May 5—Research hospitals saw big funding increases in the omnibus federal budget bill expected to clear Congress this week.

The House of Representatives and the Senate each passed the FY17 omnibus appropriations bill, which will fund federal discretionary spending through the Sept. 30 end of the federal fiscal year. The bill then went to President Donald Trump to be signed into law.

The funding bill would increase spending for the U.S. Department of Health Human Services (HHS) by $2.8 billion, to $73.5 billion. The National Institutes of Health (NIH) would receive a $2 billion increase to $34.1 billion.

The NIH budget increase was sought by hospital advocates, who are pushing for a $2 billion increase for FY18 as well.

“As a result of this investment, our researchers at medical schools and teaching hospitals are going to be able to pursue new and improved opportunities to try to make progress on some of the most debilitating diseases,” said Tannaz Rasouli, senior director of government relations for the Association of Academic Medical Centers (AAMC).

Eighty percent of NIH’s budget goes to external sources, and about 50 percent of that share goes to research at medical schools and teaching hospitals, where NIH is the largest public funder of biomedical research, Rasouli said in an interview. The hospitals provide 53 cents in research funding for each dollar of federal support.

AAMC and other research advocates still plan to fight the Trump administration’s proposal for $6 billion in cuts to NIH funding in FY18. The proposed reduction could increase to nearly $8 billion after the unexpected $2 billion bump for FY17 because the proposed total was based on the FY16 funding level.

Rasouli said research hospitals have been doing outreach to help the administration understand the “devastating” impact on research institutions from such cuts.

“It’s not like a faucet that you can just turn on and off,” Rasouli said. “You can’t simply put research on hold one year while there are budget cuts and then expect to resume that research immediately after that. You really need to have a level of reliably steady support for NIH.”

Rasouli said AAMC did not know why the cuts were proposed but assumed they were part of an attempt to find domestic savings to offset increases sought in defense spending.

Rural Health Benefits

Other healthcare spending increases include $6 million for rural health programs at the Health Resources and Services Administration (HRSA). Funding for these programs would reach $156 million, or more than 4 percent higher than in FY16.

The HRSA funding also includes $1.5 billion for community health centers, the same amount as in FY16.

The Children’s Hospitals Graduate Medical Education program would receive a $5 million increase.

Agency and Office Funding

The bill also includes a $22 million increase, to $7.3 billion, for the Centers for Disease Control and Prevention.

The bill would provide $3.7 billion in stable operational funding for the Centers for Medicare & Medicaid Services while barring additional funding to implement Affordable Care Act (ACA) programs.

No funding was provided for cost-reduction subsidies for health plan enrollees in the ACA’s insurance marketplaces who earn up to 250 percent of the federal poverty level. The Trump administration recently promised such funding would continue, at least for now.

The bill also would continue the ban on risk corridor payments for ACA health plans.

The bill calls for defunding the Independent Payment Advisory Board (IPAB), which the ACA authorized to cut Medicare funding if the program’s growth exceeded certain limits. In the absence of the IPAB, the secretary of HHS would make spending reduction recommendations, which would go into effect unless Congress approved alternative savings.

Medicare’s trustees had signaled that this was the first year in which IPAB cuts would be required, although the cuts would be implemented through a two-year process.

The spending bill includes a $150 million increase for the Substance Abuse and Mental Health Administration (SAMHSA), to $3.6 billion. The SAMHSA funding level is $130.5 million more than the Obama administration had requested.

Puerto Rico’s Medicaid program was provided an additional $296 million to prevent an FY18 shortfall after the program was expected to exhaust a $6.4 billion block grant that was supposed to last from FY11 to FY19.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Friday, May 05, 2017