(Dec. 23, 2022) – The 117th Congress has completed its work as the House passed the $1.7 trillion federal fiscal year 2023 budget this morning. Technically, the House concurred with the Senate amendments to H.R. 2617, an unrelated bill used as a shell to carry the more than 4,000-page budget measure. Additionally, since government funding expires at midnight tonight, Congress passed another weeklong continuing resolution to ensure that no blip in operations occurs while the incredibly complex contents of H.R. 2617 are prepared for President Biden’s signature.
H.R. 2617 contains important funding provisions that the Kansas Hospital Association and other provider groups have sought for some time. Most importantly, this bill delays for two years the application of a four percent PAYGO cut to Medicare that otherwise would have gone into effect automatically to offset the sequestration holiday Congress created during the pandemic. Unfortunately, this sequestration holiday expired gradually throughout 2022, and the Budget Control Act’s two percent cut to Medicare payments is in full effect now. The additional four percent PAYGO cut would have been catastrophic to hospitals. While we know we will have to readdress this issue in two years, we are grateful that Congress worked with us to stave off this incredibly ill-advised policy outcome.
H.R. 2617 also provides two-year extensions for essential programs on which hospitals around the country have come to rely. First, the bill cleaves pandemic-era telehealth flexibilities from the public health emergency’s expiration, opting instead to extend them through the end of fiscal year 2024. This allows the 118th Congress to craft legislation permanently expanding popular telehealth payment methodologies. Second, the bill provides a two-year extension for the low-volume hospital (LVH) payment adjustment’s current formulation. Third, the bill extends the Medicare-dependent hospital program for two years but does not allow hospitals to choose a new base year. Again, this is something that KHA will be working with our delegation on changing during the 118th Congress as they consider making the LVH and MDH designations permanent.
One matter that Congress only partially addressed in H.R. 2617 was the looming 4.5 percent cut to the Physician Fee Schedule. The new budget would reduce this cut to two percent in 2023 and three and a half percent in 2024. While this is not an optimal outcome, there is an opportunity to discuss the 2024 cut with Congress over the next year.
For the American Hospital Association’s detailed bulletin on health care provisions in H.R. 2617, click here: AHA BULLETIN.
For an in-depth overview of the fiscal year 2023 budget bill, here is the CQ FACT SHEET.
Senator Moran and Congresswoman Davids voted aye on the final bill. Senator Marshall voted no, as did Congressmen Mann, LaTurner, Estes and almost every other House Republican, all of whom preferred a short-term continuing resolution that would have allowed the newly-elected Republican House majority to write the fiscal year 2023 budget early in the 118th Congress. Nevertheless, our Congressional delegation was incredibly helpful in addressing our major concerns in H.R. 2617. Since most of these issues were resolved via two-year pauses, we look forward to working with them on crafting permanent solutions to the financial and workforce pressures currently facing Kansas hospitals.