White House Reveals 2020 Budget
This afternoon, the White House released its FY2020 Budget. Congress views the President’s budget as a statement of his priorities for the fiscal year and a blueprint as they move forward with the appropriations process.
Unfortunately, the budget would be devastating for the rural health safety net, key programs that help support struggling rural providers across our country.
Department of Health and Human Services
President Donald Trump's budget request envisions slashing funding for the Department of Health and Human Services (HHS) by 12% in 2020 to $87.1 billion. The budget includes $1.25 trillion in mandatory savings from a number of programs, including Medicare, though the White House believes that initiatives to lower drug prices will cut approximately $19 billion in Medicare spending through 2029.
The budget includes changes to Medicaid, including work requirements and additional eligibility standards, that the Administration estimates would save roughly $143 billion in the next decade.
Health Research and Services Administration
HRSA is the home to the Federal Office of Rural Health Policy and the majority of rural health safety net programs. The budget slashes funding for the National Health Service Corps, Area Health Education Centers (AHECs) as well as other workforce and training programs that are essential to addressing workforce shortages in rural areas.
Further, the budget aggressively cuts funding for Rural Outreach Grants, Rural Hospital Flexibility Grants, Telehealth, the Rural Residency Program, the Rural Communities Opioids Response Program, and Rural Health Policy Development.
National Institute of Health
The White House proposal would cut the National Institute of Health’s (NIH) budget by $4.5 billion in 2020. NIH houses the National Cancer Institute, which would lose $897 million and the National Institute of Allergies and Infectious Diseases which would lose $769 million.
The budget would also provide $256 million to consolidate the Agency for Healthcare Research and Quality's (AHRQ) work in the new National Institute for Research in Safety and Quality, a change the White House believes would streamline research.
Centers for Disease Control
CDC's budget would be cut by $1.27 billion overall, though some individual programs, such as vacciationations, would see a funding increase.
The budget requests $291 million for the President’s HIV/AIDS Initiative next year. NRHA recently submitted comments to HHS regarding HIV/AIDS and Hepatitis C in rural America, which you can view here.
340B and Drug Pricing
Included in the changes to the HHS budget are sweeping drug pricing reforms, including 340B. The plan proposes to “modify payment for drugs hospitals purchase through the 340B discount program and require a minimum level of charity care for hospitals to receive a payment adjustment related to uncompensated care.”
Proposals for participating 340B hospitals to have charity care of one percent or greater listed on there is not a realistic measure, especially for small rural providers. Rural hospitals serve a disproportionate share of the sick and poor resulting in higher levels of uncompensated care, and for many rural hospitals, the 340B program is essential for just keeping their doors open. A single line on a Medicare cost report does not reflect the reality of a rural hospital’s charity care and should not be used to exclude rural hospitals from this vital program.
Further, the proposal aims to increase the “integrity of the program.” The 340B statute does not require covered entities to track or report program savings or how they are used. The absence of reporting requirements in the 340B statute has resulted in a lack of data on how covered entities use the program and the value of the program, both to entities themselves and to the patients these entities serve. While NRHA does not oppose increased standards of participation, we must ensure that we don’t paperwork before patients, creating burdensome and unnecessary regulations.
The Opioid Crisis and Substance Use Disorders
Despite making opioid treatment a priority, the budget proposes to keep funding mostly flat, while calling for a slight cut to the Substance Abuse and Mental Health Administration's (SAMHSA) budget by cutting certain treatment and prevention programs, while maintaining most others at current levels.
The budget includes $4.8 billion for HHS to continue addressing the opioid use disorder and substance use disorder in communities across the country, including $1.5 billion for State Opioid Response grants, which provides funding to Tribes and all States and territories. The budget provides an additional $786 million to continue implementing the SUPPORT Act, which was passed at the end of the last Congress.
Further, the budget allows States to provide one year of post-partum Medicaid coverage for women with a substance use disorder, in order to improve health outcomes for mothers and their infants.
As the conversation for FY20 funding continues, NRHA will continue to monitor and update members with analysis of proposals from both Congress and the White House.
Though just a small piece of federal spending, rural health safety nets are essential for the future of our rural communities. We ask for the continued support of Congress and the Administration as these discussions continue. You can view NRHA’s FY20 requests here and our recent letter to the House Appropriations Committee here.