Obama Releases HHS Budget for FY 2014
On April 10, HHS posted a 126-page summary of President Obama’s fiscal year (“FY”) 2014 budget for the agency. The budget proposes $5.6 billion in Medicare payment cuts for FY 2014. Hospital-related cutbacks were proposed for graduate medical education, critical access hospitals and bad debt payments.
The budget proposal includes:
- $780 million in graduate medical education for FY 2014 and $11 billion over 10 years. The cuts were justified based on past MedPAC findings, stating “Indirect Medical Education add-on payments are significantly greater than the additional patient care costs that teaching hospitals experience”;
- A proposal to delay scheduled cuts to the Medicaid Disproportionate Share (“DSH”) program by one year until 2015. The reductions are scheduled to go into effect in 2014. The White House wanted the delay in order to get a better sense of how much the law reduces the number of uninsured now that Medicaid expansion is optional;
- $200 million less for hospital bad debt payments;
- $190 million in cuts to inpatient rehabilitation hospitals; and
- $90 million in cuts to critical access hospitals.
It’s important to remember the President’s budget proposal is nonbinding on Congress and largely symbolic. However, it sets priorities for the Administration and lays down policy markers for Congress. Items included in the President’s budget are often reflected in future Medicare-related legislation from Congress.
Date for 340B Hospital Compliance Delayed
On April 5, HHS Health Resources and Services Administration (“HRSA”) announced a four-month delay of the compliance date by which certain hospitals participating in the 340B drug pricing program must meet agency guidance.
The guidance, which was released in February, was set to go into effect April 7 for disproportionate-share hospitals, children’s hospitals and freestanding cancer hospitals to be in compliance. The guidance will now go into effect August 7, 2013.
The delay came shortly after a bipartisan group of House members asked HRSA for a six-month delay to ensure hospitals have time to implement the guidance while continuing to provide patients with services.
GOP Lawmakers Propose Medicare Fixes
Republicans on the House Energy and Commerce Committee released a white paper detailing seven Medicare reform options they hope to address this Congress. Among other items, the proposals include fixing Medicare’s physician payment system, combining Part A and Part B deductibles, implementing medical liability reform and taking steps to curb waste, fraud and abuse.
It is unclear whether the proposals would be turned into legislative language or when and what form they would be brought to the House floor. Energy and Commerce staff have indicated that legislation repealing the payment system would be on the House floor before the August Congressional recess.
Bills Introduced This Week
H.R. 1484: Rep. Bill Huizenga (R-MI) introduced a bill that would make common Medicare payments to hospitals publicly available information. The bill, which would amend Title XVIII of the Social Security Act seeks to publish the payment rates for frequently reimbursed hospital inpatient procedures, hospital outpatient procedures and physicians’ services on the official Medicare internet site.
H.R. 1473: Rep. Phil Gingrey (R-GA) introduced a bill aimed at preventing federal health care laws from establishing health care provider standards of care in medical malpractice cases. The bill has been referred to the House Judiciary and Energy and Commerce Committees.
H.R. 1427: Rep. Larry Bucshon (R-IN) introduced a bill that would make it unlawful for health care service professionals to make any deceptive or misleading statement or act that misrepresents their education, training degree, license or clinical expertise.
For more information, please contact John F. Williams, III at 317-977-1462 or jwilliams@hallrender.com.
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