Hospital leaders are getting long-awaited clarity from Congress this week as lawmakers unveil a bipartisan healthcare deal tied to a broader government funding package.
The 771-page proposal includes major wins for providers, including a multiyear delay of Medicaid DSH cuts, key Medicare payment extensions for rural hospitals and permanent hospital-at-home authority. It also preserves pandemic-era telehealth flexibilities and boosts funding for the health workforce, research and community care.
The bill notably omits some healthcare ideas recently floated by President Donald Trump, instead focusing on provisions with broad support across both chambers, according to Politico. Lawmakers are aiming to pass the bill ahead of the Jan. 30 deadline to avoid a partial government shutdown.
“This agreement shows what’s possible when lawmakers come together with a shared focus on solutions. This bipartisan compromise puts patients first — it protects rural Americans’ access to hospital care, mitigates harmful Medicaid cuts, and extends telehealth services many seniors have come to rely on,” Charlene MacDonald, president and CEO of the Federation of American Hospitals, said in a Jan. 20 statement. “It’s critical that Congress finishes the job, passes this legislation into law, and continues working together to strengthen the individual market and lower out-of-pocket costs for hardworking families.”
Eight things to know:
1. The proposal is tied to a broader $1.2 trillion spending package. The healthcare measures are part of a “minibus” of three appropriations bills released Jan. 20 by the House Appropriations Committee. The package includes funding for HHS, the Department of Labor, and other federal agencies through fiscal year 2026. It represents the result of bipartisan negotiations to stabilize health programs that had lapsed or were nearing expiration, according to The Hill.
2. PBM reform included, but ACA subsidy extension left out. The package includes provisions to increase oversight of pharmacy benefit managers, a bipartisan priority in Congress. However, it does not extend the enhanced ACA subsidies that expired at the end of 2025, a point of concern for hospitals as insurance premiums rise for millions of people across the country. Almost 93% of the 24.3 million Americans enrolled in ACA marketplace plans last year relied on enhanced subsidies, according to CMS. The Urban Institute estimates 4.8 million people could lose coverage without an extension.
“More than 20 million people are facing higher premiums or the loss of coverage altogether. For many of our patients, these tax credits are the difference between having insurance and delaying or going without care,” Ascension President and CEO Eduardo Conrado said in a Jan. 9 statement shared with Becker’s. “Their expiration forces impossible choices between medical care and everyday necessities and increases the risk of medical debt.”
3. The bill sidesteps some of President Trump’s ‘Great Healthcare Plan’ proposals. President Trump’s recently released healthcare framework, which included proposals such as most-favored-nation drug pricing and direct payments to Americans, is absent from this package. Lawmakers instead opted to advance practical, bipartisan policies that have built momentum over the past year, according to Politico.
4. Telehealth flexibilities would be extended through 2027. Medicare’s pandemic-era telehealth waivers — which have enabled providers to offer virtual care more broadly — would be extended another two years under the bill. The extension would help preserve remote access to care, especially for rural and underserved populations.
5. Hospital-at-home gets a five-year extension. CMS’ Acute Hospital Care at Home waiver program would also be extended through the end of fiscal year 2030. This long-term commitment would provide hospitals with stability to invest in infrastructure, technology and staffing models for at-home acute care delivery.
6. The bill would delay Medicaid DSH cuts until fiscal 2028. Initially set to begin in 2024, Medicaid DSH payment cuts have been repeatedly delayed due to pressure from hospital groups. The new bill would eliminate the scheduled reductions for another two years, allowing safety-net hospitals to maintain a critical source of funding for uncompensated care.
7. Medicare rural hospital payments would be extended for one year. The proposal includes one-year extensions for two programs that support rural hospitals: the Medicare-dependent Hospital program and the Low-Volume Hospital Adjustment. Both provide enhanced reimbursements and are seen as lifelines for financially vulnerable rural facilities.
8. CMS and NIH funding would increase. The bill allocates $4.1 billion for CMS program operations — a $195 million increase — and $48.7 billion for the National Institutes of Health, including increases for cancer, ALS, Alzheimer’s, and women’s health research. The added funding signals congressional support for biomedical innovation and health system oversight capacity.
The window for action is narrow, with the Senate in recess this week and the House set to be out next week.
