March 14, 2019

President's Budget Seeks Wide-Ranging Cuts to Healthcare Agencies

On Monday, March 11, the Trump administration submitted to Congress their “top line” Fiscal Year (FY) 2020 federal budget proposal, officially kicking off the federal budget process.

While the President’s budget does not have the force of law, it is widely viewed as a statement of the administration’s fiscal and policy priorities. The White House is expected to release more details the week of March 18.

The Trump Administration is proposing a $4.75 trillion dollar spending proposal that calls for $34 billion of defense hikes, and $1.1 trillion of largely unspecified non-defense cuts over 10 years. Contributing to that $1.1 trillion is a proposed a 12 percent reduction to the Department of Health and Human Services (HHS).

Within HHS, the President proposes a $4.5 billion dollar cut to the National Institutes of Health (NIH) including a $900 million cut for National Cancer Institute (NCI), a 10 percent cut to $476 million for the Centers for Disease Control and Prevention (CDC), a $200 million dollar cut from the $338 million FY 2019 budget of the Agency for Healthcare Research and Quality (AHRQ) and a $200 million dollar cut to the Health Resources Service Administration (HRSA).

However, the budget also proposes some shifting of resources and responsibilities within the budget. For example, it proposes shifting approximately $256 million for the National Institute of Research on Safety and Quality, currently administered by the Agency for Healthcare Research and Quality (AHRQ) to the National Institutes of Health (NIH).

The Food and Drug Administration (FDA) would receive a funding increase of $643 million, largely focused on ensuring the FDA’s regulatory process will be modernized and able to stay current with the rapid pace of innovation. The $643 million includes $55 million to fund an initiative enhance the safety of medical devices and improve FDA’s current information technology systems and build an “integrated knowledge management system and portal for medical devices using modern, agile information technology systems.”

On the policy front, the budget plan proposes that the Centers for Medicare and Medicaid Services (CMS) require prior authorization for practitioners who have been identified as high utilizers of radiation therapy, therapy services, advanced imaging and anatomic pathology services.

The NIH will also remain focused on leveraging the growth in volume, speed of delivery and complexity of large biomedical datasets, as articulated in their Strategic Plan for Data Science, released in June 2018. Implementation activities will continue over the next year, including the creation of a new position, NIH chief data strategist, who will be tasked with collaborating closely with stakeholders to ensure the plan is implemented in a robust manner.

Again, it is important to remember that the administration’s budget details the president’s priorities, but Congress largely drives federal spending through its appropriations process. Many of the president’s cuts to federal agencies and institutions will likely receive bipartisan pushback and are unlikely to be enacted.