The Senate has begun their debate on an amended version of its reconciliation bill. As expected, several proposals that would severely harm GNYHA members were revamped to comply with the Senate Parliamentarian’s Byrd Rule requirements. The updated bill continues to use the House-passed reconciliation bill (H.R. 1) as a template.
The Senate’s bill is subject to change during debate and before a final vote on the Senate floor. The Senate Parliamentarian continues to review provisions to ensure they abide by Byrd Rule requirements, including those that would decimate to New York’s Essential Plan (EP). We are working closely with Senate Democratic Leader Chuck Schumer’s staff as they continue their arguments before the parliamentarian.
The Senate’s revised reconciliation text includes several modifications that impact state Medicaid programs and hospitals, including:
- Provider Taxes. While the House bill “grandfathers” existing provider taxes and rates for all states beginning with the date of enactment, the Senate bill would freeze all provider taxes and rates in effect as of May 1, 2025. Starting in 2028, the Senate bill incrementally reduces the provider tax cap from 6% to 3.5% by reducing the cap by .5% per year until it reaches 3.5%. The 2028 starting date is a year later than the previous version of the Senate bill. Nursing homes, intermediate care facilities, and non-expansion states would be exempt from the provider cap reduction. The Senate language essentially mirrors the House language in eliminating “broad-based and uniform” tax waivers, such as what New York has for its Managed Care Organization (MCO) tax, except that states would be permitted to revise affected taxes to comply with this provision (i.e., make them broad-based and uniform). The bill allows up to a three-year transition period (as we have previously reported, a Centers for Medicare & Medicaid Services [CMS] proposed rule would not allow a transition).
- State Directed Payments (SDPs). Similar to the House bill, “new” SDPs would be capped at 100% of the Medicare rate for Medicaid expansion states, and 110% of the Medicare rate for non-expansion states. While the House bill grandfathers “existing” SDPs at their current levels, the Senate bill gradually drops the allowed SDP amount. If the SPD was approved by May 1, 2025 (or there was a good faith effort to receive approval), its rate will be reduced by 10% per year with the rating period beginning January 1, 2028, until it reaches the Medicare rate. For rural hospitals, SPD submissions must occur by the date of enactment of the reconciliation bill (or the good faith effort to receive approval). The 2028 start date is one year later than the original Senate bill.
- The Rural Health Transformation Program. Unlike the House bill, the Senate bill provides $25 billion in Federal funding from fiscal years (FY) 2028-2032 to enhance rural health care. It would be allocated over time: $10 billion for FY 2028, $10 billion for FY 2029, $2 billion for FYs 2030-2031, and $1 billion for FY 2032. States would be required to submit a rural health transformation plan to the CMS Administrator. Approved comprehensive rural health transformation plans would aim to improve rural residents’ access to care, health outcomes, and use of innovative technologies, while fostering strategic partnerships and supporting the financial stability of rural hospitals. States would be able to make distributions to rural providers, but the funding cannot duplicate other funding sources.
- ACA/Essential Plan Restrictions. The Senate reconciliation bill includes the same significant changes to Premium Tax Credit (PTC) eligibility as the House-approved bill and would gut New York’s EP. The Senate Parliamentarian ruled on Thursday that PTC and EP eligibility provisions did not comply with Senate rules. While the Senate has now removed provisions rendering lawfully present individuals ineligible for EP enrollment, for New York the end result is the same—without PTCs there is no funding for the EP.
The accompanying chart summarizes relevant health provisions in the new Senate legislation and highlights similarities and differences between the House-passed bill and the Senate text.
As the Senate moves forward, we have intensified our aggressive advocacy campaign in coordination with the American Hospital Association and through the GNYHA/1199SEIU Healthcare Education Project. Please continue engaging with your members of Congress, especially House Republicans, to express your opposition to the bill’s severely harmful health care cuts.
If the final bill passes the Senate, we expect the House to consider the Senate-passed version shortly thereafter. As with any Federal legislation, an identical bill must pass both chambers before it can be sent to the President’s desk for his signature.
Please contact Jon Cooper with any questions on GNYHA’s advocacy.