Federal Funding Deal Solidifies Telehealth Access, PBM Reform and Hospital-at-Home Authority

Congress and the White House finalized a bipartisan funding agreement this week that will shape care delivery for physicians and health systems nationwide. President Trump signed a roughly $1.2 trillion federal funding bill that restores full-year appropriations through September 30, 2026, while extending key healthcare policy provisions of direct relevance to clinical practices and hospital operations.

Telehealth Flexibilities Extended Through 2027

One of the most consequential outcomes for physicians is the extension of Medicare telehealth flexibilities. The funding package preserves pandemic-era virtual care policies, including reimbursement parity for telehealth visits, continued allowance of home as the originating site and expanded eligible providers, through at least 2027.

This extension provides crucial stability for telehealth programs that have become an important care modality in Los Angeles and across California. Prior to the pandemic, use of telemedicine was modest, but by 2021 more than 80 percent of U.S. office-based physicians reported using telemedicine for patient care, up dramatically from 16 percent in 2019. In California, nearly half of adults reported using telehealth in 2022, a four-fold increase compared with 2018.

New data from the AMA indicate telehealth remains widely used, with about 71 percent of physicians reporting weekly use in 2024, roughly three times higher than pre-pandemic levels. Use varies by specialty, with psychiatry, neurology and endocrinology among the highest adopters.

Local safety net innovations, such as Los Angeles County’s e-consult program, show how digital care models can relieve specialist bottlenecks. In that program, specialty responses occurred in an average of 2.6 days, and about 35 percent of patients were managed without a face-to-face specialist visit.

Voices from the Field

Physicians and telehealth advocates have been vocal about the importance of policy certainty. In a national survey conducted during the pandemic, physicians emphasized the need for stable reimbursement, noting that without current payment rates “primary care practices will close” and that continued telehealth coverage is essential to offer patients flexibility and maintain access.

National policy discussions also underscore the clinical care transformation enabled by virtual care. Leaders in the telehealth sector recently reiterated that virtual services are “not going away” but will need to evolve to sustain broad adoption and improve outcomes.

Hospital-at-Home Authority and Operational Planning

The funding deal also extends the Acute Hospital Care at Home waiver authority for multiple years. This gives health systems greater clarity to expand hospital-level care in patient homes — a model that can reduce inpatient burdens and improve patient experience. Advanced operational models, including virtual nursing and hybrid care coordination, require stable policy frameworks and reimbursement signals to scale efficiently. An expert panel at a recent national policy dialogue emphasized that durable authorization and clear quality expectations are critical for these programs to become a stable part of care delivery.

Pharmacy Benefit Manager Reform Enacted

The bill enacts reforms to pharmacy benefit manager practices under Medicare Part D. These changes increase transparency and limit certain compensation structures tied to list prices. While this represents a substantial policy shift after years of debate, stakeholders suggest ongoing work may be needed to fully address broader prescription drug pricing challenges. Current reform steps aim to improve accountability and align incentives with patient affordability considerations.

What This Means for Los Angeles Providers

For Los Angeles clinicians and healthcare leaders, the policy outcomes reinforce continuity in telehealth and hybrid care delivery. Practices that have integrated virtual visits into chronic care management, behavioral health and follow-up care should capitalize on extended coverage to refine care pathways and patient engagement strategies. Telehealth’s sustained use and high adoption rates signal its permanence in the local healthcare landscape.

Hospital systems investing in home-based acute care now have a longer runway to scale operations and workforce models that integrate virtual nursing and home diagnostics. Meanwhile, PBM reform may affect formulary negotiations and Part D strategy for practices serving Medicare populations.

As federal policy evolves, physician leaders in Los Angeles are encouraged to engage with regulators and payers to ensure that implementation details, particularly around reimbursement and quality metrics, support patient-centered care and workforce sustainability.

Physician Advocacy Matters. Now, More than Ever.

While the latest funding deal provides short-term stability, many of these provisions remain time-limited and subject to future political negotiation. Telehealth flexibilities, hospital-at-home models, Medicare payment policy and prescription drug reforms will continue to evolve and physician voices will shape what comes next.

Through LACMA+CMA, Los Angeles physicians are represented at both the local and state levels, advocating for policies that protect patient access, reduce administrative burden and sustain viable medical practice across all modes of care. Membership ensures physicians are not only informed about policy changes, but actively engaged in advancing solutions that reflect real-world clinical practice.

As federal and state healthcare decisions accelerate, collective physician advocacy has never been more critical. Joining LACMA+CMA strengthens the unified voice of physicians working to shape the future of healthcare in Los Angeles and across California.

JOIN NOW.