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Obama Administration Releases FY 2015 Budget Proposal

Posted on 3/5/2014 by NTOCC ® in Public Policy Updates

Today, President Obama released his $3.9 trillion budget proposal for fiscal year (FY) 2015 which outlines the administration’s policy priorities for the coming year. The topline for base discretionary spending in 2015 is $1.014 trillion, compared to $1.012 trillion in 2014. The proposal is largely viewed as a Democratic blueprint for the upcoming midterm elections as spending levels have already been established in the two-year agreement negotiated by Senate Budget Chairwoman Patty Murray (D-WA) and House Budget Chairman Paul Ryan (R-WI), which was passed in December of 2013. The budget adheres to the agreed-upon spending level of the Ryan-Murray plan, but also suggests an additional $56 billion in discretionary spending which the President is proposing to pay for with cuts to non-health care related programs. We believe that there will be considerable resistance in Congress to the President’s new initiatives, and we do not expect the $56 billion to materialize.

Chairwoman Murray has already indicated that she does not plan to write a budget resolution for this year, while Chairman Ryan will likely draft a budget to express Republican priorities in an election year and appears to be focused on using his budget-writing efforts to suggest ways to overhaul federal entitlement programs.

The President’s budget will not be considered in its entirety by Congress, but rather will serve as a reference document for legislators who are looking for reform proposals—specifically those that will save the federal government money—going forward.

The President’s budget provides $77.1 billion in base discretionary resources for the Department of Health and Human Services (HHS), $0.8 billion less than the 2014 enacted level and $3 billion less than last year’s request.  Health care spending for both Medicare and Medicaid, combined with spending on public health programs and medical research, will continue to be a primary focus of the administration.  In addition to committing to fully fund the implementation of the Affordable Care Act (ACA), the budget specifically includes:

  • $30.4 billion to the National Institutes of Health (NIH), an increase of $211 million, or 0.7 percent, over FY 2014.
  • $5.87 billion to the Centers for Disease Control (CDC)—a decrease of $220 million from FY 2014—plus another $810 million from the ACA’s Prevention and Public Health Fund.
  • $4.7 billion in total resources to the Food and Drug Administration (FDA)—an increase of $358 million, or 8 percent, above FY 2014—which includes $2.6 billion in budget authority and additional funding from its user fee programs.

The budget also includes $410 billion in savings over the next decade in Medicare, Medicaid and other Federal health programs.  Among them are several proposed spending reductions that are pertinent to NTOCC members:

  • Reductions in Medicare payments to certain post-acute care providers such as inpatient rehabilitation facilities (IRFs), long-term care hospitals (LTCHs), and home health agencies ($97 billion over 10 years)
  • Equalizing payments for certain conditions treated in skilled nursing facilities (SNFs) and inpatient rehabilitation centers ($2.4 billion over 10 years)
  • Implement a bundled payment starting in 2019 for post-acute care providers including LTCHs, IRFs, SNFs, and home health providers ($8.7 billion over 10 years)

Also of particular note for NTOCC, the proposal contains important investments including:

  • Investing $14.6 billion over 10 years to expand training for primary care providers to help meet the demand of the newly insured through the Affordable Care Act.
  • Providing $75 million for the Office of the National Coordinator for Health Information Technology (ONC) to continue implementation of meaningful use of certified Electronic Health Record technologies and to support investments in policies and standards that improve patient outcomes, including working with AHRQ, Patient Safety Organizations, the Joint Commission, and FDA on monitoring and analyzing data on patient safety events that could pre vented by HIT.
  • $10.8 billion for The Health Resources and Services Administration (HRSA) for FY 2015, including $1.8 billion for workforce programs to expand the nation’s health workforce capacity and to target health workforce in medically underserved areas.
  • Proposal to expand the “All-Inclusive Care for the Elderly Program.” The Medicaid-Medicare dual eligible program currently provides comprehensive, team-based, long-term care support services to ages 55+, and the proposal would create a pilot demonstration to test whether the program could effectively serve qualifying individuals between 21-55 years without increasing costs.

House and Senate appropriating and authorizing committees will be holding hearings in the coming weeks to consider the President’s budget proposal. However, as we previously mentioned, we do not anticipate this budget to make any meaningful headway.

Please click here to view the Department of Health and Human Services FY2015 budget Proposal.

Please click here to view the President Obama’s entire FY 2015 Budget Proposal.