breadth of the hearings, Kennedy did not address several critical policy issues relevant to the healthcare sector:

  • Hospital Funding and Provider Reimbursement
  • Immigration and Healthcare Access
  • Site-Neutral Payment Policies
  • Medicaid Disproportionate Share Hospital (DSH) Payments
  • Tax Changes for Healthcare Providers
  • Cybersecurity in Healthcare
  • Supply Chain Resilience
  • Home Care and Hospital-at-Home Models
  • 340B Drug Pricing Program

Confirmation Prospects and Next Steps

Sen. Bill Cassidy, a crucial vote on the Senate Finance Committee, remained undecided following the hearings. If the nomination reaches the full Senate, Kennedy could face significant challenges. With most Democrats expected to oppose him, he can afford to lose only a few Republican votes and still be confirmed.

The committee has set a deadline of 5:00 PM on January 31 for additional questions for the record, with responses expected to provide further clarity on Kennedy’s positions and plans. If confirmed, Kennedy would become the 28th Secretary of Health and Human Services.

 

 

 

 

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News   
01/31/25 11:54 AM EDT   
     
RFK Jr.’s HHS Nomination: Key Takeaways from Senate Hearings
Washington Strategic Consulting

Robert F. Kennedy Jr., President Donald Trump’s nominee to serve as Secretary of Health and Human Services (HHS), appeared before the Senate Finance Committee on January 29 for his confirmation hearing, followed by a courtesy hearing before the Senate Health, Education, Labor & Pensions (HELP) Committee on January 30.

Medicaid Health Provider Taxes Targeted for House Budget Cuts
January 29, 2025 2:34 pm
  • States use levies on hospitals, others to finance programs
  • Taxes seen as way to boost federal matching funds

A congressional bid to trim Medicaid costs by curbing state taxes on health-care providers stands to face pushback from governors over concerns it would shift more of the program’s cost burden to states.

States use taxes on providers such as hospitals and nursing homes to generate state Medicaid funding, which is used to generate federal matching payments to the states. The financing method, which is adopted by 49 states and the District of Columbia, is criticized by some policy observers as a creative maneuver that artificially boosts the amount of funding states receive from the federal government.

Republican members of the House Budget Committee this month circulated a menu of potential spending reform options, one of which would limit Medicaid provider taxes with hopes of yielding about $175 billion in savings.

House Republicans floated the changes for possible inclusion in a reconciliation bill that could help pay for an eventual extension of expiring Trump tax cuts. Lawmakers aim to hash out the details of what will be in the package over the coming weeks.

Other changes include over $2 trillion in cuts to Medicaid through the introduction of a per capita cap, in which states would receive a fixed amount of federal funding on a per-person basis, work requirements, and various other reductions.

Aggressive Reforms Less Likely

However, policy analysts like Matt Salo, former executive director of the National Association of Medicaid Directors, predict that the most aggressive cost-cutting measures like per capita caps will be less likely to make it through the finish line than more modest reforms like reining in provider taxes.

“There will be a very strong motivation to do that. However, I think it will run into equally as aggressive opposition from a lot of very, very, well-connected political stakeholders for whom they simply could not afford to have that money go away like that,” Salo said.

Per capita caps have been singled out by organizations like the National Association of Counties, KFF, and the Center on Budget and Policy Priorities as untenable, largely because the move would force states to set rates well below what’s needed to keep pace with rising health-care costs. Medicaid is already a “lean” program by federal insurance standards, with providers receiving reimbursement at rates over 22% lower than Medicare, based on an analysis of payment rates conducted by the Medicaid and CHIP Payment and Access Commission.

This leaves provider taxes as one of the most likely cost-cutting approaches to make headway with lawmakers, according to Mary Mayhew, CEO of the Florida Hospital Association and former deputy administrator and director of the Center for Medicaid and CHIP Services under the first Trump Administration.

“At the end of the day, regardless of whether it’s a Democratic administration or a Republican administration, there has been a focus on Medicaid spending, at least in terms of how states have drawn down federal funds. I expect that will continue to be part of the equation, Mayhew said.

Economic Impacts

According to Salo, Medicaid provider taxes have drawn criticism from some stakeholders as contributing to the program’s rising costs due to there being no cap on the amount of federal matching funds a state can theoretically accumulate. The Committee for a Responsible Federal Budget estimates that in 2018, the most recent year for which data is available, provider taxes funded 17% of states’ contributions to Medicaid, equaling $37 billion.

“Whether the state pays a million dollars or the state pays $100 billion, as long as it’s doing so appropriately, the federal government has to put in its share,” Salo said.

Although a recent analysis from the Congressional Budget Office determined that ending this financing scheme could save the federal government billions, David Machledt, a senior policy analyst at the National Health Law Program, cautioned that the move would do more to shift the burden of high health-care costs to states than address the root cause of the problem.

“There’s not a lot of places you can cut Medicaid,” he said. “The options are cutting provider rates, which reduces access; cutting eligibility, or cutting optional services. And those optional services are really important—they include long-term community-based care for people with disabilities and other things like that. So it doesn’t end in a good place when you shift the cost onto states,” Machledt said.

State Opposition

Machledt says some of the loudest opposition to a ban on provider taxes could come from Republican-led non-expansion states such as Texas that lean more heavily on provider taxes to fund their Medicaid program. Those states often have greater populations relying on care from a shrinking pool of rural hospitals that are more vulnerable to cuts in Medicaid reimbursement.

For example, a 2020 proposed rule that would have tightened restrictions on provider taxes was eventually pulled after governors expressed concern that the rule would “result in decreased access to care for many vulnerable Americans.”

This time around, Mayhew expects renewed opposition from states to prevent a downstream increase in health-care costs.

“At the end of the day, it’s about how well these Medicaid programs throughout the country are meeting the needs of the individuals who depend on the program,” said Mayhew.

“This is at the heart and should be front and center in all of these discussions,” she added.

>
News   
01/29/25 2:34 PM EDT   
     
Medicaid Health Provider Taxes Targeted for House Budget Cuts
bgov.com
  • States use levies on hospitals, others to finance programs
  • Taxes seen as way to boost federal matching funds

A congressional bid to trim Medicaid costs by curbing state taxes on health-care providers stands to face pushback from governors over concerns it would shift more of the program’s cost burden to states.

Hospital-at-home alternatives score with some providers
January 28, 2025 9:42 am

Providers are bypassing Medicare requirements to set up scaled-down hospital-at-home programs they say save money by reducing hospitalizations.

Ochsner Health, Los Angeles General Medical Center and TRU PACE in Colorado are among those offering home-based hospital programs that are less expensive and quicker to set up than the Acute Hospital Care at Home program, which has an uncertain future. Providers say the programs free up hospital beds for sicker patients and save money by keeping some patients in risk-based care plans out of the hospital. However, most of the in-home hospital programs don’t have the rigorous guardrails mandated in the Medicare waiver program.

Delivering hospital-level care in the home makes sense if patients prefer it, it’s safe and it’s cost-effective, said Matthew Notowidigdo, a healthcare economics professor at the University of Chicago’s Booth School of Business who studies hospital-at-home. However, he said the savings generated by these programs should not dictate where a patient receives care.

“There is always a concern that the insurers are going to respond to those incentives and try to manipulate the system in a way that is not great for patients,” Notowidigdo said.

The Medicare Acute Hospital Care at Home program requires hospitals to send nurses to patients’ homes twice a day, remotely monitor them at all times, provide meals and provide some nonmedical services for two to five days. Medicare reimburses at the same rate for hospital-at-home as it does for a facility stay. The Centers for Medicare and Medicaid Services has approved waivers for nearly 380 hospitals, but some haven’t launched hospital-at-home programs because they can be costly and hard to scale.

Those were among the reasons New Orleans-based Ochsner Health opted not to apply for the Medicare waiver, said Dr. Logan Davies, medical director of hospital access and throughput at Ochsner Medical Center. Instead, the nonprofit health system partnered last year with myLaurel, a New York-based home healthcare company, to offer its own hospital-at-home program called Acute Care at Home.

Davies said approximately 500 patients enrolled in the program last year and they had fewer emergency room visits and hospital admissions, which resulted in a $1,400 return on investment per enrollee.

Patients enrolled in Ochsner’s accountable care organization are eligible for the program and get referred to it from the emergency room. Then myLaurel sends a nurse or paramedic to the patient’s home within a day of admission and provides additional visits over a 15-day period, depending on the patient’s condition. Patients also receive supplemental telehealth support and prescriptions.

myLaurel bills Ochsner a flat fee for the first home visit and bundles fees for other services based on a patient’s length of stay, said Lisa Sasko, myLaurel’s chief growth officer.

Ochsner launched the program in March at its flagship medical center in New Orleans and expanded it to three more hospitals over the last two months. Davies said the system’s program is more flexible, and allows the system to provide only the services patients actually need.

“We can gauge what the patient’s clinical needs are and spec out a care delivery program that is specific to that patient’s condition,” Davies said.

The Medicare waiver’s rigid requirements — particularly the twice-daily nurse visits —prompted Los Angeles General Medical Center to develop its all-virtual Safer@Home program in 2020, said Dr. Brad Spellberg, the hospital’s chief medical officer.

“We don’t have enough staff to be sending them all over the county of Los Angeles,” Spellberg said.

Safer@Home provides home-based hospital care to eligible patients, who are mostly uninsured or on Medicaid. Patients receive virtual clinical visits, remote vital sign monitoring and oral or inhaled medications rather than intravenous therapy. Nurses and physicians are on hand for virtual care 12 hours a day, 7 days a week. Patients are released from the program when their conditions either improve or escalate, requiring in-person care.

In a study published last year in JAMA Network Open, Los Angeles General found patients enrolled in Safer@Home were released from care sooner than similar patients with in-facility stays and were less likely to return to hospital emergency rooms within 30 days of discharge.

Spellberg said Los Angeles General enrolls about three patients a day on average in the program and bears all costs for its patients. He said even with that expense, the health system still comes out ahead financially.

“It is expensive to be in the hospital and Medicaid reimburses below the cost of a hospital stay, so it is actually a cost savings for us to send people home if they have Medicaid,” said Spellberg. “We need those beds for patients with traumas, heart attacks and strokes.”

Another limitation of the Medicare waiver is that only hospitals can participate in Acute Hospital Care at Home.

DispatchHealth, an in-home medical treatment company, lets value-based care providers and health plans admit patients directly to its Hospital-Alternative Care program without visiting a hospital. The Denver-based company offers the program in seven mostly western cities and has treated approximately 3,500 patients since it launched in 2019, said a spokesperson.

“Our readmission rate is 8.4% where the industry average is about 20%,” Diana Verrilli, DispatchHealth’s chief growth officer, said. “From a payer lens that is significant in terms of the ability to keep that patient out of the hospital for any exacerbation that they may have.”

Patients receive either in-person or virtual nurse visits daily, remote monitoring, lab work, intravenous medications, meals and physical therapy for up to 30 days at home.

DispatchHealth charges value-based care organizations and health plans a negotiated rate for an entire episode of care based on the patient’s condition, said Verrilli.

TRU PACE in Lafayette, Colorado, has been using the Hospital-Alternative Care program for about four years for some elderly adults in the PACE program. TRU PACE takes on full-risk for Medicare and Medicaid dually-elgible older adults who get health services at home and in a neighborhood center. The nonprofit could not provide an estimate on how much the Hospital-Alternative Care program has saved the organization, but medical director Dr. Lisa-Marie Brown said it has resulted in fewer hospitalizations for patients with congestive heart failure, chronic obstructive pulmonary diease and other infections.

“Sometimes patients are kept [in the hospital] longer than they need to be and they can decline because they aren’t in their own beds or their own environment. There is also increased risk for delirium,” Brown said.

>
News   
01/28/25 9:42 AM EDT   
     
Hospital-at-home alternatives score with some providers
modernhealthcare.com

Providers are bypassing Medicare requirements to set up scaled-down hospital-at-home programs they say save money by reducing hospitalizations.

Ochsner Health, Los Angeles General Medical Center and TRU PACE in Colorado are among those offering home-based hospital programs that are less expensive and quicker to set up than the Acute Hospital Care at Home program, which has an uncertain future.

House Lawmakers Push to Revive Previously Killed Health Package
January 17, 2025 10:24 am
  • Rep. Carter says discussions continuing over legislation
  • Key health provisions stripped from December stopgap bill

Health-minded lawmakers are in conversations with House leadership on reviving health legislation that failed to make it into a December government funding bill.

Rep. Buddy Carter (R-Ga.), chair of the Health subcommittee on Energy and Commerce, told reporters on Thursday he’s in conversations with leadership to pass the more than 500-page health package, either in a stand-alone vote or included in a reconciliation package.

“I’d like to do it as a standalone, get it done, and have it behind us, personally,” Carter said. “If we did it through suspension, we could probably put it on the floor. I mean, it was an agreement. It was bipartisan, bicameral.”

The large health care package that was eventually stripped out of the end-of-the-year government spending deal held a number of notable provisions, including language that would rein in pharmacy benefit managers for the first time, boost Medicare doctor payments, and extend telehealth services for multiple years. However, the package was ultimately stripped out and replaced with a standard three-month extension of funding after President-elect Donald Trump rejected the bipartisan deal with Democrats, and made additional demands.

Rep. Greg Murphy (R-N.C.), chair of the Doctors Caucus, confirmed there have been conversations about putting the package up for a suspension vote.

“Given the bipartisan nature of” PBM reform, “and a few other things, I think it would pass,” Murphy told Bloomberg Government in a written statement Thursday. “Obviously, it will be up to the Speaker.”

The December-passed government funding deal extended existing health authorities for three months, but stripped out principal health provisions, such as a regular “doc pay fix” provision that would’ve staved off a 2.8% Medicare payment cut for doctors that took place at the beginning of January. Murphy had previously told Bloomberg Government he secured an agreement with the Trump transition team to include a retroactive “fix” in the next government funding deal.

A spokesperson for Speaker Mike Johnson did not immediately respond to a request for comment.

House Energy and Commerce Chair Rep. Brett Guthrie (R-Ky.) had told reporters Jan. 3 the policies in the killed health package are “alive again.” Lawmakers, however, are still trying to find the right vehicle for it, with reconciliation measures being a possibility.

>
News   
01/17/25 10:24 AM EDT   
     
House Lawmakers Push to Revive Previously Killed Health Package
bgov.com
  • Rep. Carter says discussions continuing over legislation
  • Key health provisions stripped from December stopgap bill

Health-minded lawmakers are in conversations with House leadership on reviving health legislation that failed to make it into a December government funding bill.

No clear path forward for health deal
December 19, 2024 1:21 pm

The collapse of the continuing resolution has seriously threatened an elaborately negotiated health care package that touches virtually every medical industry.

Why it matters: After weeks of intense bipartisan and bicameral talks, and months of laying the groundwork, the package’s major reforms, reauthorizations of existing laws and extensions of funding streams could all be scrapped.

Driving the news: The sources we talked to today do not see a clear path forward for the health care package, and no one’s sure what will happen.

  • Casualties would include major changes to how PBMs are paid, a hospital outpatient billing provision, drug patent reforms and vouchers to streamline reviews of drugs for rare pediatric diseases.
  • Congress would likely still have to pass at least short-term extensions of some must-pass expiring items affecting community health center funding and an extension of Medicare telehealth flexibilities.
  • Then, there’s language that would allow lawmakers to opt out of their ACA marketplace insurance and return to the Federal Employee Health Benefits Program, along with a pay raise. Both could likely fall out if there’s a deal on a skinny CR.

What they’re saying: “Members got greedy and tried to hang too many ornaments on the tree; now it seems to have fallen over,” Raymond James analyst Chris Meekins told Axios.

Options for what happens next include a pared-down CR with some disaster relief for farmers and language raising the debt ceiling, as President-elect Trump is insisting.

  • Debt limit language could also be added to the existing CR, or lawmakers could opt for a clean CR that’s silent on it. The possibility of a shutdown looms in any scenario.

Friction point: Don’t discount that Democrats will likely still need to deliver some votes on any compromise, considering the unruliness and potential defections of the House Republican conference and the 60-vote threshold in the Senate.

  • But Democrats are pretty angry today at Republicans for reneging on their bipartisan deal, so that may be a heavy lift for them.

If another bipartisan compromise emerges, that would leave some opportunity for health items to catch a ride.

  • Rep. Nicole Malliotakis wrote on X that Congress should take a standalone vote on the health care package, pointing to the PBM reforms she said would lower drug costs and safeguard community pharmacies.

What’s next: If the health package is dropped, another chance could arise in March if there is another government funding bill. But it’s unclear if the odds would be any better, or if priorities shift.

 
 
>
News   
12/19/24 1:21 PM EDT   
     
No clear path forward for health deal
axios.com

The collapse of the continuing resolution has seriously threatened an elaborately negotiated health care package that touches virtually every medical industry.

Why it matters: After weeks of intense bipartisan and bicameral talks, and months of laying the groundwork, the package’s major reforms, reauthorizations of existing laws and extensions of funding streams could all be scrapped.

Hospitals mostly unscathed by the CR
December 18, 2024 1:35 pm

Hospitals dodged the most substantial efforts in the year-end spending package to reform their industry, but advocates tell Peter the door has at least been cracked opened by a limited measure on outpatient billing.

Why it matters: After years of focusing on drug costs, this Congress started to train more attention on hospitals, which constitute a much larger share of U.S. health spending.

Driving the news: The CR includes a measure that would require off-campus hospital outpatient departments to have a unique identifier number, known as an NPI.

  • That’s a cost-saver designed to prevent outpatient departments from billing payers at higher amounts associated with full-service hospitals.
  • But the package still leaves out more substantial reforms known as site-neutral payments, which would have more closely aligned Medicare payments to hospital outpatient departments, ambulatory surgery centers and freestanding physician offices.
  • It also delays through 2026 scheduled Medicaid cuts to hospitals that serve a disproportionate share of low-income, uninsured and underinsured patients.

What they’re saying: The NPI provision “is a sign that a small victory can be won,” said Sophia Tripoli, senior director of health policy at Families USA.

  • She called it a “steppingstone,” given that it “barely scrapes the surface on addressing the roles of hospital consolidation and hospital pricing abuses in the markets.”

Between the lines: Although hospitals opposed the NPI provision, site-neutral was more of an industry focus and a much bigger threat because of the way it addressed how hospital-owned providers charge Medicare more for the same services that independent doctors deliver in their offices.

  • It could have saved more than $100 billion over a decade.
  • The American Hospital Association and Federation of American Hospitals both issued statements praising the package without even mentioning the NPI provision.
  • “Congress’ health package hits the spot — it protects rural health care and assures seniors continued telehealth services while preventing cuts to hospitals serving the most vulnerable,” said FAH CEO Chip Kahn.

Still, hospitals realize they need to remain on guard heading into next year.

  • “Hospitals went unscathed for the most part this go around,” said a hospital industry source. “But the bigger threats linger.”
  • Jason Kleinman, the AHA’s director of federal relations, said that “we regret the inclusion” of NPI, which he called “unnecessary and duplicative.” He said AHA “will continue to educate lawmakers on the indispensable” role of hospitals in patient care.

The big picture: Hospitals are a powerful political force, given that they’re major employers in many members’ districts.

  • The House Energy and Commerce Committee held a hearing in early 2023 on a range of health measures that included some sweeping site-neutral proposals.
  • By the time the panel’s health care legislation got to the House floor a year ago, site-neutral provisions had been pared down so they only applied to physician-administered drugs.
  • Even that option was never seriously considered in talks on the CR, with a back-and-forth instead focused on whether NPI would make the cut.
  • The Senate has been a larger obstacle to hospital cost legislation.

The other side: Hospitals argue that site-neutral payments do not account for higher costs at hospital outpatient departments and would especially harm rural areas — a particularly potent potent argument in the Senate.

  • The NPI provision that did make it in applies for billing Medicare, but backers expect there will be spillover to the commercial market.

What’s next: Backers of hospital cost reforms are hoping Congress will take broader action on site-neutral next year.

  • Sen. Maggie Hassan praised NPI’s inclusion and said it “demonstrates the strong, bipartisan interest in making additional progress on site neutral payments next year.”
>
News   
12/18/24 1:35 PM EDT   
     
Hospitals mostly unscathed by the CR
axios.com

Hospitals dodged the most substantial efforts in the year-end spending package to reform their industry, but advocates tell Peter the door has at least been cracked opened by a limited measure on outpatient billing.

Why it matters: After years of focusing on drug costs, this Congress started to train more attention on hospitals, which constitute a much larger share of U.S. health spending.

2025 Washington Events Calendar
December 17, 2024 12:36 pm

As 2024 comes to a close, we are looking ahead to the 119th Congress and opportunities for our clients to engage with their federal representatives and other decision makers in Washington, DC.

• View House and Senate calendars

• Questions? Contact Tony Wyatt: anthony@wscdc.com

January Events

Congressional Swearing-In Day
Friday, January 3rd, 2025 | 9:30 AM – 3:00 PM
U.S. Capitol, Washington, D.C.

Join us for a day of celebration as Members of the 119th Congress are sworn into office. Many lawmakers welcome visitors for informal open house style receptions throughout the day in their Capitol Hill offices. WSC will provide a schedule of events as details emerge.

Dinner Reception for Congressman Tom Kean (R-NJ-07)
Tuesday, January 7th, 2025 | 5:00 PM – 8:00 PM
Winning Strategies, 409 7th St NW Suite 450

Garden State Inaugural Gala
Sunday, January 19th, 2025 | 7:00 PM – 11:00 PM
Grand Hyatt Washington, 1000 H Street Northwest Washington

Join the New Jersey State Society at the Garden State Inaugural Gala for the best of New Jersey’s food and entertainment. Don’t miss this chance to celebrate with fellow New Jerseyans in the heart of the nation’s capital. Register here

Reception for Congressman-Elect Herb Conaway (D-NJ-3)
Wednesday, January 22nd, 2025 | 6:00 PM – 8:00 PM
Winning Strategies, 409 7th St NW Suite 450

Reception for Congressman-Elect Nellie Pou (D-NJ-9)
Thursday, January 23rd, 2025 | 5:30 PM – 7:30 PM
Winning Strategies, 409 7th St NW Suite 450

February Events

Reception for Congressman Jeff Van Drew (R-NJ-2)
Wednesday, February 5th, 2025 | 11:00 AM – 2:00 PM
Capitol Hill Club, 300 First St SE

The Walk to Washington & Congressional Reception
February 6th – 7th, 2025
Hosted by: New Jersey Chamber of Commerce

After a five-year hiatus, the 84th Walk to Washington will feature more networking opportunities and fewer speeches, bringing together 900 New Jersey leaders on a chartered Amtrak train traveling from Newark through Wilmington, DE, to Washington, D.C. Register here

Related Walk to Washington Events:

WSW-PPAG NJ Chamber of Commerce Dinner
Thursday, February 6th | 7:00 PM – 9:00 PM
The Palm, 1225 19th St NW

Irish Breakfast Reception
Friday, February 7th | 8:00 AM – 10:00 AM
The Dubliner, 4 F St NW

March Events

Reception for Congressman Rob Menendez (D-NJ-8)
Thursday, March 6th, 2025 | 12:00 PM – 1:00 PM
Winning Strategies, 409 7th St NW Suite 450

We look forward to seeing you at these events! If you have any questions or need additional details, please don’t hesitate to reach out.

>
News   
12/17/24 12:36 PM EDT   
     
2025 Washington Events Calendar
WSC

Key Updates:

• 2025 Congressional calendars now available

• Multiple January events including Congressional Swearing-In Day

• Walk to Washington returns in February after 5-year hiatus

• Several opportunities to meet with New Jersey delegation members

Medicare Advisers May Seek 7% Pay Cut for Home Health Agencies
December 16, 2024 1:30 pm
  • Pay-cut draft recommendation reflects strong industry profit
  • Medicare panel may also urge no hospice pay update for 2026
A congressional advisory panel is considering a recommendation that Congress cut Medicare payments to home health agencies by 7% in 2026.
 
The proposed draft recommendation, revealed Friday at the Medicare Payment Advisory Commission’s December meeting, reflects the industry’s continued strong profit. In 2023, home health agencies averaged a 20.2% profit margin on Medicare fee-for-service beneficiaries, said Evan Christman, a commission senior analyst.
 
That’s higher than the industry’s long-term average margin of 17.1% since 2001, he added.
 
For 2025, the commission expects agency margins to decline to 19% as costs increase faster than payments, but “these margins indicate that Medicare fee-for-service continues to pay well in excess of costs,” Christman said.
 
A 7% cut in the Medicare pay rate for 2026 would result in “no adverse effect on access to care,” Christman said. “We expect continued willingness and ability of the providers to treat” traditional Medicare beneficiaries.
 
The recommendation comes amid a dispute between the National Association for Home Care & Hospice and the Centers for Medicare & Medicaid Services over the methodology used by the CMS to determine payment rates for home health agencies.
 
In a lawsuit filed in July 2023, the association tried to stop Medicare from using a payment methodology known as the Patient-Driven Groupings Model, or PDGM, which has caused reimbursements to be cut for thousands of home health agencies since it was implemented in 2020.
 
The PDGM calculations targeted in the lawsuit set Medicare payments based on patients’ clinical characteristics, like the type and severity of ailment, rather than the volume of care provided.
 
The US District Court for the District of Columbia ruled in a memorandum opinion on April 26 that the association failed to exhaust all administrative remedies to resolve the dispute because it “skipped the agency’s process for seeking expedited judicial review.”
 
Because of that, the court granted the federal government’s motion for summary judgment. The association has said it will renew the lawsuit in the future.
 
MedPAC provides Congress with analysis and policy advice on the Medicare program. Its recommendations are nonbinding, but Congress relies on the panel’s expertise when making funding decisions.
 
Each year, the commission advises lawmakers on payment updates for a variety of care providers that treat Medicare beneficiaries.
 
The commission’s draft recommendations for annual payment updates will be formally voted on in January. Final recommendations for 2026 will be included in the commission’s March 2025 report to Congress on Medicare payment policy.
 
Hospice, Dialysis Providers
 
The commission is mulling a recommendation that Congress provide no 2026 payment update for hospice providers due to similar strong industry profit.
 
The hospice industry had an aggregate profit margin of 9.8% on traditional Medicare beneficiaries in 2022, the last year with available data, said Kim Neuman, a commission principal policy analyst. The commission expects the 2025 profit margin to be 8%, Neuman said.
 
In 2022, freestanding providers had a 12.4% profit margin, and for-profit providers had a 16.1% profit margin, Neuman said. But nonprofit hospice providers had only a 0.3% profit margin, while free-standing nonprofits showed a 5.1% profit margin on Medicare beneficiaries.
 
“Based on our positive payment adequacy indicators and the projected margins,” Congress should eliminate the 2026 payment update, Neuman said.
 
For dialysis providers, the commission is pondering a recommendation to update the Medicare payment rate by the amount determined under current law, which is an estimated 1.7%, commission staff said.
>
News   
12/16/24 1:30 PM EDT   
     
Medicare Advisers May Seek 7% Pay Cut for Home Health Agencies
bgov.com
  • Pay-cut draft recommendation reflects strong industry profit
  • Medicare panel may also urge no hospice pay update for 2026
A congressional advisory panel is considering a recommendation that Congress cut Medicare payments to home health agencies by 7% in 2026.
Prior auth likely out of health deal
December 16, 2024 1:25 pm

Language addressing insurer prior authorizations in Medicare Advantage that was holding up a year-end health care deal is likely to be dropped by negotiators.

Why it matters: Insurers’ requirements for their sign-off on some physician-ordered care is a big tension point with patients and providers, and measures to streamline the system have been a focus of Congress and the Biden administration.

  • But it appears likely that a prior authorization measure won’t catch a ride on the CR because of lingering disagreements over several provisions, sources familiar with the talks tell Victoria.
  • There is still a last-minute lobbying effort to include the bill in the package, and nothing is final until text is released, the sources cautioned.

Inside the room: One sticking point is whether to codify a prior authorization rule the Biden administration issued this year, or to include a prior authorization reform bill known as the Improving Seniors’ Timely Access to Care in the package.

  • Republicans have said they just want the rule, while Democrats want the actual bill.

Friction point: There’s a slight difference in transparency requirements for insurers, and where information on prior authorization denials and related information would be posted.

  • The bill says the MA plans would have to submit to CMS a list of all the applicable items and services subject to prior authorization, as well as the percentage of denials and appeals and other granular information.
  • The rule states that the insurers have to publicly report certain prior authorization metrics annually on their websites.
  • There was also conflict, as we reported last week, over new provisions being added to the bill which would have included a review system stemming from concerns about AI-generated denials, as well as $25 million for implementation.

What they’re saying: Over the weekend, Democrats characterized Republicans’ efforts as “watering down” the prior authorization requirements.

  • A GOP aide said that Republicans were trying “to fix issues the Biden administration identified that would have undermined CMS authorities.”

Context: The bill has the bipartisan support of majorities in both the House and Senate.

  • The legislation had also been preliminarily scored to have no new cost and has the support of the Better Medicare Alliance, a Medicare Advantage advocacy group and a range of provider groups.
  • But, notably, AHIP hasn’t weighed in on the bill. Major MA plans Humana and CVS Health have given their endorsement.
>
News   
12/16/24 1:25 PM EDT   
     
Prior auth likely out of health deal
axios.com

Language addressing insurer prior authorizations in Medicare Advantage that was holding up a year-end health care deal is likely to be dropped by negotiators.

Why it matters: Insurers’ requirements for their sign-off on some physician-ordered care is a big tension point with patients and providers, and measures to streamline the system have been a focus of Congress and the Biden administration.

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