Why It Matters

The House Energy and Commerce Subcommittee on Health examined 17 legislative proposals addressing Medicare payment reform, health care access and cybersecurity on Sept. 15, as health care providers face pressure from payment uncertainty and ransomware threats. The hearing surfaced a core tension: While Republicans and Democrats agree that Medicare's payment system needs modernization, Democrats warned that administration policies are driving providers toward closures and forcing millions off insurance rolls.

The Big Picture

Congress has grappled with Medicare physician payment reform for more than a decade. A Senate Finance Committee hearing in 2019 examined implementation of the Medicare Access and CHIP Reauthorization Act and the road ahead, while the House Ways and Means Committee held hearings on the law's effects in 2016. The issue remains pressing as physicians face long-term concerns about Medicare payment adequacy. CMS also finalized a 2.5% efficiency adjustment for certain non-time-based services under the Medicare Physician Fee Schedule, including some surgical procedures, diagnostic imaging interpretations and outpatient interventions.

The health care sector also confronts an escalating cybersecurity crisis. The 2024 Change Healthcare ransomware attack caused widespread disruption to claims processing across the U.S. health care system. In the first quarter alone, health care organizations recorded 120 ransomware attacks, according to figures cited by lawmakers, while ransom demands and the costs associated with breaches have continued to rise.

The Senate Health, Education, Labor and Pensions Committee voted 22-1 on Feb. 26 to advance S. 3315, the Health Care Cybersecurity and Resiliency Act of 2025, sponsored by Sen. Bill Cassidy (R-LA) with Sens. Maggie Hassan (D-NH), John Cornyn (R-TX) and Mark Warner (D-VA). The House hearing examined a House version of the proposal alongside Medicare payment, rural health and other health care legislation.

What They're Saying

The hearing revealed competing approaches to health care policy. On payment reform, witnesses emphasized the urgency of action. "Medicare physician payments have declined approximately 29 percent in real terms since 2001 when adjusted for inflation," according to testimony from Murad Alam, president of the American Academy of Dermatology Association. Alam called for permanent elimination of the PAYGO sequester cuts and urged Congress to reform the budget-neutrality requirement that can require payment reductions to offset increases elsewhere in the physician fee schedule.

Rebecca Andrews, immediate past chair of the American College of Physicians Board of Regents, backed the Patients First Act and the Promoting Fairness for Medicare Providers Act, which address Medicare physician payments. She also supported the Access to Claims Data Act, which would expand physician access to Medicare claims data for performance measurement and care coordination.

On cybersecurity, Greg Garcia, executive director for cybersecurity at the Healthcare and Public Health Sector Coordinating Council, emphasized the scale of the threat. Health care is a heavily targeted critical infrastructure sector for ransomware attacks, he noted, while small and rural hospitals often lack dedicated cybersecurity staff and sufficient resources. Garcia supported the Health Care Cybersecurity and Resiliency Act and the Rural Hospital Cybersecurity Enhancement Act and urged Congress to strengthen federal cybersecurity coordination and resources.

Anthony Pudlo, CEO of the Tennessee Pharmacists Association, highlighted pharmacy access challenges. In rural Tennessee, pharmacies can be among the few health care providers readily accessible to patients. Pudlo supported the Ensuring Community Access to Pharmacist Services Act, which would provide Medicare coverage for specified pharmacist services under certain circumstances. Pudlo also called for additional pharmacy benefit manager reforms.

Rep. Diana DeGette (D-CO), the subcommittee's ranking member, stated that an estimated 15 million people will lose access to health care because of Medicaid changes and the expiration of enhanced Affordable Care Act premium tax credits. She argued that when more people are uninsured and underinsured, uncompensated care costs increase throughout the health care system. DeGette also said providers across the country have begun laying off staff, reducing services or closing facilities amid financial pressures.

Dr. Eilean Attwood, an OB-GYN and immediate past chair of the American College of Obstetricians and Gynecologists' Committee on Health Economics and Coding, testified that nearly 150 rural hospitals have stopped or plan to stop providing obstetric services between 2020 and the end of this year. She described fielding obstetric emergency transfer calls, including one the weekend before the hearing. The Rural Obstetrics Readiness Act aims to improve rural hospitals' and practitioners' preparedness for obstetric emergencies.

Political Stakes

The hearing reflects broader disagreements over federal health care policy. Republicans control both chambers of Congress, with Rep. Mike Johnson (R-LA) serving as House speaker and Sen. John Thune (R-SD) as Senate majority leader. Reps. John Joyce (R-PA) and Kim Schrier (D-WA) introduced H.R. 9693, the Patients First Act. Reps. Greg Murphy (R-NC) and Brad Schneider (D-IL) introduced H.R. 8163, the Provider Reimbursement Stability Act. The American Medical Association backed the Provider Reimbursement Stability Act, while the American College of Physicians endorsed the Patients First Act.

Democrats used the hearing to highlight what they view as administration policies undermining health care access. DeGette's warnings about Medicaid changes and insurance coverage losses contrasted with the committee's bipartisan consideration of legislation intended to stabilize provider payments. Providers also face another potential reduction in Medicare physician payments next year because a temporary 2.5% increase in the physician fee schedule conversion factor expires after this year.

While cybersecurity legislation has drawn bipartisan interest, proposed federal cybersecurity requirements have also generated concern over implementation costs. A coalition of hospital and provider associations asked HHS to withdraw or substantially narrow a proposed cybersecurity rule, citing implementation costs and timelines that they argued would disproportionately burden rural hospitals and small physician practices.

The Other Side

Rural and small providers face particular pressure from payment uncertainty and regulatory complexity. Hospital and provider associations cited implementation costs and timelines in asking HHS to withdraw or narrow proposed cybersecurity requirements, arguing they would fall hardest on rural hospitals, small physician practices and other under-resourced providers. The American Hospital Association has expressed support for efforts to improve rural hospital cybersecurity resources.

Congress has also taken steps to address pharmacy benefit manager practices, including transparency and compensation provisions affecting Medicare Part D. Witnesses nevertheless argued that additional changes are needed to address pharmacy reimbursement and access.

What's next

The Trump administration has shown willingness to negotiate, the September 14 agreement on ethics rules suggested flexibility, but the Senate vote demonstrated that bipartisan consensus remains elusive.

The cryptocurrency market capitalization was $2.03 trillion as of the time of the hearing. Bitcoin and Ether combine to represent approximately 61 percent of the cryptocurrency market. Between 13,000 and 20,000 cryptocurrencies exist with a total market capitalization of over 2 trillion dollars.

The hearing suggested that Main Street interest in cryptocurrency is growing, even as Washington remains divided on how to regulate it.

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