February 13, 2020

President’s Budget Calls for Wide-Ranging Health Care Funding Cuts

President Trump’s FY 2021 budget includes many provisions to support the Administration’s Health Reform Vision, which builds on provisions outlined in the previously issued executive order, “Improving Price and Quality Transparency in American Healthcare to Put Patients First.” A key aspect of this involves price transparency and providing patients with cost information prior to the delivery of health care services. The budget proposals are expected to result in $756 billion in savings for the Medicare Trust Fund over 10 years.

Reprioritize Primary and Preventive Care in Medicare 

The president’s budget states that payment to primary care providers is not adequate compared to the specialty care providers in the Medicare Physician Fee Schedule (MPFS) system. Therefore, in CY 2021 the administration proposes a 5% annual reduction for non-primary care services paid under the MPFS in order to fund a risk-adjusted monthly Medicare Primary Care payment. More information is needed to determine if this is an additional 5% reduction to the already estimated 8% reduction for radiology services as indicated in the 2020 MPFS final rule.

Site-Neutral Payments for Hospital Outpatient Departments

The budget includes a proposal to make site-neutral payments for on-campus hospital outpatient departments and physician offices for services commonly provided in non-hospital settings, such as clinic visits. Rural hospitals would be exempt from these payment reductions.

In addition, the president’s budget proposes site-neutral payments for off-campus hospital outpatient departments, including emergency departments, cancer hospitals and grandfathered off-campus hospital outpatient departments. This change would require all off-campus hospital outpatient departments to be paid under the MPFS, effective CY 2021.

Appropriate Use Criteria Consultation and Prior Authorization

The president’s budget includes funds for continued implementation of the Protecting Access to Medicare Act (PAMA) requirement that appropriate use criteria be consulted via a qualified clinical decision support mechanism for Part B advanced diagnostic imaging services.

In addition, the budget includes a proposal to establish a prior authorization program for high-utilization practitioners of radiation therapy, therapy services, advanced imaging and pathology services.

Medicaid

Included in the fiscal year (FY) 2021 Putting America’s Health First Department of Health and Human Services (HHS) budget were many legislative and administrative proposals to address the administration’s goals for the Medicaid program. The budget falls along the president’s objectives of increased flexibility and improving Medicaid program integrity. In total, the budget includes a net savings to the Medicaid program of $10 billion over 10 years.

Under the president's goal to encourage patient-centered markets, the president would support the use of asset tests for individuals who are receiving long-term care services and are Medicaid-eligible under the Affordable Care Act’s (ACA's) Modified Adjusted Gross Income (MAGI) rules. Building on this proposal, the budget includes a proposal that would remove states' authority to substitute a higher income home equity limit when determining Medicaid eligibility, particularly for those seeking long-term care coverage. Currently, states have limited ability to charge copayments above statutory amounts. This budget proposes the option for states to use state plan authority to increase beneficiary copayments. The proposal is meant to encourage personal financial responsibility and proper use of health care services.

Furthermore, the budget includes a proposal that would require individuals to prove citizenship or satisfactory immigration status prior to receiving Medicaid benefits.

Under the direction of patient-centered markers, the administration proposes to extend disproportionate-share hospital (DSH) allotments through fiscal year 2030.

The budget also outlines an upcoming proposed rule from CMS that would allow states to conduct more frequent eligibility redeterminations along with other reforms to improve state eligibility determinations and renewal processes.

National Institutes of Health (NIH)

President Trump’s budget for 2021 would cut funding for NIH by $3 billion, nearly 7% below its current budget.

The cuts would affect institutes of particular interest to radiology and medical imaging in the following ways:

  • Proposed $5.9 billion, down from $6.4 billion for the National Cancer Institute
  • Proposed $368 million, down from $405 million for the National Institute of Biomedical Imaging and Bioengineering
  • Proposed $788 million, down from $833 million for the National Center for Advancing Translational Sciences

Members of the House of Representatives are expected to submit their requests for the fiscal year 2021 Labor-HHS spending bill by March 13.