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Breaking Down the One Big Beautiful Bill Act: Select Health Care Provisions Impacting Addiction Medicine
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On May 22, 2025, the US House narrowly passed its budget reconciliation bill, H.R. 1 - the One Big Beautiful Bill Act, by a vote of 215 to 214. While this legislation would positively update the conversion factor under the Medicare physician fee schedule, it is also expected to reduce federal Medicaid spending by billions of dollars over 10 years, decrease Medicaid rolls by the millions, scale back federal support for the Affordable Care Act’s marketplaces, and restrict states’ use of provider taxes. ASAM will continue to monitor the bill’s progress in the Senate, and keep members updated on future opportunities to influence the bill.
The bill’s major health care provisions impacting addiction medicine include:
Section 44102 – Moratorium on implementation of rule relating to eligibility and enrollment for Medicaid, CHIP, and the Basic Health Program: This section would place a moratorium through January 1, 2035, on CMS’ final rule simplifying Medicaid eligibility and enrollment processes.
Section 44108 – Increasing frequency of eligibility redeterminations for certain individuals: Starting December 31, 2026, states would redetermine Medicaid eligibility every 6 months (instead of annually) for the Medicaid Expansion population.
Section 44111 – Reducing expansion FMAP for certain States providing payments for health care furnished to certain individuals: As of October 1, 2027, states offering comprehensive health benefits or financial aid for health coverage to individuals ineligible for federal Medicaid due to immigration status (excluding lawfully residing children and pregnant women) would see their Federal Medical Assistance Percentage (FMAP) reduced from 90% to 80%.
Section 44131 – Sunsetting eligibility for increased FMAP for new expansion States: The American Rescue Plan’s 5% bump for new Medicaid expansion states would end on January 1, 2026, for states that did not expand between March 11, 2021, and January 1, 2026.
Section 44132 – Moratorium on new or increased provider taxes: After enactment, state increases in provider tax increase would be deducted from federal match reimbursement to the state. Pre-existing state laws or regulations allowing for additional provider taxes over time would remain permissible. This provision shares similarities with the CMS proposed rule released on May 12, 2025. Every state but Alaska has these taxes.
Section 44133 – Revising payments for certain State directed payments: Many states require Medicaid managed care organizations (MCOs) to increase provider rates to carry out quality initiatives, but this section would limit these future “state-directed payments” to 100% of the Medicare rate for expansion states and 110% of the Medicare rate for non-expansion states.
Section 44141 – Requirement for States to establish Medicaid community engagement requirements for certain individuals: Beginning December 31, 2026, Medicaid expansion eligibility (ages 19-64) would necessitate at least 80 hours/month of work, volunteer, or education activity; exceptions would apply for people with a substance use disorder. Non-compliance would also disqualify individuals from ACA premium tax credits. The HHS Secretary must issue implementation guidance for states by December 31, 2025.
Section 44142 – Modifying cost-sharing requirements for certain expansion individuals under the Medicaid program: Effective October 1, 2028, certain Medicaid Expansion enrollees (incomes over 100% of the federal poverty line) would be subject to new cost-sharing requirements. Exemptions for emergency care, pediatric care, prenatal care, primary care, and mental health and substance use disorder services would apply.
Section 44201(a) – Addressing waste, fraud, and abuse in the ACA Exchanges: This section would establish a nationwide annual enrollment period from November 1-December 15, ban special enrollment periods (e.g., those based on low income), and require additional eligibility verification.
Section 44304 - Modifying update to the conversion factor under the physician fee schedule under the Medicare program: This section would positively adjust the conversion factor under the Medicare physician fee schedule by linking it to the Medicare Economic Index.
For additional summaries, check out: