Congress Unveils Bipartisan Healthcare Deal Tied to Government Funding Package

Congressional lawmakers announced a bipartisan $1.2 trillion government funding package on Tuesday, January 20, that would keep the federal government open for the rest of fiscal year (FY) 2026 and extend several key healthcare programs set to expire at the end of the month.

The agreement, which was adopted by the U.S. House of Representatives on Thursday, January 22, includes funding for the Departments of Health and Human Services (HHS), Defense, Homeland Security, Labor, Education, Transportation, and Housing and Urban Development.

The healthcare proposals in the legislation would renew Medicare telehealth coverage for two years and hospital-at-home coverage for five years, boost pay to physicians participating in Medicare alternative payment models, and require greater transparency and flat fees from pharmacy benefit managers (PBMs).  It would also extend the low-volume hospital adjustment, the Medicare-dependent hospital program, and further delay scheduled Medicaid DSH cuts.  Notably, a provision requires health systems to assign unique identification numbers for hospital outpatient departments (HOPDs) as a condition of payment under Medicare or group health plans, enabling the Centers for Medicare & Medicaid (CMS) to track pricing and potentially mark a step toward site-neutral Medicare reimbursements.

The bill also provides $116.8 billion in discretionary funds to HHS through September, including:

• $48.7 billion for the National Institutes of Health (NIH), including increases for cancer, ALS, Alzheimer’s, and women’s health research
• $4.1 billion for CMS program operations
• $1.9 billion to support community health centers
• $1.4 billion to strengthen the healthcare workforce
• $1.2 billion to support maternal and child health
• $418 million for rural health, including increased funding for America’s rural hospitals, specifically targeting facilities at risk of imminent closure and increasing rural residency opportunities

The package does not incorporate elements from President Trump’s “Great Healthcare Plan” or address the enhanced subsidies for health insurance exchange plans that expired at the end of 2025.