News Briefs: ACA subsidies in limbo after government funding deal

After Congress ended the longest federal government shutdown on record at 43 days, the future of enhanced subsidies under the Affordable Care Act (ACA) remained unresolved.

The shutdown officially ended Nov. 12, three days after eight members of the Senate Democratic caucus joined Republicans to help pass a continuing resolution that maintains spending through Jan. 30.

In return for the Democratic votes, Sen. John Thune (R-S.D.), the chamber’s majority leader, pledged to hold a vote by mid-December regarding a subsidy extension. When hfm went to press, it was unclear whether enough Senate Republicans would support an extension, and the fate of any such bill in the House appeared even more uncertain.

Furthermore, by the time of the vote, the Nov. 1-Jan. 15 open enrollment period will be more than halfway over, setting up potential chaos as health plans and consumers juggle substantial changes to out-of-pocket premiums in midstream. Mehmet Oz, MD, administrator of CMS, has said the agency could implement a special enrollment period in such a scenario.

Since being introduced in 2021 legislation, the enhanced subsidies have helped push ACA enrollment from 12 million to 24.3 million.

Government funding deal extends key healthcare programs

The end to the government shutdown concluded a period of uncertainty for Medicare telehealth services.

Before the deal to fund the government, Medicare waivers allowing for expanded telehealth coverage had expired Oct. 1. CMS changed its guidance several times over the ensuing six weeks about whether providers should file or withhold claims.

Providers can resume filing claims for telehealth services furnished during the shutdown, and any claims already filed will be processed as Medicare administrative contractors work their way through a backlog.

In addition, the Acute Care Hospital at Home program can make Medicare payments after those were frozen during the shutdown.

Other healthcare aspects of the federal funding deal include a delay of a scheduled $8 billion cut to Medicaid disproportionate share hospital payments for FY26 and the resumption of Medicare supplemental payments for low-volume hospitals and Medicare-dependent hospitals. All provisions are effective through Jan. 30 for now.

Among other healthcare components, the legislation also restores the 1.0 floor for the work geographic practice cost index (GPCI). The floor ensures a practice’s work GPCI (a Medicare physician payment modifier) cannot reduce base payments.

340B rebate model will proceed in 2026 with 10 drugs

A new chapter for the 340B Drug Pricing Program will begin Jan. 1 after the Health Resources and Services Administration (HRSA) formally authorized a rebate model Oct. 30.

For 2026, nine approved manufacturers can provide rebates rather than upfront discounts to 340B participating providers dispensing
10 drugs:

• Eliquis (Bristol Myers Squibb)
• Enbrel (Amgen)
• Entresto (Novartis — delayed until April 1)
• Farxiga (AstraZeneca)
• Imbruvica (AbbVie)
• Januvia (Merck)
• Jardiance (Boehringer Ingelheim)
• NovoLog, Fiasp and related products (Novo Nordisk)
• Stelara (Johnson & Johnson)
• Xarelto (Johnson & Johnson)

The list of drugs for the rebate model was based on the set of products that are subject to negotiated prices in Medicare starting next year under the Inflation Reduction Act.

Providers have a 45-day window from the date of drug dispense or administration to put in for a rebate on the third-party Beacon processing platform. Providers should make sure they’re registered for a Beacon account by Jan. 1.

Aetna delays, modifies policy that’s set to hit inpatient reimbursement

Hospitals received a brief reprieve from a pending Aetna payment policy that remains likely to decrease reimbursement starting in 2026.

In a prior announcement, Aetna said it would apply level-of-severity criteria to all urgent or emergent hospital admissions lasting at least one midnight for Medicare Advantage and Medicare Special Needs Plans patients.

For stays not meeting the criteria, Aetna would make a lower payment approximating the observation rate, rather than the inpatient rate.

In a recent change, the insurer pushed back the start of the policy from Nov. 15 to Jan. 1, giving providers more time to prepare for what could be a slew of cases where the payment rate gets downgraded.

Moreover, after previously saying the new policy would apply to almost all cases that last at least one midnight, Aetna now plans to pay the inpatient rate by default if the stay spans at least five midnights. That likely still leaves the majority of admissions subject to the new policy at most hospitals.

Shorter stays will be exempt if they involve an unexpected death, a newly initiated mechanical ventilation or a procedure on CMS’s inpatient-only list.

CMS finalizes new regulatory curbs on Medicare physician payments

Medicare has cued up its first physician payment increase since 2020, but policy changes will bring new financial constraints for hospital-based physicians and many specialties.

The increase to the conversion factor in 2026 will be 3.77% (to $33.57) for physicians who are qualified participants in an advanced alternative payment model and 3.26% (to $33.40) for nonparticipants, CMS announced in the final rule published Oct. 31.

However, a 2.5% “efficiency adjustment” will reduce payment in 2026 and future years for roughly 7,700 non-time-based physician service codes, among them surgical procedures, diagnostic imaging interpretation, outpatient interventions, interventional pain management services and orthopedic services. The adjustment will be recalculated every three years.

Another adjustment is intended to balance payment between hospital-based and clinic-based physicians. For hospital services and other services designated as facility-based, Medicare will reduce indirect practice-expense relative value units to equal half the rate that applies to non-facility services.

RHTP application process draws widespread interest

All 50 states applied for a share of up to $50 billion to be disbursed over five years through the newly created Rural Health Transformation Program (RHTP).

Assuming there are no irredeemable errors on any state’s application, meeting the Nov. 5 deadline entitled each state to one-fiftieth of $5 billion in annual funding between 2026 and 2030. Another $5 billion per year will be distributed at CMS’s discretion. 

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