President’s Health Care Budget Continues Several Themes: Site Neutral, Value, Tech (and Cuts)
The President released his budget for Fiscal Year 2021 on February 10. Overall, the budget proposes savings of $1.6 trillion to the Centers for Medicare & Medicaid (CMS) mandatory programs over the next decade. For those of us who have had legislative or government relations experience, once you are on a policy “list” for payment cuts, you never get off of that list; those cuts just keep coming back in some shape or form in the future. So this is a big list to pick from.
And while there are many funding and reimbursement reductions to be aware of in the budget, one key thing to keep in mind is that the budget has no force of law and this Congress will not act on it. That being said, Congress or agencies could include individual provisions from the budget in other legislative vehicles (or regulations).
What this budget document does do is set the policy tone for the Administration. Some of the themes are:
- Protecting rural health, such as allowing Critical Access Hospitals to convert to an Emergency Department with outpatient and addressing the 96 hour rule for Conditions of Payment;
- Addressing key conditions like maternal health, serious mental illness, kidney disease and substance use;
- Altering Medicaid program policies, such as requiring work for able-bodied adults, extending Disproportionate Share Hospital reductions another five years, allowing for higher non-emergency department co-pays; and,
- Increasing program integrity.
A few other themes that piqued my interest?
Site Neutral Payments
Site neutral policies are peppered throughout the budget document. HHS continues to advance reimbursement systems based on patient need/diagnosis as opposed to site of service. The budget expands on these site neutral policies in many ways. For example, on-campus hospital outpatient departments (HOPDs) would be paid the same as the physician office rate for certain services (rural hospitals are exempted) and all off-campus HOPDs (no exemptions) would follow suit. Another example is a proposal to risk adjust the Outpatient Prospective Payment System and the Ambulatory Surgical Center payments so they are based on severity of patients’ diagnoses as opposed to site of service.
With respect to the post-acute sector, the budget proposes a unified payment system would begin in 2026 for Skilled Nursing Homes (SNF), Home Health Agencies, Inpatient Rehab Facilities and Long-Term Care Hospitals. It would be based on episodes of care/patient characteristics.
There is already research and modeling being developed by MedPAC for how such a unified system could be structured.
Value, Technology
In turning to advancing value and the use of technology in care delivery, the budget:
- Allows non-physician primary care providers to count towards beneficiary assignment under Accountable Care Organizations
- Extends the Independence at Home model another five years
- Waives telehealth’s restrictions for those in advanced Alternative Payment Models
- Allows Federally Qualified Health Centers and Rural Health Clinics to be “distant site” providers under telehealth
- Develops a bundled payment for certain high value technological devices, including requiring the device manufacturer to bear some or all of the risk
What’s Next?
Congress will work to develop and finalize a budget later this spring. Whatever they decide on, it will still need the President’s signature in the end. We’ll be watching!
Feel free to reach out if you have questions.
Jennifer Boese is the Director of Health Care Policy at CLA. She is a highly successful public policy, legislative, advocacy and political affairs leader, including working in both the state and federal government as well as the private sector. She brings over 20 years of government relations and public policy knowledge with her to CLA. Well over half of her career has been spent dedicated to health care policy and the health care industry, affording her a deep understanding of the health care market and environment, health care organizations and health care stakeholders. Her role at CLA is to provide thought leadership, policy analysis and strategic insights to health care providers across the continuum related to the industry's ongoing transformation towards value. A key focus of that work is on market innovations and emerging payment models. Her goal is to help CLA clients navigate and thrive in an increasingly dynamic health care environment.
Comments are closed.