Government shutdown Averted as Senate Passes Bill extending Telehealth, PBM Reforms
A deal reached in the senate on Friday offers a reprieve for telehealth services and enacts key healthcare reforms, but a potential government shutdown looms if the House doesn’t act swiftly on the legislation. The bill, which allocates $116.8 billion to the Department of Health and Human Services (HHS), was temporarily stalled due to disagreements over funding for the Department of Homeland Security (DHS) following a fatal shooting involving federal immigration officials.
The partial federal government shutdown, which began on Saturday, led to the lapse of crucial telehealth flexibilities in Medicare and waivers for acute hospital-at-home care.These programs, expanded during the pandemic, have become vital for access to care, particularly in rural and underserved communities.
The impasse centered on funding for the DHS after Democrat senators objected to approving the legislation following the death of intensive care nurse Alex Pretti in Minneapolis at the hands of federal immigration agents. The Senate ultimately voted 71 to 29 to send the package back to the House, stripping out DHS funding and initiating a two-week period for renegotiations regarding the agency’s appropriations. Speaker Mike Johnson,R-La., indicated the House should pass the funding legislation by Tuesday.
The legislation represents a meaningful investment in HHS, allocating $116.8 billion in discretionary funding – a $210 million increase over fiscal year 2025 and $33 billion more than the White House initially requested, according to the Senate committee on Appropriations. This funding comes after a period of contention, as Democrats have expressed concerns over attempts to curtail government spending at HHS.
beyond funding levels, the package addresses several key healthcare policy areas. Notably, it includes reforms targeting pharmacy benefit managers (PBMs), the often-opaque middlemen in the drug supply chain.the legislation mandates clarity requirements for PBMs and prohibits them from basing their compensation on drug manufacturers’ list prices in medicare Part D.
The bill also provides temporary relief for safety-net hospitals,delaying cuts to Medicaid disproportionate share payments untill fiscal year 2028. furthermore, it moves towards site-neutral payments by requiring off-campus outpatient departments to use separate identification numbers.
Perhaps the most immediate impact of the legislation is the extension of pandemic-era healthcare flexibilities. The bill preserves expanded Medicare reimbursement for telehealth through 2027, offering stability to providers and patients alike. The Acute Hospital Care at Home Program, which allows hospitals to deliver inpatient care in patients’ homes, has also been extended through september 30, 2030.
Why did this bill pass? The Senate passed the bill to avert a government shutdown and restore crucial healthcare access,particularly telehealth and hospital-at-home programs,which had lapsed during a brief shutdown. Political maneuvering over DHS funding initially stalled the process.
Who is affected? Millions of Medicare beneficiaries, patients in rural and underserved areas, safety-net hospitals, and the healthcare industry as a whole are affected. PBM reforms will impact drug pricing for Medicare Part D recipients.
What does the bill do? the bill extends telehealth flexibilities through 2027, the Acute Hospital Care at Home Program through 2030, implements PBM reforms, delays Medicaid cuts, and promotes site-neutral payments. It also allocates $116.8 billion to HHS.
How did it end? The Senate passed the bill 71-29 after stripping out DHS funding,initiating a two-week renegotiation period for that agency’s appropriations. The bill now
