Trump Administration Budget Proposal Slashes HHS, ONC, and OCR Funding

On Monday, the Trump Administration released its 2019 fiscal budget which includes major cuts to funding for the Department of Health and Human Services (HHS), Office of the National Coordinator for Health IT (ONC), and the Office for Civil Rights (OCR).

The HHS has had a 21% cut to its budget from 2017 levels which means the Medicare and Medicaid programs will lose billions of dollars in funding. The ONC will lose a third of its funding and will be forced to cut its staff by 22. OCR will have 20% less to fund its extensive activities and will be forced to lose 5 members of staff.

While HHS funding is being cut, additional funding has made available for the HHS to tackle the opioid crisis and improve services for individuals suffering from severe mental illness. $10 billion has been made available in discretionary funding for tackling the opioid crisis and to help individuals with serious mental illness.

The HHS is required to expand existing activities to combat the opioid crisis and new initiatives should be launched to help individuals addicted to opioids have better access to treatment and support services. The budget requests an additional $5 billion for the HHS to combat the opioid epidemic and prevent abuse, including $1 billion in 2019, with the remainder spread over the next five years.

In the budget, the Trump Administration proposes the HHS secretary should work closely with the Drug Enforcement Agency (DEA) to bar providers from billing Medicare when they have been found to have abusive prescribing patterns. The budget says, “Cutting off Medicare funding for abusive prescription practices not only helps bring premiums down for seniors, it promotes sound public health policy.”

HHS Secretary Alex Azar praised the proposed budget, in spite of the cuts to his department’s funding saying, “The president’s budget makes investments and reforms that are vital to making our health and human services programs work for Americans and to sustaining them for future generations.”

When Azar took up the position, one of his main priorities was to take steps to reduce the high prices of many prescription medications. The budget proposes several new strategies to address the problem, including “addressing perverse payment incentives and exposing drug companies to more aggressive competition.”

Cuts have also been made to funding for graduate medical education spending. The budget consolidates GME spending in Medicare, Medicaid, and the Children’s Hospital GME Payment Program into a new mandatory GME capped grant program, while $451 million currently being spent on other health professions and training programs will be lost, as they “lack evidence that they significantly improve the nation’s health workforce.” Kenneth Raske, president of the New York Hospital Association, says the budget changes would result in a $48 billion reduction in GME funding over the next 10 years, and that would seriously affect the ability of teaching hospitals in New York to train the next generation of world class doctors.

The Centers for Disease Control and Prevention will have its budget cut by approximately $900 million, although two winners in the budget are the Food and Drug Administration (FDA) and National institutes of Health (NIH) which have been penned to have increases to their operational budgets. NIH has been allocated a $1.4 billion increase in funding, although $750 million of that will come from the $10 billion discretionary funding for the HHS.  The FDA will get an additional $190 million for new user fee funding and a further $10 million out of the HHS discretionary budget for the opioid crisis.

The Trump Administration is also committed to repealing and replacing the Affordable Care Act (ACA), including “enactment of legislation modeled closely after the Graham-Cassidy-Heller-Johnson (GCHJ) bill as soon as possible, followed by enactment of additional reforms to help set Government healthcare spending on a sustainable fiscal path that leads to higher value spending.” The proposed budget explains, “The president is committed to rescuing states, consumers, and taxpayers from the failures of Obamacare, and supporting states as they transition to more sustainable healthcare programs that provide appropriate choices for their citizens.”

While the 2019 fiscal budget has been proposed, it must still be passed by Congress and that looks unlikely given last week’s 2-year budget deal.

Image source: Sarah Stierch (CC BY 4.0)

Author: Steve Alder has many years of experience as a journalist, and comes from a background in market research. He is a specialist on legal and regulatory affairs, and has several years of experience writing about HIPAA. Steve holds a B.Sc. from the University of Liverpool.