Federal Issues

FEDERAL APPROPRIATIONS AND THE BUDGET

What’s at stake?
Federal funds help promote Duke Health’s multiple missions of research, education, and patient care. In recent history, main funding agencies, notably the National Institutes of Health (NIH), have experienced challenging budget decreases.

What’s happening now?

On May 17, the Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies held a hearing to review the FY 2019 funding request for the National Institutes of Health (NIH). Witnesses included NIH Director Francis Collins and other institute directors. The Senate Appropriations Committee is expected to markup its FY 2019 Labor-HHS spending bill the week of June 25. The FY 2019 begins October 1.

On May 8, the White House released a $15 billion spending cut package. Among other things, the package proposes cutting:

  • $7 billion from the Children’s Health Insurance Program, which was previously authorized but unused;
  • $800 million from the Center for Medicare and Medicaid Innovation; and
  • $252 million from the 2015 Ebola outbreak response.

On May 21, the Government Accountability Office approved the vast majority of the administration's plan to cancel spending. The House has already drafted legislation mirroring the White House's request. It is expected to receive a House floor vote in June. Although the proposal only needs a simple majority vote in the Senate, the Majority Leader has indicated they would not take up an identical bill. A single Senate Republican "no" vote likely would be enough to sink the package. Democrats are expected to unanimously oppose the bill in both chambers.

21st CENTURY CURES ACT

Congress approved and the President signed into law the 21st Century Cures Act, which authorized $6.3 billion in spending, addressed weaknesses in the nation's mental health systems, and altered the regulatory system for drugs and medical devices. Specifically, the bill authorized $4.8 billion for FY 2017-2026 in biomedical research initiatives and $500 million to help states prevent opioid misuse and provide additional treatment options. It also authorized funding to support the Precision Medicine Initiative, the BRAIN initiative, and the Cancer Moonshot, and it takes steps to improve mental health care by creating a new Assistant Secretary for Mental Health and Substance Abuse and directing federal agencies to step up enforcement of laws on mental health parity.

Other provisions in the bill included provisions to alleviate administrative burdens on medical researchers, address the role of socioeconomic status in the Medicare Hospital Readmissions Reduction Program, and clarify that off-campus teaching hospital outpatient departments (HOPDs) under development should continue to receive Medicare outpatient payment rates.

CHILDREN'S HEALTH INSURANCE PROGRAM (CHIP)

As part of the December 21 Continuing Resolution to fund the government, CHIP was allocated $2.85 billion and reauthorized through March 31, 2018. Also, the Centers for Medicare and Medicaid Services (CMS) was given the authority to help states with CHIP funding shortfalls. 

OPIOID LEGISLATION

On April 24, the Senate Health, Education, Labor and Pensions Committee unanimously approved bipartisan legislation to address the opioid crisis following seven committee hearings on the issue. The Opioid Crisis Response Act (S. 2680) would allow the Food and Drug Administration to require drug makers to package certain opioids for a set duration and provide simple and safe opioid disposal options; provide support to improve state prescription drug monitoring programs; authorize grants to create comprehensive opioid recovery centers; implement state safe care plans for substance-exposed infants; train first responders to administer opioid overdose drugs; and address workforce shortages, among other provisions.

On May 24, the Senate Judiciary Committee approved five bills as a part of its broader work addressing the opioid crisis. The Senate Finance Committee also has introduced 22 bills to address the crisis in Medicare, Medicaid, and human services programs. The Senate's opioid package should be ready later this summer.

The House is in the process of passing it's opioid package. The package could include 57 bills approved by the House Energy and Commerce Committee on April 25 and 7 bills approved by the House Ways and Means Committee. This plan is still tentative and subject to change.

MACRA

What has happened? 
Signed into law by President Barack Obama in 2015, the Medicare Access and CHIP Reauthorization Act (MACRA) replaces the highly contested sustainable growth rate (SGR) and shifts the Medicare physician reimbursement system toward one in which physician payments are mainly based on value rather than on the volume of services they provide. The law requires the Centers for Medicare and Medicaid Services (CMS) to establish a new physician quality and value-based payment program – the Quality Payment Program (QPP) – that starts in calendar year 2019. Eligible clinicians will participate in one of two tracks – the default Merit-based Incentive Payment System (MIPS) or alternative payment models (APMs) – and their 2019 payments will be tied to performance during 2017.

MIPS is defined as a fee-for-service model with performance-based adjustments to future Part B payments. Providers, including MD, DO, DPM, DMD, OD, DC, PA, NP, CNS and CRNA, will be given a composite reporting score focused on performance in four categories: quality reporting, advancing care information (which will replace meaningful use), clinical practice improvement activities, and resource utilization. Providers can receive up to a 4% bonus or penalty starting in 2019 and up to a 9% bonus OR penalty starting in 2022. Under the program, performance will be measured against their peers. For 2017, providers can pick their pace to receive payment under MIPS. 

Advanced APMs allow higher earnings to providers who take on risk related to patient outcomes. An entity participating in this model can earn increasing payment incentives every subsequent year.

After receiving stakeholder feedback on proposed MACRA regulations, CMS made changes to the MACRA final rule last fall, allowing physicians flexibility to choose when they begin participating in the program. Rather than requiring providers to transition on January 1, the final CMS rule allows them to avoid a negative payment adjustment and qualify for a payment increase in 2019 by either submitting a limited amount of data or providing data later in 2017.