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On the Hill: Congress Reviews Trump’s Medicare, Medicaid Proposals

This week, Congress will dive into the details of President Trump’s budget recommendations for the next fiscal year.

Congress has received the president’s proposed $4.7 trillion budget proposal for fiscal year 2020, initiating the first step in the federal budgeting process. While the president’s budget is not approved by Congress and does not become law, it provides lawmakers and the public insight on the administration’s desired policy changes and preferred spending levels for federal agencies and programs.

The budget plan calls on Congress to exercise its authority and enact significant reforms to Medicare and Medicaid and reduce federal spending in both programs. The administration proposes to end Medicaid expansion and give states the option to accept a per-capita cap or block-grant funding mechanism — changes that would reduce Medicaid spending by $1.4 trillion over a 10-year budget window. The proposal maintains the $4 billion Medicaid disproportionate share hospital reduction scheduled to begin on Oct. 1, 2019, and extends reductions through FY 2029.

In addition, the proposal calls on Congress to base Medicare uncompensated care payments on a hospital’s share of charity care and non-Medicare bad debt, providing $182 billion in Medicare savings. The budget plan asks Congress to adjust Medicare outpatient payments to hospitals by the severity of a patient’s diagnosis. The proposal also includes extending site-neutral payment policy to clinic visits provided in on-campus hospital outpatient facilities and all off-campus hospital outpatient departments, including grandfathered facilities, to save Medicare $160 million over 10 years.

This week, members of the president’s cabinet will review the budget proposal before congressional committees across Capitol Hill.

Nonprofit, Tax-Exempt Hospitals

Meanwhile, Sen. Chuck Grassley (R-IA), chair of the Committee on Finance, submitted a letter to the IRS requesting information on whether nonprofit hospitals meet the charity care and community benefit obligation that accompany their tax-exempt status.

Grassley is seeking data related to IRS enforcement of tax-exempt status, and he has requested a response by April 1.

Health Care Hearings

This week, the House Committee on Energy and Commerce Subcommittee on Health will hold its first hearing on legislation to reduce prescription drug prices. The hearing will focus on legislation intended to speed up the production and availability of generic alternatives to brand-name drugs.

The House Committee on Education and Labor Subcommittee on Civil Rights and Human Services will meet to review federal child nutrition programs.

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