Legislative Update
Martha M. Kendrick, Esq., Partner, Akin Gump Strauss Hauer & Feld LLP
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resident Trump’s Fiscal Year (FY) P 2021 Budget Proposal would reduce discretionary funding for the Department of Health and Human Services (HHS) by 9% or $9.5 billion. Budget savings include a provision that would hit the post-acute care sector hard by establishing a unified post-acute care payment system (-$101 billion). The Senate impeachment trial wrapped up on February 5, ending with the acquittal of the president on both articles of impeachment. Senators voted largely along party lines, with Sen. Mitt Romney (R-UT) the only Republican to vote to convict. President Trump’s State of the Union address called on Congress to pass Sen. Grassley’s drug pricing legislation and touted the administration’s health care price transparency proposals, among other health care policy initiatives. The House Ways and Means Committee released alternative surprise billing legislation; the House Education and Labor Committee also announced a surprise billing proposal that tracks closely to the bicameral compromise of the House Energy and Commerce and Senate Health, Education, Labor and Pensions (HELP) Committee.
AMRPA Magazine / March 2020
FY 2021 Budget Proposal Includes PAC Reductions On February 10, 2020, President Trump released his annual Budget Proposal for the upcoming Fiscal Year (FY) 2021. The $4.8 trillion President’s Budget seeks to realign spending across both domestic and foreign aid programs, and attempts to eliminate a nearly $1.1 trillion deficit over 15 years. This is the only time since the president took office, that he has been able to develop a budget knowing exact spending levels. He signed a two-year funding deal into law in December 2019, and while he honors the military spending limit of $740.5 billion, the president proposes an additional $44.5 billion cut to non-defense programs for FY 2021. Although the president touted leaving Medicare alone, the Budget actually does propose $450 billion in cuts over a decade to the entitlement program, along with $92 billion in cuts to Medicaid. Of concern to AMRPA, the Trump administration once again proposes to address “excessive” payments to post-acute care providers by establishing a unified payment system. According to the proposal, skilled nursing facilities, home health agencies and inpatient rehabilitation facilities will receive a lower annual Medicare payment update from FY 2021 to FY 2025. A unified post-acute care payment system would include all four post-acute care settings beginning in FY 2026. The proposal is expected to save over $101.5 billion over 10 years. Other notable assumed savings in the proposal include a repeat of the 2020 proposal expanding prior authorization to additional Medicare fee-for-service items at high risk of fraud, waste and abuse. The Budget specifically proposes to expand the Medicare program's authority to conduct prior authorization on certain items or services that are prone to high improper payments, including, inpatient rehabilitation services, for an expected savings of $13.7 billion over ten years. The Budget also assumes $135 billion in savings from an unspecified drug pricing proposal. The Budget proposal aims to enhance quality improvement oversight at post-acute care facilities, including, IRFs, skilled nursing facilities and home health agencies, by providing the secretary with the authority to levy civil monetary penalties to address poor performance and quality of care concerns. The administration assumes $9.4 billion over 10 years in savings for modifications to the site neutral payment exceptions criteria for long-term care hospitals (LTCHs) by requiring at least an eight-day stay in an intensive care unit (ICU), rather than the current three-day requirement. The Budget proposes a $22 million cut to the National Institute on Disability, Independent Living and Rehabilitation Research (NIDILRR), which currently receives $112 million in annual funding. The Budget request for the Traumatic Brain Injury program the Limb Loss Resource Center and the Paralysis Resource Center remain at 2020 levels. For the past few budget cycles the Trump administration has proposed to eliminate the Agency for Healthcare Research and Quality (AHRQ). For FY 2021, the administration proposes creation of a new agency called the National Institute for
