Week in Washington

What’s Next?

Now that Congress has passed a reconciliation bill the natural question is what’s next? Below are a few things to keep an eye on in the coming months.

• Budget Bill – Congress will need to pass a budget bill before October 1^st to avoid a government shutdown. Inclusion of potential health care items include further changes to the Medicare physician payments or extension of ACA enhanced premium tax credits.
• More Reconciliation Bills? Several prominent Republican leaders have voiced interest in passing one or two more reconciliation bills. For example, Senator Johnson expressed interest in including potential further Medicaid cuts in a future reconciliation. 
• Implementation – A number of policies that were included in the reconciliation bill will require regulations and guidance from CMS as to how they will be implemented. One of the biggest open questions is around the $50 billion rural hospital fund. KFF has a very good summary of the fund and open questions.

CMS Regulations

CMS released proposed Medicare physician fee schedule and the outpatient prospective payment system rule.  The payment physician fee schedule  had an increase for physicians in a payment model would get a 3.83 percent boost to their payments. Doctors not in a model get a 3.62 percent increase. Hospital outpatient departments overall could expect a 2.4% increase in their Medicare payments. Additional CMS proposes to decrease payments to hospitals that administer outpatient drugs at off-campus facilities.

Commercial Trends

PwC released its annual findings on Commercial cost trends. PwC surveys commercial actuaries on their expectations for the upcoming year in terms of cost trend. For both 2025 and 2026 PwC estimates that medical cost trend would be 8.5% for Group and 7.5% for individual in 2026.