2025 promises to be a year of particular policy upheaval, and few know that better than healthcare associations caught in the crossroads of funding battles, regulatory upheaval and intense public scrutiny.
Large swaths of the industry are looking to Congress and the newly active Trump administration for relief from macroeconomic pain points like inflation or more novel developments like tariffs.
As Republican lawmakers begin poring over spending lines to tackle the deficit and offset promised tax cuts ahead of March’s budget reconciliation, healthcare lobbyists are hoping they’ll be able to extend favorable spending policies and fend off potential program cuts.
Opposing industry segments will rehash longstanding conflicts, such as prior authorization, amid a new landscape of shifting public interests. Amid an ideological effort to pull back on regulatory red tape, others will petition for rule withdrawals and more concrete flexibilities.
Many of the industry’s biggest lobbying groups have already outlined their biggest priorities for policymakers—here’s a primer of what to expect this year in D.C.
Hospitals
To borrow the framing of American Hospital Association (AHA) President and CEO Rick Pollack, the hospital industry is gearing up its offense as well as its defense for 2025.
Extending subsidies
Foremost in the offense camp are an extension to the Marketplace Premium Tax Credits that are set to expire at the end of the year. Allowing those to expire would potentially leave 3.8 million of the marketplace’s 21.4 million enrollees uninsured, according to a recent KFF estimate.
An increase in uninsured patients would reduce demand for healthcare services and, in some cases, leave hospitals on the hook for charity care. Large health systems have previously sought to downplay that scenario for investors by noting the portion of exchange enrollees who would transition to higher-paying commercial coverage.
Still, delaying expiration or permanent extension are top-line items for the AHA and the Federation of American Hospitals (FAH), which advocates on behalf of for-profits. The FAH, in a letter to legislative leaders, underscored that “Americans living in southern states and the heartland” would be most susceptible to higher premiums or uninsurance.
Limiting payers’ utilization management tactics
Perhaps smelling blood in the water, hospital groups are among the healthcare provider interests calling for policymakers to rein in commercial health insurers’ various mechanisms for limiting payouts.
First among these is prior authorization, a tool that hospitals say delays care and imposes unnecessary administrative burdens on practitioners and their organizations. Excessive, inappropriate and systematic use of the requirements is rife among Medicare Advantage (MA) plans, hospitals said.
One preferred vehicle for reforming the practices cited by hospitals is the Improving Seniors’ Timely Access to Care Act, which establishes prior authorization standards, reduces the window for health plans to send a prior authorization request and adds approval and denial reporting requirements.
And, in a rare instance of cross-sector support, insurers such as CVS Health and Humana have also signed on to support that particular bill. They like the bill’s stated purpose of transitioning the medical system to electronic prior authorization.
“Ban the fax machines,” said Mike Tuffin, CEO of trade group AHIP at the Business of Health Care Conference at the University of Miami in January. “Eliminate paper from the system. We want a fully electronic experience for everybody. Half the claims we receive in the health insurance industry come to us manually. We want to end that, and that's really a two-way street.”
Hospitals other wish list items under the umbrella of “commercial insurer accountability” resume the more combative stance against payers. Among these are requirements and enforcement around prompt reimbursement for in-network care services, guardrails on plans’ use of AI and algorithms, restrictions on mid-year coverage changes and a crackdown on insurers’ specialty pharmacy “white bagging” policies.
Medicare and Medicaid
Hospitals’ defensive efforts will largely focus on funding cuts or other adjustments to government healthcare programs that would threaten their revenues.
Though it’s still early in the reconciliation process, Medicaid seems like the likely target for House Republicans’ budget cuts following statements from President Donald Trump and House Speaker Mike Johnson, R-Louisiana, indicating that Medicare and Social Security are off the table.
Federal Medicaid work requirements are an oft-cited option for Republican lawmakers that could save $109 billion of Medicaid’s $7.4 trillion expenditure over the next decade while ultimately leaving 600,000 off insurance, according to the Congressional Budget Office. If not implemented nationwide, individual states could implement the requirements via waiver if Trump’s new Centers for Medicare & Medicaid Services (CMS) follows the same trajectory as his first.
Hospital groups’ policy papers, at the broader level, call for safeguards and full funding for Medicare, Medicaid and the Children’s Health Insurance Program (CHIP).
Within Medicaid specifically, the AHA called out support for the current Federal Medical Assistance Percentage—the portion of a state’s Medicaid spending covered by the federal government, which is typically higher in poorer states—Upper Payment Limits and Directed Payments “and the financing sources that sustain them.”
Also called out by the AHA and America’s Essential Hospitals are Medicaid Disproportionate Share Hospital (DSH) payments, to which $8 billion have been pushed off more than a dozen times and are set to go into effect on April 1. In a similar vein are the Medicare-dependent Hospital designation and Low-volume Hospital Payment Adjustments, which help subsidize rural hospitals and require extensions.
More recently, the AHA's Pollack specifically urged Congress to "reject" substantial reductions to the Medicaid program as part of reconciliation process.
But for all the focus on Medicaid, it’s site-neutral Medicare payment policies that have picked up steam on both sides of the aisle. These policies would do away with current Medicare outpatient service rates that pay hospitals and off-campus hospital outpatient departments more than other settings such as ambulatory surgery centers or outpatient clinics.
In November, senators Bill Cassidy, M.D., R-Louisiana, and Maggie Hassan, D-New Hampshire, floated the framework for such a policy with promises to direct the Medicare program’s savings to rural and underserved hospitals. It was soundly criticized at the time by the FAH and the AHA, which say that hospitals need the higher payments due to the broader care capabilities their sites are expected to maintain.
The AHA again pushed back on site-neutrality in its 2025 advocacy agenda, saying the “additional payment cuts … do not recognize legitimate differences among provider settings.”
340B Program
The 340B Program, a decades-old program that allows safety-net care providers to purchase outpatient drugs for a discount, has become an increasingly important pillar of hospitals and health systems’ operations. Government data suggest a 22% jump in wholesale purchase discounts from 2021 to 2022, with health systems big and small benefiting from tens of billions of dollars in discounted purchasing per year.
Those trends have drawn the ire of drug manufacturers who are finding more sympathetic ears in Congress (if not always the courts).
The AHA, America’s Essential Hospitals and 340B Health each argue that the discounts are needed to maintain patient services. They intend to fend off drugmakers’ lawsuits and other tactics, such as rebate models, and push friendlier lawmakers to pass proposed legislation like the 340B PATIENTS Act to codify contract pharmacy dispensing.
Health insurers
Medicare Advantage
In President Joe Biden’s final days in office, the CMS proposed increasing benchmark payments to MA plans by 2.23%, a significant increase over recent years.
That bump is still not as high as insurers would like to see, citing medical costs rising by more than 8%. Insurance plans say the regulatory environment has caused plans to close, leave markets or cut benefits.
MA-aligned trade group Better Medicare Alliance was also disappointed to learn the MA Value-Based Insurance Design model will be ended at the end of this year. The group hopes the CMS will extend the model for an additional year to allow for more time to “explore alternative options to incorporate successful aspects of the model into Medicare Advantage more broadly.”
A majority of Medicare beneficiaries are now enrolled in an MA plan. Many insurers are beginning to pivot to chronic special needs plans, Fierce Healthcare previously reported.
PBM reform
Lawmakers, federal regulators, think tanks and even Trump stress they want to see reform of pharmacy benefit managers passed through Congress.
Yet an end-of-year health package, which originally included such reform, was axed in the eleventh hour, and now the new Congress is tasked with picking up where they left off. It remains to be seen whether the issue will continue to take a back seat to more imminent matters or whether PBM provisions could be included in reconciliation bills.
A coalition including Blue Shield of California, independent pharmacists, employers and alternative PBMs urged Congress to include PBM reform priorities in any upcoming government spending bill.
“This agreement includes policies that were approved by committees of jurisdiction to de-link drug prices from PBM revenues, share negotiated savings with employers, workers and their families, ban spread pricing, and require transparency from the PBM corporations that have persistently resisted it,” the groups said in a letter (PDF) to congressional leadership Feb. 5.
Many of these priorities are supported by Pharmaceutical Research and Manufacturers of America (PhRMA). Insurers at times say they are receptive to making PBMs more price transparent but largely balk at broad reform, choosing to put the onus of costly drug prices at the feet of drug manufacturers.
Transparency
Included in the Lower Costs, More Transparency Act were provisions codifying transparency rules for PBMs and hospitals.
The bill, which passed the House in late 2023, also focused on PBM reform, site-neutral payments and bolstering the No Surprises Act for employer plan sponsors, according to health policy leaders at Mercer.
Employers groups support similar objectives for 2025. Transparent billing requirements within the No Surprises Act, site-neutral payment and stronger enforcement of hospital transparency laws and regulations are just a few of the wish list items from the Purchaser Business Group on Health (PBGH).
The PBGH also calls out market consolidation among providers and health plans as a main driver for rising healthcare costs.
Doctors and practices
Reversing Medicare pay cuts
Ahead of and during the first few months of 2025, no issue has garnered more attention from physician associations and lobbying groups than a 2.83% cut in Medicare pay rates that went into effect Jan. 1.
The costs of running a medical practice have risen 59% since 2001, according to the American Medical Association (AMA), and recent years in particular have seen a bump in inflationary pressures. The group notes that the same 25-year period has only yielded a 7% increase in payments to doctors—a 33% drop when adjusting for inflation.
This year's pay reduction is the fifth consecutive cut to physician rates, which organizations like the Medical Group Management Association (MGMA) say could lead to practice closures or further provider consolidation and other gaps in the country's healthcare system.
“With nearly 80% of all physicians now employed by facilities and larger entities, Medicare beneficiaries in areas of the country that rely solely on community-based medical practices are especially vulnerable to access issues," the MGMA said in late January. "Without immediate congressional action on this important legislation, more and more physician practices will be forced to close their doors, unable to keep up with rapidly rising staff salaries, rent and administrative costs.”
Though they couldn't head off the cuts in year-end budget negotiations, sympathetic lawmakers are floating a make-good for potential inclusion in March's reconciliation bill.
The proposed legislation would bring a 6.62% pay increase for April to December to offset the pay cut, adjust for inflation and prorate the first three months of pay cuts. It was introduced alongside endorsements from more than 150 provider professional associations, trade groups and lobbyists.
"I understand that physicians are frustrated. I'm frustrated, too, as year after year it seems we come back with these cuts," AMA President Bruce Scott, M.D., said in a Jan. 13 policy interview from his association. "We need a Medicare payment system that is based upon what it actually costs us to provide care to the patients.
"... Let me assure you that we're going to be up on Capitol Hill every day in this next Congress fighting for a reversal of these cuts and a reform of the Medicare payment system that's going to give physicians a payment update that is based upon the cost of providing care."
Administrative burden reduction
Physicians, like hospitals, have an ax to grind with payers' prior authorization practices.
They paint the coverage prerequisites as a roadblock to timely care and another factor driving clinician burnout. Physician survey data gathered by the AMA show that more than 9 in 10 physicians believe prior authorization negatively affects clinical outcomes for patients.
In 2025, the MGMA said they seek to "eliminate or significantly reduce the volume of prior authorizations" through "greater health plan transparency, uniform national standards and increased automation in prior authorization."
The AMA has also hammered home the transparency calls, noting that a denial "issued without explanation or justification, with no information on how the decision can be appealed, and with no guidance whatsoever on alternative treatment options" is "maddening" and can lead to adverse patient outcomes.
Providers did score a win early last year when the CMS finalized a rule that will require health plans to send prior authorization decisions within three days for urgent requests and seven days for standard requests, starting in 2026. That rule also requires payers to give patients and providers a reason for denying a prior authorization request, as well as instructing the other party how to resubmit the request or appeal the decision.
That upcoming regulation was "a welcome step toward rightsizing the prior authorization process," the AMA said while advocating for future reforms like, again, the Improving Seniors’ Timely Access to Care Act.
“We believe it’s not perfect [and] it needs to be tweaked, but the tweaking that needs to be done is in terms of emphasizing preventative care,” the AMA's Scott said at the Business of Health Care Conference at the University of Miami. “And we need to get those who are the fiscal hawks to understand that it’s actually cost-saving in the long-run by making sure this group of people have access to care.”
Workforce development, well-being
Professional groups have sounded the alarm on nationwide shortages of clinicians—both primary care providers and specialists—that lead to care delays, heavy workloads and other constraints.
The organizations advocate for legislation to increase physician supply by boosting the number of graduate medical education slots, as well as other tools like the Conrad 30 waiver program that incentivize providers to practice in areas particularly hit by shortages. They've also identified tens of thousands of unused employment-based visas for nurses and physicians, which legislation like the prior session's proposed Healthcare Workforce Resilience Act sought to recapture.
The flip side is advocacy for policies intended to preserve the existing clinical workforce, such as those addressing burnout. Alongside a pushback on administrative burdens like prior authorization, groups have backed the reauthorization of bills like the Dr. Lorna Breen Health Care Provider Protection Act, which funds mental health care for providers and awareness campaigns.
On the state level, provider associations have also thrown their weight behind bills to increase charges for violence against healthcare workers and the removal of stigmatizing language from licensure and credentialing applications.
Digital health
Expiring Medicare telehealth, hospital-at-home flexibilities
At the top of nearly every digital health association’s priority list in 2025 is finding a more permanent solution for Medicare telehealth flexibilities, which expire March 31, 2025.
The telehealth flexibilities for Medicare providers and patients have been on offer since 2020, but Congress has not yet made them permanent. The flexibilities—which include expanded provider types and the ability for patients to do visits from home—were nearly extended for two years in the first, broadly negotiated end-of-year deal by House Republicans and Democrats.
However, most healthcare extenders got shorter, three-month leases after Trump stepped into the negotiations, though he was not yet in office.
After the government funding deadline on March 14, lawmakers will have to band together on a healthcare package. Associations like the American Telemedicine Association, the Alliance for Connected Care and 300 other advocacy organizations have urged Congress to move forward a two-year telehealth extension at the end of last year.
The pandemic-era Acute Hospital Care At Home (AHCAH) program, which has allowed qualifying hospitals to provide acute hospital-level care within a patient’s home, is another top priority for digital health and home-based care advocates. The AHCAH received a five-year extension in the squashed December 2024 health deal and was also punted to March.
Advocates like the Alliance for Connected Care, and particularly its related Moving Health Home initiative, are pushing again for a five-year extension. Physician groups like the AMA and the MGMA have also voiced support for long-term telehealth flexibilities and reimbursement.
There are many other telehealth-related priorities that may or may not see the light of day in a March healthcare package, like allowing virtual suppliers to participate in the Medicare Diabetes Prevention Program, a priority for the Consumer Technology Association, the American Telemedicine Association and the Connected Health Initiative.
Digital health associations also want the CMS to change the requirement that a telehealth provider list their home address on public Medicare forms to protect their personal safety and privacy.
For employer-sponsored health plans, many telehealth advocates are pressuring Congress to reinstate first dollar coverage of telehealth for members of high-deductible health plans linked to health savings accounts; and, they want to reinstate telehealth as an excepted benefit for part-time and seasonal workers.
Remote prescribing of controlled substances
Prescribing controlled substances via telehealth has been a topic of much debate since the onset of the COVID-19 public health emergency.
Advocates’ chief goal in 2025 is to convince the Trump administration to scrap a proposed rule by the Biden administration that outlined a new special registration framework for telehealth prescribers, which they view as overly restrictive.
Time is ticking for the prescribing waiver, which the Biden administration extended through Dec. 31, 2025 while it attempted to create a longer-term solution.
At issue for telehealth advocates is the rule’s heightened restrictions on prescribing Schedule 2 controlled substances and a requirement to check all 50 states’ prescription drug monitoring programs for evidence of substance abuse before providing a prescription. This kind of nationwide check is not currently possible, advocates say.
The Trump administration would need to propose and finalize a new rule on telehealth prescribing of controlled substances—a process that usually takes months—by the end of the calendar year to prevent a cliff for patients.
Trump’s pick for drug enforcement administrator, Derek Maltz, still awaits confirmation by the Senate.
Remote monitoring
The Alliance for Connected Care and the Connected Health Initiative are both prioritizing remote monitoring billing reform in 2025.
Both organizations are urging the Centers for Medicare and Medicaid Policy to adopt remote monitoring code changes enacted by the American Medical Association in September. The changes include allowing providers to bill for less than 16 days' worth of patient data per month.
In addition to accepting the AMA’s code changes, remote monitoring advocates are pushing the agency to remove more restrictions on the technology, such as allowing providers to bill for less than 20 minutes of time reviewing patient data, clarifying a broader range of use cases under remote therapeutic monitoring codes and to reduce the confusion between remote therapeutic monitoring and digital mental health technology codes.