DCMedical News: Tuesday, February 13, 2018
DCMedical News
Washington, D.C.
Tuesday, February 13, 2018
To our new readers: This is an independent newsletter, published every day that one or another House of Congress is in session. Subscription information will be found at the bottom of these pages.
THE BIG STORY TODAY IN HEALTH CARE
The Administration sent its $4.4 trillion budget to Congress, beginning the appropriations process for FY2019 (the federal budget fiscal year, 10-1-2018 to 9-30-2019). The big picture, here, from the Committee for a Responsible Federal Budget.
At what level are the federal agencies spending now? They are operating at the level of FY2017 funding.
What about the “Budget Bill” passed February 9th? That bill proposes additional spending (higher caps) for FY2018 and FY2019, a total of $320 billion more than would have otherwise been authorized.
What happens now? The Administration, which proposes, as it did today, and Congress, which disposes, have to complete the appropriations process for FY2018. For this purpose, the bill passed February 9 included a six week stop-gap spending measure. In theory, by March 23rd, the end of the six weeks, the appropriations process for FY2018 (which will be nearly six months old by that day) will be complete, and some higher spending will take place.
Here are documents which you may want to consult and retain concerning this budget, the first full budget produced by the current Administration:
Highlights of the Administration budget (160 pages) can be found here.
The budget’s “analytical perspectives” (338 pages) can be found here.
The budget’s “major savings and reforms” (202 pages) can be found here.
The budget appendix (1,306 pages) can be found here.
Budget historical pages (340 pages) can be found here.
Perhaps most important, the budget for health care spending and for the Department of Health and Human Services (138 pages) can be found here.
HIGHLIGHTS OF THE ADMINISTRATION BUDGET FOR THE HEALTH FIELD
Reduction in “mandatory spending,” as follows:
The proposal will reduce by $1.66 trillion the “mandatory spending” which is not part of the annual appropriations process, over the course of a decade. This amount would be realized primarily through changes in Medicaid and Medicare. Medicaid would be transformed into block grants. Slower growth in Medicaid and in the subsidies of the insurance exchanges will yield $675 over the decade. This is the Graham-Cassidy-Johnson-Heller proposal, $1.2 trillion in grants to states to replace Medicaid expansion and exchange subsidies. See below under insurance for more.
The largest portion of these savings comes from “repealing and replacing” PPACA, some $675 billion. That $675 billion, in turn, is a net figure of “savings” produced by $1.5 trillion in reductions to Medicaid; repeal of the exchange subsidy after two years; a $1.2 trillion increase in “market-based” grants to the states; and various reductions in Medicare.
For Medicare, the administration budget proposes a reduction of $554 billion, including reduced reimbursement to post-acute care providers, graduate medical education programs, subsidies for uncompensated care, and higher payment to hospital-owned physician offices (site-of-service differential.
Other savings are proposed through curbs on Medicare payment for drugs, including authority to negotiate Part D prices and to limit reimbursement for Part B drugs prescribed by physicians. Overall, mandatory spending outside of Social Security, Medicare and Medicaid would have 7% cuts over the next ten years, most of it from a student loan repayment plan and from changes in the Supplemental Nutrition Assistance Program (SNAP).
Reduction in “discretionary spending,” as follows:
For discretionary spending in HHS, OMB’s figures show a reduction of 20%, from FY 2017’s $87 billion to FY2019’s $69.5 billion, while budget details reported by HHS show an increase, to $85.4 billion. (See below, coming hearings on the budget of HHS.)
Other provisions directly or indirectly involved with health:
For the VHA, additional spending of $85.5 billion, background here.
Paid family leave (state-specific, beginning in 2021, six weeks of paid leave), but a 21% cut in Labor Department funding, for example in job training.
Supports passage of the Graham-Cassidy-Heller-Johnsonville to transfer revenues to the states which come to the federal government from PPACA provisions, so that states might develop their own health care plans.
Supports repeal of the Medicaid expansion which took place under PPACA, turning federal funding for the program into a block grant. Savings from these efforts at “deconstruction” of PPACA are projected to produce $675 billion.
DOCTORS AND OTHER HEALTH PROFESSIONALS
Graduate medical education: decreased by $48 billion over ten years.
HOSPITALS AND OTHER HEALTH CARE FACILITIES
Hospitals would be paid for professional services of physician practices they own at the physician rate, lower than the hospital outpatient rate. This is the “site of service differential,” which has fueled hospital acquisition of physician practices.
Some $70 billion is to be saved by “targeting” payments to hospitals treating the uninsured.
Post-acute care providers would be paid under a “single, unified payment system.” This would include skilled nursing facilities, home health agencies and rehabilitation facilities.
HEALTH INSURANCE, MEDICARE, MEDICAID, COMMERCIAL
As noted above, long term reductions are proposed for both Medicare and Medicaid, totaling more than one trillion dollars over ten years.
PPACA: The budget provides $812 million to fund the PPACA risk corridor program, allowing HHS to repay insurers. Also, Cost-Sharing Reduction (C-SR) payments would be made for FY2018 through the end of calendar year 2019.
Medicaid: In addition to the block grant program, states would be given authority to develop formularies (see below under Pharma). Medicaid rules would also be changed to allow co-payment charges for beneficiaries using emergency rooms in the absence of an emergency, and to deny Medicaid funding to some immigrants.
PHARMA
The Administration budget proposes various steps which it contends will lower drug prices generally. The ways through which the budget will work to lower prices (but also spur pharmaceutical innovation) were described in the report of the White House Council of Economic Advisers entitled “Reforming Biopharmaceutical Pricing at Home and Abroad,” and found here.
State Medicaid program drug expense: the Administration proposes to give up to five states the ability to develop limited formularies, and to negotiate directly with pharmaceutical manufacturers on prices.
Medicare: may allow pass through of rebates to consumers; exclude rebates from out-of-pocket costs; and shift drugs billed under Part B to the Part D program. The last of these would avoid the conflict over Medicare negotiating prices directly, and leave it to the insurance companies (Part D carriers).
Opioid abuse: $10 billion in new HHS funding, coming from cuts to other programs. SAMHSA (Substance Abuse and Mental Health Services Administration) would have $700 million in cuts, but $1.2 billion for new opioid-specific programs, projected to go the states as grants as authorized in 2016 by the 21st Century Cures Act.
ASIDES
Fax machines: CNBC has fun (here) with the “backward” nature of health care, still using fax machines and pagers (“beepers”). Medical students are puzzled, never having seen a fax machine or having used a pager. “Thousands of would-be doctors from across the country are learning to use outdated technologies like pagers and fax machines for the first time while in medical training.” But consider this: how many times have miscreants stolen 15 or 20 million faxes from the unlocked car of an inattentive clerk? How often do residents-in-training lose themselves, deep in the apps on their pager? Just a thought, or two.
EVENTS & MEETINGS
Your February & March Calendar:
February 14
10:00 a.m., Ways and Means Committee, Budget proposals for the Department of Health and Human Services, livestreamed at waysandmeans.house.gov/live.
10:15 a.m., Committee on Energy and Commerce, Subcommittee on Oversight, examines the impact of consolidation in the health care field. Among the stars: Leemore Dafny and Martin Gaynor. Webcast at http://energycommerce.house.gov.
February 15
9:00 a.m., Senate Finance Committee hearing on the budget of the Department of Health and Human Services.
10:00 a.m., Committee on Health, Education, Labor and Pensions, Subcommittee on Workforce Protections, on the opioid epidemic implications for America’s workplace.
Noon, CMS Open Forum on BPCI Advanced, https://engage.vevent.com/rt/cms2/index.jsp?ecid=780.
12:30 p.m., The Health Subcommittee of Energy and Commerce will hold a hearing entitled, “Oversight of the Department of Health and Human Services.” Livestreamed.
February 21
11:00 a.m., at Medicare.gov, Physician Compare 90-minute webinar on PQRS.
February 27
10:00-11:30 a.m., The Future Role of Government in Health IT and Digital Health, Bipartisan Policy Center, 1225 Eye Street NW, Suite 1000, Washington, DC 20005.
March 1
MedPAC, Ronald Reagan Building, Horizon Ballroom, 1300 Pennsylvania Ave, continuing March 2.
MACPAC, advisory body on Medicaid and the Children’s Health Insurance Program, continuing March 2.
March 6
8:00-11:00 a.m., Roll Call and CQ News present Health Care Decoded, at the Newseum, information at:
http://go.cq.com/2018HealthCareDecoded_01.RegistrationPage.html?utm_medium=newsletter&utm_source=hbmorning.
March 26
PTAC, Physician-Focused Payment Model Technical Advisory Committee, continuing March 27, information at www.regonline.com/PTACMeetingsRegistration or livestream at www.hhs.gov/live.
FOR REFERENCE
Members of the Senate (here) and Members of Senate Committees (here), Senate Calendar (here).
Members of the House with their House Committees (here), House Calendar (here).
DCMN: February publication dates: 14, 15, 16, 26, 27, 28.
Notes to: Fred Hyde, MD, JD, MBA; fredhyde@aol.com