President Trump’s FY18 Budget: What Does It Mean For Health Centers?

By NACHC Federal Affairs Staff

On Tuesday, President Trump released his FY18 budget proposal, which reflects the administration’s priorities for federal spending in the upcoming fiscal year. The President’s budget is a blueprint for national priorities, which is then submitted to Congress. Ultimately, it will be Congress that makes the final budget decisions during the appropriations process.

Based on NACHC’s preliminary review, below is a brief summary of the major provisions of the President’s FY18 budget that could directly impact health centers. We will continue to update the blog as the budget process progresses.

Primary Care Funding Cliff

The FY18 budget calls for a two-year fix to the “health center funding cliff” and extensions of key primary workforce programs. Specifically, the budget includes:

  • $5.1 billion in total funding for the Health Centers Program in FY2018 – the same top-line funding level as FY17, made up of $1.5 billion in discretionary funding and $3.6 billion in mandatory funding
  • An additional year of mandatory funding, also at $3.6 billion, for Fiscal Year 2019
  • $60 million annually for two years for the Teaching Health Centers Graduate Medical Education Program (THCGME). This represents level funding compared to FY2017, but less than is needed to fully fund existing residency slots and programs
  • $310 million annually for two years the National Health Service Corps (NHSC), which is level funding from FY17

While the President’s support for health centers in the FY18 budget is an important boost to efforts to avert the health center funding cliff in Congress, NACHC continues to advocate that all three primary care programs be extended on a longer-term basis to ensure stability and predictability of funding.

Medicaid

The President’s budget would make dramatic changes to the Medicaid program that would transform the underlying structure of the program and cut at least $610 billion in federal funding – largely by capping federal Medicaid contributions to states. The proposed budget cuts are meant to be layered on top of the cuts to the program that have already been passed by the House of Representatives as a part of the American Health Care Act.

Cuts of this magnitude would inevitably lead to reductions in provider payments, narrower eligibility requirements, and restricted benefits for enrollees — all of which would limit health centers’ ability to maintain current service levels and severely inhibit efforts to expand treatment and access for patients or respond to urgent public health crises.

Taken together, these actions would make it more difficult for health center patients to access health care across the safety net, and also put extreme stress on health centers’ budgets as state Medicaid programs face growing shortfalls.

Children’s Health Insurance Program (CHIP)

Funding for the Children’s Health Insurance Program is set to expire at the same time the funding cliff would kick in – September 30, 2017. As with Health Centers, the budget proposes a two-year extension of CHIP through 2019, but also reduces funding for the program by $5.8 billion.

These funding reductions are achieved by eliminating key provisions of the Affordable Care Act that bolstered the program, including a “primary care bump” which provided a 23-point increase in state CHIP matching rates and the maintenance of effort (MOE) requirement that states maintain current eligibility and benefits for children.

The budget would further change CHIP eligibility by capping it at 250% of the Federal Poverty Level (FPL) while also giving states the option to move certain children below 138% FPL from Medicaid back to CHIP.

340B

The FY18 budget includes level funding of $10.2M for the Office of Pharmacy Affairs at HRSA to administer the 340B Program. Of note, the budget includes a new provision this year which directs HHS to work with Congress to develop a legislative proposal “to improve 340B integrity and ensure that the benefits derived from the program are used to benefits patients, especially low-income and uninsured populations.” The legislative proposal is also expected to include new regulatory authority for HRSA to administer the program, a priority of the previous administration.

In addition, the budget calls on HRSA to continue strengthening 340B program compliance by expanding oversight activities, educating covered entities and prospective sites on the statutory requirements of the program and conducting audits of manufacturers. Lastly, some additional priorities that carry forward from the previous year include the development of the 340B pricing system and a facilitated process for refunds and credits to entities who were overcharged.

Conclusion

The President’s proposed budget calls for deep cuts and disinvestment in America’s safety net programs – most of all in Medicaid, which covers more than 70 million Americans and half of health center patients. This is of great concern to all of us who work to address the needs of low-income and vulnerable populations. While the nation struggles to put its fiscal house in order, we will continue our work with Congress on solutions to protect the health, well-being and stability of America’s communities.

How We Got Here & What’s Next for the AHCA

It’s been quite the week for health care here in Washington. The American Health Care Act, House Republicans’ effort to repeal and replace the Affordable Care Act (ACA), was first declared dead then subsequently brought back from the depths before passing in the House last Thursday. In a little more than a week, the political dynamic on Capitol Hill was turned on its head and much has changed since March 24, when Republican leadership pulled the AHCA due to a lack of support from both the conservative bloc of members in the Freedom Caucus and a smattering of moderates. Below, you’ll find a brief summary of some of the major events and changes to the AHCA since the bill was pulled in March, as well as a bit of insight into what may play out once the AHCA arrives in the Senate. Also, don’t forget to take a look back at our March blog for a refresher on how the AHCA could impact Medicaid, private insurance, and public insurance exchanges, and be sure to read NACHC’s statement on House passage of the bill.

Major Changes in the AHCA Since March

Early last week, it looked as though Representative Tom MacArthur’s amendment to allow states to apply for waivers and opt out of several ACA protections, including rules requiring minimum plan benefits, limits on charging older Americans more, and the ban on charging sick people more, may well have doomed House Republicans’ efforts to pass the AHCA. The amendment, which allows states to opt out of ACA protections as long as their alternative ideas would lower premiums, attracted the support of many Freedom Caucus members who opposed the initial draft of the AHCA, but also sent many moderate Republicans running for the hills at the prospect of voting for an age tax on senior citizens and a sick tax on folks with preexisting conditions. The MacArthur amendment also exempted Members of Congress and their staffs from the state waivers; however, that provision was taken out of the bill in a separate piece of legislation passed immediately after Thursday’s vote.

On Tuesday, the AHCA appeared to be on life support when Rep. Fred Upton came out in opposition to allowing states to waive protections for preexisting conditions. As a former chairman of the Energy and Commerce Committee, which has wide jurisdiction over health care policy in the House, Rep. Upton is a respected moderate voice within the GOP on health care issues, and his temporary defection was notable. In addition to concerns about preexisting conditions, Rep. Upton stated the amount of money included in the AHCA for “high risk pools,” which fund care for individuals who can’t afford or access insurance coverage due to their health, wasn’t high enough ‒ despite the claims by Republican leadership that the bill contained $100 billion for states to cover the sickest, most expensive customers.

After a bit of deal-making, and intense pressure from House Republican leadership and the White House, Wednesday brought about a change of heart from Rep. Upton, and helped turn the tide of opposition from moderates into a wave of support that eventually resulted in the passage of the AHCA. In an effort to ease the pain for folks with preexisting conditions who could be harmed by the AHCA, and in exchange for his vote, Rep. Upton negotiated an additional $8 billion to lower costs for the sickest and costliest Americans. The additional money, which outside experts say is not enough to accommodate the number of folks who could be pushed off insurance rolls and into high risk pools, was enough to convince wavering moderates to support the bill.

What’s Next in the Senate?

The AHCA now moves to the Senate where it faces an uncertain future. Senate Republicans can afford to lose just two votes – a slim margin given that both moderate and conservative Senators have expressed concerns with the House bill. A number of Republican Senators have already expressed concerns and apprehension with the House-passed legislation, including Senator Lindsey Graham (R-SC) who tweeted, “A bill – finalized yesterday, has not been scored, amendments not allowed, and 3 hours final debate – should be viewed with caution.” In addition, Senator Rob Portman (R-OH) issued a statement, saying “I’ve already made it clear that I don’t support the House bill as currently constructed because I continue to have concerns that this bill does not do enough to protect Ohio’s Medicaid expansion population, especially those who are receiving treatment for heroin and prescription drug abuse.” In other comments made Thursday shortly after the AHCA passed the House, Senator Lamar Alexander (R-TN), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee and someone who will have an important role in how this bill is shaped in the Senate, stated in a floor speech, “We’ll carefully consider the legislation passed by the House. We will work together carefully to write our own bill. We will make sure we know what our bill costs when we vote on it… We will get it right and then we will vote.” Thus signaling that Senate Republicans are planning a slower, more deliberative process than the House, at least at this time.

In terms of process and procedure, we should note here that Republicans are attempting to pass the AHCA under the budget reconciliation process, which only requires a 51-vote majority in the Senate to pass a bill, rather than the normal 60-vote standard. More importantly, passing a bill through reconciliation subjects the legislation to the so-called “Byrd rule,” meaning the bill’s primary purpose must be changing the federal deficit, and not making major policy changes. Many observers believe that MacArthur amendment, and several other provisions of the House bill, may be stripped out in the Senate due to violating the Byrd rule. Simply stated, significant portions of the House bill veer into the realm of making large policy changes whose primary purpose, it will be argued, is not budgetary in nature. It remains to be seen how much of the AHCA will be ruled out due to the Byrd rule, but rest assured that you’ll hear this phrase quite often as the Senate begins debating a repeal of the ACA.

While Thursday’s vote gave the AHCA effort a major shot in the arm, it’s clear major hurdles remain before ANY health care legislation can be signed into law. As the Senate moves forward in its efforts to repeal and replace the Affordable Case Act, the Federal Affairs Team here at NACHC will continue to provide timely updates and analysis. As always, please continue to follow NACHC’s Twitter and Facebook accounts for up-to-the-minute news and insights, and visit the Health Center Advocacy Network site to find out what steps you can take to get engaged.

 

 

 

Final FY17 Spending Deal Reached, Congress Expected to Vote This Week

Late Sunday evening, leaders in Congress came to final agreement on the FY17 spending package, which if signed into law later this week, will provide dedicated and reliable funding for the federal government through September 30, 2017. The House of Representatives is slated to vote on the $1.070 trillion bill tomorrow, and the Senate is expected to take the bill up shortly after it passes the House before sending it along to President Trump’s desk to be signed into law.

The bill is almost evenly divided, providing $551 billion for defense and national security to keep Americans safe, and $518 billion for investments in education, health care, and our roads and bridges to ensure the nation’s future remains bright ‒ a $15 billion bump for both defense and nondefense spending. The FY17 omnibus package also received an $88.6 billion from a wartime savings account, known as the overseas contingency operations fund. Overall, there’s $150 million to battle the opioid crisis and improve access to mental health treatment throughout the bill, including Medication Assisted Treatment and grants to train first responders to use overdose prevention devices.

To the surprise of many, Congressional leaders were able to agree on an FY17 spending package that remains free of controversial provisions to fund the wall along the U.S.‒Mexico border, and deny federal funding to “sanctuary cities” or Planned Parenthood. It does, however, provide health insurance for retired mine workers, and injects Puerto Rico with a much-needed cash infusion to avoid a collapse of its Medicaid program. Finally, the bill contains no funding for the Affordable Care Act or the cost-sharing reduction payments to insurers.

Most importantly, the bill maintains Congress’ historic commitments to community health centers and:

  • Provides $1.5 billion in discretionary 330 grant funding to ensure quality primary care access at FQHCs across the country; and
  • Directs $100 million ‒ $50 million for both mental health treatment and battling opioid addiction ‒ of 330 grant dollars to ensure health centers can remain on the front lines in communities struggling with these twin challenges.

The spending package also reflects Congress’ deep interest in expanding the next generation of health center specialists and providers, and developing the health center workforce in the years to come. Specifically the bill:

  • Extends Conrad 30 J-1 Visa Waiver program, which allows international physicians to remain in the U.S. after their residency if they practice in an medically underserved area for three years;
  • Maintains a pipeline of diverse providers by funding Area Health Education Centers (AHECs) and the Health Careers Opportunity Program (HCOP);
  • Provides a $77 million boost for HRSA, including $50 million for behavioral health workforce training;
  • Encourages $800,000 for the Dental Faculty Loan Repayment Program; and
  • Supports the inclusion of substance abuse and pain management education in education curriculums to stop future epidemics.

There are several other health center priorities including the Federal Tort Claims Act (FTCA), the 340B Program, telehealth expansions, and community-based health initiatives that are important to many NACHC members. The FY17 omnibus bill:

  • Provides almost $100 million to replenish the FTCA judgement fund, which will ensure coverage for individuals serving at health centers against claims;
  • Allocates an additional $1.5 million to expand telehealth access and create a plan to open a “Telehealth Center of Excellence” at HRSA;
  • Requires HRSA to brief Congress on the 340B Program – specifically their progress on a secure website to calculate and verify 340B ceiling prices ‒ within 90 days of signing the FY17 spending bill into law;
  • Ensures $22.5 million for the National Diabetes Prevention Program (NDPP), which reaches Americans with pre-diabetes; and
  • Cuts $891 million from the Prevention and Public Health Fund, which ensures Americans in communities across the country have access to vaccines, lowers smoking rates, and helps prevent suicide.

For the most part, the FY17 spending bill was largely positive across the health care landscape. Most agencies and departments including the Centers for Disease Control and Prevention (CDC), Substance Abuse and Mental Health Service Administration (SAMSHA), and National Institutes of Health (NIH) saw relatively small increases in funding in the face of tight budget caps. Most observers expect the FY17 spending package to pass with ease tomorrow; however, the fight for federal funding will only become tougher as we return to lower spending levels in the FY18 budget.

Importantly, the spending deal for FY17 only addresses annual appropriations, or “discretionary” funding for the Health Centers program. The bill does not address the Health Centers Funding Cliff, which is still set to take place at the end of September without Congressional action.

As always, the Federal Affairs Team at NACHC continues to work with members of both parties in Washington to ensure leaders understand the importance of long-term funding for community health centers. Please feel free to reach out if you have additional questions, comments, or concerns about how the FY17 spending package impacts the future of health center funding.

Congress Temporarily Averts Shutdown

Earlier this afternoon, both the House and Senate passed a one week extension of federal funding in order to avoid a shutdown and continue negotiations on the FY17 spending package.

With a deal on the FY17 spending package in sight, leaders in both chambers of Capitol Hill passed the short-term extension earlier today to give themselves more time to finalize negotiations before the new deadline ‒ Friday, May 5. This bipartisan act of good faith will ensure that Congressional Democrats, and Republicans on Capitol Hill and in the Trump administration, have enough time over the next seven days to settle the few remaining areas of disagreement. Two of the largest roadblocks to an agreement, President Trump’s $1.5 billion request for border wall funding and Democrats’ demand for $7 billion for CSR subsidies, were stripped out of the negotiations earlier this week and will both be negotiated away from the spending package. The bill does, however, provide a temporary extension of coal miners’ health benefits through Friday, May 5. For now, leaders in Washington are focused on finding agreement on several less contentious provisions of the FY17 spending package.

We’ll continue to provide timely updates over the next week as Congress and the Trump administration work towards a bipartisan, long-term extension of funding  that provides certainty, stability, and predictability for health centers.

Avoiding a Shutdown, Resurrecting AHCA, and Closing Out the Wicker-Stabenow Health Center Funding Letter

By: Oliver Spurgeon, Deputy Director, NACHC Federal Affairs

The halls of Capitol Hill are buzzing this week as Congress returns from the two week Easter Recess, President Trump and Congressional Democrats continue negotiations to keep the federal government open beyond Friday, April 28, the Wicker-Stabenow Health Center funding letter closes, and House Republicans consider bringing the American Health Care Act back from the dead.

We here at Health Centers on the Hill want advocates to be up to date on all the latest developments. To that end, you can get a more in-depth look at these and other policy issues impacting health centers by joining our April Policy and Advocacy Webinar, this Wednesday at 3:30 PM eastern. Click here to register.

Shutdown Fight

With just three days left to negotiate a deal before the federal government shuts its doors and temporarily suspends nonessential services on Friday at midnight, Democrats on Capitol Hill and the Trump administration have yet to find agreement on the remainder of the FY17 spending package. At issue for the Trump administration and Congressional Democrats, respectively, are a $1.5 billion down payment to begin construction of the southern border wall, and $7 billion to fund cost sharing reduction (CSR) payments for participants in the federal healthcare exchanges with incomes below 250% of the poverty level. For more on CSR payments and their role in marketplace coverage, see a recent post here on our sister blog, The Policy Shop.

Until the inclusion of recent demands to fund the border wall and continue CSR subsidies for health exchange enrollees, Congressional leaders were able to iron out roughly 200 controversial provisions in the FY17 continuing resolution. Congressional leaders in both parties were able to put partisan affiliations aside to avoid the traditional political stumbling blocks of Planned Parenthood funding and budget cuts at various federal agencies, including the Environmental Protection Agency and State Department, which have held up previous negotiations. However, the recent addition of border wall funding and CSR payments have left Congressional Democrats and the Trump administration at loggerheads.

Most recently, Mick Mulvaney, the Director of the Office of Management and Budget OMB and President Trump’s chief negotiator on the FY17 spending package, proposed a dollar-for-dollar exchange to fund both the border wall and CSR subsidies; however, that offer has drawn sharp rebuke from Congressional Democrats who support a permanent extension of the CSR payments. We’ll continue to send out updates this week negotiations between the Trump administration and Congressional Democrats progress. Please keep an eye on NACHC’s social media accounts and blog for up-to-the-minute news about the FY17 spending package.

****Editor’s Note****

 

Negotiations between the Trump administration and Congressional Democrats are still ongoing, showing glimmers of a possible breakthrough to avert a government shutdown before Friday’s midnight deadline. President Trump’s $1.5 billion request for border wall funding has been rescinded ‒ removing one of the largest obstacles leaders in Washington faced to strike an agreement that keeps the federal government open.

However, a deal isn’t guaranteed. As of Wednesday afternoon, Republicans and Democrats are still wrestling with several issues including $7 billion for CSR subsidies, at least a $15 billion increase in defense funding, $500 million to alleviate Puerto Rico’s looming Medicaid crisis, and $1.3 billion for coal miners’ health benefits. At Wednesday’s morning press briefing, Speaker of the House Paul Ryan suggested that the $7 billion for CSR subsidies have no place in Congress’ annual spending bills ‒ implying that the Trump administration, and not Congress, is responsible for funding them. As we move closer to Friday’s midnight deadline, it looks increasingly likely that Congress will pass a week-long extension in order to reach a deal next week.

 

****End Note****

Wicker-Stabenow Health Center Funding Letter

If Friday’s shutdown drama doesn’t provide enough excitement for you, there’s also another deadline on the horizon: the Wicker-Stabenow Health Center Funding Letter closes out Thursday, April 27. Currently, 46 Senators have signed on board to support health center funding in FY18; but that’s still well short of the 62 who joined last year. (Click here to see if your Senator has signed, or if he/she signed last year but not yet this year) We need your help to make sure Congress knows the importance of ending the health center funding cliff well before September 30, and why providing robust funding for health centers in FY18 is important. Click here to send a note to your U.S. Senators and ask them to add their names to the Wicker-Stabenow Health Center Funding Letter.

Reviving the American Health Care Act

House Republicans spent much of the Easter Recess discussing potential changes to their Affordable Care Act repeal bill, the American Health Care Act, which failed to receive a vote on the House several weeks ago. In a concerted effort to bring additional members of the House Freedom Caucus on board the American Health Care Act, Rep. Tom MacArthur (R- NJ) proposed an amendment to relax many of the ACA’s current consumer protections. Specifically, it would allow states to opt out of certain ACA requirements that everyone be charged the same amount for health care coverage, regardless of their health status. In exchange for waivers, states would be required to establish a new risk-sharing program to help cover the sickest and most costly patients, who could be denied coverage by insurers due to the waiver.

Lastly, a change made to the bill before Congress departed for the Easter Recess provided $15 billion for states to establish their risk-sharing programs; however, a recent analysis of Rep. MacArthur’s proposal suggests states will need between $3.3 billion and $17 billion each year in order to make the proposal viable. Long story short, Rep. MacArthur’s amendment is expensive!

House Republicans have yet to decide whether to move forward with Rep. MacArthur’s amendment, and several moderate Republican members of the House of Representatives have already expressed concerns about the potential impact, and cost, of removing health care protections for vulnerable Americans.

Wrapping Up

Although progress on the House ACA repeal effort is expected to grind to a halt this week due to Congress’ focus on the looming government shutdown, the Federal Affairs team here at NACHC will continue to publicly express the importance of immediately fixing the health center funding cliff, preserving the structure and integrity of Medicaid, and providing predictability for health centers. Click here to read NACHC’s statement on the American Health Care Act, and please continue to follow our activities on Twitter and Facebook for the latest updates on the House’s ACA repeal effort.