What to Know Before Going Back to the Healthcare Business: FY2023 Omnibus Expense Bill | Faegre Drinker Biddle & Reath LLP

In late December, Congress passed and President Biden signed a $1.7 trillion year-end omnibus spending bill to fund the federal government through fiscal 2023. This notice summarizes the major policies and sanitary provisions included in the package.


Policies that have been extended until the end of 2024:

  • The Acute Hospital Care at Home program
  • The Safe Harbor for Offering Telehealth in High-Deductible Health Plans (HDHP) with Pre-Deductible Health Savings Accounts (HSA)
  • Medicare telehealth flexibility, namely:
    • Beneficiaries will continue to be able to receive telemedicine services from any geographic location, even from the comfort of their homes.
    • Physical therapists, occupational therapists, speech therapists, and audiologists can provide telehealth services.
    • Federally Qualified Health Centers (FQHC) and Rural Health Clinics (RHC) may offer telehealth services.
    • Audio-only services are covered.
    • Implementation of Medicare’s in-person telemental health requirement is delayed.

Telehealth and Medicare Program Integrity Report | The bill allocated $10 million for a Medicare and Telehealth Program Integrity Report that will evaluate the impact of telehealth services provided on Medicare beneficiaries’ future use of health care services, including visits to the first aid, personal services, etc. October 2024 and the final report is expected in April 2026.

The Commerce, Justice, Science (CJS) Report | The report included language directing the Drug Enforcement Administration (DEA) to take action on Special Registration, a regulation that restricts the prescribing of controlled substances via telemedicine.

Mental health and substance use disorder

Reauthorizations for Major Mental Health Programs | The bill reauthorizes the National Suicide Prevention Lifeline Program, Community Mental Health Service Block Grants, and the renamed Substance Use and Prevention, Treatment, and Recovery Block Grants.

Restoring Hope for Mental Health and Well-Being Act of 2022 | The bill expands treatment for opioid use disorders, promotes the integration of behavioral health, and reauthorizes critical programs that support mental health and substance use disorder prevention, treatment, and recovery. Some notable inclusions are below or see the Energy and Trade Commission’s list of provisions online.

  • Removal of X-waiver for prescribing buprenorphine for opioid use disorder (MAT Act).
  • Require prescribers of controlled substances to complete training (MATE Act).
  • Temporary additional payments for non-opioid pain relief treatments (NOPAIN Act).
  • Extension of the current classification of fentanyl-related substances under Schedule I of the Controlled Substances Act as of December 31, 2024.
  • Grants to states with disproportionately high rates of drug overdoses or overdose deaths to incentivize those states to build/maintain their Prescription Drug Monitoring Programs (PDMPs).

Grants for implementation to States | States may receive annual grants from HHS to enforce and ensure compliance with applicable federal mental health and substance use disorder equality laws to health insurance issuers that offer individual and group market health insurance coverage, including their comparative analyzes of non-quantitative treatment limitations. $50 million in grants will be available over five years.

Pandemic response

Sections of the PREVENT Pandemics Act | This bill passed the Senate HELP committee earlier this year and parts of it have been included in the omnibus. Notable highlights include:

  • The director of the Centers for Disease Control and Prevention (CDC) will need to be confirmed by the Senate.
  • An Office of Pandemic Preparedness and Response will be established within the White House.
  • An agency-wide strategic plan should be developed every four years.
  • A CDC Director Advisory Committee will be created to advise and assist the CDC director in executing his strategic plan and the agency’s mission.
  • The Secretary of HHS is provided with additional authority to coordinate with and solicit support from other departments and agencies in leading the federal public health and medical response to a PHE.
  • The national stockpile will need to be regularly assessed for capacity and gaps.


Permanent IVIG home benefit for primary immunodeficiencies | A Medicare demo, which has been extended several times over the past decade, covered the cost of supplies and administration of IV immunoglobulin therapy at home for Medicare beneficiaries with a primary immunodeficiency. This will no longer be temporary during the demo and is now a permanent benefit.

Partial relief from Medicare payment cuts | Physician Fee Schedule (PFS) cuts were reduced from 4.5% to 2% in 2023 and 3% in 2024. Statutory 4% Pay-As-You-Go (PAYGO) garnishment will be delayed by two years.

Incentive Payments for Advanced Alternative Payment Models | A 3.5% Medicare Part B incentive payment is available through 2025 to physicians participating in advanced APMs after the 5% incentive payment ends in 2024. Bonuses are also extended through 2025 before to increase to 75% in 2026.

Key Hospital Program Extensions | The Acute Hospital at Home program, which allows some patients to receive acute-level care in their homes rather than a hospital, has been extended for two years. Two programs that increase Medicare payments to rural hospitals were also extended for two years: the Medicare Low-Volume Payment Adjustment and the Medicare Dependent Hospital Program.

Additional GME Slots | An additional 200 Medicare-funded graduate medical education places are available, half of which will be dedicated to psychiatry residencies. In addition, at least 10 percent of the positions will be distributed to rural hospitals, hospitals operating above the cap, hospitals in states with new medical schools, and hospitals serving areas with health personnel shortages.

Updated Payment Methodology for Inpatient and Psychiatric Units | Beginning in 2025, HHS is directed to update the methodology for determining pay rates under the Medicare Inpatient Psychiatric Prospective Payment System (IPF PPS) based on the new data collection.

Other Medicare mental health provisions as of January 1, 2024:

  • Medicare Partial Inpatient Benefit now includes coverage for intensive outpatient services.
  • Medicare Physician Pricing Program payment rates for crisis psychotherapy services are increased by 50% when provided from a mobile unit.

medical help

Early End of Medicaid Continuing Coverage Requirement | The requirement for states to continuously cover (i.e. maintain enrollment of) anyone enrolled in Medicaid as of March 2020 in exchange for receiving an enhanced federal match rate is being discontinued since the end of the public health emergency. States will be allowed to begin deregistering individuals who are no longer eligible on April 1, 2023. The improved federal match rate is available for the first three months of 2023 and will then be gradually reduced over the remainder of the calendar year.

12 months of continuous Medicaid coverage for children | All states are required to cover children under 12 on Medicaid and CHIP continuously for 12 months, regardless of changes in circumstances.

12 Months Medicaid Coverage Postpartum | The state’s American Rescue Plan Act option to provide 12 months of postpartum Medicaid coverage (instead of the standard 60 days) was made permanent.

Additional Funding for US Territorial Medicaid Programs | Unlike state Medicaid programs, territory Medicaid programs operate on a limited allotment funding structure and their federal match rates are set by law. The bill provides Puerto Rico with additional federal Medicaid funding over the next five years and prevents a planned reduction in the federal match rate for all five territories.

Medicaid and CHIP Provider Lists | State Medicaid and CHIP programs (including their managed care programs) are required in 2025 to publish and frequently update searchable provider lists that include information about whether the provider is accepting new patients, the provider’s cultural and linguistic abilities, whether the provider offers services through telemedicine and other information.

Extension of Home and Community Key Services (HCBS) policies | The HCBS’s major spouse impoverishment protections along with the money rebalancing demonstration follows the person are extended through fiscal year 2027.

Medicaid coverage for young people in public institutions | States are required to provide medically necessary screening, referral, and case management services for eligible youth in public institutions in the 30 days prior to release. They also have the option to provide Medicaid and CHIP coverage to youth in public institutions during the initial period pending settlement of expenses.

Accelerated approval

The omnibus includes provisions related to the FDA’s accelerated approval path that were originally considered, but ultimately not included, for the PDUFA reauthorization in September. This language gives the FDA clearer authority to specify requirements for post-approval studies before approving products, to expedite product recalls, and to mandate sponsor completion of post-approval studies. It also establishes a coordinating council within the agency to ensure consistent and appropriate use of accelerated approval across the FDA.

Agency for Advanced Research Projects for Health (Arpa-H)

The authorization language establishes ARPA-H and codifies some of the ways ARPA-H is currently operating, for example, it is found at the organizational level within the National Institutes of Health (NIH), with the Director reports to the Secretary of HHS instead of the Director of NIH. ARPA-H is intended to advance high-potential, high-impact biomedical and healthcare research that cannot easily be accomplished through traditional research or commercial activity.

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