Updated Sunday, March 10, at 2:30 pm
The Senate followed the House by clearing a spending package Friday night that keeps a portion of the federal government funded until September and prevents a partial government shutdown.
The Senate voted 75 to 22 to approve the $460 billion package, according to media reports. Earlier in th week, House lawmakers approved the measure by a 339-to-85 vote, the New York Times reported.
President Joe Biden signed the measure on Saturday.
The bipartisan spending bill, which was unveiled on Sunday, March 3, narrows some of this year’s cuts to physician Medicare pay, pushes back scheduled disproportionate share hospital (DSH) payment cuts and increases annual funding for community health centers.
The 1,050-page deal (PDF) between red and blue lawmakers outlines the funding for several federal agencies, including the Food and Drug Administration and the Department of Veterans Affairs, and is backed by leaders in both chambers. A second set of bills would be needed before a March 22 cutoff to fund other portions of the government, including the Department of Health and Human Services.
For healthcare, the latest agreement blunts the doctor pay decrease enacted in the 2024 Medicare Physician Fee Schedule final rule by providing a 1.68% bump that, alongside an earlier increase from the end of 2023, totals a 2.93% payment increase that will run through the end of the year—still below the 3.37% decrease of the final rule.
An $8 billion-per-year cut to Medicaid DSH program payments that has been repeatedly punted by lawmakers would again be pushed back, this time to Jan. 1, 2025. The hospital sector also stands to gain from extensions of the higher inpatient payment adjustment for low-volume hospitals and the Medicare-dependent Hospital program.
Issues like the cuts to physician pay and DSH program payments have been frequent points of lobbying for provider groups like the American Medical Association and hospital groups.
In a statement issued Friday, Bruce Siegel, M.D., president and CEO of America’s Essential Hospitals said eliminating this fiscal year’s $8 billion cut to Medicaid disproportionate share hospital (DSH) funding and delaying the fiscal year 2025 cut gives policymakers "valuable time to find a lasting solution to the decade-long threat to DSH support."
"This funding is crucial to essential hospitals and the disadvantaged people and communities they serve," Siegel said. "With the imminent threat to DSH averted, Congress can turn to policies that shore up and stabilize our safety net, including by formally defining the hospitals at its core. By doing so, lawmakers would create a powerful tool to direct support where it’s needed most."
But, many provider groups said the legislation only provides "short-term patches" rather than comprehensive Medicare payment reforms.
“While we appreciate the challenges Congress confronted when drafting the current 2024 appropriations package, we are extremely disappointed that about half of the 2024 Medicare physician payment cuts will be allowed to continue. There were many opportunities and widespread support to block the 3.37% Medicare cuts for physician services that took place Jan. 1, but in the end, Congress opted to reverse only 1.68 of the 3.37 percentage payment reduction required by the Medicare Fee Schedule. The need to stop the annual cycle of pay cuts and patches and enact permanent Medicare payment reforms could not be more clear," Jesse Ehrenfeld, M.D., president of the American Medical Association, said in a statement issued Wednesday.
The American Academy of Family Physicians echoed the AMA's concerns.
“We’ve repeatedly told Congress that the 3.4% Medicare payment reduction that went into effect on January 1 is untenable for family physicians and threatens patients’ access to primary care. With the passage of this legislation, Congress has offset 2.93% of that payment cut. We appreciate this temporary measure but continue to urge Congress to advance comprehensive, long-term Medicare payment reform," said Steven Furr, M.D., president of AAFP.
Also included in the legislation is $270 million in new annual funding for community health centers. That money is backdated to the beginning of the current fiscal year and brings the centers’ total funding to $4.27 billion annually.
In a statement, Sen. Bill Cassidy, M.D., R-Louisiana, the ranking member of the Senate Committee on Health Education, Labor and Pensions, said that the “responsible” $270 million is “fully paid for.” The senator also noted that the Medicare reimbursement increase “was essential to ensure our seniors are able to access the best care and doctors possible.”
Elsewhere in the bill is a one-year extension to incentive payments for participation in certain alternative payment models, though the incentive has been reduced from a 3.5% bonus to a 1.88% bonus. Lawmakers also extended through Dec. 31 funding for the National Health Service Corps with an additional $35 million, the Teaching Health Center Graduate Medical Education program with a $48.5 million increase and funding for the Special Diabetes Programs with a $10 million increase.
While there’s more to be done to avoid the March 22 deadline, the weekend’s compromise suggests that certain hot-button lobbying issues are unlikely to be addressed anytime soon.
In a statement, Senate Finance Committee Chair Ron Wyden. D-Oregon, acknowledged that the funding package “provides essential health programs and providers with certainty for the rest of the year” but said he was “extremely disappointed it leaves behind major reforms” around Medicaid prescription drug costs, mental health care expansions, pharmacy benefit managers’ “shadowy tactics” and Medicare Advantage plans’ inaccurate provider directories (or “ghost networks”).
“It is a real missed opportunity that these critical, bipartisan provisions will be unnecessarily delayed until December or longer,” he said in a statement. “While disappointed, I plan to support the package and will go to the mat to advance these priorities that will lower healthcare costs and improve health outcomes for the American people.”
Senior Editor Heather Landi contributed to this report.