Hospitals and pharmacy benefit managers who've repeatedly been targeted in congressional debates over health spending appear to have ducked major federal reforms that could have upended how they do business.

Why it matters: The big congressional spending deal that was unveiled this week with health policy attachments largely keeps the status quo for the two powerful industries, potentially leaving patients exposed to higher health costs.

• The must-pass package was viewed as the likeliest vehicle for big policy changes before the elections. Barring a surprise, any debate will be punted to a lame-duck session toward year's end.
• "The combination of industry lobbying and dysfunction in Congress have conspired to stop anything from happening" on proposals to change how Medicare pays the providers or impose new price transparency requirements, said Larry Levitt, executive vice president of health policy at KFF.

Between the lines: After Congress addressed drug prices through the Inflation Reduction Act in 2022, attention on the hill shifted to PBMs, who negotiate with drugmakers on behalf of insurers and employers.

• Members of both parties argued the companies were not passing enough of the discounts they received along to their clients, and weren't transparent enough in their business practices.
• But lawmakers couldn't winnow an array of House and Senate bills and settle on a consensus plan. Republicans, in particular, were split on whether reforms should apply to private health insurance or just those on Medicare.
• PBMs argue that they are in the business of taking on drug companies to lower prices and that lawmakers should focus on the manufacturers themselves if they want to control costs.

Hospitals also faced scrutiny, with lawmakers focusing on an industry that accounts for a much larger share of health care costs than prescription drugs.

• One major proposal, known as site-neutral payments, sought to lower costs for the government and for patients by having Medicare pay the same for outpatient services regardless of whether they're delivered in hospital outpatient departments or independent physicians' offices.
• But hospitals vigorously fought the idea, arguing it would lead to diminished patient care and hurt struggling rural hospitals.
• An effort to improve transparency by requiring hospitals to disclose prices, which even got a boost from a Super Bowl ad with prominent musicians, also fell victim to internal congressional squabbling.

By the numbers: The American Hospital Association boosted its lobbying by $3 million, up to over $25 million, from 2022 to 2023.

• PCMA, the trade group for PBMs, almost doubled its spending in that time period, from $8.7 million to $15.4 million.

What's next: There's a second government funding package that needs to be passed by March 22, though working out all of the health policy differences in that short of a timeframe would be a major challenge.

• The reform initiatives still have powerful backers in lawmakers such as House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.), who joined with Democrats on her panel on both hospital costs and PBM changes.
• Senate Finance Committee Chairman Ron Wyden (D-Ore.) is another influential advocate for PBM changes, though he's expressed reservations about how Medicare hospital payment changes could affect rural areas.

The bottom line: Unlike the 2022 push to allow Medicare to negotiate with drug companies, these changes are wonkier and harder to explain to the public, even if they could end up saving patients money.

• "The public isn't clamoring for action on these measures," Levitt said. "Most voters likely have no idea what a PBM is.
• "This has been about a handful of motivated members of Congress on both sides of the aisle wanting to get something done, but it's hard to do that in the face of industry opposition."

A version of this story was published first on Axios Pro. Unlock more news like this by talking to our sales team.