White House Budget Would Severely Harm NY’s Health Care System

February 20, 2018

President Donald Trump last week released his proposed Federal fiscal year (FY) 2019 budget, “Efficient, Effective, Accountable: An American Budget.” The President uses the non-binding blueprint to detail his vision and priorities for the coming fiscal year. GNYHA released the following statement in response to the proposed budget:

“The massive hospital cuts in President Trump’s proposed Federal budget are the latest example of his administration’s unrelenting attack on New York’s health care community, and nothing less than economic tyranny. The staggering cut to GME alone ($48 billion over 10 years) would shatter the ability of New York’s teaching hospitals—the crown jewel of the nation’s physician training enterprise—to produce the next generation of world-class doctors. Across the board, the budget’s health care cuts disproportionately impact New York State. GNYHA calls on the New York Congressional delegation to halt this economic tyranny by rejecting this severely harmful budget.”

While Congress is unlikely to adopt the President’s budget—large portions will be dismissed outright—parts of it could be used in future legislative proposals. GNYHA fiercely opposes the budget’s proposed hospital cuts. In addition to the GME cuts, the President’s budget:

  • Makes several changes to Medicare uncompensated care pool (UCP) distributions, reducing overall funding by $69.5 billion over 10 years
  • Reduces payments to hospital outpatient departments (HOPDs) by $34 billion over 10 years by reimbursing hospitals for all outpatient services provided at “off-campus” locations at the much lower physician rate—effectively eliminating all current exceptions to the site-neutral payment policy, including those for grandfathered and “mid-build” sites, and cancer hospitals.
  • Reduces Medicare bad debt payments from 65% generally to 25% for all eligible providers over three years, an approximately $37 billion cut over 10 years
  • Enacts changes to the 340B Drug Pricing Program such as implementing a new user fee on all drugs purchased by covered entities, increasing the Health Resources and Services Administration’s regulatory authority, and enacting more stringent reporting requirements.

Leaders on Capitol Hill will determine the Federal budget process’s next steps, but for now it is unlikely that Congress will move forward with a formal budget resolution for FY 2019, which begins on October 1, 2018. The risk to hospitals remains high, however, because Congress always seeks ways to “pay for” other legislation, and presidential budget proposals are often used for this purpose.

GNYHA will convey to the Trump Administration, House and Senate leaders, and the New York Congressional delegation how severely the President’s budget proposals would harm GNYHA members and the entire health care system.