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AHA blasts Trump's budget cuts to outpatient services

American Hospital Association President Rick Pollack said the organization is opposed to a $34 billion reduction in critical services.

Susan Morse, Senior Editor

The American Hospital Association is speaking out against funding cuts for providers in President Donald Trump's 2019 budget proposal, including a planned $34 billion reduction in off-campus outpatient payments.

"We strongly oppose any proposals to reduce payment for services provided to Medicare patients in the outpatient setting," AHA President and CEO Rick Pollack said by statement. "Hospital-based facilities provide access to critical services that are not otherwise available in the community and treat patients with very severe conditions."

[Also: Site-neutral payments called an assault on the financial stability of hospitals]

The budget would eliminate the current exemption from site neutral payment cuts for off-campus hospital outpatient departments, reducing the amount Medicare pays to these hospital-owned medical facilities by $33.9 billion over 10 years.

Historically, hospital-owned outpatient centers received significantly higher reimbursement than private physician offices or ambulatory surgical centers performing the same procedures. Medicare is already reimbursing new outpatient facilities that used to be paid under the higher rates of the outpatient prospective payment system, on the physician fee schedule. 

The budget proposals would end the grandfather, putting all off-campus hospital-owned physician offices on the physician fee schedule.

AHA said it is also concerned about planned cuts to disproportionate share hospitals that serve low-income populations.

The budget also includes significant cuts to teaching hospitals, Pollack said.

The Medicare Payment Advisory Commission had recommended closing the gap between outpatient rates. There was also concern that hospitals were buying up physician practices to take advantage of the higher reimbursement.

The Alliance for Site Neutral Payment Reform has commended the provision to expand site neutral payments for all hospital-owned physician practices. Data show disparities in Medicare payments across care settings drive up patient costs through higher premiums and copayments, the Alliance said.

The Community Oncology Alliance also said it supported expanding Medicare's site neutral payment policy because it lowers patient costs and reduces the initiative for hospitals to take over independent practices.

The 2019 budget, coming out days after President Donald Trump signed a stopgap, two-year budget deal, proposes to cut close to $18 billion, or a 21 percent decrease, from the Department of Health and Human Services. Over 10 years, $554 billion would be cut from Medicare.

The budget faces a tough approval process in Congress.

The White House budget proposal recommends continuing 340B reforms and for sharing manufacturer rebates and discounts with seniors in Medicare Part D.

The budget proposal adds $10 billion to address the opioid epidemic and serious mental illness, according to the Feb. 12 letter to House Speaker Paul Ryan from Mick Mulvaney, director of the Office of Management and Budget. 

It gives $9.2 billion to the National Institutes of Health to return the NIH to 2017 funding levels of $33 billion. It adds $200 million to CMS' Program Management account to support programs.

Twitter: @SusanJMorse
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