Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


Lawmakers Reach Budget Cap Agreement, Fund Government Through March 23

Following a brief partial government shutdown, the Senate passed the latest continuing resolution -- Bipartisan Budget Act of 2018 -- by a vote of 71-28 in the early hours of Friday morning, followed promptly by passage in the House of Representatives by a vote of 240-186, and ultimately signed by the President Friday morning. The bill extends government funding at current levels through March 23, and lawmakers hope to use the interim time to negotiate a complete omnibus spending bill to fund the government through September 30, the remainder of fiscal year (FY) 2018. The Bipartisan Budget Act of 2018 raises the budgetary spending caps on defense and domestic spending first imposed in 2011, which will increase federal spending by almost $300 billion. The budget agreement also suspends the debt ceiling for a year (until March 1, 2019). Sen. Rand Paul’s (R-Ky.) protest of the spending increases delayed the Senate voting process for several hours causing Congress to miss the midnight funding deadline, which resulted in a short government shutdown.

The bipartisan budget agreement includes a number of important public health and health care priorities:

  • Community Health Centers. $7.8 billion is provided to fully fund Community Health Centers (CHC) for two years.
  • CHIP. The six-year funding extension for the Children’s Health Insurance Program (CHIP) that Congress passed last month is extended to a full decade of funding for the program.
  • Medicaid DSH Payments. Scheduled reductions to Medicaid Disproportionate Share Hospital (DSH) payments will be delayed for two years.
  • Medicare Therapy Caps. Medicare therapy caps are permanently repealed.
  • Enhanced Medicaid for Puerto Rico/Virgin Islands. Medicaid caps for Puerto Rico and the U.S. Virgin Islands will be increased by $4.9 billion for two years as they recover from hurricane damage.
  • IPAB Repeal. The bill repeals the Independent Payment Advisory Board (IPAB) created in the Affordable Care Act.
  • Physician Update. The budget agreement cut in half the 2019 Medicare physician fee schedule increase from 0.5 percent to 0.25 percent. The reduction will cost doctors $105 million in Medicare reimbursements in 2019 and a total of $1.85 billion over the next decade. The Medicare Access and CHIP Reauthorization Act (MACRA), which replaced the sustainable growth rate (SGR), specified that physicians would receive an annual increase of 0.5 percent from 2016 through 2019, followed by five years of no annual increases. The budget deal passed by Congress will impact the last year of MACRA’s scheduled annual increases.
  • MA Bonus Payments. The deal limits the ability of Medicare Advantage (MA) plans to artificially boost their star rating bonus payments by consolidating a low star plan with a plan that has received a higher star rating. The Centers for Medicare and Medicaid Services (CMS) will be required to calculate a weighted average across the two plans to determine a more accurate star rating. The change is estimated to reduce insurer payments by $520 million over the next decade, or 0.3 percent of annual payments to MA plans.
  • MACRA Technical Changes. The bill grants CMS flexibility in applying the 30 percent resource use performance score for three years, while also providing the agency three additional years to ensure a gradual and incremental transition to the performance threshold. The bill also makes technical corrections to the application of the Merit-based Incentive Payment System (MIPS) to covered professional services. Finally, the agreement updates the ability of the Physician- Focused Payment Model Technical Advisory Committee (PTAC) to further aid the development of physician led alternative payment models.

The bipartisan budget agreement increases the budget caps allowing for additional funds for certain health priorities to be executed as a part of omnibus appropriations for FY 2018 and subsequent appropriations in FY 2019. This includes a total of $6 billion ($3 billion for each of the fiscal years 2018 and 2019) to combat the substance abuse epidemic. These funds will enhance state grants, public prevention programs, and law enforcement activities related to opioids and mental health care. Congress has also given $2 billion in budget authority to increase support for the National Institutes of Health (NIH) and additional scientific research for fiscal years 2018 and 2019. The bill provides $4 billion for fiscal years 2018 and 2019 to address the backlog of claims at the Department of Veterans Affairs health centers. Language from a number of other health care provisions was included in the final bill, including:
  • H.R. 3935, the Bolstering Organizations and Options to Support Training in Primary Care Act (BOOST Primary Care
  • Act), providing FY 2018 and FY 2019 funding for the National Health Service Corps;
  • H.R. 3394, the Teaching Health Centers Graduate Medical Education Extension Act, providing FY 2018 and FY2 019 funding for Teaching Health Centers;
  • H.R. 3924, to amend the Public Health Service Act to extend funding for the special diabetes program for type I diabetes, providing FY 2018 and FY 2019 funding;
  • H.R. 3917, to amend the Public Health Service Act to extend funding for the special diabetes program for Indians, providing FY2018 and FY2019 funding;
  • H.R. 3900, the Youth Empowerment Act, providing FY2018 and FY2019 funding for Title V Sexual Risk Avoidance Education;
  • H.R. 938, the Medicaid Third Party Liability Act;
  • H.R. 3263, to extend the Medicare Independence at home Medical Practice Demonstration program for two additional years;
  • H.R. 1148, the Furthering Access to Stroke Telemedicine Act of 2017;
  • H.R. 3163, the Medicare Part B Home Infusion Services Temporary Transitional Payment Act;
  • H.R. 3271, the Protecting Access to Diabetes Supplies Act of 2017;
  • H.R. 2465, the Steve Gleason Enduring Voices Act of 2017;
  • H.R. 3245, the Medicare Civil and Criminal Penalties Act;
  • H.R. 3120, to reduce the volume of future electronic health record-related significant hardship requests;
  • H.R. 829, the Prioritizing the Most Vulnerable Over Lottery Winners Act of 2017; and
  • H.R.4430, to provide temporary direct hire authority for certain emergency response positions.

The final legislation dropped a provision opposed by the medical provider community that would have extended Medicare’s misvalued code initiative from 2018 to 2019. The deal does not include any measures to stabilize the individual health insurance market, but supporters are hopeful that such provisions will be included as a part of a longterm spending bill.

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