On January 23, 2026, by a vote of 341-88, the House of Representatives passed a bipartisan, three-bill minibus to fund the Departments of Labor, HHS, Education, Defense, Transportation, Housing and Urban Development and related agencies, totaling roughly $1.2 trillion in spending. HHS would be fully funded until October 2026. It includes provisions requiring hospital outpatient departments to obtain a separate National Provider Identifier (“NPI”), the extension of telehealth flexibilities, a reduction in cuts to Medicaid Disproportionate Share Hospital (“DSH”) payments, and other program renewals and extensions.
Under a House procedural measure, this three-bill minibus was combined with three other appropriations bills, including funding for the Department of Homeland Security (“DHS”), before being sent to the Senate for its approval this week. However, following recent events in Minneapolis, Senate Democrats—at least seven of whom are needed to join with Republicans to pass the appropriations package—are insisting on changes to the DHS/ICE provisions before approving the six-bill package. Democrats contend that the Senate could pass five of the six bills and renegotiate the DHS bill, but the House—which would need to approve the amended appropriations package—is out of session this week.
The package provides $116.6 billion in discretionary funding to HHS across a broad range of healthcare areas, including rural health, support for community health centers, skilled healthcare providers, the Centers for Disease Control and Prevention (“CDC”), Head Start, and block grants for mental health and substance use.
Specific provisions of the package related to healthcare providers include the following:
- Hospital Outpatient Department Requirements – The bill would require off-campus hospital outpatient departments to obtain a separate NPI and use it to bill for services provided in the outpatient department. The deadline to obtain and start using the separate NPI is January 1, 2028. Hospitals would also be required to submit an attestation certifying compliance with Medicare requirements for outpatient departments to be sufficiently separate from the hospital. The bill also requires HHS-OIG to conduct an analysis of the reviews and determinations in connection with these rules by January 1, 2030.
- Telehealth Flexibilities – The bill extends telehealth flexibilities through 2027, including federally qualified health centers, rural health clinics, and providers of mental health services furnished through telehealth. Additionally, the acute-care hospital-at-home program is extended through FY30.
- Out-of-State Provider Eligibility – The bill allows eligible out-of-state providers to furnish items and services to Medicaid beneficiaries without facing screening or enrollment requirements above the minimum necessary requirements, such as the provider’s name and NPI.
- Medicaid Disproportionate Share Hospital Payments – The bill delays and reduces the contemplated DSH payment cut from $24 billion over three years to $8 billion in one year, FY28. The bill also gives states the option to distribute unspent DSH allotments from prior years to a hospital up to a modified cap, so long as the retroactive allotment of unspent funds does not extend farther back than September 2022. Additionally, the bill protects hospital funds previously received, prohibiting recoupment of payments already made to hospitals based on the previous methodology. Finally, the bill extends Tennessee DSH allotments through the end of FY 2026 and into 2027 and eliminates DSH allotment reductions that would have stretched into 2028.
- MA Plan Requirements – The bill imposes stricter requirements for MA plans to maintain accurate provider directories.
- Other Program Renewals and Extensions – The bill extends increased inpatient hospital payment adjustments for certain low-volume hospitals through 2027; add-on payments for ambulance services through 2027; and provides a 3.1% bonus for physicians who participate in advanced alternative payment models through 2026.
A copy of the bill is available here.
