AACU News & Notes

White House Releases Fiscal Year 2021 Budget

posted: February 17, 2020

On February 10, the White House released its $4.8 trillion FY 2021 budget proposal. The budget, while unlikely to be fully implemented, reflects the Administration’s priorities for the upcoming fiscal year.

The healthcare component of the budget proposes deep cuts in funding for both Medicare and Medicaid (combined $1.6 trillion over ten years) and slashes the Department of Health and Human Services (HHS) by nine percent ($94.5 billion).

The cuts to Medicare would be achieved by lowering payments for uncompensated care, expanding Medicare Advantage plans, and promoting high deductible health plans for seniors. Medicaid would save close to a trillion dollars over ten years by limiting eligibility, establishing work requirements, and providing waivers to states that reduce their Medicaid spending.

As part of the cuts to HHS, the National Institutes of Health (NIH) would lose $2.6 billion next year and the Centers for Disease Control and Prevention (CDC) would absorb a $700 million reduction. Those savings would be redistributed into block grants for states to address chronic diseases. The Agency for Healthcare Research and Quality (AHRQ) would be restructured as a division under the NIH.

Other healthcare policy changes in the budget proposal include:

  • A new, unified payment system for all post-acute care sites (e.g. skilled nursing facilities, long-term care hospitals) within five years;
  • Implements site-neutral payments for certain on-campus HOPD services such as imaging tests, clinic visits and drug administration;
  • Reinforces a 2017 policy change to pay hospital-owned, off-campus offices at the physician office rate;
  • Expands prior authorization to additional Medicare fee-for-service items;
  • Eliminates the requirement to submit new MIPS proposed quality measures to peer reviewed journals; and
  • Limits physicians’ medical liability by providing a three-year statute of limitations, capping awards for noneconomic damages, and creating new safe harbors for providers.

In line with the Administration’s long-term goal, the FY21 budget includes a $50 billion reduction in payments over ten years to the Graduate Medical Education (GME) program, accomplished by consolidating all federal GME spending into a single grant program for teaching hospitals. The budget also threatens workforce training by eliminating Section 747 of Title VII, which allows for grants to support training primary-care physicians.

The AACU is continuing to review the White House budget request and will work with our partners in the urology community to address any legislative proposals that affect our ability to practice or impede patient access to care.

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