The 2018 budget bill cuts CMS reimbursement 0.25%

February 9, 2018

This is extracted from the 2/9/2018 CMA press release

CMA Federal Budget Update: Trump Signs Budget Act loaded with health care provisions


Early this morning (February 9, 2018), President Trump signed a two‐year bipartisan budget agreement
that ended the brief government shutdown. It would increase both defense and domestic spending by
~$300 billion over two years and is loaded with health care provisions.
Highlights of the Health Care Provisions in the Budget Act
1. Spending Offsets
Medicare Physician Payment Cut of 0.25% in 2019‐ CMA Opposed
The Act cuts Medicare physician payments by 0.25% in 2019 to extend other expiring programs within
The Medicare physician payment originally started out as a two year cut: 0.5% in 2019 and a larger cut
in 2020. The 2020 cut was projected to reduce the fee schedule base below 2015 payment levels. The
cuts would be achieved by revaluing misvalued services and making cuts if certain spending targets were
not realized. After intense pressure from organized medicine, the House removed the 2020 payment
cut in their stopgap bill on Tuesday.
The AMA negotiated a further reduction in the cut from 0.5% to 0.25% at the last minute in the Senate.
While this is an improvement over the original proposal, CMA is extremely frustrated that the cuts
are even in the bill. This cut will reduce by half the 0.5% payment update guaranteed to doctors in the
MACRA legislation. CMA warned Congress that physicians cannot meet the difficult MACRA quality and
EHR reporting requirements without adequate resources. We told them that Congress was going back
on their MACRA agreement to provide annual stable updates. See the CMA letter attached. CMA
leaders will be in Washington, D.C. next week and we will be asking Congress to restore the MACRA
payment cuts from 2016 and 2019 and to fund payment increases going forward.
All other Medicare providers received payment cuts to offset other spending, including Pharma who is
funding the Medicare Part D donut hole for seniors.
Medicare premiums for wealthier seniors will rise. Individuals earning more than $500,000 or families
earning more than $750,000 will pay 85% of the cost of Part B and Part D premiums instead of 80%.
The ACA Public Health and Prevention Fund was cut by ~ $2 billion over 10 years to offset other funding
increases. CMA opposed.
2. Health Care Improvements
There is some good news. The bill provides improvements that CMA has been advocating.
‐Extends and stabilizes the expired Children’s Health Insurance Program (CHIP) for ten years.
‐Extends the expired Teaching Health Center Primary Care GME program for two years and doubled the
funding; CMA instrumental in the House‐passed funding increase.
‐Repeals the Medicare Independent Payment Advisory Board (IPAB) slated to make arbitrary Medicare
program budget cuts without Congress’ approval.
‐MACRA Improvements (AMA‐sponsored)
‐Removes the cost of Part B Drugs from the cost category calculations which will help
‐Removes the cost of Part B Drugs from the total physician billings so that more physicians will
be exempt from MIPS.
‐Reduces the weight of the cost category to 10% for the next three years which will reduce its
negative impact.
‐The threshold for success in the cost category will be set at either the mean or median‐ again
helping to keep physicians out of the penalty
‐Provides more authority to the Physician Focused Payment Model TAC to provide actual
feedback to physicians developing and submitting
new payment models.
‐EHR Improvements
‐Removes the mandate that the standards become more strict over time.
‐Reduces the Advancing Care Information/Meaningful Use EHR requirements
‐Provides $6 billion in funding for mental health and the opioid crisis (new state grants for prevention,
treatment, and law enforcement)
‐Increases funding for NIH research and CDC
‐Provides funding for the community health centers and the National Health Service Corps
‐Expands Medicare telehealth services and access
‐Repeals the Medicare outpatient therapy caps
‐Allows Medicare Shared Savings ACOs to prospectively assign enrollees to the ACO
3. Outstanding Issues
DACA: There is not a deal on DACA or immigration. Those negotiations will continue.
ACA Market Stabilization: None of the bipartisan ACA market stabilization provisions were
included. However, the Senate budget agreement sets up an omnibus spending bill for consideration in
late March that leaders say could be used as a vehicle to stabilize the individual insurance
markets. Senators Alexander (R‐TN) –Murray (D‐WA) continue their work to achieve a bipartisan market
stabilization bill that would for two years fund the cost‐sharing payments that help low‐income families
afford copayments and deductibles and it would fund reinsurance to cover the high‐cost, catastrophic
cases in order to bring down premiums for everyone. There is also a bill in the House authored by Rep
Costello (R‐PA) that would provide funds for states to use for reinsurance programs that cover high‐cost
patients. The reinsurance idea is gaining momentum partly because individual market/ACA Exchange
premium hikes are expected to be announced right before the 2018 midterm elections unless more can
be done to bring them down. CMA supports Alexander‐Murray. We also support the reinsurance
provisions in the Costello bill but it also includes abortion restrictions that we do not support.
Thank You and Next Steps
Many thanks to the physicians who worked to gain passage of these issues and who contacted their
Members of Congress to fight the payment cut.
The CMA physician leaders will be in Washington, D.C. next week fighting to restore physician payment
cuts and provide a framework for updates in the future, urging passage of the market stabilization
reinsurance bills, finding a permanent solution for the “Dreamers” who include over 100 medical
students, and to provide massive regulatory relief for physicians. We will also be fighting the new
federal regulation that sets limits on the dosage and duration of opioid prescriptions. CMA will meet
with the leaders in Congress and Seema Verma, the head of the Centers for Medicare and Medicaid
Services. See attached CMA’s “Top Ten Priorities for Regulatory Relief.”
Elizabeth McNeil
Vice President
Federal Government Relations
California Medical Association

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