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On February 10, 2020, the White House released its fiscal year (FY) 2021 budget request, “A Budget for America’s Future.” The proposed budget seeks $4.4 trillion in spending cuts over the next decade, including $1.6 trillion in net mandatory health savings. Overall, the administration projects that the budget would reduce deficits to 3.3 percent of gross domestic product (GDP) after ten years, compared to a deficit of nearly five percent in 2020.
For the Department of Health and Human Services (HHS) specifically, the administration lays out a series of priority areas that speak to its continued direction on America’s health. We outline some of the key issues below, and pull in elements from the HHS’s own Budget in Brief (BIB) where relevant.
Overall HHS Budget
The administration requests a total of $94.5 billion for HHS, marking a 10 percent decrease from the 2020 enacted level. In the HHS BIB, the administration’s “vision for health reform” would yield savings of $844 billion over ten years, including cuts to Medicare totaling at $756 billion and to Medicare at $920 billion. Of note, the administration forecasts an extension of the Medicare program by at least an additional 25 years through its recommendations.
Broader Health Care Reforms
Building on Executive Order 13877, “Improving Price and Quality Transparency in American Healthcare to Put Patients First,” the budget seeks to reform health care through greater transparency of health care costs. It also focuses on lowering prescription drug prices, ending surprise medical bills, increasing choice and competition, and reducing regulatory burden. The budget outlines provisions to reform Medicaid, including measures to increase state flexibility and improve program integrity. Over 10 years, these reforms are estimated to save nearly $600 billion, driven primarily by more rigorous screening for ineligible enrollees and an uptick in states implementing work requirements.
The proposed budget notably includes a request for $5 billion to combat the opioid epidemic, with an eye toward investments in research, surveillance, prevention, treatment, increasing access to overdose reversal medications, and recovery support services. This includes $1.6 billion for State Opioid Response grants (an $85 million increase over 2020), with added flexibility to address psychostimulant abuse. In the HHS BIB, the administration includes specific research related line-item requests for the National Institutes of Health (NIH) and Centers for Disease Control and Prevention (CDC), and would also require minimum standards in Medicaid state drug utilization review programs to increase oversight of opioid prescriptions and dispensing in Medicaid.
For mental health, the administration requests additional funding ($375 million in total) for initiatives including expansion of Certified Community Behavioral Health Clinics (CBHCs); extending the current CBHC demonstration programs through 2021; and providing state Medicaid agencies more flexibility to provide inpatient mental health services to beneficiaries with serious mental health illness. The HHS BIB includes additional detail on funding for SAMHSA suicide prevention efforts, and would also increase efforts to address mental health wellness programs for students, especially for those in rural communities.
Regarding drug pricing, the administration offers explicit support for bipartisan legislative reform to redesign the Part D benefit, broadly resembling current legislation in the Senate. The administration also expresses interest in increasing access to generics and biosimilars. Curiously missing from the budget proposal, however, is any mention of potential regulatory levers for addressing drug prices, including the highly anticipated International Pricing Index (IPI) model and a proposed rule on drug importation programs.
The administration emphasizes the importance of expanding access to telehealth for patients in rural regions, and discusses the potential for increasing flexibility for offering telehealth services to providers predominantly serving rural or vulnerable populations. On the Medicare front, the administration also proposes modifying payments to Rural Health Clinics, specifically through the creation of a new prospective payment system for these facilities similar to the system used for Federally Qualified Health Centers.
The budget would provide $74 million in new resources to address the rising rate of maternal mortality in the United States. The resources are to focus on four strategic goals: 1) achieving health outcomes for all women of reproductive age by improving prevention and treatment; 2) achieving healthy pregnancies and birth by prioritizing quality improvement; 3) achieving healthy futures by optimizing postpartum health; and 4) improving data and bolstering research to inform future interventions. The HHS BIB also includes an administration proposal to test interventions aimed at reducing maternal mortality and morbidity.
The budget proposes to prohibit any federal funding for certain entities that provide abortion services, including funding for the Title X Family Planning and Medicaid programs. Additionally, the budget aims to protect conscience rights, prohibit coercion in healthcare, and allow private parties to enforce these rights in Federal court.
On kidney care, the administration discusses a provision that would allow Medicare beneficiaries with kidney transplants to have lifetime coverage for immunosuppressive drugs, along with oversight reforms for Organ Procurement Organizations (OPOs). The HHS BIB outlines additional kidney-related changes, including a recommendation to reset funding amounts for end-stage renal disease (ESRD) Networks and to tie subsequent increases to the Consumer Price Index For All Urban Consumers (CPI-U).
For FY 2021, the budget proposes to move the Center for Tobacco Products out of the FDA and create a new agency within HHS to focus on tobacco regulation. The budget notes that an agency with a singular mission on tobacco and its impact on public health would have greater ability to directly respond to the growing complexity of new tobacco products. The budget also details that this new agency would be led by a Senate-confirmed Director.
Josh LaRosa is a Policy Director at Wynne Health Group, focusing primarily on regulatory affairs with an emphasis on the FDA and CMS. His interests lie in delivery reform and innovations in payment and care delivery models. You can reach Josh via email at firstname.lastname@example.org, and can find him on LinkedIn and Twitter as well.