LUGPA Policy Update: House Passes HHS Funding Package with PBM Reforms and Healthcare Extenders

January 2026  

At-a-Glance

What’s Changing

• The House passed a bipartisan HHS funding package (341–88), funding the government through September 30, 2026
• Modest PBM reforms applied to Medicare Part D
• Medicare telehealth flexibilities extended through 2027–2028
• One-year extension of the Advanced APM bonus at 3.1%
• Extension of the 1.0 Work GPCI floor through 2026
• Delay of Clinical Laboratory Fee Schedule (PAMA) cuts through 2026
• Coverage pathway established for multi-cancer early detection (MCED) screening tests beginning in 2029
• Short-term extensions of multiple healthcare, workforce, and public health programs

Why It Matters

• Provides near-term funding stability and preserves telehealth access
• Prevents additional geographic payment cuts and delays lab payment reductions
• Includes limited PBM transparency reforms
• Continues reliance on temporary fixes
• Leaves major physician payment and access issues unresolved

What’s Missing

• No Medicare Physician Fee Schedule stabilization
• No site-neutral payment reforms
• No Medicaid PBM spread pricing or NADAC reforms
• No protections for in-office dispensing (IOD)
• No relief from ongoing Medicare sequestration

LUGPA Position

• Supports telehealth certainty, lab payment stability, cancer screening innovation, and increased PBM transparency
• Urges Congress to pursue durable reforms on physician reimbursement, PBM practices, site-neutral payments, and physician-led care models

Overview

The U.S. House of Representatives passed a bipartisan appropriations package funding the Department of Health and Human Services (HHS) through September 30, 2026, by a 341–88 vote. The legislation includes healthcare funding, workforce investments, research support, telehealth extensions, and limited PBM reforms. While the package contains several provisions relevant to independent practices, it relies heavily on temporary extensions and fails to address core physician payment challenges. The legislation now moves to the Senate, where further changes may be made.

The HHS provisions are part of a broader multi-bill appropriations package that also funds Defense, Homeland Security, and other federal agencies. As of late January 2026, the package remains unresolved in the Senate due to disagreements between Democrats and Republicans, primarily centered on Department of Homeland Security funding levels and immigration enforcement provisions. Without an agreement by January 30, 2026, the funding deadline, a partial government shutdown remains possible. Final enactment of the HHS measures will depend on the resolution of these broader negotiations.

Key Provisions Affecting LUGPA Members

PBM Reforms (Medicare Part D Only)

The bill includes modest PBM reforms that:

• Prohibit PBMs from tying compensation to drug list prices in Medicare Part D
• Require greater transparency and standardized definitions in PBM contracts
• Expand reporting and audit rights for Part D plan sponsors

Medicaid PBM reforms—including spread pricing bans and NADAC-based reimbursement—were excluded. Physician-administered drugs and in-office cancer therapies are largely unaffected.

Telehealth and Virtual Care Extensions

• Extends Medicare telehealth flexibilities through December 31, 2027, including home-based visits, audio-only services, and expanded distant-site eligibility
• Extends hospital-at-home waiver authorities and related virtual care programs through 2027–2030, depending on the provision
• Directs HHS to issue guidance on accessible telehealth for patients with limited English proficiency

These extensions preserve access for patients and provide necessary continuity for independent practices, but remain temporary.

Payment and Practice Stability Provisions

• Extends the 1.0 Work Geographic Practice Cost Index (GPCI) floor through December 31, 2026, preventing additional geographic payment reductions
• Extends the Advanced APM bonus for one year at 3.1%, with adjusted participation thresholds
• Extends the 2% Medicare sequester, continuing downward pressure on physician reimbursement
• Delays scheduled PAMA-related cuts to the Clinical Laboratory Fee Schedule through 2026

While these provisions offer short-term relief, they do not resolve the long-term instability in Medicare payments.

Hospital, Medicare Advantage, and Site-of-Care Policy

• Extends the Medicare-dependent hospital program and low-volume hospital payment adjustments through 2026
• Requires Medicare Advantage plans to maintain accurate, publicly available provider directories, addressing ongoing “ghost network” concerns
• Requires off-campus hospital outpatient departments to bill under unique NPIs, improving CMS data transparency and potentially laying groundwork for future site-neutral payment reforms

Cancer Screening, Research, and Diagnostics

• Establishes Medicare coverage for multi-cancer early detection (MCED) screening tests beginning January 1, 2029, subject to CMS parameters
• Provides $49 billion for the National Institutes of Health, supporting cancer, chronic disease, and rare disease research
• Maintains funding for community health centers, rural health programs, and prevention initiatives

Healthcare Workforce and Provider Support

• Allocates $1.4 billion for healthcare workforce initiatives, including rural workforce programs
• Extends key provisions of the Dr. Lorna Breen Health Care Provider Protection Act through 2027 to support provider mental health and well-being
• Extends funding for quality measure development and provider outreach programs

What the Package Does Not Address

Despite its breadth, the legislation does not resolve several high-priority issues for independent practices:

• No Medicare Physician Fee Schedule stabilization or inflationary update
• No site-neutral payment reforms
• No Medicaid PBM reform or spread pricing limits
• No protections against white-bagging or reimbursement suppression
• No federal protections for in-office dispensing (IOD)

Several public health and safety-net programs were extended for limited durations, increasing uncertainty and setting up another debate over healthcare extenders in the near future.

Why It Matters for Independent Urology

While the package provides short-term funding stability, preserves telehealth access, and includes limited PBM transparency reforms, it continues a pattern of temporary extensions rather than long-term solutions. Payment inequities, PBM practices, consolidation pressures, and reimbursement instability affecting independent urology practices remain largely unaddressed.

LUGPA Position

LUGPA supports telehealth certainty, lab payment stability, cancer screening innovation, and increased transparency and oversight of PBM practices. However, LUGPA strongly urges Congress to enact durable reforms that stabilize physician reimbursement, advance site-neutral payments, meaningfully reform PBMs across Medicare and Medicaid, and protect physician-led care models, including in-office dispensing.

LUGPA will continue to engage lawmakers as the package moves through the Senate amid the current appropriations impasse and will keep members informed of developments.