On Tuesday afternoon the House voted 217-214 to pass the remaining Fiscal Year 2026 Appropriations Bills. The Senate had amended the legislation to only include 2 weeks of funding for the Department of Homeland Security. The legislative package included funding for the Department of Health and Human Services and approximately 300 pages of health policy riders, which included several AAHKS priorities that we have been advocating for:
- Increasing the APM Participation Payment from 1.88% to 3.1% for the 2026 performance year/2028 payment year: Few stakeholders were pushing for the extension of this policy as consistently as AAHKS. This is a strong signal that Congress remains dedicated to seeking cost-reductions and care improvement through value-based care. This extension also excluded attempts from lawmakers to phase out the payment for providers that have been in APMs in prior years, which would have unfairly punished hip & knee surgeons for being pioneers of APMs.
- Extending the Medicare Physician Fee Schedule Geographic Practice Cost Indices (GPCI) floor through Calendar Year 2026: The GPCI floor prevents an additional negative adjustment to physician reimbursement in areas that have labor costs below the national average.
- Extending Medicare Telehealth Flexibilities through the end of 2027: While telehealth flexibilities remain popular, the Congressional Budget Office (CBO) continues to find that extending the flexibilities are expensive. AAHKS endorsed the CONNECT for Health Act, which would provide for a permanent extension of the flexibilities, but the 10-year cost of that legislation is more than Congress can easily offset. There are current efforts to present CBO with additional data that could help them re-evaluate the cost of a longer-term extension.
For information on other policies impacting providers included in the Appropriations Bills, see below.
- Requirement for Accurate Medicare Advantage Provider Lists: This requirement is intended to both boost consumer transparency and crack down on insurer “ghost networks”.
- Extension of Medicare Rural Hospital Payment Programs: The Medicare Low Volume and Medicare Dependent Hospital payment programs were both extended through the end of CY 2026.
- 5-year Extension of the Medicare Hospital at Home Waiver Flexibilities: This program allows for acute care to be delivered to patients in their home, including daily visits, patient remote monitoring and telehealth for certain conditions.
- Elimination (instead of delay) of ACA Medicaid Disproportionate Share Cuts until 2028: The ACA was partially paid for by a schedule of cuts to Hospital Medicaid DSH payments, with the expectation that the increased coverage from Medicaid expansion would largely offset the DSH cuts. The cuts would have been substantial; over 50% reduction to DSH payments. Although these cuts have never hit, Congress has usually elected to simply delay the cuts for “free” by simply delaying them within the 10-year budget window (a budgetary gimmick). There is only one year of DSH cuts remaining on the books.
