DC Update From Friday, April 4, 2025
Reconciliation, HHS Layoffs, Tariffs, and More
The past week has seen a flurry of activity from Washington, DC as Congress and the new Administration continue to try to advance their policy agendas. Below is a recap of this week’s developments and how AHCA/NCAL is engaging in these issues.
Medicaid and Budget Reconciliation
This week, Senate Republicans released their “compromise” budget proposal or blueprint to unlock the next step of the budget reconciliation process. Here’s what’s in the Senate’s second version:
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The plan would give the Senate committees a minimum floor to find government savings/deficit reduction by $4 billion. This is very different from the House’s version, which specifically called for $880 billion in savings from the House Energy & Commerce Committee (which oversees Medicaid).
- Typically, both chambers must adopt identical budget resolutions. Senate leaders opted to use a strategy that is known as disparate reconciliation instructions. This allows them to set their own, differing targets from the House while allowing both sides to move forward.
This is still an early step in the larger reconciliation process. The specific details of the final package will be crafted through legislation to be determined in committees. In our case, the Senate Finance Committee oversees Medicaid.
We anticipate that the Senate will pass the resolution before the April recess, and the committees will move forward from there after the break. To consider this resolution, the Senate will kick off a marathon session known as “vote-a-rama” that could spill into the weekend before a final vote. This is where we may see a number of amendments proposed by both sides of the aisle, which we will continue to monitor.
What does this all mean for long term care? The budget reconciliation process continues to inch forward, and we still have a long way to go to ensure Medicaid is protected from potential cuts. We remain concerned that some members of Congress view important funding programs, like provider taxes, as fraud/waste/abuse. So, we continue to maintain an aggressive lobbying strategy to educate lawmakers about this. As of this week, we have had more than 125 meetings on the Hill since the start of the year, and we appreciate our members who have come to DC to participate in these meetings. Facility tours remain a valid and meaningful way to deliver the message as well. If you’d like to get involved, please contact our Government Relations team, and please be sure to register for Congressional Briefing this coming June.
Dr. Oz Confirmed as CMS Administrator
On Thursday afternoon, the Senate confirmed Dr. Mehmet Oz as the Administrator of the Centers for Medicare and Medicaid Services. We issued a statement congratulating Administrator Oz on his confirmation and hope to meet with him and other CMS officials in the coming weeks. We look forward to collaborating with the Administration and sharing our solutions, including how to rationalize the regulatory system.
HHS Layoffs and Restructuring
Late last week, HHS Secretary Robert Kennedy, Jr. announced that HHS would be reducing its employees by 20,000 and restructuring or consolidating many of the agencies under HHS. Here are some relevant details for long term care:
- 28 HHS divisions will be consolidated to 15.
- 10 regional HHS offices will become five. This consolidation will impact the Office of General Counsel offices in Boston, New York, Chicago, Dallas, San Francisco, and Seattle.
- CMS will decrease its workforce by approximately 300 employees, with a focus on reducing minor duplication across the agency. HHS says this reorganization will not impact Medicare and Medicaid services.
- HHS will have a new Assistant Secretary for Enforcement to provide oversight of the Departmental Appeals Board, Office of Medicare Hearings and Appeal, and the Office for Civil Rights to combat waste, fraud, and abuse.
- Move the functions of the Administration for Community Living to other agencies, including CMS.
With Administrator Oz now in place at CMS, we hope to continue to learn more about the agency’s restructuring and priorities. As always, we will continue to encourage clear and consistent communication from regulators, so members can remain in compliance and focused on providing high quality care.
If you are running into reimbursement or regulatory challenges during this transition, please contact AHCA's SVP of Reimbursement Policy Martin Allen.
Tariffs
On Wednesday, the President unveiled his tariffs plan, labeling it “Liberation Day.” President Trump is imposing a 10 percent tariff baseline on all countries and an individualized reciprocal higher tariff on the country with which the United States has the largest trade deficits. Both will go into effect in the coming days. While these new tariffs apply to medical supplies, there are a number of goods that will not be subject to the Reciprocal Tarriff, including pharmaceuticals. However, President Trump has emphasized that tariffs are coming for pharmaceuticals, as well.
We are continuing to monitor these major economic developments and how they might impact our business community and, thereby, long term care providers.
Senate Democrats Request GAO Report on Assisted Living
This week, Senators Warren (D-MA), Wyden (D-OR), and Gillibrand (D-NY) sent a letter to the Government Accountability Office, requesting an update to its 2018 report on state and federal oversight of assisted living facilities that participate in Medicaid. This report focused on how state Medicaid programs oversee assisted living facilities, including the types of deficiencies and number of critical incidents identified.
Some in the trade media have characterized this request as accelerating the path toward federal regulation for assisted living. This is not accurate. There is no real appetite in Congress to pursue federal regulation, and Medicaid remains a small payer of assisted living services, unlike nursing homes.
If this new GAO report proceeds, it should focus on whether state Medicaid programs are meeting their obligations to report to the federal government. There are also new federal regulations that speak to this in the Medicaid Access Rule, but those have yet to be implemented. Therefore, we believe this request is preemptive.
As NCAL did in 2016, when the first report was requested, we will remain engaged with members of Congress and the GAO to help inform policymakers about assisted living, Medicaid, and oversight. But we remain confident that state-based regulation is the better way and will remain.
SNF Payment Rule
The SNF PPS proposed payment rule, along with many other Medicare payment rules for various health care settings, is still at the Office of Management and Budget pending review. CMS typically releases the proposed payment rule by now, so we will continue to monitor its review and check with CMS officials about the timeline. We anticipate a normal market basket percentage increase in the base PDPM rates consistent with prior year methodology.
As always, thank you for your membership and continued engagement. There is a lot happening in DC, but we remain committed to keeping you apprised and defending the sector, so you can focus on doing what you do best—caring for your patients and residents.
Clifton J. Porter, II
President & CEO, AHCA/NCAL
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