Congress unveils bipartisan health bill, funding deal

Modern Healthcare – Tuesday, January 20, 2026
By Michael McAuliff

Senior lawmakers announced a bipartisan deal Tuesday that would keep the federal government open for the rest of fiscal 2026 and enact long-sought health policies.

In addition to funding the Health and Human Services Department, the legislation features major provisions from a healthcare package that then-President-elect Donald Trump torpedoed at the end of 2024.

The measure would renew Medicare telehealth coverage for two years and hospital-at-home coverage for five years, set the stage for site-neutral Medicare reimbursements, boost pay to physicians participating in Medicare alternative payment models, and require greater transparency and flat fees from PBMs.

The bipartisan, bicameral nature of this agreement between House and Senate appropriations committee leaders suggests it could pass before the end of the month, forestalling another government shutdown, although conservative Republicans may object to the cost.

The bill includes a first step toward site-neutral Medicare payments for outpatient care by requiring health systems to create separate identification numbers for outpatient departments to enable the Centers for Medicare and Medicaid Services to track pricing in different settings.

Medicare Advantage insurers would be required to maintain accurate provide lists and patients who visit providers erroneously included would only have to pay in-network rates. The bill doesn’t include limits on Medicare Advantage prior authorizations that were part of similar packages in the past.

The package does not address the enhanced subsidies for health insurance exchange plans that expired at the end of 2025 nor begin overhauling the Medicare physician reimbursement system.

And with the exception of the PBM policies Congress has come close to passing for several years, there are no elements from Trump’s “Great Healthcare Plan,” such as expanded health savings accounts.

The bill appropriates $116.8 billion to HHS through the rest of the fiscal year ending Sept. 30, which is a $210 million increase in discretionary spending and $33 billion more than Trump requested.

The major provisions are:

• Allocating $4.6 billion to community health centers through the end of 2026
• Delaying cuts to Medicaid disproportionate share hospital payments to safety-net hospitals until 2029
• Extending add-on payments low-volume and Medicare-dependent hospitals, Medicare geographic payment adjustments for doctors, and ambulance payments through the end of the year
• Restoring a 3.1% bonus for alternative Medicare payment models that expired in 2024 for one year
• Allowing hospitals to delay reclassifications that could impact Medicare pay until the end of the year
• Extending numerous disease treatment efforts and grant programs
• Extending in-home cardiopulmonary rehabilitation flexibilities through 2027
• Tightening rules to spot fraud with durable medical equipment under Medicare
• Funding graduate medical education programs through 2029
• Funding the National Health Service Corps through 2026
• Boosting the funding formula for the World Trade Center Health Program
• Extending special diabetes programs though 2026
• Extending public health preparedness programs through 2026
• Signaling Congress’s growing interest in regulating wearables by mandating a report on their use

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