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  • Washington Highlights

    HHS Secretary Testifies Before Congress on President’s Budget Proposal

    Tannaz Rasouli, Sr. Director, Public Policy & Strategic Outreach
    Jason Kleinman, Senior Legislative Analyst, Govt. Relations

    Health and Human Services (HHS) Secretary Alex Azar testified in support of the president’s fiscal year (FY) 2020 budget proposal [see related story] in front several congressional committees of jurisdiction. Members of Congress highlighted a variety of issues during these hearings, including voicing concerns about cuts to the National Institutes of Health (NIH), reductions to Medicaid financing and Medicaid disproportionate share hospital (DSH) funding, and health workforce programs.

    Both Democrats and Republicans on the House Labor-HHS-Education Appropriations Subcommittee expressed concern March 13 over the administration’s proposal to cut NIH funding by nearly $5 billion in FY 2020, a move that full Appropriations Chair Nita Lowey (D-N.Y.) characterized as “absurd” and that Subcommittee Chair Rosa DeLauro (D-Conn.) vowed to reject.

    Emphasizing the need for “steady, sustained, inflation-plus increases” in NIH funding, Subcommittee Ranking Member Tom Cole (R-Okla.) noted that discretionary spending “makes up only about 8 percent of total outlays” at HHS and that some of the budget’s proposed discretionary cuts were “shortsighted” because “you simply cannot balance our national budget by chipping away at 8 percent of total spending.”

    Many Democratic members voiced their opposition to the Medicaid proposals included in the president’s budget at the Labor-HHS hearing and others. During the March 12 House Energy and Commerce Health Subcommittee hearing, Committee Chair Frank Pallone (D-N.J.) noted, “The Fiscal Year 2020 budget continues the sabotage by reviving the failed Graham-Cassidy ACA repeal proposal which would lead to tens of millions of Americans losing their health insurance and would undermine protections for people with pre-existing conditions. The president's budget also continues the administration's assault on the millions of hard-working families that rely on Medicaid for health insurance proposing $1.5 trillion in cuts to Medicaid.”

    Rep. Eliot Engel (D-N.Y.) raised concern about the administration’s proposal to extend Medicaid DSH cuts, stating, “Medicaid DSH payments help support hospitals across the country and all types of communities, urban and rural. And at the end of this year hospitals will face substantial cuts to their DSH funds if Congress doesn’t act. So the president’s budget, by the way I look at it, doesn’t propose to reduce or delay these cuts. Instead, it doubles down and proposes increasing the size of these cuts over a longer period of time. And by your own rejections, this would result in $25.9 billion in cuts to Medicaid DSH on top of the $44 billion in DSH allotment reductions under current law.” He added, “I don’t see how hospitals will be able to sustain cuts of that size.”

    During the March 14 Senate Finance Committee hearing, Sen. Tim Scott (R-S.C.) added that the Medicaid DSH cuts “could have a catastrophic impact on states like South Carolina, where we could see a 34% cut in payments to our state.” He urged the administration to “take a closer look at the model that you will use to spread the cuts that will be seen around the country.”

    Several Republicans, including Reps. Larry Bucshon, MD, (R-Ind.) and Buddy Carter (R-Ga.), highlighted their support for the administration’s proposed changes to the 340B Drug Pricing Program. Specifically, Bucshon expressed concern that “a significant number of hospitals in the 340B program may be providing low levels of charity care despite the rapid growth in the program” and referenced a bill he introduced in the 115th Congress to create new reporting requirements for participating hospitals [see Washington Highlights, Jan. 12, 2018].

    At the Labor-HHS Subcommittee hearing, members also raised concerns over implications of the budget’s proposals on efforts to strengthen the health care workforce. Despite proposing to eliminate most of the Health Resources and Services Administration (HRSA) Title VII and VIII health workforce programs, Sec. Azar discussed the importance of HRSA. The Secretary argued HRSA “will continue to make investments to address substance use disorder, including opioid use disorder, through the Rural Communities Opioid Response Program, the National Health Service Corps (NHSC), behavioral health workforce programs, and the Health Centers Program.” Rep. Katherine Clark (D-Mass.) criticized the proposed cuts in the president’s budget to the HRSA Title VII behavioral health workforce programs, which she said combined with the proposed cuts to Medicaid would make it harder for patients with opioid use disorder to receive treatment.

    During the hearing, Ranking Member Cole asked Sec. Azar about the status of $25 million in funding from the FY 2019 spending bill designated for HRSA Graduate Medical Education grants to public medical schools [see Washington Highlights, Sept. 14, 2018], noting HHS has yet to put out guidance on the program. Sec. Azar responded that he was not familiar with that program and would get back to the Ranking Member regarding his request.