How healthcare organizations can keep current and build resilience in 2025

For healthcare organizations that are highly regulated and highly dependent on federal funding, operational success comes with a big catch-22: High-quality care is expensive, but the organizations most in need of funding are often those least equipped to pursue it.

Budget constraints limit investment in technology that could improve billing and quality metrics, which are often prerequisites for new funding. Small leadership teams must balance grant writing, compliance and reporting with day-to-day service delivery. And persistent workforce shortages affect not only the ability to deliver care, but also to qualify for performance-based funding.

Against this backdrop, the administration change has tossed several more curveballs at already-stretched healthcare leaders.

By following the topics and recommendations listed in this article, organizations can better position themselves for short-term resilience and long-term success.

The first recommendation is to keep current — so here are some key policy changes to watch.

1. Reimbursement changes

Medicare and Medicaid reimbursements: The Centers for Medicare & Medicaid Services (CMS) has made updates to reimbursement models and requirements, with an increased focus on quality measures and value-based care. It’s essential for organizations to get up to speed on recent developments, including:

• CMS’s value-based insurance design model looks to reward high-quality facilities that serve large underserved populations and includes changes to purchasing programs for hospitals and skilled nursing facilities. The model also includes an update for CY 2025 requiring participants to address social determinants of health by offering supplemental nutrition, transportation or housing services.
  
  
• Changes to the Medicare Shared Savings Program (MSSP) include a “prepaid shared savings” option for Accountable Care Organizations (ACOs) with a history of earning shared savings. This allows ACOs to receive advance payments to invest in direct patient services, staffing or infrastructure.
  
  
• CMS decreased the Physician Fee Schedule on January 1. The temporary increase put in place last year expired. The new rate is $32.35, down from $33.29 in 2024.
  
  
• CMS has proposed a $21 billion increase in payments to Medicare Advantage Plans for CY 2026 to enhance plan stability. The public comment period closed in February, and CMS is expected to publish the final rate announcement on or before April 7, 2025.

Telemedicine reimbursements: Especially for rural healthcare organizations, the ongoing expansion of telemedicine reimbursements allowed during COVID-19 has been a game changer. Here are some recent developments:

• Medicare beneficiaries can continue to receive telemedicine for non-mental-health-related services in their homes through September 30, 2025 — and there are no geographic restrictions on originating sites for these services during this period.
  
  
• CMS has delayed implementing a requirement for an in-person visit within six months of an initial Medicare mental telehealth service and annually thereafter. This rule will not go into effect until at least September 30, 2025, or January 1, 2026, for federally qualified health centers (FQHCs) and rural health centers (RHCs).
  
  
• The list of Medicare-eligible telehealth practitioners now includes physical therapists, occupational therapists and speech-language pathologists.

   

• CMS has permanently expanded the definition of “interactive telecommunications system” to include two-way, real-time audio-only communication. This allows providers, including mental health providers, to use audio-only communication when the patient is not capable of using video technology or does not consent to the use of video.
  
  
• New Current Procedural Terminology (CPT) codes have been added to the Medicare Telehealth Services List to allow providers to bill for telehealth services. For example, code 98016, for short virtual check-ins, became a billing option starting in CY 2025.

2. New funding opportunities benefit rural healthcare centers

In September 2024, the Health Resources and Services Administration (HRSA) announced a $75 million investment to support rural healthcare. This funding aims to launch new opioid treatment and recovery services in rural communities, strengthen maternal healthcare and assist rural hospitals in maintaining operations.

Medicaid expansion, which was authorized under the Affordable Care Act and has been implemented in 41 states and the District of Columbia, has expanded Medicaid eligibility to adults with incomes up to 138% of the federal poverty level. This eases financial burdens for providers as well, particularly for rural healthcare organizations that have carried a disproportionate burden of uncompensated care — a situation that limits not just revenue, but also eligibility for matching grants that require a baseline of insured patients.

3. Tariffs likely to increase medical supply costs

The global supply chain disruption has led to higher costs for medical supplies, which make up about 10.5% of the average hospital’s budget. Tariffs on imports from countries like China have increased costs for critical, high-volume purchases, from PPE items like face masks and medical gloves to medical devices like syringes and needles.

These factors, compounded by inflation and supply chain volatility, can significantly impact cost management. Healthcare organizations need to stay informed about changes in tariffs, import duties and the availability of essential products.

4. New cybersecurity requirements

As cyberthreats continue to evolve, recent legislative changes have introduced stricter cybersecurity requirements for healthcare organizations to comply with the Health Insurance Portability and Accountability Act (HIPAA).

In January 2025, the U.S. Department of Health and Human Services (HHS) proposed significant updates to the HIPAA Security Rule, including the mandatory encryption of electronic personal health information (ePHI) both at rest and in transit, and the use of multi-factor authentication. Other requirements include:

• Required annual security audits must include vulnerability scanning every six months and penetration testing every 12 months.
• Organizations must maintain written security incident response plans, implement network segmentation and deploy anti-malware protection.
• Business associates are also required to notify covered entities within 24 hours of a breach.

Cybersecurity funding is available from federal grants and public-private partnerships to help healthcare organizations enhance their security infrastructure. Organizations may want to investigate these federal funding opportunities:

• HHS Hospital Preparedness Program
• Office of the National Coordinator (ONC) for Health IT
• Federal Communications Commission (FCC) – Rural Health Care Program
• Department of Homeland Security (DHS) Cybersecurity Grant Program

5. Changes in 340B drug pricing program

The 340B Drug Pricing Program remains a crucial source of financial relief for healthcare providers serving vulnerable populations. However, recent changes in 340B regulations have created challenges for many organizations.

Shift to rebate models: Some pharmaceutical manufacturers have moved away from providing upfront 340B discounts in favor of rebate models, where covered entities must purchase drugs at standard prices and then submit detailed rebate claims. This increases the administrative burden and may affect cash flow.

Increased audits and oversight: Manufacturers are increasingly requesting permission from HRSA to audit 340B-covered organizations. These audits are often detailed and resource intensive. HRSA has also intensified its own program integrity audits, focusing on drug diversion and duplicate discounts.

6. Federal grant disbursement and funding levels  

Federal grants for healthcare organizations continue to evolve. For organizations that rely on these funds to support operations and often don’t have large administrative and grant-writing teams, the changes can be challenging to keep up with.

One recent change to be aware of is a freeze on family-planning grants, announced on March 25. The administration has suspended approximately $120 million in federal grants for services including pregnancy testing, contraception and treatment of sexually transmitted infections, as it investigates the possible use of funds for diversity, equity and inclusion initiatives.

7. Executive orders and litigation

Recent executive orders — and, in many cases, resulting litigation — has created tremendous uncertainty for many organizations, including healthcare providers. Healthcare organizations need to be aware of new regulatory shifts and legal challenges that could impact everything from reimbursement rates to operational guidelines. Here are a few to be aware of:

• Enforcement of the Hyde Amendment (Executive Order 14182): Reaffirms the prohibition of federal funding for elective abortions, revoking prior executive orders that expanded access to reproductive healthcare.
  
  Current status: There is no pending litigation against this order, so healthcare organizations must ensure compliance with this funding restriction.
  
  
• Restrictions on Gender-Affirming Care for Minors (Executive Order 14187): Limits federal funding for healthcare providers offering gender-affirming treatments to individuals under 19. Organizations providing such care may face funding challenges and increased scrutiny.
  
  Current status: This order is currently being challenged in two court cases. In PFLAG v. Trump, a U.S. District Court judge issued a temporary restraining order preventing the enforcement of funding restrictions, which was extended on March 4. In State of Washington et al. v. Trump, a U.S. District Court judge issued an injunction on March 1 blocking the order’s enforcement in Washington, Minnesota and Oregon.
  
  
• Revocation of Executive Order 14087, “Lowering Prescription Drug Costs for Americans”: The original order directed the Center for Medicare and Medicaid Innovation to develop new payment models to control drug costs. Its rescission may affect reimbursement structures and financial planning for healthcare providers, since organizations that had begun aligning operations with the anticipated changes now face uncertainty. Investments made in preparation for these models may not yield the expected benefits, leading to potential financial and strategic challenges.
  
  Current status: While there are no specific legal challenges against the revocation of this executive order, the rescission has led to uncertainty about future drug pricing and has been met with concern from healthcare industry stakeholders.

Recommendations

When the must-do list feels overwhelming, here are some tips to help your team work smarter, not harder:

• Use free tech tools to stay current: If you’re watching policy changes that remain in legal limbo or waiting for regulations to be finalized, set up a Google Alert to receive an email whenever new information is released. New AI-based search engines can also save you time sifting through search results. You can prompt free tools like Perplexity, ChatGPT or others to “give me the latest updates on …” and then add your topic of interest.
  
  
• Team up: Consider regional partnerships or shared services models to pool grant writing capacity and strengthen back-office infrastructure. Engaging consultants with industry experience may also be a good investment.

   

• Invest in tech upgrades: Map out a digital transformation plan that aligns with current and anticipated funding opportunities — especially those supporting telehealth, quality improvement or data sharing.
  
  
• Gather meaningful metrics: Especially for organizations operating in non-Medicaid-expansion states, consider how charity care tracking, community benefit reporting and integrated care models can be used to strengthen funding applications and demonstrate impact.

How Wipfli can help

Wipfli’s experience in healthcare policy, tax and regulatory requirements has been a helpful guidepost for hundreds of organizations nationwide. Our team of professionals helps healthcare leaders with technology upgrades, compliance support, reimbursement optimization, workforce strategies and funding guidance. For more information, visit our website.