After 26 hours of debate, several House committees passed budget reconciliation bills that seek to pay for an extension of tax cuts expiring at the end of the year. The Energy and Commerce Committee, which was tasked with finding $880 billion in savings, adopted many cuts impacting Medicaid. However, because of the joint efforts of AHPA health systems and our industry partners, other policies harming providers such as site neutral payments, Medicaid per capita caps and 340B payment cuts, were ultimately excluded from the bill. The next step is for the House Budget Committee to combine the bills into one that is presented to the House floor by Memorial Day. Some Republican legislators have already spoken against the bill; as negotiations continue, the language of these provisions may change. AHPA will continue to engage in advocacy efforts and provide updates.  

Below are key provisions included in the budget reconciliation bills based on our preliminary review. 

• Freezes provider taxes at current levels and adds limits to Directed Payment Programs. Thanks to a last-minute amendment our systems advocated for, directed payments that are in “pre-print,” meaning they are already approved or that have been submitted to CMS for approval before the bill’s date of enactment, would be grandfathered in and renewed as long as they are not increased above the grandfathered amount. 

• Adopts monthly, 80-hour work and civic engagement requirements on “able-bodied” recipients, with exceptions to protect vulnerable patients.  

• Shrinks the Medicaid retroactive coverage from 90 days to 30 days before application, effective October 1, 2026. 

• Repeals the minimum staffing requirements for nursing homes that were adopted by the Biden Administration.  

• Allows states to charge co-pays for Medicaid expansion adults, effective in 2028. 

• Adopts budget neutrality for Section 1115 demonstration waivers. 

• Lowers the federal government’s match by 10% for states that use state funds to provide health coverage to aliens without lawful resident status, effective in 2027. 

• Prohibits coverage of gender-affirming care with some exceptions (e.g., puberty treatment and for treatment of other medical conditions). 

• Imposes a 10-year ban on state legislation and regulations on Artificial Intelligence. This policy is intended to prevent a patchwork of state-level requirements from interfering with federal efforts to modernize and secure federal data systems.  

• The House Agriculture Committee advanced controversial legislation to cut up to $300 billion in food aid. If adopted, it would require a significant overhaul of the Supplemental Nutrition Assistance Program (SNAP), sharply increasing cost-sharing for states.