On Tuesday, February 4, Gov. Josh Shapiro delivered his annual budget address to the Pennsylvania General Assembly. Gov. Shapiro’s budget proposal serves as the initial step in a months-long budgeting process, but its most important purpose is a statement of the Shapiro administration’s priorities this year. Following are highlights of the governor’s address that may have notable impacts on Community Health Centers:

Addressing Rural Health Care Worker Shortages – Specific proposals include:

• $5 million to support workforce initiatives to educate, train, and recruit nursing professionals.

• Increase base funding by $20 million to counties to provide critical behavioral health services and address deepening workforce shortages. This is the third year of the administration’s three-year commitment to invest $60 million into the county behavioral health system.

• $15 million in new funding for the Primary Health Care Practitioner program. Of this $10 million to expand the Primary Care Loan Repayment Program, broadening the program’s geographic eligibility requirements and supporting behavioral health care workers in all regions of Pennsylvania. An additional $5 million would be used to expand programs to address workforce shortages specific in rural areas.

• Supporting full practice authority to nurse practitioners who work under a licensed physician for at least three years. This legislation has passed the State Senate in previous years but has not cleared the House of Representatives.

Investing in Apprenticeships and Other Paths to Success

Many CHCs in Pennsylvania are now offering apprenticeships and other forms of on-the-job training. The governor’s proposal includes:

• A dedicated $12.5 million Workforce and Economic Development Network appropriation, leveraging $10 million in existing funds and $2.5 million in new state funds to train additional workers.

• $2 million for the creation of the Career Connect program, a statewide program to build internships at Pennsylvania employers.

Addressing Structural Challenges at Rural Hospitals

The Governor convened a rural health care working group in 2023 (including several PACHC members and staff) to find a solution to this problem. Based on those conversations, the Governor’s proposed budget:

• Leverages a $10 million investment to draw down an additional $26 million in federal matching funds to provide immediate relief to Pennsylvania hospitals.

• Invests another $10 million in state funds to help meet rural hospitals’ needs.

• Adds $20 million for a new appropriation – ‘Patient Safety and Support for Hospitals’ – to “address barriers to care” at all hospitals.

Continuing to Make Mental Health Reforms

The Governor is calling on the General Assembly to send a bill to his desk that closes a loophole that allows insurance companies to deny coverage for mental health services provided to students inside the walls of a school, even though those same services would be covered in a mental health professional’s office across the street.

Transitions from Incarceration

The budget proposal also includes $4.8 million to provide Medical Assistance coverage for individuals transitioning from incarceration to the community. This is one of the federal 1115 waiver components (“Keystones to Health”) approved by CMS.

Following Wednesday’s article about Apexus (the 340B Prime Vendor), The New York Times published a second article about 340B this week, focusing on how drops in the sticker price for insulin have impacted CHCs and their low-income patients. The article explains how lower “sticker prices” caused 340B prices for insulin to skyrocket last year, and how this has affected CHCs patients and operations. While the human impacts of these changes can be devastating, the article clearly shows how CHCs are good stewards of the 340B program, using it to expand access to affordable medications and other important services to low-income patients. For this reason, we advise CHCs to keep this article handy to share with policymakers.

Federal Poverty Level (FPL) guidelines are issued each year by the U.S. Department of Health and Human Services (HHS) based on information gathered by the Census Bureau. The bureau uses that data to calculate the total cost of essential resources used by an average person in a year. FPLs are used to determine eligibility for certain programs and benefits, including savings on Marketplace health insurance and Medicaid and CHIP coverage. The 2025 guidelines establish $32,150 as the FPL for a family of four, a 3% increase from the previous FPL. View the full HHS chart.

Pennie, Pennsylvania’s Health Insurance Exchange, saw record-breaking enrollment of 496,661 customers for the 2025 Open Enrollment period. Nationally 24.2 million people have enrolled in coverage with a few state-based exchanges remaining open till the end of January. While this is remarkable, those currently enrolled may not be able to access extended enhanced premium tax credits in 2026 if Congress does not extend the tax credits for 2026 and beyond. Currently, 90% of Pennie enrollees could face substantial increases in their monthly premium should these credits not continue. Since 2021 these enhanced tax credits have not only reduced monthly premiums but improved access to preventive care for chronic conditions and provided some financial security for vulnerable populations.

The U.S. Drug Enforcement Administration (DEA) released three new rules impacting prescribing controlled substances via telehealth, including the long-awaited regulations regarding establishing a telehealth prescribing registration process that was first mandated by Congress in 2008. While the registration regulation is a proposed rule, the two additional rules regarding buprenorphine and Veterans Affairs providers are final rules:

·    Proposed Rule – Special Registrations for Telemedicine and Limited State Telemedicine Registrations

·    Final Rule – Expansion of Buprenorphine Treatment via Telemedicine Encounter

·    Final Rule – Continuity of Care via Telemedicine for Veterans Affairs Patients

Each of the rules seeks to create permanent exceptions to the existing in-person evaluation requirement related to the prescribing of controlled substances. Readers may recall that the DEA’s current permanent telehealth prescribing policies have been waived since the onset on the COVID-19 public health emergency (PHE) with the current temporary waiver currently slated to expire at the end of 2025. While these final and proposed regulations by the DEA would expand permanent policies, they will not be as broad as what has been seen during the temporary waiver period.

The U.S. Preventive Services Task Force released a final recommendation statement on screening for osteoporosis to prevent fractures. Screening for osteoporosis can help prevent fractures in women 65 and older and in younger women who have gone through menopause and are at increased risk. View the recommendation, the evidence on which it is based, and a summary for clinicians.

The U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), announced the selection of 15 additional drugs covered under Medicare Part D for price negotiations. In accordance with the Inflation Reduction Act, the negotiations with participating drug companies for these 15 drugs will occur in 2025 and any negotiated prices will become effective in 2027. Between November 2023 and October 2024, about 5.3 million people with Medicare Part D coverage used these drugs to treat a variety of conditions, such as cancer, type 2 diabetes, and asthma. These selected drugs accounted for about $41 billion in total gross covered prescription drug costs under Medicare Part D, or about 14%, during that period. When combined with the total gross covered prescription drug costs under Medicare Part D of the 10 drugs selected for the first cycle of negotiations over that same time, this represents over a third of total gross covered prescription drug costs under Medicare Part D. You can read more about the announcement and selected drugs in this HHS Press Release and CMS Factsheet.

President Trump ordered all executive departments and agencies to take the following steps:

·    Do not propose or issue any rule in any manner, including by sending a rule to the Office of the Federal Register (the OFR), until a department or agency head appointed or designated by the President after noon on Jan. 20, 2025, reviews and approves the rule.

·    Immediately withdraw any rules that have been sent to the OFR but not published in the Federal Register

·    Consistent with applicable law and subject to the exceptions described in paragraph one, consider postponing for 60 days from the date of the memorandum the effective date for any rules that have been published in the Federal Register.

President Trump signed an Executive Order that terminates DEI preferencing in federal contracting and directs federal agencies to combat private sector discrimination. The enforces long-standing federal statutes and faithfully advances the Constitution’s promise of colorblind equality before the law. Read the fact sheet.

Congress faces an array of policy choices as it confronts large federal deficits and rising federal debt. In June 2024, under the assumption that current laws governing taxes and spending generally would not change, the Congressional Budget Office (CBO) projected that the federal deficit would average $1.9 trillion per year between 2025 and 2034, or 5.4 percent of gross domestic product (GDP) over that period. In comparison, over the past 50 years, the annual deficit averaged 3.7 percent of GDP. In response, the CBO published Options for Reducing the Deficit: 2025 to 2034 in December 2024.