PBM, telehealth, hospital-at-home measures clear Congress

Modern Healthcare – Tuesday, February 3, 2026
By Michael McAuliff

After more than two years of trying, Congress finally passed significant healthcare legislation Tuesday featuring new rules on pharmacy benefit managers and a measure of certainty for telehealth and hospital-at-home providers.

The legislation funds most of the federal government, including the Health and Human Services Department, and provides $4.6 billion for community health centers this year.

Passage was delayed last week after Senate Democrats concerned over immigration enforcement insisted on changes to the portion of the bill funding the Homeland Security Department, overshadowing the significant healthcare measures.

The House voted 217-214 to approve the legislation Tuesday after the Senate passed it Friday. President Donald Trump later signed the bill into law, ending the partial federal government shutdown that started Saturday.

The PBM provisions are the most significant step Congress has taken to curb what critics see as abuses by the drug industry middlemen that share corporate parents with major health insurance companies.

The legislation includes extensive reporting and transparency requirements while also requiring PBMs to pass the rebates they earn from drugmakers through to health plans and patients. Instead of taking a cut of the rebates they secure, the PBMs will have to charge a set fee.

Lawmakers long complained that PBMs drive up drug prices because the rebate system led the managers to prefer higher-priced pharmaceuticals, which yielded bigger payouts. PBMs long denied that, blaming drug companies for high list prices, but ultimately lost this fight.

For telehealth, the bill includes a two-year extension of rules first permitted during the COVID-19 pandemic that dramatically expand the remote services physicians can bill to Medicare.

The measure provides a five-year extension for acute hospital-at-home coverage under Medicare.

Providers had hoped for permanent extensions, but Congress balked at the expense.

While the bill grants community health centers stability through December, the measure fails to provide the multiyear funding stream that Congress used to enact. Federally qualified health centers have been operating under a series of stopgap funding bills since 2023.

And though the bill represents the most significant health legislation passed in several years, it also leaves a number of major priorities unfinished.

Congress has looked at policies such as tightening standards on health insurance prior authorizations, strengthening cybersecurity, regulating artificial intelligence, overhauling the Medicare physician reimbursement system, instituting “site-neutral” Medicare payments for outpatient care and reducing spending in the 340B Drug Pricing Program for safety-net providers.

The bill also:

• Delays Medicaid disproportionate share hospital payment cuts until 2029
  Extends add-on payments for low-volume and Medicare-dependent hospitals, Medicare geographic payment adjustments for doctors, and ambulance payments through the end of the year
• Restores a 3.1% bonus for physicians participating in Medicare alternative payment models in 2026
• Delays reclassifications of hospitals under Medicare reimbursement rules until the end of the year
• Funds numerous disease-treatment and grant programs
• Extends in-home cardiopulmonary rehabilitation flexibilities
• Tightens rules for durable medical equipment under Medicare
• Funds graduate medical education programs through 2029
• Funds the National Health Service Corps
• Increases funding for the World Trade Center Health Program
• Extends special diabetes program funding
• Extends public health preparedness programs

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