The following update was provided for our members by Hall Render, NOSORH Legislative Liaison:

State Office of Rural Health Reauthorization Update
On February 28, the Senate Health, Labor, Education and Pensions (HELP) Committee voted to advance the State Offices of Rural Health Reauthorization Act of 2018 out of committee.  The bill (S. 2278) now heads to the Senate floor for a full Senate vote.  The bill advanced after an amendment was agreed to which increases the authorization of appropriations level to $12,500,000 for each of the fiscal years 2018 through 2022.  The bill passed unanimously.

On the House side, introduction of a companion bill to the House measure is likely to occur in early March. The bipartisan bill will be introduced by members of the House Energy and Commerce Committee.

Congress Passes Massive Budget Bill with Numerous Health Care Provisions
On February 9, Congress passed a two-year budget deal containing substantial implications for health care. The Bipartisan Budget Act of 2018 sets new limits on how much the federal government can spend in the next two years. The budget deal keeps the government operating until March 23, at which point Congress must pass an omnibus appropriations bill to detail spending levels for each government program for the rest of the fiscal year.

The measure sets up a two-year, $300 billion increase in spending on military and domestic programs. It includes a four-year extension of funding for the Children’s Health Insurance Program, which comes on top of the six-year extension that Congress approved last month, and provides $7.8 billion in funding for community health centers over the next two years. The bill also provides $6 billion to combat the opioid crisis and improve mental health care.

Additionally, the legislation delays the reductions in Medicaid Disproportionate Share Hospital payments for two years and fully repeals the Independent Payment Advisory Board. The measure contains significant changes to telehealth reimbursement by allowing those services to be provided as a basic benefit for Medicare Advantage enrollees, expanding the ability of accountable care organizations to use telehealth and increasing the use of telehealth for individuals with stroke symptoms.

Other health care policy provisions in the measure include the following.

  • Permanent repeal of the Medicare payment cap for therapy services
  • Two-year extension of Work Geographic Practice Cost Index floor
  • Five-year extensions of home health rural add-on payments, ground ambulance add-on payments, the Medicare-dependent hospital program and low-volume hospital adjustment
  • Payment reductions for physicians providing Medicare services, home health services, skilled nursing facilities and the Medicare and Medicaid Improvement Funds, which are reduced to zero
  • Increased civil and criminal penalties, both monetarily and via longer sentences, for federal health care fraud and abuse

Trump Budget Proposes Cuts to HHS and Entitlement Programs
On February 12, the White House released President Trump’s FY 2019 budget proposal, which seeks major cuts to the HHS, HRSA and rural health. If enacted into law, the budget would cut the HHS discretionary budget by 21 percent and slash Medicare and Medicaid spending by hundreds of billions of dollars. For the second year in a row, the budget proposed to zero-out funding for the State Office of Rural Health and FLEX grant programs.

However, as with every presidential budget, the request is seen as more of an aspirational “wish list” than a realistic legislative proposal by most lawmakers on Capitol Hill. Nevertheless, provisions in the budget could find their way into legislation or agency regulations.

The Trump budget would provide HHS with nearly $10 billion in new funding to fight the opioid crisis through drug abuse prevention, treatment and recovery programs. However, it would also reduce Medicare uncompensated care payments, cut coverage of Medicare bad debt payments from 65 percent to 25 percent over a three-year period starting in 2019 and pay all hospital-owned physician offices located off campus at the physician office rate.

Heavy Focus on 340B Program Reform
President Trump’s budget request also calls for significant modifications to the 340B drug discount program. The proposal calls for savings from hospitals providing a certain amount of uncompensated care to be redistributed based on that percentage. Hospitals that do not meet the requirement would not receive any funds and their payment reductions would be returned to the trust. In addition, the budget proposal pushes for a requirement that hospitals report how they use savings from the 340B program, even including proposed legislative language to let HHS audit the records of providers to determine how savings are used.

The budget also calls for $16 million in user fees to help HRSA administer the 340B program. Nonprofit hospitals and other facilities would pay user fees amounting to 0.1 percent of 340B drug purchases. On February 15, Hall Render attended HRSA’s FY 2019 budget rollout where the agency described program priorities. HRSA officials said they are asking for increased regulatory authority over the 340B program to set standards as well as implement the user fee. HRSA administrators indicated they are still ironing out details of the new proposals and will release them as soon as possible.

The 340B program proposals in the president’s budget echo many of the concerns raised by Congress, and several track very closely to recommendations in a report released by the House Energy and Commerce Committee earlier this year. Members of the committee also raised concerns about the 340B program during a recent hearing on the impact of health care consolidation. In his opening statement, Chairman Greg Walden (R-OR) cited the 340B program as one of the reasons for increased consolidation because it “creates an incentive for hospitals to acquire independent physician offices not eligible for the 340B discount, especially those in the oncology space.”

Prior to the budget’s release, the White House Council of Economic Advisors issued a drug-price report suggesting increased oversight of the 340B program. The report suggests restricting the drug discount program to low income patients, and it raises concerns with current 340B eligibility standards.

GOP Moving Away from ACA Repeal Efforts
Congressional Republicans met for their annual policy retreat in February in West Virginia. Key GOP lawmakers stated that there are no imminent plans to try again to fully repeal the Affordable Care Act (“ACA”). Instead, they are shifting their focus to passing legislation for lowering health care premiums. When addressing the Republican legislative retreat, President Trump focused mostly on non-health care priorities, aside from supporting the Right to Try legislation and lowering drug prices.

Rural Health-Related Bills Introduced this Month
Rep. Cheri Bustos (D-IL) introduced the Rural Health Liaison Act of 2018 (H.R. 4945) to amend the Department of Agriculture Reorganization Act of 1994 to establish a Rural Health Liaison.

Sen. Chuck Grassley (R-IA) introduced S. 2415 to amend Title XIX of the Social Security Act to streamline enrollment of certain Medicaid providers and suppliers across state lines.

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