/>iReconciliation Text Is Here
Late Sunday night, May 11, 2025, the House Committee on Energy and Commerce released the much-anticipated budget reconciliation bill text ahead of its scheduled markup on May 13, 2025.
While the Congressional Budget Office (CBO) has not yet released a score, we expect that it will do so before the markup. In the meantime, CBO provided a letter to Energy and Commerce Chairman Guthrie confirming that the committee exceeds the $880 billion in federal savings that the House budget resolution instructed the committee to find. The vast majority of the bill’s policies and savings are in the Medicaid program, some of which were expected, including:
- Establishing new work requirements in Medicaid (called “community engagement requirements” in the legislative language)
- Repealing the Biden-era eligibility rules and nursing home staffing rule
Additional Medicaid policies include:
- Prohibiting gender transition procedures, focused on minors
- Restricting coverage of undocumented immigrants by reducing the federal match for the expansion population to 80% if the state covers undocumented immigrants with state-only funds, and checking immigration status sooner than 90 days
- Implementing new cost-sharing requirements and verifying eligibility every six months for the expansion population
- Banning spread pricing by pharmacy benefit managers (PBMs) and prohibiting PBM compensation based on the price of a drug as a condition of entering into a contract with a prescription drug plan in Medicare
The legislation also includes versions of policies that remain highly contested among many stakeholders, including:
- Implementing a moratorium on new state directed payments (SDPs) that exceed the Medicare rate, as opposed to adjusting existing SDPs that go up to the average commercial rate
- Introducing a moratorium on new or increased provider taxes, as opposed to reducing or removing existing provider taxes
- Closing the managed care organization (MCO) provider tax “broad based” loophole, which is expected to impact seven of the 20 states that use MCO provider taxes (California, Illinois, Massachusetts, Michigan, New York, Ohio, and West Virginia)
You can brush up on these policies and more in our Medicaid Restructuring Options document.
The bill includes additional provisions outside of Medicaid. For example, it would codify the March 2025 Affordable Care Act program integrity proposed rule, which includes provisions to roll back certain special enrollment periods, impose new premium payments for certain individuals, prohibit states from providing coverage for sex-trait modification as an essential health benefit, and exclude Deferred Action for Childhood Arrivals recipients from the definition of “lawfully present.” It proposes a short term “doc fix,” which would establish a single conversion factor for clinicians who are qualifying participants in Advanced Alternative Payment Models and those who aren’t, and would set the update to the single conversion factor at 75% of the Medicare Economic Index (MEI) in calendar year (CY) 2026 and at 10% of the MEI for CY 2027 and future years. The bill would also prevent disproportionate share hospital payment cuts until 2029.
This bill is still in the early stages of committee processes, and we still need to see CBO estimates for federal savings and coverage changes (likely decreases). The committee markup will likely last well into the evening on Tuesday, with Democrats offering amendments and critiques. Assuming the bill passes committee, it will then need to be stitched together with the other bills that make up reconciliation for consideration on the House floor.
We are also waiting for additional language and official notice of a markup from the House Committee on Ways and Means, which has jurisdiction over the Medicare program. Its early release of language was incomplete. House Speaker Mike Johnson has indicated a desire to get the reconciliation package through the House by the Memorial Day recess.
Outside of reconciliation, the Senate Committee on the Judiciary will hold a hearing on PBMs, and the House Committee on the Judiciary, Subcommittee on Administrative State, Regulatory Reform, and Antitrust will hold a hearing on graduate medical education and evaluating the medical residency antitrust exemption.
US Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. will testify on Wednesday, for the first time as the HHS Secretary, before the House Appropriations Committee and the Senate Committee on Health, Education, Labor, and Pensions on the president’s fiscal year 2026 proposed HHS budget.
Secretary Kennedy along with Centers for Medicare & Medicaid Services Administrator Mehmet Oz participated in a press conference on Monday morning as President Trump signed a new executive order requiring the establishment of “most-favored-nation” pricing for prescription drugs.
Today’s Podcast
In this week’s Healthcare Preview, Debbie Curtis and Rodney Whitlock join Maddie News to discuss the released text of the House Energy and Commerce Committee’s reconciliation language and what comes next.
