MH/BH/ Fin/Budget- Medicaid and mental health programs big winners in $1.7 trillion federal spending law

MM Curator summary

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[MM Curator Summary]: Big buckets – Medicare docs magically avoid rate decreases for the 800th year in a row; Medicare adds $1B+ for mental health; states can start kicking people off their Medicaid rolls (if they want to) in April; extra Medicaid cash for maternity lives at least 1 more year; and rural health gets some stuff.

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The $1.7 trillion catch-all federal spending bill, enacted by Congress and President Joe Biden just before lawmakers left town, won both praise and scorn. But supporters, most congressional Democrats, and Republican opponents, who called it a budget-buster, focused largely on spending provisions for defense, emergency assistance to Ukraine , and aid for various environmental crises.

Just as important in the 4,155-page bill, though, are spending provisions aimed at helping hospitals and healthcare systems. The law, cleared by the outgoing Democratic House on Dec. 23 and signed by Biden shortly thereafter, allots $9.2 billion for the Centers for Disease Control and Prevention for “fundamental public health activities” — coupled with a $760 million boost over the 2022 fiscal year. The appropriations bill also includes $350 million in flexible funding for public health infrastructure.


However, funding for COVID-19 prevention and mitigation measures was not included in the bill. That’s a blow to public health advocates who say new coronavirus strains could wreak havoc this winter and beyond.

Still, Senate Majority Leader Chuck Schumer (D-NY) said the bill was the most significant done in a long time.

“The omnibus is aggressive, generous, and far-reaching in healthcare, making it more affordable, more extensive,” Schumer said.

In addition to increased funding for the CDC and public health, the bill includes the following major provisions:

Public Health

The bill aims to improve public health through better data collection, vaccine development, and agency oversight.

The bill does not include a proposal that would have created a bipartisan task force, such as the 9/11 Commission, to examine the national response to COVID-19. That’s a politically touchy subject that House Republicans, soon to be in the majority, plan to tackle once they run committees. While, in theory, there’s plenty of room for a bipartisan investigation of the national response to COVID-19, it’s unlikely to go in that direction.

Physician Payments
The appropriations curb a cut of almost 4.5% to the Medicare Physician Fee Schedule, the annual regulatory rule released by the Centers for Medicare and Medicaid Services that updates the standards for physician reimbursement and policies related to the delivery of healthcare. The fee schedule cut was scheduled to go into effect in 2023. The spending law effectively tightens the cut to 2% for 2023, with another 3.25% cut in 2024.

Value-Based Care
The value-based care bonus sent to eligible physicians who participate in alternative payment models will drop from 5% to 3.5% in the next year. The health incentive aims to offset losses in revenue for physicians who move from fee-for-service to value-based care models.

The bill allows states in April to begin Medicaid redeterminations. That’s the process states use to ensure that Medicaid enrollees continue to be eligible for coverage by the federal and state program, which aims to limit healthcare costs for people with limited income and resources.

Now, states will have an indicator on when they should start redeterminations. States will also be allowed in April to begin removing people from pandemic-enhanced Medicaid coverage.

The packages ensure that flexibilities for doctors to treat patients remotely via telehealth remain in place for two years. That’s to provide regulators with the proper time to determine which flexibilities should be made permanent. Still, the provision falls short of the blanket permanence many lawmakers pushed for.

Medicare and many Medicaid programs have expanded the types of originating sites that a patient could be at while receiving services via telehealth. Other telehealth changes have included delaying certain in-person requirements and extending coverage for audio-only services.

Mental Health
The spending bill includes several policies to improve mental health across the nation, such as allowing Medicare to cover therapists and counselors, along with increases in funding for mobile healthcare units focused on mental healthcare.

Over $1 billion will also go toward the Community Mental Health Services Block Grant, in addition to increased funding for the 988 mental health hotline.

Mothers and Postpartum Care
The bill also extends a policy that allows states to offer a year of postpartum coverage for those enrolled in Medicaid and the Children’s Health Insurance Program.

Another provision, the Pregnant Workers Fairness Act, requires employers to make accommodations for medical conditions related to pregnancy. A second act, the PUMP Act, also requires employers to support mothers by providing private places, not including a bathroom, to pump breast milk.

Rural Health
The Medicare Dependent Hospital program and Low-Volume Hospitals program have been extended through 2025, which increases payments for those facilities with a large portion of Medicare patients.

The bill also includes $2 million for a rural hospital pilot program that helps to improve current hospital management.

And $5 billion will go to efforts to reduce opioid misuse, such as easing buprenorphine prescription regulations (which previously required extra certifications.) The law includes $1.6 billion offered to states through the State Opioid Response Grant, medication-assisted treatment, and opioid overdose surveillance at the CDC.


Increased Funding

The bill includes a 22% increase, totaling nearly $119 billion, for VA medical care. Another provision sends a 5.6% increase of almost $50 billion for the National Institutes of Health, along with $950 million for Biomedical Advanced Research and Development Authority.

It also dictates that the Advanced Research Projects Agency for Health, which receives $1.5 billion of the allotted funding, will be housed under the NIH.