Biden signs funding bill extending telehealth flexibilities, but no relief for doctors — or PBM reform

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President Joe Biden signed a stripped down funding bill on Saturday, averting a government shutdown during the holiday season.

Congress agreed to a sweeping package earlier last week that included a number of important healthcare provisions, including an extension of telehealth flexibilities, relief from scheduled Medicare cuts for physicians and reform for controversial pharmacy benefit managers.

However, of the major healthcare changes only an extension of virtual care waivers made it into the final bill, after President-elect Donald Trump and billionaire Elon Musk panned the initial package as overly expensive.

Physicians slammed Congress for failing to prevent the Medicare cuts from going into effect.

“For the fifth consecutive year, Congress has adjourned and allowed Medicare cuts. What will be the result? Patients struggling to access health care. Physicians closing or selling their private practices while others opt to leave the profession,” said Bruce Scott, the president of the American Medical Association, in a statement.

Congress has to step in at the end of the year and avert scheduled cuts due to statutory requirements around how Medicare pays doctors. That creates significant stress for physicians, who have amplified calls for a permanent fix to the situation.

Without relief in the stopgap funding bill, physicians’ Medicare funding will fall by 2.8% in 2025.

With that cut, Medicare rates have fallen 33% over the past two decades when adjusted for physician costs, according to the AMA.

“The Medicare payment system is broken,” Scott said. “Congress must enact meaningful long-term reforms.”

Physician groups support tying annual reimbursement hikes to a measure of inflation, a policy backed by some members of Congress and influential advisory groups.

Reform will likely be on the table in Congress next year. There’s also a chance lawmakers could pass relief in 2025 that’s applied retroactively, making physicians whole for some or all of the 2.8% cut.

The final bill is a “huge congressional failure to the detriment of the nation’s Medicare patients and their physicians,” said Anders Gilberg, the top lobbyist for the Medical Group Management Association, in a statement. “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.”

With the final bill, pharmacy benefit managers, companies that sit in between payers and pharmaceutical companies in the drug supply chain, have once again sidestepped legislative reform despite months of rising scrutiny from Washington.

The original funding agreement would have, among other things, forced PBMs to pass through all rebates they get from drugmakers to their plan clients in Medicare and the group health market. It would have represented the most meaningful reform of the sector ever, though its impact on drug prices was unclear.

However, it’s likely PBM reform will be resuscitated in Congress next year too, given Trump has expressed an interest in reining in PBMs.

As for telehealth, Congress including a three-month extension of current Medicare telehealth flexibilities, down significantly from the two-year window in the original agreement.

Telehealth groups said they were grateful for the extension, which allows temporary changes to telehealth rules first enacted during COVID-19 to continue, such as allowing patients to receive virtual care in their homes.

Losing the flexibilities would have been a huge hit to virtual care companies like Teladoc that saw business soar over the pandemic but have struggled recently amid a larger return to in-person care.

“Providers who deliver, and millions of patients who rely on, virtual care cannot face this kind of uncertainty if we are going to unlock the full potential of telehealth. We look forward to working with members of the new Congress on permanent solutions to safeguard access to telehealth,” said Alye Mlinar, executive director of lobbying group Telehealth Access for America, in a statement.