Parliamentarian Advises Against Senate’s Medicaid Financing Provisions, Others

A memo released on the morning of June 26 revealed that the Senate Parliamentarian has advised lawmakers that several provisions in the budget reconciliation bill will not be able to pass with a simple majority vote. This includes the Senate’s proposed reductions to state provider taxes that were expected to result in billions of cost savings to the federal government. Senate Republicans now have several options to consider before moving forward: remove key Medicaid provisions in the bill or re-draft them and re-submit them to try again to earn Parliamentarian approval. Other policies that were ruled unallowable under the Byrd Rule include the exclusion of certain immigrants from Medicaid, including withholding federal funds from states that use their own funds to provide coverage. The memo comes as several moderate House representatives have publicly asserted their concerns  with the Senate’s deeper cuts and other Senate lawmakers like Thom Tillis (R-NC) and Josh Hawley (R-MO) continue to voice their concerns about the impacts on their constituents, particularly rural providers (Politico, June 26;  Senate Committee on the Budget, June 26; The Hill, June 26).

Moderate House Republicans Send Letter to Senate Leadership, Voicing Concern Over Cuts

On June 24, 16 House Republican lawmakers submitted a letter to Senate leadership, warning that they consider the Senate’s cuts to Medicaid to be too stringent. On June 16, the Senate Finance Committee released its revisions to the budget reconciliation bill, which included provisions that would severely limit state-directed payments and provider taxes, beyond what the House had approved in its version last month. Most Republicans who signed the letter hold seats in Democratic-leaning states. In the letter, the lawmakers explained that the Senate’s cuts may reduce access to coverage or threaten the financial stability of hospitals and providers in their states. They also raised concerns about how quickly policies must be implemented if passed, potential penalties imposed on expansion states, and the stricter work requirement policies for adults with dependents (The Hill, June 24).

Senate Leadership Proposes Small Hospital Relief Fund in Attempt to Offset Medicaid Provider Cuts

Amid growing concerns over the impact that Medicaid provider funding cuts included in the budget reconciliation bill will have on hospitals, Senators Rick Scott and Susan Collins are pushing for a dedicated federal fund to support rural and other vulnerable hospitals. While some Republicans support provider tax changes included in the Senate bill, they acknowledge the risk to smaller facilities and have been engaging in conversations related to amendments.

In response, Senate Republicans are now offering a $15B stabilization fund to help rural hospitals stay afloat, as part of ongoing talks over a domestic policy bill. The fund is meant to ease concerns about rolling back state provider taxes, an important source of Medicaid funding in many states. But several GOP senators, including Josh Hawley, Susan Collins, and Thom Tillis, say the proposed amount may fall short for the hospitals in their districts. The $15B figure is being treated as a starting point, with continuing negotiations (Inside Health Policy, June 18; Politico PRO June 25).

AHA Launches Call-to-Action Ad Campaign, “Tell Congress: Protect Hospital Care”

On June 23, the American Hospital Association (AHA) launched a call-to-action ad-campaign to be run on broadcast and cable TV across DC and on digital platforms across the nation. In the ad, the AHA urges Congress to protect patients’ access to hospitals, arguing that the Medicaid cuts included in the reconciliation bill will result in negative impacts for patients, communities, and hospitals (Modern Healthcare, June 23; AHA, June 23).

HHS Secures Commitment from 48 Payers to Standardize Prior Authorization Processes

On June 23, 48 health insurance companies joined HHS Secretary Robert F. Kennedy Jr., and CMS Administrator Dr. Mehmet Oz at a press conference to announce a set of joint commitments designed to improve access to care. The commitments included an initiative to standardize the electronic prior authorization system, reducing the scope of claims with regards to prior authorization, ensuring continuity of care across plans, enhancing communication and transparency on prior authorization determinations, offering more real-time responses to prior authorization requests, and ensuring that all non-approved requests will be reviewed by a medical professional. These commitments are voluntary, although Dr. Oz noted that CMS reserves the right to pursue regulatory action to ensure these commitments are kept if needed. The changes are expected to affect over 257 million people within the scope of Medicare, Medicaid, ACA Marketplace, and employee benefit plans (Modern Healthcare, June 23; Health Payer Specialist, June 23; AHA, June 23; HHS, June 23).

Medicare’s Hospital Trust Fund Could Be Depleted of Funds by 2033

The Medicare Hospital Insurance Trust Fund, which helps pay for hospital care for millions of seniors, is now expected to be depleted of funds by 2033, three years sooner than experts had projected. This change is due to rising costs for hospital services, hospice care, and doctor-administered treatments. Without action from Congress, Medicare would have to cut payments to hospitals and other providers by 11%, with bigger cuts likely in the future, potentially affecting the care seniors rely on. Experts warn that delaying action will make the necessary fixes more difficult, leading to possible sudden cuts or tax hikes. The Medicare trustees stress that acting sooner will allow for smoother, more manageable changes that protect the program’s future and those who depend on it (Healthcare Dive, June 20).

HRSA Announces New Requirement for FQHCs to Price Insulin and Epinephrine at Cost

On June 24, the Health Resources and Services Administration (HRSA) announced that it has issued updated award terms that will require HRSA-funded health centers to provide insulin and injectable epinephrine to low-income patients at or below the price that was paid by the center through the 340B Drug Pricing Program. This policy change is in line with the President’s executive order, “Lowering Drug Prices by Putting Americans First,” and aims to improve access and affordability for these common medications. The agency’s press release notes that over 15,500 HSRA-funded health centers provide care to over 31 million patients, with 90% of patients being seen having incomes below 200% FPL (HRSA.gov, June 24).

CMS Issues ACA Marketplace Final Rule

On June 20, CMS issued a final rule, “Patient Protection and Affordable Care Act; Marketplace Integrity and Affordability Final Rule,” which was first proposed in March 2025. The rule finalizes provisions intended to reduce “improper enrollments” and tighten Marketplace eligibility standards. Provisions included in the final rule are: creating more stringent income verification processes, removing Deferred Action for Childhood Arrivals (DACA) recipients from the definition of “lawfully present” for coverage under the Marketplace and Basic Health Programs (BHPs), establishing pre-enrollment verification processes for special enrollment periods, requiring Exchanges to withhold advanced premium tax credits if an enrollee does not reconcile the Advanced Premium Tax Credits (“APTCs”) in their taxes, requiring individuals who do not re-confirm their eligibility upon automatic re-enrollment in a $0 premium Qualified Health Plan to pay a $5 monthly premium, shortening the annual Open Enrollment Period (OEP) by one month so that it begins on November 1 and runs through December 15, instead of January 15, eliminating special enrollment periods for people with a projected annual household income at or below 150% of the Federal Poverty Level, prohibiting essential health benefits (EHB) in QHPs from covering sex-trait modification procedures, and revising de minimis thresholds for the actuarial value for plans subject to EHB requirements. Effective dates for provisions vary, with some like the DACA exclusion effective immediately while others are set to be implemented in Plan Year (PY) 2026. The OEP reduction is set to go into effect in PY2027. For the annual eligibility redetermination and the pre-enrollment verification for special enrollment periods (SEPs), these provisions are not finalized for state-based Exchanges. Eight of the 17 finalized provisions are temporary and are intended to quickly reduce improper enrollments and federal spending. This includes the APTC withhold, more stringent eligibility processes, and the removal of the SEP for low-income individuals. The agency argues that it aims to improve access to care and reduce costs through stabilizing the risk pool, lowering premiums, and reducing improper enrollments. The final rule, which could result in up to 1.8 million people losing coverage under the marketplace, according to estimates included in the rule document, has not yet been published in the Federal Register (CMS.gov, June 20; Healthcare Dive, June 23).

MedPAC June 2025 Report: Medicare Reform Recommendations

On June 12th, MedPAC released its June 2025 report to Congress, addressing key issues in Medicare payment policy and healthcare delivery. The report recommends tying annual physician fee schedule updates to inflation using the Medicare Economic Index and improving payment accuracy with more timely cost data. It also explores trends in Medicare Advantage supplemental benefits, including home healthcare usage, and examines factors influencing the cost and availability of Part D drug plans. Additional topics include the long-stay nursing home population and CMS efforts to improve quality, rural provider participation in Medicare quality reporting, and a proposal to reduce outpatient cost sharing at critical access hospitals by basing it on Medicare payment rates rather than hospital charges (MedPAC, June 12).