Peering Into 2025: A Glance at the Complex Policy Landscape Ahead
There is no question whatsoever that the year 2024 has been a complex and somewhat challenging one in terms of healthcare policy in the U.S. healthcare system, with major political shifts taking place, amid an already-unsettled policy landscape.
To begin with, Donald Trump defeated Kamala Harris by a very small margin in the popular vote, and will return to the White House on January 20 for a second term; but also, the Democrats lost a crucial few seats in that chamber, while the Republicans retained a bare majority in the House of Representatives, meaning that the Republicans will control the White House and both houses of the U.S. Congress in the next Congress, a change from the split control of the past few years, in which Democrats have controlled the Senate. Still, the margin will be extremely small, particularly in the House, where the Republicans will start out with a 1-seat margin.
As everyone saw in the last few days of the last Congress this week, the House and Senate were able to pass a continuing resolution (CR) to keep the federal government open, but only at literally the last minute (with literal minutes to go before a shutdown was to take effect), on Friday, December 20; President Joe Biden signed the CR on Saturday morning, Dec. 21. And that final CR differed considerably from the original one that House Speaker Mike Johnson (R.-La.) had negotiated with House Minority leader Hakeem Jeffries (D.-N.Y.) over a period of several weeks. But when billionaire industrialist Elon Musk inserted himself into the process last week, he exploded the original, negotiated CR, and those at the table in the House had to negotiate a new one, which ended up snipping off key provisions, including, as we reported on Sunday, a provision to avert most of a scheduled 2.83-percent cut to Medicare physician reimbursement, though the final bill did include a provision to delay an $8 billion reimbursement cut to Medicaid disproportionate-share hospital (DSH) payments through March 31 of next year. The final bill also included the extension of some telehealth flexibilities.
As the leaders of the California Medical Association noted, “Other previously agreed to health care provisions were excluded from today’s bill as well, including community health center funding, an extension of the 3.53-percent Medicare Alternative Payment Model incentive payments, a requirement that Medicare Advantage plans maintain accurate provider directories, pharmacy benefit manager pricing reforms, and hospital site of service billing transparency requirements.”
Anders Gilberg, senior vice president, government affairs, at the Englewood, Colo.-based Medical Group Management Association (MGMA), released a statement on Saturday, in which he said that, “While MGMA is relieved that telehealth flexibilities and the 1.0 work GPCI floor were extended — albeit temporarily — the final Continuing Resolution (CR) represents a huge congressional failure to the detriment of the nation's Medicare patients and their physicians. The previously agreed-upon CR, while not perfect, would have critically averted most of the 2.83-percent cut to physician reimbursement in Medicare beginning January 1. Now physician practices head into the new year facing uncertainty and financial shortfalls that not only negatively impact the viability of their Medicare business, but their commercial contracts tied to Medicare rates, as well as Medicaid reimbursement in states that use Medicare as a benchmark. Lawmakers are playing a dangerous game that will ultimately hurt patient access to physicians who can no longer deal with the chaos caused by congressional inaction to fix a reimbursement system that continues to destabilize the Medicare program.”
What’s more, Gilberg said in the statement, that “Heading into the 119th Congress, while retroactively addressing the 2.83-percent cut to the conversion factor is of utmost importance, permanent reform to the Medicare payment system is needed to sustainably support medical groups and their ability to provide timely access to Medicare patients.”
All of this complicated the policy landscape at the federal level, for the coming year and beyond. In addition, President-elect Trump is nominating Robert F. Kennedy Jr. to be Secretary of Health and Human Services, and Mehmet Oz, M.D., to be Administrator of the Centers for Medicare & Medicaid Services, and neither individual has any federal healthcare policy experience of any kind, so that is a major wild card in terms of what policy directions the two might take.
I had spoken with Anders Gilberg in the MGMA Washington offices just days before the meltdown of the first draft of the CR. Speaking of the moment, Gilberg told me that “There’s a lot of uncertainty around value-based care, regulatory relief and physician payment, because the appointees so far aren’t on the record on any of these issues. We know with RFK that he’s going to focus on the FDA [Food and Drug Administration] and vaccines. We need to clear the air with those issues first. There’s uncertainty, but I don’t think it will be coupled with any immediate action on those issues. But there are longer-term concerns,” he emphasized to me. “We keep limping along with the Medicare Physician Fee Schedule and there are cuts that are looming that we have to deal with. A lot of physicians are now employed by health systems that can subsidize their pay to some extent. Patients Over Paperwork came out as an initiative under Seema Verma. I’d like to see some continuation of that, at least conceptually. There still are a lot of regulations impeding physicians’ ability to deliver care.”
Still, Gilberg told me, “It’s just unclear about the longer term. We’re going to have to do a lot of educating. One of the issues we have next year is that several key Republican members who are physicians will have retired, and the institutional memory of SGR and MACRA and all those elements from ten years ago, just won’t exist anymore. So it will require educating members and the administration about value-based care and other issues. And we’ve been concerned over the years about the fact that this administration and others haven’t adopted many ideas coming from physicians. We have a Physician Technical Advisory Committee, the PTAC; that was formed out of MACRA, and they’ve recommended various physician-led initiatives to CMMI. A lot of procedural specialties where you don’t have the preventive care opportunities in primary care; so there were initiatives to expand value-based care among specialists, and there were recommendations coming from them that haven’t been adopted.”
In addition, he notes, at MGMA, “We’re currently developing a Top Ten Regulatory Burdens document. And a huge initiative this year was prior authorization reform, especially in Medicare Advantage and Medicaid, and CMS has issued a few initiatives to address it. We had 500 organizations supporting this prior authorization bill”; unfortunately, that provision was also snipped out of the final CR.
Meanwhile, many issues need to be addressed in the coming year, Gilberg emphasizes. “The fiscal year started in October, and we’re limping into the new year, and when that kind of thing happens, you don’t get the kind of robust reform out of Congress. And it remains to be seen what the Republicans’ real healthcare agenda is. We’re clear on many things they don’t like, but less clear from a substantive standpoint, they would implement policies to fix those problems.”
So inevitably, there are more questions than anything like concrete answers, when it comes to the coming year in the healthcare policy world. More than ever in recent memory, it is an open question what will happen next. But one thing is certain: all the associations and groups representing healthcare providers will be in the scrum, working to advance policy and payment issues on behalf of hospitals, medical groups, and other providers. So: stay tuned.
