Late last month, before President Joe Biden took office and proposed his pandemic relief plan, Congress passed a nearly 5,600-page legislative package that provided some pandemic relief along with its more general allocations to fund the government in 2021.
While the $900 billion that lawmakers included for urgent pandemic relief got most of the attention, some even bigger changes for health care were buried in the other parts of that huge legislative package.
The bundle included a ban on surprise medical bills, for example — a problem that key lawmakers had been wrestling with for two years. Starting in 2022, because of the new law, patients generally will not pay more for out-of-network care in emergencies and at otherwise in-network facilities.
But surprise bills weren’t the only health care issue Congress addressed as it ended a tumultuous year. Lawmakers also answered pleas from strained health facilities in rural areas, agreed to cover the cost of training more new doctors, sought to strengthen efforts to equalize mental health coverage with that of physical medicine and instructed the federal government to collect data that could be used to rein in high medical bills.
Here are some details about those big changes Congress made in December.
Rural Hospitals Get a Boost
Throwing a lifeline to struggling rural health systems — and, it appears, a bone to an outgoing congressional committee chairman — lawmakers gave rural hospitals a way to get paid by Medicare for their services regardless of whether they have patients in beds.
The law creates a new category of provider, known as a “rural emergency hospital.” Starting in 2023, some hospitals will qualify for this designation by maintaining full-time emergency departments, among other criteria, without being required to provide in-patient care. The Department of Health and Human Services will determine how the program is implemented and which services are eligible.
Medicare, the federal insurance program that covers more than 61 million Americans 65 and older or with certain disabilities, currently does not reimburse hospitals for emergency or hospital outpatient services unless the hospital also offers in-patient care.
That requirement has exacerbated financial problems for rural hospitals, many of which balance serving communities with fewer patients — and less need for full in-patient services — with the need for emergency and outpatient services. One study last year found 120 rural hospital facilities had closed in the past 10 years, with more at risk.
Hospital groups have praised the change, which was introduced by Sen. Chuck Grassley (R-Iowa), who has championed rural health issues and ended his term as chairman of the Senate Finance Committee this month. “I worked to ensure rural America would not go overlooked,” he said in a statement.
Medicare Invests in More Doctors
Hoping to address a national shortage of doctors that has reached critical levels during the pandemic, Congress created an additional 1,000 residency positions over the next five years.
Medicare will fund the positions, which involve supervised training to medical school graduates going into specialties like emergency medicine and are distributed among hospitals most in need of personnel, including rural hospitals.
Critics like The Wall Street Journal’s editorial board have noted this is Congress’ attempt to fix a problem it created in the late 1990s, when lawmakers capped the number of Medicare-funded residency positions in the United States, fearing too many doctors would inflate the cost of Medicare.
While Medicare is not the only source of educational funding and hospitals may add their own residency slots as needed, Medicare generally will reimburse hospitals for the number of residents they had at the end of 1996. Among other consequences of that 1996 cap, most Medicare-funded residencies are clumped at Northeastern hospitals, a 2014 study showed.
In contrast to the 1,000 positions created as part of the stimulus package, one bipartisan proposal in 2019 that was never enacted would have added up to 15,000 positions over five years.
Strengthening Mental Health Parity
The legislative package strengthens protections for mental health coverage, requiring federal officials to study the limitations insurance companies place on coverage for mental health and substance use disorder treatments.
In 1996 Congress passed the first law barring health insurers from passing along more of the cost for mental health care to patients than they would for medical or surgical care. The Affordable Care Act, building on earlier laws, made mental health and substance use disorder treatments an “essential health benefit” — in other words, it required most health insurance plans to cover mental health care.
But enforcing that standard has been a challenge, in part because violations can be hard to spot and the system has often relied on patients to notice — and report — them.
In December, lawmakers approved a measure requiring insurers to analyze their coverage and provide their findings to state and federal officials upon request.
They also instructed federal officials to request the findings from at least 20 plans per year that may have violated mental health parity laws and tell insurers how to correct any problems they find — under penalty of having insurer violations reported to their customers if they do not comply.
The law requires federal officials to publish an annual report summarizing the analyses they collect.
More Transparency in Cost and Quality
Americans often do not know how much they will be expected to pay when they enter a doctor’s office, an ambulance or an emergency room.
Taking another modest step toward transparency, Congress banned so-called gag clauses in contracts between health insurers and providers.
Among other things, these sorts of “gag” restrictions previously have prevented insurers and group health plans from sharing with patients and others — such as employers — information about a provider’s prices or quality. The December legislation also prohibited insurers from agreeing to contracts that prevent them from getting access electronically to claims and other information from providers on behalf of the insurer’s enrollees.
In 2018, Congress banned gag clauses in contracts between pharmacies and insurers or pharmacy benefit managers. Those gag clauses had prevented pharmacists from sharing cost information with patients, like whether they could pay a lower price for a prescription by paying out-of-pocket rather than using their insurance coverage.
The proposal approved in December’s legislation came from a big, bipartisan package of health care cost fixes passed in 2019 by the Senate Health, Education, Labor and Pensions Committee, but not by the rest of Congress. The committee’s Republican chairman, Sen. Lamar Alexander of Tennessee, retired from Congress this month. His Democratic partner on that package, Sen. Patty Murray of Washington, will take over the chairmanship as Democrats assume control of the Senate and has vowed to focus on health care affordability.
Consumers First, a health consumer-focused alliance of health professionals, labor unions and others, led by Families USA, praised the ban. The change is “a significant step forward” to stop “the abusive practices from hospitals and health systems and other segments of the health care sector that are driving up health care costs and making health care unaffordable for our nation’s families, workers, and employers,” it said in a statement.
KHN senior correspondent Sarah Jane Tribble contributed to this report.
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