February 12, 2016

White House Releases FY 2017 Budget Proposal

On February 9, President Obama released his proposed federal budget for the 2017 fiscal year (FY). The FY 2017 budget will be the last of his presidency. The budget is comprised of $4.1 trillion in spending on receipts of $3.6 trillion, resulting in a $503 billion deficit for the year. Although several provisions in the Obama budget may be included throughout the year as separate policies to congressional legislation, due to the Republican majority in Congress, the vast majority of the president’s proposals contained in his budget will not be considered or debated.

The President’s budget is chock-full of various Medicare-related changes that present both opportunities and threats to radiologists. The American College of Radiology (ACR) is encouraged that the Administration, once again, included provisions to close the in-office ancillary services (IOAS) exception to the Ethics in Patient Referrals Act, commonly referred to as the Stark law, after its author, former Congressman Fortney “Pete” Stark. The budget stipulates that, starting in 2018, advanced imaging, radiation therapy, anatomic pathology and physical therapy services would be removed from the IOAS exception. The Obama Administration would only permit these four services to be self-referred within clinically integrated practices that are required to demonstrate cost containment. In total, closure of the IOAS exception is expected to produce slightly more than $4.9 billion in savings over 10 years.

However, the ACR continues to be frustrated by the Obama Administration’s annual effort to establish a Medicare prior authorization program. Although the Administration did not specifically cite a prior authorization policy strictly for advanced imaging services as it has in past budgets, the president did call for a broader, prior authorization policy that affects all Medicare fee-for-service procedures. The ACR is puzzled as to why the Administration would pursue such a policy for imaging services in light of the passage of a mandatory imaging appropriate use criteria (AUC) consultation policy specifically designed to reduce imaging overutilization. Furthermore, the ACR remains deeply skeptical that a prior authorization policy would generate any savings for Medicare because of the considerable administrative costs associated with implementing the policy. Above all, the ACR continues to hold strong reservations about prior authorization programs limiting patient access to lifesaving imaging services.

In addition to some of the more specific policies the ACR monitors within the President’s budget, The White House’s medical research funding included a $33.1 billion budget for the National Institutes of Health (NIH) in fiscal year 2017. Some of the Administration’s research priorities include:

Cancer Moonshot

The budget provides $680 million to the NIH to expand clinical trials for health disparity populations, pursue new vaccine technology and fund exceptional opportunities in cancer research. These investments will drive scientific advances that aim to understand the causes of cancer, discover new prevention strategies, improve early detection and diagnosis and cultivate effective treatments.

Advances the Precision Medicine Initiative

The budget provides the Department of Health and Human Services with $309 million to continue scaling up the Precision Medicine Initiative. Recent breakthroughs in genomics, computing and molecular medicine have created extraordinary opportunities to advance health care into a new era when many more treatments are based on the genetic characteristics of each patient. Research based on this cohort will lay the foundation for findings for many diseases that can lead to new prevention strategies, novel therapeutics and medical devices.

BRAIN Initiative

The budget provides $195 million within NIH, $45 million more than FY2016, for the Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative. Increased funds in FY 2017 will continue to support basic neuroscience research, human neuroscience, neuroimaging and training initiatives. The funding is also expected to be used on potential projects to collaborate with industry to test novel devices in the human brain, new ways to address big data from the brain, and to develop devices for mapping and tuning brain circuitry.

The ACR will continue to monitor the budget process as it progresses through the legislative process and evaluate any policies that emerge from it that may impact imaging services and/or the practice of radiology.