As healthcare actuaries, staying up-to-date on the latest legislation and how it may impact the industry is our responsibility- which can be a daunting task. In one of my recent newsletters, I discussed the Consolidated Appropriations Act, also known as the Omnibus Spending Bill, signed into law by President Biden in December 2022. 

This massive bill contains provisions affecting healthcare in many ways, from telehealth to physician payments to public health funding. I’ll venture to guess your schedule does not allow for thorough scrutiny of everything in it, so let me give you an overview of the key implications.  

Let’s begin with how the bill applies to telehealth.

It still extends an array of flexibilities for Medicare coverage relating to payment for telehealth services through the end of 2024. This was welcome news for healthcare providers and patients alike, as telehealth remains a prevalent tool in the wake of the pandemic and appears to be here to stay. Extending these flexibilities demonstrates a commitment to the continued care of Medicare beneficiaries, provides regulators time to determine which accommodations to maintain, and gives providers time to acclimate to the resulting regulatory changes. Call it a win-win-win.

Next up: Medicaid

At the start of the pandemic, the government increased its Medicaid matching rate to the states under the proviso that the States could not drop anyone from the program for the duration of the Public Health Emergency (PHE). States have been on standby since, unsure of when the PHE will end and when they will need to reevaluate the eligibility of those enrolled. The Act requires that the states start this reevaluation process in April 2023, regardless of the PHE’s status.

Medicare: Impact on physician payments

The legislation curbed a scheduled cut of almost 4.5% to the Medicare physician fee schedule set to take effect in 2023. It reduced the cut to 2% in 2023 but then scheduled an increase to 3.25% in 2024. These cuts were due to take effect despite warnings from the American Medical Association that they would place Medicaid beneficiaries in a precarious position to receive care, threatening the financial viability of physician practices. 

The legislation extended a value-based care bonus to physicians who participated in alternative payment models. However, the bonus will drop from 5% to 3.5% in 2024. Nevertheless, the continuation of this bonus, in any capacity, was a relief to provider groups. It remains an integral incentive to help sustain the trend toward paying physicians based on patient outcomes, not the volume of services they provide in the U.S. healthcare system. 

Finally, the omnibus bill includes $9.2 billion in funding for the Centers for Disease Control and Prevention. This is a $760 million boost over the fiscal year 2022, with over half of this bonus dedicated to public health preparedness in the event of another pandemic. 

The bill also provides $350 million in “flexible funding” for public health infrastructure — a 75% increase – and additional resources for mental health and substance abuse disorders. For the first time, Medicare will cover services provided by marriage and family therapists and counselors.

Although this is a highly condensed overview of the Consolidated Appropriations Act, I hope it provides healthcare actuaries with a surface-level understanding of impending industry changes. If you have any questions, feel free to reach out to me.