As markup begins, AHA issues detailed comments on E&C bill with Medicaid changes

The House Energy and Commerce Committee May 13 began to mark up its portion of the fiscal year 2025 reconciliation bill. The committee has been instructed to reduce deficits by $880 billion, with significant Medicaid changes and cuts being considered.

The AHA May 13 sent a detailed statement to the E&C Committee with comments on certain sections of the bill, including potential changes to policies related to provider taxes and state directed payments, among other provisions.

Specifically, the bill would freeze, at current rates and amounts, what states can assess through provider taxes as of the date of enactment of this legislation and prohibits states from establishing new provider taxes.

“The AHA is greatly concerned about the significant disruption this policy change will have on states’ ability to fund their Medicaid programs,” the AHA said. “We believe the proposed restrictions on provider taxes fail to recognize the critical role they play in closing significant gaps in the cost of care for essential services.”

In addition, the bill directs the Department of Health and Human Services to revise current regulations to limit state-directed payments for services furnished on or after the enactment of this legislation from exceeding the total published Medicare payment rate.

SDPs are used to support essential hospital services, including behavioral health and obstetrical services, and to create incentives to improve quality and health outcomes. They are particularly important in rural areas, where hospitals are sometimes the sole source of care in a community.

“Setting limits on the amount that can be paid for SDPs into perpetuity will impact the delivery of care for both Medicaid beneficiaries as well as the larger communities served by our hospitals and health systems,” the AHA said.

View AHA’s detailed comments submitted to the E&C committee. AHA May 12 shared a Legislative Advisory with summaries of provisions included in the bill.

The May 13 E&C Committee markup is expected to last well into the night or tomorrow morning. AHA will continue to provide updates.