Healthcare has seen a slew of proposed policy changes at the federal level in recent months. Here are the 10 most important federal policy updates for ASC leaders and physicians to know since May 1:
1. On May 22, House Republicans passed President Donald Trump’s “One Big Beautiful Bill,” which promoted the use of AI to recover and reduce improper Medicare payments. A May 20 report from the nonpartisan Congressional Budget Office found that the bill could cut nearly $500 billion over the next decade in Medicare funding.
2. The massive budget package also includes a 2.25% boost to Medicare physician payments in 2026. Under current law, Medicare physician payment is set to rise 0.25% in 2026 and cap out with a 2.5% annual increase in 2035. If the budget proposal is enacted, physicians would see their annual Medicare payments rise 4.3% by 2035, according to a report published by the American Medical Association.
3. The bill includes proposals that would significantly limit the amount of money students can borrow through federal student loans. Specifically, it calls for the elimination of the Grad PLUS loan program, which allows graduate students to borrow up to the full cost of tuition and living expenses.
4. Federal loans for students in graduate and professional programs would be capped at $100,000 and $150,000, respectively. In 2024, more than 70% of medical school students graduated with education debt. The average debt amount that year was $212,341, according to the Association of American Medical Colleges. In its current form, the bill also excludes loan repayments made during residency years from counting toward Public Service Loan Forgiveness.
5. Federal lawmakers have reintroduced the “Improving Seniors’ Timely Access to Care Act,” a bipartisan bill that aims to streamline the prior authorization process for Medicare Advantage enrollees. The proposal would establish an electronic prior authorization process for Medicare Advantage plans, standardize transactions and clinical attachments, increase transparency, and clarify HHS’ authority to set timeframes for requests. It also focuses on expanding beneficiary protections and requires reporting to Congress on program integrity and improvements to the electronic prior auth process.
6. On May 12, President Trump signed an executive order directing drugmakers to match U.S. drug prices with those in other wealthy nations under a “most favored nation” model. HHS has 30 days to set pricing targets, with enforcement options including trade actions and potential drug importation from countries like Canada.
7. CMS released draft guidance on May 12 outlining changes for the third round of Medicare drug price negotiations, including the possible inclusion of certain Part B drugs that lack generic or biosimilar alternatives. This marks a shift from the initial focus solely on Part D medications.
The guidance aims to improve transparency, focus on high-cost drugs, and balance fair pricing with continued pharmaceutical innovation.
8. CMS proposed a new rule targeting what it calls a loophole that enables states to levy targeted taxes on Medicaid managed care organizations (MCOs) to boost federal matching funds. These funds are often redirected back to the taxed entities, a practice CMS says undermines fair funding practices.
While certain provider taxes are allowed under federal law, CMS contends that some states are exploiting these allowances by implementing non-redistributive, Medicaid-specific taxes. The agency cites California, Michigan, Massachusetts, and New York as accounting for 95% of projected federal losses tied to these mechanisms.
9. On May 12. U.S. Sens. Alex Padilla,D-Calif., and Jeff Merkley, D-Ore., along with Rep. Jan Schakowsky, D-Ill., reintroduced the Nurse Staffing Standards for Hospital Patient Safety and Quality Care Act, which aims to establish mandatory minimum nurse-to-patient ratios in hospitals nationwide.
10. On May 11, House Republicans unveiled a 160-page bill aimed at reducing federal healthcare spending by imposing nationwide work requirements for Medicaid recipients and tightening eligibility criteria. The legislation is part of a broader effort to curtail government expenditures, particularly within Medicaid and Affordable Care Act (ACA) programs.
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