Government Avoids Shutdown; Healthcare Reforms and Funding Untouched

December 24, 2024

In a last-minute effort to prevent a government shutdown, Congress passed a continuing resolution (CR) that extends funding for federal operations. However, the resolution has left many in the healthcare sector feeling frustrated and disappointed due to the lack of significant reforms and funding provisions. The CR includes some temporary measures that, while providing short-term relief, fall short of addressing the broader needs and concerns of healthcare providers, patients, and advocacy groups. This situation reflects the complex and often contentious nature of healthcare policy in the U.S.

Limited Extension of Telehealth Services

The CR’s inclusion of a 90-day extension for Medicare’s telehealth flexibilities and the CMS acute hospital at home program has been met with mixed reactions. While telehealth advocates welcomed this extension as a critical lifeline for maintaining essential services, many were hoping for a more substantial commitment, such as a two-year extension. The American Telemedicine Association (ATA) described the short-term extension as “far from an ideal outcome,” emphasizing the urgent need for stable and long-term solutions to support telehealth services.

The COVID-19 pandemic has shown the vital role telehealth can play in healthcare delivery, making it easier for patients to access care and allowing providers to continue offering services even during lockdowns. The temporary extension provides some relief, allowing telehealth services to continue in the short term. However, the limited duration raises significant concerns about the possibility of disruptions in continuity of care for patients who have come to rely on telehealth for their medical needs. Healthcare providers are left in a state of uncertainty, unsure if they should invest in expanding telehealth capabilities without the assurance of enduring support from Medicare.

Exclusion of Key Provisions

Several anticipated healthcare provisions were conspicuously absent from the final CR. Noteworthy omissions include first-dollar coverage for high-deductible health plans linked to health savings accounts (HDHP-HSAs), in-home cardiology rehabilitation facilities, virtual diabetes program suppliers in the Medicare Diabetes Prevention Program, and the provisions of the SPEAK Act for telehealth flexibilities. The exclusion of these measures has been deeply disappointing for many healthcare organizations and advocacy groups.

The omission of these key provisions underscores the complexities and challenges of achieving comprehensive healthcare reform in a politically divided Congress. Advocacy groups have repeatedly highlighted the importance of these measures in improving access to care and in reducing healthcare costs. However, getting them included in the CR proved too difficult amidst the legislative gridlock. The failure to pass these provisions has reinforced the need for continued legislative efforts and advocacy to address the pressing issues within the healthcare system. These measures, if implemented, could pave the way toward more accessible and affordable healthcare.

Physician Pay Cuts and Industry Reactions

Among the most contentious issues addressed in the CR is the partial reversal of a 2.83% payment cut to Medicare physicians. The legislation provides a 2.5% increase, which still results in a marginal cut. This outcome has been criticized by the American Medical Association (AMA) and other medical groups, who argue that the adjustment is insufficient to cover rising costs associated with medical practice. Medical professionals, already under tremendous pressure, view this as yet another burden.

Physicians and healthcare providers face increasing financial pressures due to escalating operational costs, staffing challenges, and the need to invest in new technologies and treatments. Though the partial reversal of Medicare payment cuts offers some relief, it is widely viewed as a stopgap measure rather than a sustainable solution. The AMA and other organizations have called for more substantial reforms to ensure that Medicare reimbursement rates keep pace with the costs of delivering care to patients. They argue that a continued lack of adequate support will ultimately hurt patient care, as providers may be forced to cut services or limit their acceptance of Medicare patients.

Major Legislative Omissions

The CR’s failure to include several major healthcare-related reforms has not gone unnoticed. Notable exclusions are provisions aimed at reforming pharmacy benefit manager (PBM) practices, updating drug patent regulations, addressing future pandemics, implementing electronic prior authorization standards, and tackling the opioid crisis. These omissions have drawn significant criticism from public health advocates and industry stakeholders who viewed these reforms as crucial steps toward a more efficient and equitable healthcare system.

The exclusion of PBM reforms is particularly striking, considering these reforms are seen as vital for increasing transparency in drug pricing and reducing medication costs for consumers. The National Community Pharmacists Association and other groups have called for swift legislative action to address the adverse impacts of current PBM practices. Similarly, failing to include measures to address future pandemics and the opioid crisis leaves critical gaps in the government’s healthcare strategy. These omissions underscore the difficulty of enacting comprehensive healthcare reforms in a system influenced by powerful industry interests and political considerations.

Hospital Funding and Disproportionate Share Payments

The CR has temporarily delayed cuts to disproportionate share hospital (DSH) payments, providing a brief reprieve for hospitals that rely on this crucial funding to serve uninsured and underinsured populations. While this delay is a welcome relief for many hospitals, it does little to address the long-term funding challenges they face. The uncertainty surrounding DSH payments creates a precarious financial situation for these institutions.

Hospitals play an essential role in providing care to some of the community’s most vulnerable members. The temporary delay in DSH payment cuts helps ensure that hospitals can continue offering services without immediate financial distress. However, healthcare organizations argue that more predictable and sustainable funding solutions are needed to address long-term challenges. Ensuring the financial stability of hospitals that rely on DSH payments is vital for maintaining access to care for underinsured and uninsured patients.

Political Dynamics and Fiscal Considerations

The passage of the CR involved significant political maneuvering and fiscal caution. Influential figures such as Elon Musk and President-elect Donald Trump played crucial roles in shaping the final legislation. Their opposition to a broader healthcare package, based on concerns over government spending and reform priorities, led to a truncated version of the CR that excluded many initially proposed reforms. This highlights the complex interplay of political dynamics and fiscal considerations in the legislative process.

The political landscape surrounding the CR emphasizes the difficulty of navigating healthcare policy in a divided Congress. Fiscal considerations and special interests have significantly influenced the final outcome, often at the expense of comprehensive healthcare solutions that benefit the broader population. The debate over the CR reflects the ongoing challenges of achieving bipartisan cooperation to implement meaningful healthcare reforms. While the CR avoided a government shutdown, it has left many crucial issues unaddressed, revealing the need for sustained efforts to build consensus across political divides.

Diverse Stakeholder Reactions

In a last-minute bid to avert a government shutdown, Congress passed a continuing resolution (CR) to extend funding for federal activities. Despite this measure, many in the healthcare field are feeling let down and frustrated. The CR lacks significant reforms and funding provisions that the sector was hoping for. Although the resolution includes some temporary measures that provide short-term relief, these are insufficient to address the broader and more pressing needs of healthcare providers, patients, and advocacy groups. This scenario highlights the intricate and often contentious nature of healthcare policy in the United States.

Healthcare professionals were particularly disappointed by the CR’s failure to tackle long-standing issues, such as securing long-term funding for crucial healthcare programs and addressing the rising costs of healthcare services. Patients and advocacy groups have also voiced their concerns, emphasizing that temporary fixes are not enough to ensure the sustainability and quality of care.

Moreover, the lack of progress in enacting substantial healthcare reforms underscores the persistent challenges and political obstacles in American healthcare policy. The complexities of navigating bipartisan support and the differing priorities of policymakers continue to fuel frustration and uncertainty within the sector. Overall, while the CR sidestepped an immediate crisis, it has done little to resolve the ongoing and systemic issues plaguing the U.S. healthcare system.

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