Final bill ensures no loss of funding for Medicaid DSH payments, graduate medical education

The finalized continuing resolution (CR) to keep the federal government funded through mid-March includes key healthcare provisions.

The bill that passed both chambers of Congress just before Friday night’s expiration of funding contained the same healthcare items as the version that failed to pass the House the day before. A key difference was the absence of a provision to address the debt ceiling, which had been inserted in the previous version at the request of President-elect Donald Trump.

Trump and Republicans still preferred the final bill to the iteration that had seemed on track to pass Congress earlier in the week. They had sought a streamlined bill after the bipartisan first version totaled 1,547 pages, compared with 118 for the bill that President Joe Biden signed into law.

The healthcare provisions will need to be renewed again before federal funding runs out March 14. With Republicans set to narrowly control both chambers, Congress will look to produce a budget for the remainder of FY25 early next year.

What’s in the bill

The finalized CR ensures an $8 billion cut to Medicaid disproportionate share hospital (DSH) payments will not begin with the new year as scheduled.

In Medicare, the bill extends supplemental payments for low-volume hospitals and Medicare-dependent hospitals.

Waivers allowing expanded Medicare coverage of telehealth services and payments for acute-care services delivered in the home will continue for the duration of the CR.

An elevated floor for the work geographic practice cost index (GPCI) stays in place, helping rural physician practices better afford labor.

Funding for graduate medical education, community health centers, the National Health Service Corps and the Special Diabetes Program will be maintained.

What got left out

Relative to the expanded version of the bill, the final legislation omitted several key policies.

Perhaps most notably in healthcare circles, the Medicare payment cut for physicians in 2025 will remain at the level established by final regulations. That reduction amounts to 2.83%, whereas the first CR would have trimmed it to 0.33%. A few Republicans pledged to negate the cut in the final FY25 budget and issue a retroactive adjustment.

Also pertaining to physicians, the legislation left out a continuation of the Medicare payment incentive to participate in advanced alternative payment models (APMs). A 3.53% bonus had been included in the first attempt to pass the CR. As things stand, 2025 will be the first performance year with no APM incentive since 2017, although participants will be eligible for a modestly higher annual Medicare update beginning in 2026.

A change to the Medicaid DSH hospital-specific limit would have accounted for care furnished to patients who are dually eligible for Medicare and Medicaid. The only Medicaid provision in the final bill is the delay of the DSH payment cut.

One change that hospitals likely support is the exclusion of a mandate for off-campus outpatient departments to obtain their own national provider identifier (NPI) and use that unique NPI when billing Medicare. The administrative burden imposed by that requirement would have been significant, America’s Essential Hospitals said in a statement on the original CR.

Public-health programs that did not make the final bill include funding for the Public Health Emergency Preparedness Program and the Hospital Preparedness Program, reauthorizations and updates for the SUPPORT Act, and funding for a 2022 law that was drafted to support the health and wellness of healthcare professionals.

Policies intended to constrain pharmacy benefit managers likewise did not make the final cut.