Legislative Update: March 12, 2019

President’s FY2020 Budget Proposal

On March 11th, the Trump Administration released a high-level summary of its budget request for fiscal year (FY) 2020. The President’s budget proposes to increase military spending, while reducing overall funding for non-defense, discretionary programs by 5 percent.

Regarding health care programs, the Trump Administration budget would reduce funding for discretionary health care programs – such as those administered by the Centers for Disease Control and Prevention and the National Institutes of Health - by a total of 12% in FY2020, which equals roughly $89 billion dollars.

The Trump Administration budget also proposes significant reductions to the Medicaid and Medicare programs. Specifically, the budget proposal would reduce spending for Medicaid by $1.5 trillion over the next ten years, which includes shifting the Medicaid program to a more restrained, block grant structure. The President’s budget would slash the Medicare program by $845 billion over the next ten years through a combination of proposals to modify Medicare payment and program integrity rules.

As with most Administration budgets, lawmakers largely view the FY2020 budget proposal as symbolic. However, Congress will ultimately need to find common ground with the President as it works to develop next year’s federal appropriations bills. 

The major Committees of jurisdiction will hold hearings this week to discuss the President’s budget requests. More details about the President’s budget proposal will be released in the coming weeks.

Congressional Activity: Health Care Hearings Continue

While the budget activity is underway, Congress continues to hold hearings related to key health care issues. 

Last week, the House Ways & Means Committee held another in a series of hearings related to reducing prescription drug pricing. More information on this hearing can be found here. The House Energy & Commerce Committee held a legislative hearing on a series of bills to bolster the health insurance marketplace. Finally, the Senate Finance Committee held an oversight hearing to evaluate ways to improve care in nursing homes.

MedPAC: Focus on Future Post-Acute Care Policies

The Medicare Payment Advisory Commission (MedPAC) held a public meeting on Friday, March 8th to discuss topics that will be included in their upcoming, annual June report to Congress. 

Included in the MedPAC agenda was discussion of a post-acute presentation entitled: “Evaluating an episode-based payment system for post-acute care.” This presentation was a follow-up to ongoing MedPAC research into designing a “unified post-acute care (PAC) prospective payment system.”

MedPAC’s work related to designing a unified PAC payment system was mandated by Congress in 2016. The intended goal of a unified PAC system is to more closely align payment for long-term care hospital (LTAC), inpatient rehabilitation facility (IRF), skilled nursing facility (SNF) and home health services. 

Discussion at the MedPAC meeting centered around whether a unified PAC system should be “stay-based”, which would essentially require a “site-neutral” payment regardless of whether a certain patient was treated in an LTAC, IRF, SNF or in home health care. Or, whether a unified PAC system should be based on an “episode” of care that would bundle together payment for all post-acute care a patient receives across settings. Based on MedPAC staff analysis, the MedPAC Commissioners determined a “stay-based” system would be more feasible in the near-term compared to bundling together payment for all PAC services. 

MedPAC will continue to explore issues around designing a potential unified post-acute payment system in the coming months and will report on their research to-date in their June report to Congress. 

By way of reminder, MedPAC is an independent Congressional agency established in 1997 to advise Congress on Medicare policy. MedPAC conducts research and makes recommendations to Congress on potential Medicare policy changes, but recommendations made by MedPAC are not binding.

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