Year-End Funding Package Includes Medicare and Medicaid Policies

In late December, Congress passed an omnibus spending bill (P.L. 117-328) that funds the federal government through the current fiscal year (September 30, 2023) and makes several important changes to Medicare and Medicaid.

Medicare

Medicare Telehealth

PHE Waiver Extension—The bill extends most of the COVID-19 public health emergency (PHE) Medicare telehealth flexibilities through 2024 and directs the Department of Health & Human Services (HHS) to study telehealth utilization and assess potential fraud.

Medicare Mental Health Care

Provider Expansions—Medicare mental health coverage has known gaps, which the spending bill helps close. One long-sought change will allow Medicare Part B to cover services provided by marriage and family therapists and licensed professional counselors beginning January 1, 2024.

Intensive Outpatient Services—To further ease access, the package revises Medicare’s partial hospitalization benefit to establish coverage of intensive outpatient services beginning January 1, 2024.

Crisis Psychotherapy Services—It also increases payments for mobile crisis care (crisis psychotherapy services furnished by a mobile unit or in other non-facility settings) starting on January 1, 2024.

Workforce Development—It provides for 200 new Medicare-supported graduate medical education (GME) residency positions, half of which are allocated for psychiatry and psychiatry subspecialties.

Provider Outreach—To promote uptake, the omnibus requires HHS to educate providers on the availability of crisis psychotherapy services, behavioral health integration services, and opioid use disorder treatment services under Medicare.

COVID Treatments—The bill temporarily (through December 2024) allows Part D plans to cover oral antiviral treatments that have an emergency use authorization (EUA). This update will permit Medicare to cover COVID-19 treatments like Paxlovid once the PHE ends and those products shift to the commercial market.

Medicare Coverage Changes and Extenders

Lymphedema Compression Garments—Under the bill, compression garments for the treatment of lymphedema will be covered under Part B as durable medical equipment (DME) starting in January 2024.

In-home intravenous immune globulin services (IVIG)—It also provides permanent Medicare coverage for items and services related to the administration of IVIG, beginning on January 1, 2024.

Durable Medical Equipment—The omnibus continues the blended payment rates for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) in certain non-competitive bid areas through 2023.

Hospital at Home Waiver—It extends (through December 31, 2024) the Acute Hospital Care at Home initiative.

Medicaid

Medicaid Home- and Community-based Services (HCBS)

Money Follows the Person and Spousal Impoverishment—The bill continues the Medicaid Money Follows the Person program and protections from spousal impoverishment for people receiving HCBS through September 30, 2027. These critical Medicaid policies that we have long supported help older adults and people with disabilities live with choice, dignity, and independence.

Medicaid PHE Coverage

Continuous Coverage Requirement—The omnibus sunsets the Medicaid continuous coverage requirement. Created in 2020 by the Families First Coronavirus Response Act (FFCRA), this provision has allowed states to maintain their Medicaid rolls in exchange for a 6.2% federal match rate (FMAP) bump. The FFCRA tied this coverage policy to the duration of the PHE; it will now end on April 1.

At that time, the enhanced FMAP will begin to reduce gradually, eventually reaching zero on December 31, 2023. The maintenance of effort (MOE) requirements tied to the FMAP increase—that states may not make eligibility standards, methodologies, or procedures for determining Medicaid eligibility more restrictive than they were on January 1, 2020—will continue to apply during the phase-down period.

Medicaid Eligibility and Funding

Enhanced Eligibility Postpartum and for Children—The bill also requires states to give children (under the age of 19) 12 months of continuous coverage in Medicaid and CHIP and permanently extends the American Rescue Plan policy allowing states to provide 12 months of postpartum coverage to pregnant individuals in Medicaid and CHIP.

Funding for the U.S. Territories—The omnibus extends Puerto Rico’s higher federal Medicaid match (76%) through September 30, 2027, and permanently extends a higher federal match (83%) for American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, and the U.S. Virgin Islands. These updates will provide much-needed consistency and fiscal stability.