On Thursday, the House of Representatives passed its tax and reconciliation package by a vote of 215 to 214. The legislation includes extensions of the 2017 tax cuts, offset by spending cuts Medicaid, Medicare and the Affordable Care Act (ACA). Although the Trump Administration and Republican leadership have the goal of signing this package into law by July 4th; however, Senate leadership has already pledged significant changes. ACG will focus our advocacy efforts on the Senate, pushing for changes that benefit clinical GI and patients.
While the package is extensive, please find below a summary of the provisions impacting ACG members and GI practices.
Health Insurance and Federal Spending
The Congressional Budget Office (CBO) estimates that while the bill saves $800 billion in federal spending over 10 years, it would also cause 8.6 million Americans to lose their health insurance. Of that number, 7.6 million would lose Medicaid benefits, and 1 million people would no longer purchase plans through the Affordable Care Act.
Overall, the CBO estimates the bill increases the federal deficit by $3.8 trillion. The bill also increases the “debt ceiling,” or amount the money the federal government may borrow.
Of note, ACG is monitoring these deficit estimates as it could trigger more automatic spending cuts in Medicare by PAYGO and sequestration. In accordance with the Statutory Pay‑As‑You‑Go Act of 2010 (S-PAYGO), this would occur if an enacted bill raised deficits by $2.3 trillion over 10 years. ACG members already receive a 2% Medicare reimbursement cut due to sequestration, in addition to this year’s 2.8% cut due to the Medicare conversion factor.
Medicare
The package proposes consolidating the two separate conversion factors (MIPS and APM participation) to provide 75% of the annual MEI for FY 2026 physician reimbursement, then 10% of MEI beginning in 2027.
In 2025, the MEI was projected to increase by 3.5%, which would translate to a reimbursement update of 2.63% for 2026; for 2027 and beyond, the update would be 0.35%.
ACG applauds the House for tying Medicare physician reimbursement to healthcare inflation, a move long championed by the provider community. Physicians are the only Medicare providers an inflationary update. However, this proposal still does not go far enough. We do not view a mitigated cut or meager increases as an advocacy success.
ACG met with both the Democratic and Republican doctors’ caucuses after the bill was released last week. The estimated cost for this reimbursement change is roughly $9 billion. They were dismayed by the final Medicare reimbursement agreement and shared their desire to build off these policies in the bill.
Medicaid
The package comes at a significant cost to state Medicaid financing and beneficiary enrollments programs.
As mentioned, roughly 7.6 million people will lose Medicaid coverage. The CBO also projects that state Medicaid will likely respond to cuts by cutting provider reimbursement.
The programmatic changes include:
- Ensuring accuracy of enrollment (e.g., deceased individuals, preventing multiple states from insuring the same individuals)
- Restricting Medicaid enrollment to residents or legal qualified immigrants
- Increasing frequency of eligibility redeterminations for certain individuals
- Freezing state Medicaid program provider taxes to current level
- Reducing the Federal Medical Assistance Percentage (FMAP) by 10% for Medicaid Expansion States who use their Medicaid infrastructure to provide health care coverage for illegal immigrants
- Limiting state directed Medicaid payments from exceeding 100% – 110% of the total published Medicare payment rate, depending on whether the states expanded Medicaid coverage via the ACA
- Establishes new work requirements for able-bodied adults between 19 and 64 years old without dependents, with specified exemptions and flexibilities
There are other significant restrictions on Medicaid coverage and policies for abortion and gender-affirming surgery that go beyond this summary.
ACG will continue to keep members updated about any changes that emerge from the Senate’s consideration of this bill.