President Trump Releases FY2020 Budget

March 14, 2019
Health Policy

On March 11, the president released to Congress his budget request for fiscal year (FY) 2020. The budget request proposes significant reductions to Medicare and Medicaid over 10 years.  The president’s budget is non-binding.  Congress will now develop the budget and pass the measure for fiscal year 2020. 

Medicare

Medicare spending would be reduced under this budget by $845 billion over 10 years.  Significant provisions include proposed changes to the physician fee schedule and post-acute payments.

The budget establishes a unified system of post-acute payment for long-term care providers along with reduced annual payment updates to skilled nursing facilities, home health agencies, and inpatient rehabilitation facilities every year from 2020 through 2024. This proposal is projected to reduce Medicare post-acute care spending by $101.2 billion over 10 years.

The budget found inadequate reimbursement for primary care relative to specialty care due, at least in part, to challenges in reflecting clinician time and resources spent evaluating and coordinating ongoing patient care. Beginning in FY 2021, the budget creates a risk-adjusted monthly Medicare Priority Care payment for providers who are eligible to bill for evaluation and management (E/M) services and who provide ongoing primary care to Medicare beneficiaries. The payment would be funded by a 5% annual reduction to the valuations of all non-E/M services and procedures under the Physician Fee Schedule.

The budget changes the Merit-based Incentive Payment System (MIPS) through the proposal of new measures. Effective calendar year 2022, the budget alters the MIPS program by adopting a uniform set of broader claims calculated measures and simplifying beneficiary surveys to assess performance at the group practice level instead of the individual clinician level during the performance period to reduce burden and provide meaningful and comparable results to clinicians and patients. This proposal would use the budget-neutral payment adjustments under the current statute to fund the incentive pool during the corresponding payment year and would retain the $500 million in annual additional performance bonus payments for top performers.

Medicaid

The president’s budget proposals for Medicaid would cut federal spending on the program by $1.48 trillion over the next 10 years. The administration’s budget resurrects the call for the transformation of Medicaid into a block grant or system of per-capita capped payments to the states. The budget would impose mandatory work requirements, make it easier for states to eliminate non-emergency medical transportation, and allow higher copayments when beneficiaries seek non-emergency care at the emergency room.

Geriatrics Workforce Enhancement Programs

The “skinny” budget did not yet include information regarding primary care training programs such as the Geriatrics Workforce Enhancement Program (GWEP) under Titles VII and VIII under the Health Resources Services Administration. This important program enhances and extends geriatric education in a variety of settings. We expect the president to release this number under his full budget. 

The president’s submission is the first step in setting a budget and spending levels for the fiscal year that will begin on October 1, 2019. Congress will now determine spending levels for federal programs in fiscal 2020. We will urge Congress to reject this budget and to ensure that post-acute and long-term care providers have the resources necessary to meet the needs of people as they age.