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The Forecast for Legislative and Regulatory Activity on Health Care in 2024

Photo, view of Congress

The House of Representatives meets at the U.S. Capitol on October 18, 2023, in Washington, D.C. Congress has limited time in 2024 to advance meaningful health initiatives through policy. Photo: Win McNamee/Getty Images

The House of Representatives meets at the U.S. Capitol on October 18, 2023, in Washington, D.C. Congress has limited time in 2024 to advance meaningful health initiatives through policy. Photo: Win McNamee/Getty Images

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Even though the year has just begun, the clock is running out for Congress to advance meaningful health initiatives in 2024. The spending bills for fiscal year 2024 are likely the last vehicles for advancing major legislation this year. The expiration of four annual appropriations bills on March 1 is the first of a two-part deadline for congressional action. The remaining eight annual appropriations bills, including funding for the U.S. Department of Health and Human Services (HHS), and “health extenders” (e.g., for community health centers), expire on March 8. Overdue reauthorizations that fell by the wayside in 2023, such as the Pandemic and All-Hazards Preparedness Act and SUPPORT Act, also warrant prompt attention.

Congress made progress at the end of 2023 in laying the foundation for a sweeping bipartisan, bicameral package. The House overwhelmingly passed the Lower Costs, More Transparency (LCMT) Act (H.R. 5378), including measures to strengthen price transparency requirements for hospitals, insurers, and pharmacy benefit managers and to require consistent Medicare payment for physician-administered drugs in hospital outpatient departments or doctors’ offices. Senate committees advanced several bipartisan health bills aimed at expanding access to mental health care and substance use disorder services and reducing prescription drug costs. It remains to be seen whether party leaders will reach a spending deal for these health reforms to hitch a ride on.

The Biden administration is also working to ensure top priorities — including reducing health costs and tackling the behavioral health crisis — are advanced through rulemaking while also laying out a vision for a second term. The administration is under pressure to expeditiously enact its regulatory agenda. If Republicans sweep Congress, final rules issued in the last 60 session days of 2024 could be overturned under the Congressional Review Act in 2025.

Issues to Watch

Medicare

The focus on Medicare changes will likely increase in 2024 as key expirations draw near, including those impacting telehealth coverage and payment policies and alternative payment model (APM) incentive payments. Congress must intervene prior to 2025 to maintain COVID-19 pandemic telehealth flexibilities, including loosened geographic and originating site requirements as well as a pause in prohibitions against reimbursing telehealth at the same rates as in-person care. Ongoing work to better understand the use of telehealth, such as an audit by the Office of Inspector General, could shape policymaking.

The expiring bonus for physicians participating in APMs and a 3.4 percent decrease to the Medicare Physician Fee Schedule (MPFS) conversion factor could spur broader payment reform efforts. A provision that would extend payments through 2026 at half the 2025 rate (1.75 percent) has bipartisan support and was advanced favorably out of committee by both Senate Finance (SFC) and House Energy and Commerce. Lawmakers also may dconsider changes to the MPFS payment methodology, such as integrating a new inflationary factor or restricting budget neutrality adjustments. Proponents assert these policies will improve the long-term stability of physician payments by ensuring reimbursement keeps up with inflation.

Finally, the administration and Congress have expressed interest in improving accountability in Medicare Advantage. Hearings and rulemaking in 2023 largely focused on protecting consumers against misleading marketing practices and removing inappropriate financial incentives for brokers. The push for increased oversight will likely continue in 2024 with possible legislative and regulatory changes to data collection and publication, prior authorization, and supplemental benefit policies.

Prescription Drugs

Policies to tackle high prescription drug prices — primarily through increased transparency in and changes to pharmacy benefit management — have garnered bipartisan, bicameral support. Recently, Congress has scrutinized the role of pharmacy benefit managers (PBMs), with some members arguing that manufacturer rebates to PBMs and other intermediaries in the distribution system might contribute to higher-cost prescription drugs. The House and Senate will have to resolve significant policy differences between their proposals. The LCMT Act would increase transparency and ban spread pricing in Medicaid, which occurs when PBMs reimburse pharmacies less than what they are reimbursed by plans for a drug and retain the “spread” as profit. Senate proposals (S. 1339, S. 2973) would require numerous additional changes such as banning spread pricing in commercial plans and limiting PBM reimbursement for Part D drugs to a flat fee.

The administration will also continue to focus on implementing the Inflation Reduction Act, which includes Medicare drug price negotiation. The Centers for Medicare and Medicaid Services is expected to publish the negotiated maximum fair prices for the 10 selected drugs by September 1.

Behavioral Health

Bolstering the behavioral health workforce pipeline, ending the opioid epidemic, and reducing rising rates of negative mental health and substance use outcomes, especially for children, remain a bipartisan priority. Through the SUPPORT Act reauthorization, lawmakers seek to increase state and Tribal capacity to respond to the opioid overdose crisis. The House already passed its bill (H.R. 4531), while the Senate has not yet voted on a Health, Education, Labor, and Pensions committee–approved bill (S. 3393). SFC is pursuing policies to improve timely access to behavioral health care for Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) beneficiaries.

The administration will likely finalize its rule to strengthen parity requirements for mental health and substance use disorder benefits, which would help to ensure that insurance coverage for mental health conditions and substance use disorders are comparable to coverage for medical conditions. The Drug Enforcement Administration and HHS plan to announce whether telemedicine flexibilities for prescription of controlled medications will be made permanent.

Access to Care

Incremental measures to improve health care affordability are ripe for bipartisan action in 2024. Lawmakers seek to address concerns with price-transparency regulations for hospitals and health plans. Both chambers will have to reconcile the few meaningful differences between the LCMT Act and the newly introduced bipartisan Health Care PRICE Transparency Act 2.0 (S. 3548).

Continued House oversight on the administration’s implementation of the No Surprises Act, which protects consumers from unexpected medical bills, is expected. HHS, Labor, and Treasury seek to resolve challenges with the process for providers and insurers to resolve payment disputes on out-of-network services, repeatedly stalled by litigation, through new rules.

Aligned with President Biden’s promise to build on the Affordable Care Act, the administration plans to finalize rules expanding access to comprehensive coverage and strengthening consumer protections. They include policies to rescind Trump-era regulations on short-term plans and association health plans, which lack protections for preexisting conditions; a policy to expand eligibility for coverage through the marketplace, Medicaid, and Basic Health Program to Deferred Action for Childhood Arrivals recipients; and a policy to expand access to contraceptive services. Congress and the administration must also begin the debate around the enhanced Advanced Premium Tax Credits for marketplace coverage expiring at the end of 2025. Under the enhanced financial assistance, an estimated nine of 10 customers are eligible for savings on monthly premiums.

Publication Details

Date

Contact

Alyssa Llamas, Vice President, Impact Health Policy Partners

[email protected]

Citation

Alyssa Llamas, Lena Marceno, and Lauren Testa, “The Forecast for Legislative and Regulatory Activity on Health Care in 2024,” To the Point (blog), Commonwealth Fund, Jan. 17, 2024. https://doi.org/10.26099/SQ76-GY39