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Proposed HHS Budget Has Good and Bad News for Providers

The administration has proposed an 18 percent cut in the FY 2018 budget for the Department of Health and Human Services (HHS).


Analysts have evaluated these proposed cuts for their impact on healthcare providers.


Proposed Increases (Good News)


$70 million increase in the FY18 budget for the Health Care Fraud and Abuse Control (HCFAC) program to “double down” on revamping federal antifraud efforts, shifting away from a “pay-and-chase” approach to a prepayment claim review.


HCFAC recouped $5 for every $1 it spent in 2014-16, according to the administration. One analyst noted, “The message to providers—particularly hospitals—is that, based on this [ROI], congressional testimony, and based on things HHS Secretary Tom Price has said, the goal is to get to a system that is more like commercial insurers use.”



The federal government has been moving toward the prepayment review approach using analytics to identify “bad actors.” Generally, this has been limited to individual advance reviews by Medicare administrative contractors (MACs).



“When you talk about Medicare, that would scare the heck out of a hospital because the MACs are so slow and they so lack the expertise to make judgments about whether a claim is appropriate,” the analyst said. The budget push “ultimately would be good news because the pre-claim approach that Medicare currently uses is not one that anybody is satisfied with.”


$3.5 billion more to the Veterans Choice Program, which pays providers outside of the U.S. Department of Veterans Affairs (VA) to care for VA patients when they face long waits or lengthy travel to a VA facility. This program was funded with $10 billion in 2014 and is scheduled to expire in August.


$500 million to increase opioid-misuse prevention efforts and access to treatment and recovery services.


Focusing mental health funding on high-performing entities and high-priority areas, such as suicide prevention, serious mental illness, and children’s mental health.


Proposed Decreases (Bad News)


$5.8 billion decrease for the National Institutes of Health (NIH). The budget also would consolidate the Agency for Healthcare Research and Quality within NIH. The reduction would have a significant impact on some academic centers. In FY 2016, an analysis of NIH funding showed that independent hospitals received $2.2 billion and medical schools received $12 billion.


$403 million decrease from healthcare professional and nurse training programs. The administration believes there is no evidence that the programs significantly improve the healthcare workforce. Some hospital advocates warned that the nurse-training cuts could undercut their efforts to expand state scope-of-practice laws for nurse practitioners to practice at the top of their licenses. Although the cuts could affect funding for medical school students, they are not expected to affect Medicare’s graduate medical education monies.


The administration plans to release the full budget in May, including specific mandatory spending and tax proposals, and it’s difficult to assess the approach Congress will take. So it’s wait-and-see for healthcare providers. The above analysis, however, shows the general direction of the administration with respect to HHS.


(Source for this information: “Hospitals Could See Antifraud Push Under Trump Budget,” HFMA Weekly News, March 24, 2017)




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