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How the new budget deal affects physicians


Bob Doherty of the ACP breaks down the major healthcare implications of the government's funding plan.

On February 8, Congress passed, and President Donald Trump signed, a budget deal that will fund the federal government through September 2019. The agreement increases domestic spending by about $128 billion over the next two years. Included in that amount is funding for the Children’s Health Insurance Program (CHIP), community health centers, and other programs affecting healthcare delivery and medical practices.

To get a better sense of what the budget deal will mean for doctors and the healthcare system, Medical Economics spoke with Robert Doherty, senior vice president for governmental affairs and public policy for the American College of Physicians (ACP.)

Medical Economics: In your view, what are the three or four biggest gains for doctors and healthcare to come out of this agreement?

Robert Doherty: Well I think they fall into several areas.  One has to do with funding and re-authorizing several programs and priorities that were really up in the air until this bipartisan agreement was reached.  That list included the Children’s Health Insurance Program, and that’s huge because there are about nine million children whose coverage was at risk had Congress not re-authorized CHIP. We came really close to the point where states were going to be forced to begin limiting enrollment in CHIP.


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There are several other programs whose authorizations were also set to expire.  Community Health Centers probably top that list. Community Health Centers are the principal source of primary care in many underserved communities around the country.  Their initial authorization lapsed on September 30 of last year. Congress patched together a very short-term extension for Community Health Centers to March but the budget agreement that passed Congress last week re-authorizes that program for two more years.

The same for National Service Corps. This agreement gives two years of funding for that program.  And then there’s the Teaching Health Center GME Program, which is a pilot program to fund residency programs or teaching programs where physicians are trained in community health centers. That program’s authorization also lapsed and again there was a short-term extension but now that program is authorized for two more years.

So if you look at all those programs together, CHIP still provides coverage for millions of kids. The Community Health Centers and National Service Corps are extremely important programs in terms of providing access to primary in underserved communities. And the National Service Corps and the Teaching Health Center GME Programs are extremely important programs in terms of training physicians in fields like primary care. And again, the nice thing about it is it’s not just three or four months or even a year of authorization, they funded through fiscal year 2019.

There’s another change in the Medicare Quality Payment Program where there’s a cost of care [category] of MIPS that originally was going to be 10 percent of the physician’s score under MIPS. And CMS delayed implementing that, so that for the last two years that component has been zero percent of your total score. But under the MACRA law that was going to go to 30 percent  [in 2019], but Congress included in the budget agreement flexibility for the administration to not go above 10 percent with that.

So that could be significant because CMS does not have a good way of measuring cost of care and if it had gone to 30 percent, that would have been a big part of the MIPS scores for something that’s not reliable and probably would have put quite a few physicians in negative territory in terms of updates based on the cost of care measure. 

Next: Did the bill provide any other relief for physicians?


Another major area I think that was a little under the radar for a lot of folks is the enactment of legislation to reduce barriers to chronic care under Medicare. [The budget bill] extends the Independence At Home Demonstration Project, which provides home-based primary care to Medicare beneficiaries with multiple chronic conditions and supports their independence at home, which is so important for people with chronic illnesses who otherwise might have to go into an assisted living facility or other system if they didn’t have the support at home to live independently.

And then, very importantly, at the beginning in 2021 physicians will be able to furnish telehealth consultation services for treating acute stroke without any geographic limits.  Currently, those services are covered only if they meet certain geographic restrictions; basically that they have to be in an underserved community. Beginning in 2021 there no longer will be geographic restrictions on the ability of physicians to furnish telehealth services and for those to be paid for.  It also will allow extensive telemedicine coverage by Medicare Advantage plans and Accountable Care Organizations.


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So it’s not everything that we might have recommended be done in chronic care management but these are huge steps forward, particularly seeing this emphasis on telemedicine taking center stage with Medicare … It’s a big step forward for Medicare and for seniors enrolled in the Medicare program and for physicians who are interested in providing telehealth services or want their patients to be able to access telehealth services from a specialist who is not located within their own community.

ME: Did the bill provide any other relief for physicians?

BD: They made a number of changes to help ease some of the regulatory burdens on physicians. Probably the most significant one is removing the mandate that electronic health record Meaningful Use / Advancing Care Information standards become more stringent over time.

A lot of physicians have had difficulty meeting the Meaningful Use requirements for EHRs, which are transitioning to the Advancing Care Information category under the Merit-based Incentive Payment System (MIPS).  And the requirement that came from the original HITECH Act that those standards have to continually get more stringent over time when physicians already are having difficulty meeting the existing requirements really created an untenable situation.

So they’re going to give the [HHS] secretary more flexibility in his ability to determine whether a physician is meeting the standards or would meet the conditions for a hardship exemption and also physicians won’t necessarily have to constantly reapply for a hardship exemption. We don’t know exactly how the secretary will use the additional flexibility the law now gives him in interpreting those standards and applying them to physicians.  But at least he has the legislative authority to do all that.

 ME: What do you think are going to be the most immediate effects that doctors will see coming out of this agreement?

Next: What will the impact be on drug costs?


RD: There have been sequestration caps in effect now that have put a ceiling on the amount of dollars that Congress could appropriate for defense and non-defense programs. So what the agreement does is raise caps of both defense and non-defense spending and specifically it says that as they lift the caps on non-defense spending, that the money should be dedicated to the CDC, to the NIH, and funding programs to deal with the opioid epidemic.  So that creates a lot more room in the budget for Congress to then appropriate the dollars needed to support those priority areas.

A lot of the chronic care changes that I just mentioned, their effective dates are still a year or two or three years from now largely because Medicare’s got to write all the rules and policies that go with it. An example is the authorization to provide stroke services via telehealth outside of existing geographic restrictions.  That doesn’t go into effect until 2021.  So there’s going to have to be work done with CMS on the implementation side to see exactly how it’s going to be rolled out. 


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ME: What impact is the agreement going to have on drug costs for Medicare beneficiaries?

RD: I know that they accelerated closing of the donut hole under Medicare Part D. I haven’t looked into that in any real detail yet but certainly I think most physicians and patients will be happy to see the donut hole go away as quickly as possible.

There is increased cost-sharing requirements in the budget agreement for higher income beneficiaries. So they’ll have to pay more out-of-pocket. I believe it goes from 80 percent of the cost to 85 percent of the cost above a certain income bracket.  We didn’t do a deep dive analysis of that but that’s in the agreement for some higher income beneficiaries and my guess is they’re not going to be too happy with that.  But that was part of the offset to help pay for other things.

ME: Was there anything ACP would have liked to see, or expected to see in this budget agreement that wasn’t there?

RD: I think given the fact that our government is so polarized right now, getting Democrats and Republicans agreeing on anything is significant. And they agreed to a lot of things that have been on ACP’s and organized medicine’s wish list for years. So given the fiscal constraints, the partisanship, and everything else, it probably exceeded expectations.

ME: Is it too early yet to talk about your priorities for the next budget?

RD: I think ACP will be continuing to make sure that Congress actually puts its money where its mouth is in terms of opioids, and that NIH and the CDC get the appropriate funding.

And then an area I think is a priority for physicians is the high cost of prescription drugs. The president’s budget actually has some proposals to try to address the problem of the high cost of prescription drugs, to give Medicare more ability to use its purchasing power to try to lower the out-of-pocket costs to patients of expensive drugs. Whether those go far enough I think is going to be debated. But at least there’s some indication by the administration that this is a priority.

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