June 2025

     In this issue we feature: 

• Major Health Provisions in the House-Passed Reconciliation Bill
• Protecting Patient Access to Complex Therapies Act: Milliman Report
• CMS Draft Guidance: Medicare Drug Price Negotiation (Cycle 3)
• CMS Innovation Center Strategy
• Executive Order on Drug Pricing
• Congressional Push for CMMI Reform
• Congressional Resolution Opposes HHS Comment Period Restrictions

Major Health Provisions in the House-Passed Reconciliation Bill 

In May, the House passed the “One Big Beautiful” reconciliation bill, a sweeping budget package with significant federal healthcare reforms. The Congressional Budget Office (CBO) estimates $910 billion in healthcare savings over 10 years, largely from Medicaid changes, though 7.7 million individuals could lose coverage. The bill also modifies Medicare, Health Savings Accounts (HSAs), and Affordable Care Act (ACA) subsidies.

Key Healthcare Provisions

Medicaid Reforms: Focused on cost containment and targeting non-expansion and non-core populations.

• Eligibility and Enrollment: A moratorium on streamlined enrollment (Sec. 44102) saves $81.8B; tighter address verification (Sec. 44103) saves $17.4B.
• Managed Care Oversight: Monthly provider screenings and MCO audits (Secs. 44104–44105) aim to improve integrity, though CBO did not assign savings.
• Redeterminations and Work Requirements: Redeterminations resume Dec. 31, 2026 (Sec. 44108), saving $53.2B; mandatory work/community engagement (Sec. 44141) saves $280B.
• Payment Reforms: MCO payments capped at 110% of Medicare in non-expansion states and 100% in newly expanded states (Sec. 44133), saving $72.5B.
• Other Provisions: PBM spread pricing ban (Sec. 44124) saves $261B; federal funding ban for gender transition procedures for minors (Sec. 44125) saves $830M; retroactive coverage limited to 30 days (Sec. 44122), saving $6.4B.

Medicare Changes: A moratorium on streamlined enrollment in the Medicare Savings Program (Sec. 44101) saves $85.3B. Physician payment reform (Sec. 44304) ties the conversion factor to the Medical Economic Index (MEI), costing $8.8B but stabilizing payments. Expanded eligibility for Rural Emergency Hospitals (Sec. 111201) saves $806M through service consolidation.

While Sec. 44304 ties annual updates to a percentage of the MEI (75% of MEI in 2026 and 10% of MEI for each subsequent year) it does not reverse the 2.85% cut scheduled for January 2025 and fails to keep pace with practice costs or broader inflationary pressures, particularly for high-acuity specialties like urology.

LUGPA’s Concerns:

• The proposed MEI tie-in still leaves practices vulnerable to declining real-dollar payments.
• Fails to address the significant projected cut in 2025 retroactively.
• Lacks incentives or support for practice sustainability, especially for independent and rural providers.

Tax-Related Health Provisions: HSA eligibility and contribution limits are expanded (Secs. 110204–110213), costing $41B over 10 years. Stronger premium tax credit verification (Secs. 112103, 112202) saves $90.7B by tightening special enrollment rules.

Senate Outlook and Timeline
The Senate aims to finalize its reconciliation bill by July 4, targeting at least $1.5 trillion in savings. Key steps include early June markups, mid-June Byrd Rule reviews, and a vote by June 23. Provisions like work requirements and the gender care ban may face Byrd Rule challenges. Moderate Republicans (Collins, Murkowski, Paul, Johnson, Hawley) are pivotal for passage.

Provisions to Monitor
Medicaid work requirements may face opposition; a state-option compromise is possible. Provider tax and cost-sharing reforms may be revised to protect rural and low-income populations. ACA verification rules risk destabilizing marketplace enrollment; Senate may add safeguards. HSA expansions and PBM oversight could be pared back to meet budget rules or equity goals.

LUGPA’s Position and Priorities
LUGPA is actively engaging Congress, particularly Rep. Greg Murphy, MD (R-NC), to support independent practices and specialty care access. LUGPA urges Congress to reverse the 2025 Medicare Physician Fee Schedule cut, establish stable, permanent reimbursement pathways, and pass the Protecting Patient Access to Cancer and Complex Therapies Act to preserve Part B drug reimbursement.

Final Note

The reconciliation process is progressing swiftly, with potential changes expected. It's worth noting these dynamics, and we anticipate further updates once the Senate completes its review of the bill, likely later this month. We will continue to closely monitor developments and provide timely updates as they become relevant.

Protecting Patient Access to Complex Therapies Act: Milliman Report

Reintroduced by Senator John Barrasso (R-WY) and Representative Greg Murphy, MD (R-NC), the Protecting Patient Access to Complex Therapies Act aims to address reimbursement changes under the Inflation Reduction Act (IRA), particularly concerning Medicare Part B drugs. The bill proposes to preserve the current Average Sales Price (ASP) plus 6% reimbursement methodology, which is used to support the administration of physician-delivered drugs in outpatient settings.

Key provisions include:

• Maintaining ASP+6% reimbursement for Part B drugs
• Holding providers financially harmless from price negotiation outcomes
• Preserving access to community-based care delivery
• Ensuring budget neutrality within the Medicare program
• Excluding providers from direct involvement in drug price negotiations

A Milliman report, commissioned by the ASP Coalition, analyzed the projected impact of the legislation and estimated the following outcomes:

• $56.3 Billion in Cuts to Providers Averted: Under the IRA, provider reimbursements would be reduced by $56.3 billion from 2028 to 2037. This bill reduces those cuts to just $0.6 billion, preserving the ability of practices to offer essential treatments.
• $3.3 Billion in Additional Medicare Savings: By applying the 2% sequester to ASP+6% instead of the lower MFP+6%, Medicare achieves greater net savings, demonstrating that preserving provider reimbursement is sustainable and beneficial to the program’s bottom line.
• No Change to Beneficiary Savings: Patients still benefit from $93.3 billion in cost reductions under the IRA, ensuring affordability while protecting provider access.
• Shifted Responsibility to Manufacturers: Drug manufacturers would bear $58.9 billion more in cost responsibility, reflecting the original intent of the IRA to reduce prices at the manufacturer level, not penalize providers.
• Urology-Specific Impact: Urology alone is projected to see $1.4 billion in savings under the bill, a testament to the legislation’s importance to specialty providers.

LUGPA supports efforts to manage drug costs while ensuring policies do not unintentionally limit access to specialty care. This legislation offers a framework for addressing cost pressures while maintaining the stability of independent practices that administer complex therapies.

CMS Draft Guidance: Medicare Drug Price Negotiation (Cycle 3) 

The Centers for Medicare & Medicaid Services (CMS) released draft guidance for the third cycle of the Medicare Drug Price Negotiation Program. For the first time, Part B drugs will be eligible for inclusion. CMS intends to select up to 15 high-expenditure, single-source drugs across both Part B and D by February 1, 2026. Negotiations will be held throughout that year, with the resulting prices set to take effect on January 1, 2028.

The draft guidance outlines:

• Criteria for identifying high-cost drugs eligible for negotiation
• Measures to promote transparency and predictability in the process
• Guardrails to protect innovation, such as exclusions for certain new or small-market drugs

LUGPA acknowledges the importance of reducing Medicare drug spending but emphasizes the need for policies that continue to support adequate provider reimbursement. Sustainable reimbursement models are essential for maintaining access to specialty treatments administered in outpatient settings.

CMS Innovation Center Strategy

The CMS Innovation Center (CMMI) has introduced a refreshed strategic framework aimed at addressing long-term cost growth in Medicare and improving care delivery. The strategy emphasizes voluntary participation, data-informed design, and care models that focus on preventive services, digital access, and health equity.

Key focus areas include:

• Expanding evidence-based prevention and chronic disease management models
• Enhancing access to virtual care and price transparency tools
• Reducing administrative complexity for participating providers

LUGPA supports innovation efforts that promote flexibility and align with the operational realities of independent practices. Voluntary, adequately funded models tailored to specialty care may contribute to improved outcomes while maintaining practice sustainability.

Executive Order on Drug Pricing 

A recent Executive Order from the White House outlines new federal efforts to address prescription drug prices. Proposals under consideration include:

• Aligning certain U.S. drug prices with international price benchmarks (Most-Favored-Nation pricing)
• Expanding the ability to import drugs from approved foreign sources
• Enhancing antitrust enforcement within the pharmaceutical supply chain

Complementary legislation, such as Senator Bernie Sanders’ Prescription Drug Price Relief Act of 2025, would tie prices of select drugs to the median prices in comparable developed nations.

LUGPA supports efforts to increase affordability and access to prescription medications while also noting the importance of ensuring that any new pricing mechanisms are implemented to avoid potential disruptions to patient care, particularly in physician-administered therapies.

Congressional Push for CMMI Reform 

Lawmakers have expressed concern over the CMS Innovation Center's (CMMI) performance, noting that few of its more than 50 models have yielded consistent cost savings. A 2023 Congressional Budget Office (CBO) report found that CMMI’s activities had resulted in approximately $5.4 billion in net added costs to Medicare.

In response, CMS has discontinued several underperforming models, with projected savings of $750 million. Members of Congress have recommended reforms focused on:

• Prioritizing models that address access challenges in rural and underserved areas
• Increasing transparency in model design and evaluation
• Improving engagement with stakeholders during model development

LUGPA supports efforts to refine innovation models and ensure they are both evidence-based and responsive to the needs of patients and providers, particularly those operating in independent and community-based settings.

Congressional Resolution Opposes HHS Comment Period Restrictions 

A bipartisan resolution introduced by Representative Lizzie Fletcher (D-TX) and Senator Ron Wyden (D-OR) challenges the Department of Health and Human Services’ (HHS) decision to reduce public comment periods for non-statutory rulemakings. The March 3 repeal of the Richardson Waiver effectively shortens the public’s window to respond to certain regulatory proposals.

Supporters of the resolution argue that reduced comment periods may limit meaningful input from stakeholders and diminish the transparency of the rulemaking process.

LUGPA supports regulatory processes that promote transparency and stakeholder engagement. Extended and accessible comment periods help ensure that complex healthcare policies reflect input from the provider community and support thoughtful, patient-centered regulation.