Seven Burning Questions Related To Commercial Prices For Health Care Services

Health Affairs: Leading Publication Of Health Policy Research & Insight

Source: Health Affairs, by Michael E. Chernew and Victoria Berquist

Almost two decades ago, Gerard Anderson and colleagues published the seminal paper ‘It’s the Prices, Stupid’, identifying why health care spending in the US was so much higher than other developed countries.  Spoiler alert: it’s the prices. Twenty years on, this conclusion has continued to be affirmed over time and in greater detail.

Yet, the many differences between national health care systems make it difficult to conclude that transplanting other countries’ prices to the US would be ‘right’ for the US.  Nevertheless, the observation that prices are a significant determinant of high US health care spending motivates examination of American health care prices.

The price issue is most salient in the commercial sector, where prices set using market mechanisms are considerably higher than in the public sector. A Congressional Budget Office review suggests commercial prices for inpatient care are 182 percent of Medicare prices, commercial outpatient prices are 240 percent of Medicare prices, and commercial physician fees are 129 percent of Medicare fees. Price growth has also been rapid in the commercial sector, far beyond public sector growth and beyond what is likely attributable to increases in input costs or quality improvement.

The wide differential between commercial and Medicare prices has led some to claim that Medicare prices are too low, rather than commercial prices being too high.  On one hand, Medicare payments are higher than public payments in several other countries and often sit at about the 20th percentile of commercial prices, suggesting Medicare prices are not completely out of line with the market.  On the other hand, although evidence suggesting that lower public prices cause higher commercial ones is inconclusive at best, high commercial prices may improve access to care and quality for individuals insured through public programs.  If commercial hospital prices were set at Medicare levels, hospital revenue would drop about 35 percent, undoubtedly causing some institutions to reduce quality-enhancing activities and other institutions to close.  Moreover, price trajectories in Medicare are set to rise at a rate below inflation, potentially further reducing the adequacy of public fees over time.  Regardless of whether one thinks Medicare price are too low or not, however, it is clear that the core problem in public programs in the US is not that prices are too high, and thus we focus on commercial prices.

The reason for high commercial prices is clear: It’s the market power, stupid.  Well-functioning markets should not have the amount of price variation observed within and between commercial markets in the US, particularly when it comes to services with minimal quality differences. Studies of mergers, both within sectors (e.g. hospitals) and between sectors (e.g. hospitals acquiring physician practices) demonstrate the connection between market power and prices: consolidation leads to higher prices and little improvement in quality. Importantly, while market power is often treated as synonymous with market concentration, factors beyond concentration also generate market power. For example, providers in less concentrated markets may wield market power due to insensitivity of patients to the price of care and hesitancy of employers to steer patients to lower price/higher quality providers.

Widespread acknowledgement of market failures has created growing interest in examining how commercial health care prices are established in the US.  Much energy has been devoted to measuring prices, assessing the impact of consolidation, and proposing policy solutions, including price transparency, increased antitrust enforcement, and price caps. These issues continue to be important, but there are several under-explored burning questions in the price debate that we think deserve attention.  Here are our top seven:

1. Do Poorly Set Public Prices Distort Commercial Prices?

Our current systems for setting prices in public programs are flawed.  For example, Medicare pays different amounts for the same service delivered in different settings.  Providers are often paid more if they prescribe more expensive drugs.  Relative value units for physician services are often inaccurate.  If prices are set too high, or not adjusted when they should be, incentives are created to overuse care.  Underpricing, though less common, discourages service use.  While these issues clearly affect Medicare, understanding the extent to which they spillover to commercial prices is important.  Although there is some evidence that higher Medicare prices lead to higher commercial prices (the opposite of cost shifting), more evidence on the extent to which relative prices in the commercial sector follow relative prices in Medicare is needed.

2. How Should Services Be Defined?

Prices are integrally related to how we define services.  Many of our payment systems rely on very granular service definitions.  For example, there are now ten Current Procedural Terminology (CPT) codes for office visits, varying based on visit intensity and whether a patient is new or established.  Detailed service definitions can help ensure minimal variation in delivery costs within any given service category.  However, having many codes creates opportunities for providers to choose more lucrative codes.  The sheer number of codes and continual updating of code definitions generates administrative costs (including training and program integrity activities as well as the need to employ specialized coding staff) to ensure codes are used appropriately.  This is all exacerbated by the fact that not all payers use the same coding systems.

Broader service categories may be desirable, including those used in payment methodologies such as partial capitation.  However, broader payment systems may also encourage stinting and selection of patients with fewer health care needs, though evidence of these problems is scant.  Our sense is that our system has erred on the side of too many service codes and too little standardization, but more attention to this point is needed.

3. How Does Quality Respond To Changes In Pricing?

The relationship between price and quality is central to the policy debate. What will we give up if we adopt policies that lower prices? Some evidence suggests that more expensive providers offer better care, indicating higher prices may mean higher quality.  However, cross-national evidence suggests countries paying lower prices do not suffer significantly worse quality of care.  These cross-sectional examinations do not imply causality; yet, studies of the relationship between mergers and prices suggest antitrust activities may lower prices but not degrade quality, supporting the position that policies intended to lower heath care prices do not necessarily impact quality adversely.

Addressing this issue is challenging for several reasons. First, the relationship between price and quality may not be linear, and reductions in the price of high-priced providers may have a different effect than reductions in the price of low-price providers. Second, quality is multidimensional and different people may weigh different dimensions differently, making broad conclusions elusive.  Finding natural experiments that shed light on this issue is important, but so is conducting longer-run studies because quality impacts may play out over time.  Investigating how infrastructure investments, innovation, and specialty choice respond to financial rewards may provide useful long-run insights about how price changes affect health.

4. How Should We Price New Digital Services?

Health care in the US is experiencing a digital revolution. A wide array of new digital tools and services and new ways to digitally communicate have been recently introduced, including portal messages between patients and their care team, artificial intelligence-enabled algorithms to support diagnosis and treatment, remote patient monitoring, web-based care support tools, and digital therapeutics.  Questions of how these services should be paid for have not been resolved. Given the fee-for-service chassis of the US health system, the instinct is often to create codes for these services then assign prices, but that is problematic. For many interventions, there is limited evidence about their appropriate use.  Low unit costs and limited barriers to access for digital and virtual services are appealing but raise the potential for overuse.  Bundling digital tools into broader service packages might be valuable, but more work must be devoted to assessing how that might be accomplished.

Moreover, expansion of these services may have spillover effects on the availability of traditional services, requiring broader consideration of prices.  Understanding the impacts these tools have on the broader system is a first-order challenge that would benefit from the best available evidence.

5. How Much Spending Is Flowing Outside Of The Claims System?

Most pricing research is based on claims data, a valuable but flawed resource. Increasingly, funds are flowing from payers to providers outside of the claims system via infrastructure or other fixed payments, quality bonuses, or shared savings from alternative payment models.  These payments are often not a traditional ‘price’ as they do not change with service volume.  But their use may lead to underestimates of what is being paid to providers in the commercial sector, mask market power by distorting observed revenues per service delivered, and may complicate enforcement of price regulation.  Understanding how much revenue is flowing through non-claims channels, and how it is structured, may give a more complete picture of how markets are functioning and what is rewarded in health care.

6. Are Pay For Performance Systems Worth It?

Many payment systems (in commercial and public sectors) pay providers partly based on quality metrics. These systems strive to incentivize value, not volume, but are only justified if payments lead to better quality.  There is a growing body of evidence suggesting this is not the case.  Quality measures are often not closely enough tied to health outcomes to merit additional payments.  In addition, operating these models is expensive and may distract from other activities.  Understanding costs and benefits of pay for performance programs (whether stand-alone or part of an alternative payment model) is critical given the investment we have in them. Based on available evidence, we believe it would be reasonable to conclude that some of these systems should at least be scaled back, maybe even abandoned, until better, more targeted approaches to eliminating substandard care and improving quality can be designed.

7. To What Extent Do High Prices Reflect Higher Costs Of Production In The US, And Why?

Prices reflect, in part, the costs of production. Production costs in the US may be higher than in other countries for several reasons. First, health care prices likely reflect high labor costs in the US.  While these high labor costs in health care may reflect details of the American health care system, they may also reflect a broadly different structure of the labor market.  Reforming only the health care sector may not alter wage profiles more broadly, and efforts to lower incomes in the health care sector may, over time, create an imbalance between health care and other sectors.  Relatively little is known about these dynamics.

Second, while the US uses more of some technologies and less of others compared to other countries, in general, prices of technologies (including drugs and devices) are higher in the US compared to other nations. These technology prices may be associated with higher quality (or innovation), but more work is needed in that area.

Additionally, the complexity and fragmentation of the American health care system create higher administrative costs, driving higher prices.  While we know market power is an important determinant of higher prices in the US, further understanding of production costs of health care services in the US, and how and why these differ from other systems, would be valuable.

Conclusion

With health spending high and rising in the US, attention to health care prices – particularly in the commercial sector – will only continue to grow.  Policy solutions will involve tradeoffs between spending, access, and quality, so understanding the impacts of various policy options on these tradeoffs will be central to better decision-making.

What The Inflation Reduction Act’s Reforms To Medicare Part D Mean For Prescription Drug Prices

How Will the Prescription Drug Provisions in the Inflation Reduction Act  Affect Medicare Beneficiaries? | KFF

Source: Health Affairs, by Anna Kaltenboeck

Last year, President Joe Biden signed into law the Inflation Reduction Act (IRA), setting into motion a series of changes to the way that Medicare and its beneficiaries pay for prescription drugs. Much has been written about the act’s individual provisions, but little has been said about how they fit together as a whole. In fact, these seemingly standalone reforms act together to reshape access and affordability of branded prescription drugs under Medicare Part D, while also leaving the door open to further reforms.

At the center of this framework is a policy to limit beneficiary cost sharing to no more than $2,000 per year. This reform responds to the erosive effect that high prices of drugs set by manufacturers—known as list prices—have had on affordability even with insurance coverage. Because Medicare currently covers 80 percent of spending past a certain threshold, the cost-sharing cap is paired with three additional reforms to ensure that the program remains sustainable: a shift in the allocation of financial risk to manufacturers and industry under the Part D benefit structure, the creation of a program under which Medicare negotiates what it pays for certain drugs, and rebates to claw back spending attributable to drug price growth exceeding inflation. The act includes a fifth provision that caps growth in beneficiaries’ share of Part D premiums at 6 percent, to allow time for savings from these changes to go into effect without impacting premiums.

Cost Sharing’s Burden On Medicare Beneficiaries

The provision to cap beneficiary cost sharing at $2,000 per year, adjusted for inflation, responds to the fact that rising list prices have made drugs increasingly unaffordable to those filling prescriptions. Both the current and redesigned Part D benefit include a component of patient cost sharing, either as a copayment or co-insurance, which is based on list prices. This arrangement harnesses cost sensitivity to steer beneficiaries toward or away from certain drugs depending on their clinical benefits and costs. In many instances, however, patients may choose to discontinue treatment, skip doses, or not fill their prescriptions.

Medicare beneficiaries have been particularly exposed to unaffordable cost sharing because, unlike most commercial health plans, there is no annual limit to their spending on prescription drugs. The current design of Part D leaves them responsible for 5 percent of a drug’s list price even after they have exceeded their deductible and two initial coverage phases in which cost sharing is 25 percent. Most beneficiaries don’t spend enough to qualify for this phase of the benefit, known as the catastrophic phase; some are protected by income-based subsidies. However, those with high spending and without such subsidies can face serious financial consequences. In 2019, 1.5 million Part D beneficiaries qualified for the catastrophic phase of the benefit, with their cost sharing totaling $1.8 billion. Both the number of beneficiaries who enter the catastrophic phase and their cost-sharing burden continue to grow.

Understanding The Drivers Of High List Prices

Implemented as a standalone provision, the cap to beneficiary cost sharing would result in higher overall Medicare spending, both because cost-sensitive beneficiaries would fill more prescriptions and because Medicare covers 80 percent of spending in the catastrophic phase. This insulates plan sponsors and manufacturers from financial liability for high list prices. To prevent ballooning spending, the cost-sharing limit is accompanied by the three provisions mentioned in the introduction, which reform how drugs are paid for under Part D.

Understanding how and why these provisions work requires a sense of the dimensions of the US pharmaceutical market. Approximately 80 percent of prescriptions dispensed in the US are for generics. The remaining 20 percent are for branded drugs that account for 80 percent of spending. Closer examination reveals that, even among these drugs, spending is concentrated among a small number of high-price branded products. Despite accounting for fewer than 1 percent of prescriptions, drugs in the top decile by price account for 15 percent of prescription drug spending. Spending attributable to high-price branded drugs has largely offset Medicare savings from generic drugs.

It’s a mistake, however, to assume that high-price branded drugs are expensive for the same reason. In the case of drugs covered under Medicare Part D, both competition and its absence encourage high list prices. The paradox is rooted in how prescription drug benefits are designed and administered. Health plans that cover prescription drugs, including Part D, use formularies that determine which products are covered, how much beneficiaries pay for them, and whether they must try other drugs first. The manufacturers of drugs with close therapeutic substitutes compete to gain placement on such formularies by providing rebates to the plans and third parties administering the formularies, known as pharmacy benefits managers. To make headroom for greater net price concessions, drug manufacturers often raise list prices. Part D plan sponsors use rebates to keep premiums low but base cost sharing on list prices, driving up expenses for beneficiaries filling prescriptions.

Meanwhile, list prices are also high among branded drugs that are protected from competition, either because they have no therapeutic alternatives or because they are included in a protected class, a group of drugs that Part D plans must cover and includes treatments for cancer and HIV. Because coverage of such drugs is guaranteed in Part D, their manufacturers are free to act as monopolists, with little incentive to offer low list or net prices.

In other words, the drivers of high list prices among prescription drugs are two different, albeit related, issues—a failure to link competitive pressure to list prices on the one hand and an inability to exert purchasing power on the other. The IRA contends with these issues through two key reforms: re-aligning the financial interests of Part D plans and manufacturers to increase their sensitivity to high list prices, and aggregating purchasing power under Medicare to negotiate prices where the plan sponsors cannot.

Addressing High List Prices Driven By Competition

As currently designed, the Part D benefit allows both plan sponsors and manufacturers to benefit from high list prices by shifting financial liability to the Medicare program in the catastrophic phase. Plans are responsible for 75 percent of spending beyond the deductible, known as the Initial Coverage Limit (ICL). Spending above a further threshold enters the Coverage Gap Discount Program (CGDP), or “donut hole,” at which point drug manufacturers are obligated to cover 70 percent, while plans are liable for 5 percent. Once spending continues beyond a third threshold, into what is known as the catastrophic phase, Medicare assumes responsibility for 80 percent of spending, while plans assume 15 percent.

Medicare’s open-ended financial liability in the catastrophic phase has long been criticized for insulating plan sponsors and manufacturers from financial downsides of high spending, creating situations in which high prices may actually act as a reward when paired with high rebates. The IRA confronts this problem by shifting the financial risk in the catastrophic phase toward plan sponsors and manufacturers and eliminating the CGDP entirely. With the change in design, 65 percent of costs in the ICL will fall to plan sponsors and 10 percent to manufacturers. In the redesigned catastrophic phase, Medicare’s share of spending falls to 20 percent, with manufacturers being responsible for another 20 percent and health plans for the remaining 60 percent. Beneficiaries remain responsible for 25 percent of spending in the ICL but will owe nothing in the catastrophic phase due to the cap on cost sharing. Although the redesign comes at a price tag of $25 billion in federal spending, the changes in financial liability can be expected to soften the value of rebate dollars relative to list price reductions.

Addressing High List Prices Driven By Monopoly Power

The IRA also establishes a program under which Medicare will negotiate with manufacturers what it pays for certain branded drugs. Drugs that qualify for negotiation must have been on the market for at least 7 and 11 years, for small molecule and biologics, respectively. This policy responds to the fact that manufacturers have increasingly harnessed intellectual property and market exclusivity protections to protect their most lucrative drugs from generic or biosimilar competition for extended periods of time.

Each year, Medicare is directed to rank such products according to their gross spending in Medicare Parts B and D. A certain number of drugs from the top of the list will then be selected for negotiation, with the goal of arriving at a “maximum fair price” or MFP, which becomes Medicare’s reimbursement rate. Medicare cannot agree to an MFP that is higher than a statutorily defined ceiling: either a percentage of a drug’s cost to non-federal purchasers or the net price achieved by Part D plan sponsors, whichever is lower.

While both drugs with and without branded therapeutic alternatives can be selected, it is among those without close substitutes and with coverage guarantees that negotiation promises the greatest savings. The statutory price ceilings allow negotiations to arrive at prices that would otherwise be expected from generic or biosimilar competition, commensurate with the amount of time the drug has been on the market.

The Congressional Budget Office (CBO) estimates that negotiation will save $101 billion over the coming decade, which is largely due to the fact that Medicare will have leverage to match that of manufacturers. Unlike current circumstances, in which neither Medicare nor plan sponsors is able to decline coverage for certain drugs, the new law imposes restrictions that automatically go into effect should manufacturers attempt to evade negotiation once selected for it. Manufacturers that refuse to participate in the process or delay the negotiation of an MFP past its statutory deadline will be faced with a choice between accepting an excise tax on US sales, which escalates to an onerous 95 percent over time, or withdraw its products from coverage by federal programs.

Safeguarding List Price Reforms Through Inflation Rebates

Although Medicare negotiation and the redesign of Part D address high list prices, as explained above, they do not insulate the program from the well-documented manufacturer strategy of raising revenues by systematically raising list prices, a major contributor to the growth in Medicare spending on prescription drugs. Manufacturers set and raise list prices for the entire US market, not just Medicare, so inflationary pressures on list prices will continue despite reforms. Manufacturers that expect to be selected for negotiation may also raise their list prices in attempts to inflate the price benchmark used in negotiation.

The IRA accounts for this issue through a provision known as the “inflation rebate,” which claws back Medicare spending attributable to list price increases beyond the rate of inflation. The overall effect of the rebate is to make list prices increases less lucrative. The CBO estimates that the federal government will save more than $62 billion by 2031, both as a result of revenues from the rebates and reduced list price growth overall.

How The New Provisions Affect Premium Growth

Under the current design of Part D, premiums have remained relatively stable and below the CBO’s initial projections even as list prices and cost sharing have grown. The payment reforms of the IRA—Medicare negotiation, the redesign of Part D, and inflation rebates—ensure that limiting cost sharing will increase affordability of high-price drugs without ballooning spending in the program over time. However, they will affect the value and availability of rebates that have historically been used to keep Part D premiums low. The degree to which savings to the program coincide with changes to the flow of rebates will depend on how quickly market participants adapt to the IRA’s multiple different reforms. To ensure that Part D premium growth remains stable in the interim, the act constrains the beneficiary share of premiums to grow by no more than 6 percent through 2030, with Medicare covering shortfalls if plan sponsors’ costs grow faster.

The IRA In The Bigger Picture Of Drug Pricing Reforms

In responding to high list prices and growing unaffordability of prescription drugs, the IRA takes aim at several problems: a failure of competitive pressure to act on list prices, inadequate negotiating leverage among plan sponsors for drugs with coverage guarantees or no therapeutic alternatives, and open-ended exposure of Medicare and its beneficiaries to the consequences of high list prices. The reforms contend with readily observable pricing trends that have had deleterious financial consequences for beneficiaries and grew particularly concentrated among a subset of branded prescription drugs.

This confluence of factors created momentum for reforms that will reshape how Medicare pays for aging and branded products, while leaving the market for new products unaltered. The CBO estimates that the impact of the law on new drug development will be relatively small: two fewer drugs entering the market in the coming 10 years, and 13 in the subsequent two decades. Overall, the agency projects that approximately 1,300 new drugs will be approved over the next 30 years. In other words, the volume of new drug approvals will likely continue unabated, especially as manufacturers begin developing new products to replace declining revenues from older ones affected by the IRA.

Meanwhile prices of new drugs have been rising, and the CBO expects higher launch prices following the implementation of the IRA’s policies. Manufacturers will continue to set list prices, eventually allowing them to incorporate anticipated concessions for inflation rebates and negotiation, particularly for drugs with no close therapeutic substitutes.

These trends promise to shape future spending challenges not only for Medicare but also for other payers, including privately purchased or employer-sponsored health insurance. However, reforms in the IRA were not extended to the private market because it was passed through budget reconciliation, a special legislative procedure that allows lawmakers to avoid a Senate filibuster but comes with rules that limit the scope of reforms. Although the act will likely have spillover effects that affect the entire market, such as downward pressure on list prices, concerns about affordability of prescription drug coverage among the privately insured and uninsured will likely continue to grow. As the IRA begins to reshape how Medicare pays for drugs, it may yet prove to be just the first step in response to continued political pressure for reform.

Author’s Note

The author is an employee of ATI Advisory, which provides consulting services in the health sector and receives grant funding from foundations, including Arnold Ventures and West Health. She is also a former staffer to the Senate Committee on Finance and was previously the program director of the Drug Pricing Lab at Memorial Sloan Kettering Cancer Center, which received grant funding from Arnold Ventures.

Remote Work, Intermittent Leave Make FMLA Compliance ‘Much More Challenging’

Tips for Training Managers on FMLA Compliance - MyHRConcierge

Source: HR Dive, by Ryan Golden

Family and Medical Leave Act administration is at once a foundational part of HR practice in the U.S. as well as one of its most challenging.

The past three years have not made the task any easier, especially given the rise of remote work, according to Robin Shea, partner and editor in chief at employer-side firm Constangy, Brooks, Smith & Prophete.

In a webinar on Wednesday, Shea told attendees that remote work makes FMLA administration “much more challenging,” as FMLA-eligible remote employees may be inclined to check emails or perform other tasks that would otherwise be considered part of their job — even while they’re on FMLA leave.

“Sometimes it’s the employer who wants the employee to work, but I find more often nowadays that it’s the employee who wants to know what’s going on or wants to stay engaged,” Shea said.

For that reason, some employers may opt to cut the employee’s access to company email while they’re on leave, or instruct managers not to call workers during leave, Shea added.

But there is another scenario under which that advice doesn’t hold, one that management-side attorneys have previously raised the alarm about: intermittent leave.

Timekeeping for intermittent FMLA leave can be a “pain in the neck” due to the sheer amount of data that both employers and employees need to account for, Shea said. She noted that some employers capture time by creating a spreadsheet and requiring the employee to record intermittent FMLA time each day. The employee then submits the spreadsheet to the employer once per week.

Digital timekeeping systems also may be used, “but that would depend on what kind of system you have,” Shea said.

Employers must be careful to distinguish FMLA time off from non-FMLA time off. “Walking the dog should count as time not worked,” Shea said, “but that should not count as time not worked under the FMLA.”

She noted that employers can, generally, count intermittent time not worked due to FMLA reasons as FMLA leave. But that process may be more difficult for employees who are exempt under the Fair Labor Standards Act, since employers typically would not track hours worked for employees who are salaried.

Employers have options for tracking exempt workers’ intermittent leave, “but they’re going to have to be very careful,” Shea said. Intermittent FMLA leave absences should not be charged under an attendance policy, she added.

Separately, employers may need to consider how different state leave laws interact for remote workers.

Shea gave the example of an employee who works in Massachusetts but who reports to an employer based in New Hampshire. This employee would be considered an employee of the company’s New Hampshire offices for FMLA purposes because they receive assignments from that office. But for state leave law purposes, the employee would be considered a Massachusetts employee, Shea said.

That’s notable because Massachusetts has a paid family and medical leave law, whereas New Hampshire does not.

The December Omnibus Bill’s Little Secret: It Was Also A Giant Health Bill

Opinion | Does America Have Too Much Debt? - The New York Times

Source: The New York Times, by Margot Sanger-Katz

The giant spending bill passed by Congress last month kept the government open. But it also quietly rewrote huge areas of health policy: Hundreds of pages of legislation were devoted to new health care programs.

The legislation included major policy areas that committees had been hammering away at all year behind the scenes — like a big package designed to improve the nation’s readiness for the next big pandemic. It also included items that Republicans had been championing during the election season — like an extension of telemedicine coverage in Medicare. And it included small policy measures that some legislators have wanted to pass for years, like requiring Medicare to cover compression garments for patients with lymphedema.

Though the bill was primarily designed to fund existing government programs, a lot of health policy hitched a ride.

Big, “must-pass” bills like the $1.7 trillion omnibus often attract unrelated policy measures that would be hard to pass alone. But the scope of the health care legislation in last month’s bill is unusual. At the end of 2022, congressional leaders decided to do something that staffers call “clearing the decks,” adding all the potentially bipartisan health policy legislation that was ready and written. There turned out to be a lot to clear.

The midterm election also played a role. Many lawmakers saw that the incoming Republican House majority would be far less likely to pass another big spending bill, and so the omnibus was widely viewed as a last legislative hurrah.

In fact, the new House leadership has pledged to avoid this sort of omnibus legislation in the future. House Speaker Kevin McCarthy has agreed to move smaller spending bills one at a time, and to allow lawmakers to propose amendments to each on the House floor. That process would make it much more difficult to combine future spending bills with unrelated policy measures, like a package in the bill that aims to modernize the country’s mental health system.

The coming change made the omnibus bill a critical opportunity to pass pieces of legislation that might have withered in the new Congress. Many of the health measures weren’t controversial enough to stop the omnibus from passing as one big bill. They might not have all succeeded on their own, however.

Several retiring senators were eager to use the bill to pass favored measures and cement their legacies. Among departing senior Republicans were Richard Burr of North Carolina, who was the ranking member of the Senate Health, Education, Labor and Pensions Committee; Roy Blunt of Missouri, a Republican who was ranking member on the Senate Appropriations health subcommittee; and Richard Shelby of Alabama, vice chairman of the Senate Appropriations Committee. Legacies were also meaningful for the retiring Democrat Patrick Leahy, who was the chairman of Appropriations, as well as Nancy Pelosi, who was giving up her position as the top House Democrat.

Mr. Burr had been working all year with his Democratic counterpart to develop a pandemic preparedness package known as the Prevent Pandemics Act. That legislation passed as part of the spending bill.

Mitch McConnell, the Senate minority leader, had signaled earlier in the year that he hoped for a relatively modest spending bill. But he did not stand in the way of the giant bill in the end.

“Probably a lot of the driver was, ‘Let’s resolve it and accept the reality of a lot of stagnation we’ll see in the next Congress,’” said Drew Keyes, a senior policy analyst at the Paragon Health Institute and a former staffer on the Republican Study Committee. He was critical of the size and scope of the bill, especially given the limited debate on many of its provisions. But he said he understood why it came together: “We saw a lot of pieces that felt like this is the last opportunity.”

Some convoluted budget math made it possible for lawmakers to pass expansions of Medicaid without appearing to cost much money, an opportunity that was likely to disappear over time. By scheduling an end date for an expensive pandemic policy, Congress could then use the projected savings to pay for expanded Medicaid benefits for children, postpartum mothers and residents of U.S. territories.

The bill requires states to keep children signed up for at least a year at a time, and extends funding for the Children’s Health Insurance Program. It also sets up a series of policies meant to discourage states from automatically dumping large numbers of adult enrollees after the end of an emergency policy that protected enrollments during the pandemic. The provisions reflected a longstanding interest by Ms. Pelosi in broadening health coverage through the Affordable Care Act and other means.

In addition to the expiring funding sources, there was a “time-limited coalition behind some of those policies,” said Matthew Fiedler, a senior fellow at the Brookings Institution, who was tracking the Medicaid provisions.

Crucially, most of the bill’s health measures had bipartisan support in Congress. Even though Democrats held majorities in both the House and Senate, the bill needed 10 Republican Senate votes to overcome a legislative filibuster. It got far more — the omnibus passed the Senate by a 68–29 margin. (In the House, where Republicans were less involved in negotiations over the bill since their votes were not needed, a greater share voted against it. The final vote was 225–201.)

The consequence of all this deck clearing is that it may be a quiet Congress for new health legislation. There are a few health funding programs that will need to be renewed, including funding for programs to combat opioid addiction and overdoses, and one to subsidize hospitals that treat uninsured patients.

But beyond those must-pass items (which may or may not pass in the end), don’t expect too much.

Democrats already achieved much of their health care agenda earlier in the year, when they passed legislation to allow Medicare to limit the prices of some prescription drugs, expanded subsidies for Americans who buy their own insurance, and added new health benefits for veterans.

Mr. McCarthy did have some plans for modest health care measures with a chance of becoming law, including extended Medicare coverage for telemedicine. But that passed in the omnibus, leaving him without a lot of concrete health policy goals beyond oversight into the performance of pandemic programs.

The remaining wish list for Democrats includes measures to broaden Medicare benefits and to expand abortion rights — things they could not pass even when they controlled the House. As part of concessions with right-wing lawmakers to secure the speakership, Mr. McCarthy has promised Republicans in the House will propose substantial spending cuts to balance the budget in a decade, a goal that would be impossible without cuts to some or all of the major health programs — Medicare, Medicaid and Obamacare. But those would never advance with Democrats controlling the Senate and White House.

That means the omnibus was an unexpectedly meaty health care bill. There may not be another one for a while.

Last Updated 01/25/2023

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