This afternoon the House is anticipated to approve the FY 2017 Omnibus appropriations package. The spending bill is the result of negotiations with Democrats to keep the federal government funded until Oct. 1, 2017. As is the case with every bill that gets approved by Congress, it is wise to read the fine print. Here is a list of provisions that we found interesting:
Puerto Rico Medicaid – Gets an additional $296 million. Puerto Rico received a Medicaid block grant of $6.4 billion for years FY 2011 to FY 2019. However, Puerto Rico is on track to exhaust those funds by Q1 of FY 2018 (between October and December 2017) which is likely to lead to a humanitarian crisis. Good news for anyone that provides health care services in Puerto Rico and Puerto Rico's residents.
National Institutes of Health – Congress is planning on increasing funding by $2 billion even though the president had asked for a reduction. This increase represents 6.2 percent more than FY 2016. The explanatory statement accompanying the spending bill expresses an expectation that Research Project Grants – the raw material of drug development – will also increase 6.2 percent. Good new for drug companies.
Cost-Reduction Subsidies – Democrats wanted these payments to be included as mandatory spending. While the White House has promised to continue the payments for the time being, the spending bill does not include them. Coupled with the continued ban on risk corridor payments discussed below, the absence of CSR payments is doing nothing to calm the individual health insurance market. Bad news for insurers.
IPAB – The spending agreement calls for defunding IPAB. The effect of this zero appropriation would be that, if IPAB is triggered , there would be no money to develop the cuts contemplated by the creation of this board. In other words, they won’t happen. Good news for Medicare Advantage and Pharma.
Air Ambulance Services – The explanatory statement carries forward instructions in the June 2016 Senate Committee on Appropriations’ report requesting a GAO study on air ambulance services. If you did not follow that request, it asks the GAO to submit a report to the House Committee on Appropriations on air ambulance services. In the FY 2017 Omnibus Spending bill it reiterates that request with instructions that the report include:
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An analysis of costs including all operational, mechanical, medical, human capital and business expenses.
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An analysis of the number of providers providing either fixed wing or rotor wing ambulance services and the number of transports, taking into consideration the volume of transports per provider over time, and the number of comparative volumes for accident site, inter-facility and non-emergency/charter transports.
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Reflect demographic and urban/rural/super rural differences as well as differences in fixed wing and helicopter services
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An examination of the source and amount of reimbursement for these services among private insurance companies, Medicare, Medicaid and other government sponsored insurance programs such as TRICARE
Not a new development, but still bad news for AIRM.
Insurers – The explanatory statement also continues to ban use of CMS program management funds for risk corridor payments. CMS has made partial payments for 2014 and Congress seeks to prevent them from making any more. Part of the reason for the continued ban on risk corridor payments is strategic. The federal government is defending several lawsuits from insurers and voluntary payments would complicate the courtroom strategy. The other part is ideological. Republicans like Marco Rubio have equated the payments with a “bailout” similar to those given that other type of beloved financial institution – large banks.
The decision to continue the ban comes at a critical time. Continued payments of Cost-sharing Reductions to insurers are an open question. The payments are not included in the Omnibus as Democrats have initially demanded. No one is surprised the Omnibus continues the prohibition on making the risk corridor payments but combined with other events helps erode the confidence insurers have in federal support of the individual market.
Reflecting a desire to avoid a shutdown of the federal government - a distraction President Trump does not need - the spending package is pretty tame and includes the few things Democrats and Republicans can agree on these days.
Call with questions. We will be up late watching the action on the AHCA.
Emily Evans
Managing Director
Health Policy
@HedgeyeEEvans
