Trump Administration Releases Budget Proposal Calls for Changes to Open Payments and Increased Funding for Fighting Fraud and Abuse

The Trump Administration recently released its fiscal year (FY) 2019 budget proposal, including extensive health policy provisions.

The budget proposal features numerous program integrity provisions. For instance, the budget calls for: a $45 million increase in Health Care Fraud and Abuse Control funding; expanded prior authorization requirements for high utilization practitioners of radiation therapy, therapy services, advanced imaging, and anatomic pathology services; expansion of the items of DME, prosthetics and orthotics that are subject to prior authorization; a demonstration to test the use of a benefits manager for serial/refill DME claims; a requirement that clearinghouses and billing agents enroll in Medicare; and the addition of the National Provider Identifier of covered recipients on the public Open Payments website.

The budget proposal also snuck in some proposed changes to Open Payments, including altering the Open Payments reporting and publication cycle, and publishing the National Provider Identifier for covered recipients in the Open Payments Program, as ways to address fraud and abuse in Medicare.  

The budget also includes proposals to streamline Medicare program rules for providers and suppliers, including: relaxing Medicare meaningful use program requirements for hospitals and physicians, simplifying Merit-based Incentive Payment System (MIPS) rules and Advanced Alternative Payment Model (APM) bonus rules for physicians, and various reforms to the Medicare appeals process.

The budget also proposes a new exception to the physician self-referral law for arrangements that arise due to participation in Advanced APMs. Furthermore, several provisions are intended to boost accountable care organizations (ACOs), including a proposal to allow ACOs to pay beneficiaries for a primary care visit.

Trump continues to attempt a “repeal and replace” method to the Affordable Care Act (ACA). This year’s budget calls for a “Market-Based Health Care Grant Program” (similar to the pending Graham-Cassidy-Heller-Johnson legislation) as an initial step to help states stabilize their insurance markets during a transition period. The second step would then repeal the ACA’s Medicaid expansion and significantly restructure Medicaid by allowing states to choose between a per capita cap or a block grant.

Another area of emphasis in this year’s budget proposal is reducing prescription drug prices, although there is debate regarding the potential effectiveness of the Administration’s approach. Among other things, the budget would:

• “Modernize” the Medicare Part D benefit by requiring Part D sponsors to apply at least one-third of total rebates and price concessions at the point of sale and eliminating cost sharing for generic drugs for low-income, among others.
• Establish new standards for hospitals to receive redistributed savings resulting from reduced payment for outpatient drugs purchased through the 340B discount drug program, based on the hospital’s level of uncompensated care.
• Reduce Medicaid drug spending by establishing a Medicaid demonstration to test coverage and financing reforms that build on private sector best practices,  requiring state Medicaid to cover all FDA-approved Medication Assisted Treatments for opioid use disorder, and establishing minimum standards for Medicaid drug utilization review programs.

This budget proposal is separate from the two-year budget deal passed by Congress in early February, which is complicating efforts made by the White House to reorder federal priorities.