From telehealth to Medicare cuts: Here are the health policies in Congress' $1.7T omnibus

A major end-of-the-year spending package released early Monday only gave partial relief to physicians seeking to get rid of a 4.5% pay cut set to go into effect next year, amid other major health policy reforms. 

Congress is expected to pass the $1.7 trillion package by Friday to avoid a government shutdown.

Here is a list of the major health policies included in the package:

1. Partial relief from Medicare cuts

Providers received a mixed bag in the spending package. Congress agreed to stave off a 4% cut to Medicare payments under the PAYGO law, which calls for mandatory cuts if government spending reaches a certain level.

But physicians didn’t get everything they wanted. Several major groups were calling for Congress to step in and forestall a 4.5% cut to Medicare payments next year in the Physician Fee Schedule. Instead, Congress has decided to shave the cut to 2% next year and bump it up to 3.25% in 2024.

“The draft omnibus legislation demonstrates a lack of commitment to our nation’s seniors and continues to put off a long-term solution,” said the Surgical Care Coalition, a collection of surgery professional societies, in a statement.

2. Extension of value-based care bonus

Congress decided to extend a value-based care bonus sent to physicians that participate in alternative payment models. However, the bonus will drop next year from 5% to 3.5%.

But provider groups were still happy that Congress continued the bonus expected to go away in 2023.

“This vital incentive will help physicians continue to build on the significant progress the United States is making to improve patients’ health and experience,” said the Alliance for Value-Based Patient Care, a collection of healthcare groups that advocate for value-based care reforms.

3. Medicaid redeterminations have a deadline

States have been waiting to get some word on when the COVID-19 public health emergency will end, and they can start redetermining the eligibility of Medicaid enrollees. At the start of the pandemic, states got a boost for their federal matching rate to Medicaid payments but only if they agreed to not drop anyone off the program for the duration of the PHE.

The omnibus would instead let states start Medicaid redeterminations in April, even if the PHE is still in effect. The provision gives states a heads-up on when they can start redeterminations, which can take more than a year to complete.

Currently, the PHE ends in January but is expected to be extended for another three months.

4. Funding to strengthen public health

The legislation includes $9.2 billion in funding to the Centers for Disease Control and Prevention, a $760 million boost over fiscal year 2022. More than half of this boost is dedicated to public health preparedness to help prepare for another pandemic.

The bill also has $350 million in “flexible funding” for public health infrastructure, which is a 75% boost.

5. Two-year extension of telehealth flexibilities

Telehealth use exploded during the pandemic thanks to flexibility in getting Medicare reimbursement for the services. But those flexibilities were set to expire five months after the PHE ends.

The legislation will ensure that the flexibilities will stick around for two years. The goal is to give regulators more time to determine which flexibilities should be made permanent. It will also extend the hospital-at-home program for two years;

6. New policies to improve mental health

The omnibus includes several policies to boost mental health, a major priority for lawmakers. The omnibus will enable Medicare to cover marriage and family therapists as well as counselors and improve funding for mental health mobile crisis units that can boost access to mental health services.

It also permanently extends a policy that enables states to offer a year of postpartum coverage to pregnant individuals in Medicaid and the Children’s Health Insurance Program. So far, 27 states have implemented the policy.

7. Extension of key rural hospital programs

The legislation extended both the Low-Volume Hospital program and Medicare Dependent Hospital Program through 2025.

The programs were expected to go away after this Friday. The Medicare Dependent Hospital program boosts payments to hospitals with a high share of Medicare patients. The Low-Volume Hospital program adjusts pay for hospitals that in turn have a small number of Medicare patients.

The programs have been pivotal to help shore up the financial stability of rural hospitals, which have faced a lingering trend of closures in recent years.

The omnibus also includes $2 million for a rural hospital pilot program intended to help improve long-term operations through technical assistance of “current hospital management,” the legislative text said.