HHS Releases FY 2015 Budget
On March 4, HHS released its fiscal year 2015 budget as part of the Obama Administration’s overall budget request to Congress. The HHS portion of the request is $77.1 billion, which is $3 billion less than what was requested last year.
The budget request would cut more than $350 billion in payments to Medicare providers, which is about $50 billion more than reductions put forward last year. While the President’s budget does not carry the force of law and has no bearing on what the actual spending levels will be, the list of savings offsets could come into play later this year when Congress is looking to pay for a doc fix package.
Much of the proposed savings would come from hospitals and other providers related to bad debt and GME funding. The budget also calls for a change in payments and designations of critical access hospitals (“CAHs”).
Under the proposal, CAHs would still get enhanced cost-based payments, but instead of 101% of reasonable costs, the facilities would get 100% – a savings to the federal budget of $1.7 billion over 10 years. And starting in 2015, CAHs within 10 miles of another hospital could not maintain their special designation and enhanced rate.
However, the prospects for a budget being passed by Congress this year are bleak. Congress reached a budget resolution in December for 2014 and 2015, and Senate Budget Chairwoman Patty Murray (D-WA) has indicated she doesn’t intend to prepare a budget for 2015.
House to Vote on SGR Fix Next Week
House Republicans are planning to bring a permanent “doc fix” bill to the floor next week. The bill, which would cost about $138 billion, would be paid for by repealing the individual mandate in the Affordable Care Act (“ACA”). Because the legislation would repeal a significant part of the ACA, it is unlikely to be taken up by the Democratic controlled Senate.
While three committees of jurisdiction have been able to agree on the policy behind the SGR, they have been unable to reach agreement on paying for the legislation. The Congressional Budget Office (“CBO”) recently estimated that the bill (H.R. 4015, S. 2000) would cost $138.4 billion over 11 years. In 2011, CBO estimated that repealing the individual mandate would save $282 billion from 2012-2021.
By combining the individual mandate bill to the “doc fix” legislation, it likely means that another short-term patch will be needed to prevent a significant cut in physician payments on March 31. Most believe the House will use a 9- or 12-month patch to push the issue into the lame duck Congress following the November midterm elections.
Bill to Delay Health Coverage Penalty Passes House
On March 5, the House passed legislation (H.R. 4118) that would delay the health care law’s individual-mandate penalties for one year. Under the ACA, most individuals are required to obtain health coverage or pay a penalty of $95 or 1% of income, whichever is greater. A day earlier, the Obama administration issued a Statement of Administration Policy saying the president would veto the measure were it to reach his desk.
Also on March 5, the White House announced it would allow insurance plans that do not meet the minimum requirements of the ACA to continue for another two years. The timetable allows consumers to renew old health plans for the last time on October 1, 2016, meaning some plans will continue into 2017.
Bills Introduced This Week
Senators Robert Menendez (D-NJ) and Deb Fisher (R-NE) introduced legislation to address the issues surrounding the “2-midnight rule” issued last year by CMS. The bill (S. 2082) seeks to establish new guidelines for CMS to establish criteria and payment methods applicable to beneficiaries in need of short inpatient stays. The bill also codifies the enforcement delays CMS has already imposed to ensure hospitals are not subjected to audits while the new guidelines are being developed.
Next Week in Washington
The House will vote on H.R. 4015, the SGR Repeal and Medicare Provider Payment Modernization Act. In addition, HHS Secretary Kathleen Sebelius will testify before the House Ways and Means Committee on the proposed HHS budget for fiscal year 2015.
For more information, please contact John F. Williams III at 317.977.1462 or jwilliams@hallrender.com.
Please visit the Hall Render Blog at http://blogs.hallrender.com for more information on topics related to health care law.
