Lawmakers unveiled their long-awaited $1.7 trillion government funding package on Dec. 20, 2022. As of publishing, it seems likely that a vote on final passage in the U.S. Senate will occur at some point today or tomorrow, with a final up-or-down vote in the House of Representatives taking place ahead of the December 23 government funding deadline.

The information below is focused on notable Medicare and Medicaid policies and is not reflective of every policy or funded program.

Medicare

·    Medicare Physician Payment Reductions: The omnibus package will reduce expected reductions to Medicare reimbursement for physician services over the next two years. Accordingly, the omnibus increases the Medicare conversion factor by 2.5 percent for 2023 and 1.25 percent for 2024. Watch for a new fee schedule in your area. Will this delay claims in the New Year? I guess we have to wait and see.

·    Alternative Payment Model (APM) Bonuses: Currently, Advanced APMs can only earn the 5 percent payment incentive through the end of 2022. (There is a two-year lag between performance and payment years.) After this, there will be a "gap year" between the expiration of the bonus payments and the restart of modest (cheap) annual conversion factor updates, leaving less incentive for providers to participate in an Advanced APM in 2023. To address this, the omnibus provides a one-year bonus for providers who are part of APMs – but rather than keep that bonus at 5 percent, the bill lowers the bonus to 3.5 percent. The bill also extends the current freeze on participation thresholds for qualification for the APM bonuses for an additional year.

·    PAYGO: The omnibus halts the looming statutory Pay-As-You-Go (PAYGO) sequestration in 2023 and 2024. It may be back in 2025. PAYGO requires that mandatory spending and revenue legislation not increase the federal budget deficit over a 5-year or 10-year period. Should such legislation be enacted without offsets, the Office of Management and Budget (OMB) is required to implement sequestration, or across-the-board reductions, in certain types of mandatory federal spending. The Congressional Budget Office (CBO) estimated that a Statutory PAYGO sequester in fiscal year (FY) 2022 resulting from the American Rescue Plan Act of 2021 passage would cause a 4 percent reduction in Medicare spending or cuts of approximately $36 billion.

·    Telehealth: The omnibus continues Medicare's expanded access to telehealth by extending COVID-19 telehealth flexibilities for an additional two years through Dec. 31, 2024. The bill also extends through calendar year 2024 the flexibility to exempt telehealth services from the deductible in high-deductible health plans (HDHPs) that can be paired with a Health Savings Account (HSA). Hooray!!!!

·    PAMA: The omnibus delays for one year pending payment reductions and data reporting periods for the Clinical Laboratory Fee Schedule under the Protecting Access to Medicare Act (PAMA).

·    Separate OPPS Payment for Non-Opioid Packaged Treatments: The omnibus provides a separate (capped at 18 percent) Medicare payment, from 2025 through 2027, for non-opioid treatments that are currently packaged into the payment for surgeries under Medicare's Outpatient Prospective Payment System (OPPS).

·    Lymphedema treatment. The final package folds in provisions of the Lymphedema Treatment Act, which expands Medicare coverage for lymphedema-related pressure garments. The new coverage will go into effect in 2024 and could affect more than 3 million Medicare beneficiaries.

·    CBO Part D Data Authorization: Authorizes the CBO to access prescription drug payment data, including rebate and direct and indirect remuneration (DIR) data, under Medicare Part D.

·    Acute Hospital Care at Home Waivers: The omnibus will extend the waivers by two years until the end of 2024. CMS has approved more than 250 hospitals to participate in the acute hospital care at-home program.

·    Sequester Extension and Other Offsets: The package would extend sequestration for the first six months of FY 2032 to help offset the package cost. The sequester policy would also smooth out the sequester cuts in later years and keep the Medicare sequestration percentages at 2 percent for FY 2030 and FY 2031. Hopefully, we will all be retired by then.

Medicaid

·    The Children's Health Insurance Program (CHIP): The omnibus extends funding for CHIP for two years through FY 2029. The omnibus also requires children to be provided with 12 months of continuous coverage in Medicaid and CHIP, effective January 1, 2024.

·    Modifications to Postpartum Coverage Under Medicaid and CHIP: The bill makes permanent a state option to allow states to continue to provide 12 months of continuous coverage during the postpartum period in Medicaid or CHIP.

·    Medicaid Redeterminations Transitioning From Medicaid FMAP Increase Requirements: Under the Families First Coronavirus Response Act, each state was eligible for a 6.2 percentage point increase in its Federal Medical Assistance Percentage (FMAP) if it met several conditions. Among these was the institution of a continuous enrollment policy for Medicaid beneficiaries, States could not remove individuals from Medicaid rolls until the end of the COVID-19 public health emergency (PHE). Now, the omnibus lets states start Medicaid redeterminations (eligibility checks) at the beginning of April, even if the PHE is still in effect. Please verify your Medicaid patients or dual eligibles during that period.

·    Medicaid Funding for U.S. Territories: The omnibus extends Puerto Rico's higher federal Medicaid match of 76 percent through FY 2027 and permanently extends a higher federal Medicaid match of 83 percent for American Samoa, the Commonwealth of the Northern Mariana Islands, Guam and the U.S. Virgin Islands.

·    340B: In the accompanying report language, Congress directed HRSA, which oversees the 340B program, to provide a briefing to Congress on actions taken to safeguard 340B covered entities’ “lawful access” to discounted drugs. Over the past several years, 18 drug manufacturers have ended discounted pricing to 340B hospitals with regard to contracted pharmacies. In response, HRSA exercised its authority to refer these companies to the Office of the Inspector General to impose civil monetary penalties. Several drug companies then filed lawsuits challenging the government’s authority to enforce penalties against them. This just goes on and one and this provision is kind of toothless.

There is much, much more in this bill. To view it, go to this site.