Congressional Leaders, White House Agree to FY 2020 Spending Deal

December 20, 2019

Congressional Leaders and the White House reached a deal earlier this week to fund the Federal government for the remainder of Federal fiscal year (FY) 2020 (which ends on September 30, 2020). The deal includes a short-term delay—to May 22—of Medicaid disproportionate share hospital (DSH) cuts, which were set to take effect today (December 20). President Trump is expected to sign the bill in the coming days.

GNYHA worked closely with Senate Minority Leader Chuck Schumer (D-NY), the New York Congressional delegation, and others on Capitol Hill to ensure that the final budget deal included a Medicaid DSH cut delay. It remains our position that the Medicaid DSH cuts must be delayed for at least two years, and we will continue to strongly push for that outcome as the May 22 deadline approaches. We believe there is strong support for this policy on Capitol Hill, as earlier this year the House Energy & Commerce Committee and leaders of the Senate Finance Committee individually agreed to longer-term Medicaid DSH cut delays.

We are happy that the FY 2020 spending package includes neither hospital cuts nor a surprise billing proposal that would have benefited for-profit insurers at the expense of providers. We will work to ensure that this remains the case in future packages that Congress may agree to in the comings months, such as a longer-term health care extenders package or drug pricing bill. We are also thrilled that the final deal didn’t include language being pushed by several Senators that was hostile to recently approved and GNYHA-supported liver allocation reforms.

The spending agreement also includes the following provisions:

  • Provides an increase in the Federal matching rate (Federal medical assistance percentage, or FMAP) for Puerto Rico and the other US territories; Puerto Rico’s FMAP was set to revert to 55% and will now be set at 76% for two years (and 83% FMAP for two years for other US territories)
  • Complete repeal of three Affordable Care Act taxes:
    • A 2.3% tax on medical devices
    • A tax on health insurance plans
    • A tax on high-cost employer medical plans (the “Cadillac tax”)
  • Other short-term health extenders, such as funding for community health centers, are extended through May 22, 2020
  • The Federal minimum age to purchase tobacco products is raised to 21
  • Repeals the transportation fringe benefit tax on nonprofits
    • For nonprofit, tax-exempt hospitals, the Tax Cuts and Jobs Act of 2017 made amounts paid or incurred for qualified transportation fringe benefits and parking facilities used in connection with qualified parking provided to employees taxable as unrelated business income—this bill repeals the tax retroactive to Dec. 22, 2017
  • $25 million for the Centers for Disease Control and National Institutes of Health to study gun violence prevention (see GNYHA’s tweet on this provision here)

Additional information on this deal can be found here. We will keep our members apprised of any developments related to health care extenders and provisions that were only temporarily extended by the FY 2020 spending bill.