The recent enactment of the Full-Year Continuing Appropriations and Extensions Act provides relief to health care providers, the broader industry and patients. The legislation offers temporary financial support and stability in reimbursements, primarily through September 2025, essential for helping to maintain the financial health of hospitals and health care systems.
What to know about appropriations and extensions
The act encompasses a range of extender provisions designed to improve patient access to health care, ensuring the delivery of high-quality services. These measures address various facets of health care delivery and seek to enhance health care access while preserving the integrity of health care services and research.
Several extensions within the act benefit underserved communities by funding low-income programs, outreach assistance, Community Health Centers (CHCs), and initiatives like the National Health Service Corps and Teaching Health Centers with Graduate Medical Education programs. CHCs alone serve 32.5 million patients, with over 90% being low-income individuals. The funding ensures continued access to essential services, providing financial relief, community support and health equity. It also enhances enrollments in programs such as Medicare savings and the Part D low-income subsidy (Help) program.
The act also ensures continuity of care by extending telehealth flexibilities and the Acute Hospital Care at Home Waiver Authorities. These telehealth provisions eliminate geographic restrictions and originating site limitations, offering flexibility for audio-only services. Patients can continue to receive acute-level care at home with proper medical oversight, effectively addressing hospital capacity challenges.
In addition, as part of the act, the National Health Security extensions ensure the continuity of crucial programs that support national health security and emergency preparedness, enhancing the nation’s ability to address evolving health threats and coordinate comprehensive responses to public health emergencies. Quality will be maintained through the extended funding for quality measure endorsements which supports developing and maintaining health care quality measures and is essential for improving health processes, outcomes and best practices across the health care system. Additionally, the act’s extension for research for special diabetes programs will continue through September 2025. Likewise, the extensions of oral antiviral drugs as covered by Part D drugs will allow patients to maintain drug coverage for certain prescriptions.
Financial stability for health care providers
The act also incorporates extenders and provisions that directly impact hospitals and health care providers by offering essential financial support and relief through delayed funding cuts. These measures support the financial vitality of health care providers, ensuring they can continue delivering high quality care to their communities.
Small rural hospitals will receive temporary relief through the extension of increased inpatient hospital payment adjustments for certain low-volume hospitals and the Medicare Dependent Hospital Program. These extensions allow hospitals to qualify for payment adjustments under broader eligibility criteria and receive enhanced reimbursements, helping to offset the challenges posed by their geographic location and population they serve. The extension of the work geographic index floor will also ensure fair compensation for physicians in rural areas, while reducing competitive barriers for practicing in underserved regions.
Health care providers will also benefit from continued financial relief through amended time periods and delays with the Medicare sequestration cuts and Medicaid Disproportionate Share Hospital (DSH) reductions. DSH payments play a pivotal role in mitigating hospitals’ uncompensated care costs. These payments are vital for supporting hospitals that serve vulnerable populations, ensuring their financial stability while providing health care services to low-income and uninsured individuals.
Lastly, ambulance services will benefit from the extension of add-on payments, which help offset rising operational costs and address historically low Medicare reimbursement rates. This financial support is crucial for ensuring the operational viability of ambulance providers and maintaining access to emergency medical transportation, particularly in rural and underserved areas.
The takeaway
While the House budget resolution proposes $880 billion in cuts, potentially affecting several Medicaid programs, the Full-Year Continuing Appropriations and Extensions Act marks a step forward in supporting health care providers and the broader industry. By offering temporary financial support and stability in Medicare and Medicaid reimbursements, the act could help ensure the financial health of hospitals and health care systems. This consistent funding is vital for sustaining patient care and enhancing access to essential services. The stability provided by the act allows health care providers to focus on delivering high-quality care without the immediate pressure of financial uncertainty. It also provides time to address revenue streams and payor mix, and apply strategic modifications to mitigate risks from potential federal budget cuts.
