NYAPRS Note: Thanks to Lauri Cole of the NYS Council for Community Behavioral Healthcare for passing these on.
Obama Budget Sets Aside $864M To Set Up Healthcare Law
By Julian Pecquet, The Hill, 02/13/12
President Obama’s budget includes $864 million to get a key element of his healthcare reform law off the ground.
The law requires health insurance exchanges to be in place in all 50 states by Jan. 1, 2014. States that want to run their own exchanges must pass muster with the federal government by the end of 2013; the federal government will operate a default exchange in states that fail to launch their own.
The funding increase is included in a $1 billion hike for program management at the Medicare agency, which hosts the exchange program.
“The majority of that funding is going to the implementation of the exchanges,” said Marilyn Tavenner, the acting administrator for the Centers for Medicare and Medicaid Services. “We plan on working with Congress for additional funding. . We have a plan to implement the exchanges so they’ll be operational by 2014.”
The healthcare law did not set aside any money specifically for the creation of a federal exchange. The new budget fixes that by allocating $574 million for the creation of the so-called “Federally-facilitated Exchange” and to “begin the process of certifying state-based Exchanges,” according to budget documents <http://www.hhs.gov/budget/budget-brief-fy2013.pdf>
The federal exchange portion would pay for operations that include “receiving and evaluating submissions from issuers for qualified health plans in the [federal exchange], contracting with entities to perform eligibility and enrollment functions, quality and setting up financial management and oversight infrastructure.”
The budget also sets aside $290 million for “consumer and beneficiary education and outreach” within the exchanges.
Obama Budget Slices Medicare, Medicaid Through Provider Cuts
By John Reichard and Jane Norman, CQ HealthBeat February 12, 2012
President Obama’s $76.4 billion fiscal 2013 Health and Human Services budget proposal would trim $360 billion in Medicare and Medicaid payments over 10 years, in part by cutting payments to certain providers. It also cuts $664 million from the Centers for Disease Control and Prevention, freezes the National Institutes of Health budget at $31 billion and adds about $1 billion to the Centers for Medicare and Medicaid Services.
Administration officials explained the NIH’s stagnant funding by saying that “new grant management policies” would increase the number of new research grants.
The budget also calls for “a single blended matching rate for Medicaid and Children’s Health Insurance Program spending to replace the current complicated patchwork of matching formulas starting in 2017.”
In his remarks on his budget proposal during an appearance at Northern Virginia Community College, Obama mentioned health only briefly, saying that his administration is helping community colleges redesign training programs to provide workers in high-demand fields like health care services. And he said that “tuition inflation has actually gone up even faster than health care. That’s hard to do,” drawing a laugh.
The spending proposal calls for $267 billion in Medicare cuts over 10 years. It would save $155 billion by reducing Medicare payments for pharmaceuticals provided to low-income beneficiaries by compensating drug companies at Medicaid rates. It would reduce payments to certain post-acute care providers by $57 billion. Post acute providers include skilled nursing facilities.
Medicare “bad debt” payments to compensate providers when patients don’t pay their out of pocket charges would fall by $36 billion. Cuts in the bad-debt payments have been on the table during the ongoing congressional negotiations over the Medicare physician payment formula fix, the extension
of unemployment insurance and the payroll tax holiday.
Medicare payments for graduate medical education would decline by $9.7 billion. Payments to “critical access hospitals” located in more remote geographic regions would drop $1.4 billion. A total of $820 million would be saved by updating Medicare payments “to more appropriately account for utilization of advanced imaging.”
The president would save money on pharmaceuticals by, starting in 2013, giving biotech companies starting seven years of exclusive marketing for brand name products rather than 12 years under current law. The administration would ban “pay for delay” agreements, under which brand name drug makers pay generic drug companies to delay introduction of low cost copycat drugs.
These cuts would extend the solvency of the Medicare trust fund for hospital care by two years.
Another provision would reduce “the federal subsidy of Medicare costs for those beneficiaries who can most afford them,” apparently by raising their Part B doctor care and Part D prescription drug monthly premiums. The proposal also “applies a premium surcharge for new beneficiaries beginning in 2017″ if they chose Medigap coverage.
“Research indicates that beneficiaries with Medigap plans that provide first dollar or near-first dollar coverage have less incentive to consider the costs of health care services, thus raising Medicare costs and Part B premiums for all beneficiaries,” the proposal explains.
Also, “to encourage appropriate use of home health services that are not preceded by inpatient care, new beneficiaries beginning in 2017 would be responsible for a modest copayment for home health services in certain cases,” the proposal says.
Preventive Fund Eliminated
The Preventive and Public Health Service Block Grant would be eliminated under the Obama budget proposal. In the past, CDC has used the grant to pay for items such as public health data collection and surveillance, food safety, and emergency medical services. According to the CDC, $94.8 million was allocated to the states in the 201 budget year. The activities that the grant has funded “can be more effectively implemented” through other existing programs, the budget says. It allocates $1.25 billion from the Prevention and Public Health Fund, which was created in the health care law, for activities to help improve outcomes and reduce costs. The prevention fund has in the past been eyed by budget cutters.
In the area of public health, there’s also $39 million for the CDC to reduce health-care-associated infections and expand reporting of the infections, which patients pick up in hospitals and nursing homes. And funding for disease-specific chronic diseases with common risk factors are consolidated into one program, which may draw objections from advocates for those diseases.
The president proposes to scrub some health-related programs. They include Area Health Education Centers, a program created by Congress in 1971 to address the needs of people who don’t get adequate health care. It has grown to 235 centers in every state, according to the centers’ association. It promotes partnerships between the centers and schools of medicine and nursing to encourage students to go into health professions and provide
professionals with continuing education.
“These activities do not directly train new providers and thus do not increase the number of providers trained,” says the budget proposal . “The 2013 Budget focuses resources on activities that more directly address the primary care provider shortage.” It suggests the programs are well supported since they have been around for so many years and may be able to find other sources of financing.
The spending plan places an emphasis on warding off public health threats to national security. It includes $547 million for development of next-generation medical responses to chemical, biological and nuclear threats. There’s $50 million for a “Strategic Investor” in the office of the assistant secretary for preparedness and response, which is described as an independent venture capital entity. Such investors in the business world add value to money that’s invested through their contacts or experience.
FDA Budget Up
For the Food and Drug Administration, the president’s budget calls for an increase of $654 million from 2012 levels, including $10 million in “new resources” to improve food safety and medical-product imports to the U.S. The funds will support “a greater FDA presence” in foreign countries that
export to the U.S., including China.
The budget includes $2.5 billion in budget authority and $4.5 billion in total program resources for the agency. It also outlines new user fees to implement food safety provisions (PL 111-353 http://www.cq.com/law/111/353 ) and to support availability of generic drugs and biologics, known as biosimilars. The budget supports FDA’s efforts to advance regulatory science and reviews of medical countermeasures for chemical, radiologic, biomedical and nuclear threats.
AIDS Money Expanded
Funding for access to domestic HIV/AIDS prevention and treatment would be expanded, the budget says, to an overall $3.5 billion. An additional $75 million would be allocated to the Health Resources and Services Administration’s Ryan White program for people living with the condition who can’t afford health care, for an overall budget of $2.4 billion.
In addition, there is an increase of $67 million to $1 billion total for the AIDS Drug Assistance Program, which has faced long waiting lines in the states. And there’s a $30 million increase for Centers for Disease Control and Prevention activities connected with preventing AIDS.
Nellie Bristol contributed to this story.