$616 Billion Proposed Medicaid Cut Jeopardizes Home Health

President Donald Trump unveiled his budget proposal for fiscal year 2018 on Tuesday, May 23, with deep cuts to the Medicaid program and a fundamental shift in the way the federal government provides financial support to states through the program.

The proposed cuts would total $616 billion from Medicaid and the Children’s Health Insurance Program over the next decade, and there are other provisions in the budget that could impact the home health industry.

“What is offered is a combination of good news and bad news,” Bill Dombi, vice president for law at the National Association for Home Care and Hospice (NAHC), told Home Health Care News.


The Bad

Trump’s budget—”A New Foundation For American Greatness”—would not only cut Medicaid spending drastically but give states the choice between a block grant or per capita caps for receiving federal dollars in the program.

The cuts are on top of the roughly $800 billion in Medicaid cuts outlined in the American Health Care Act (AHCA)—the Obamacare replacement bill that was approved in the House in late April. Trump’s budget assumes the AHCA will be signed into law. The astronomical cuts have rung alarm bells across home care associations.


“Our largest concern as providers in the Medicaid services space is that this is $610 billion in cuts on top of any AHCA cuts,” Joy Cameron, vice president of policy and innovation at ElevatingHome, told HHCN. “Significant seems like such a little word to described the magnitude of these cuts. …This puts the ability of patients to get high quality service in their homes in serious risk.”

The budget lacks details on spending cuts, NAHC noted, and the association presumes that the Community First Choice benefit, which incentivizes home-based services over institutional care, could be eliminated in a shift to per capita caps.

“We are very concerned that the decades-long battle to provide Medicaid beneficiaries with improved access to home care rather than institutional care will risk a serious setback through these changes,” Dombi said. “States can still fund home and community based care, but it will be harder.”

The Partnership for Medicaid Home-Based Care (PMHC) responded to the budget by urging Congress to push for home-based care services and incentivize this option over nursing homes.

“By strengthening Medicaid recipients’ access to high-quality, low-cost, consumer-preferred home- and community-based services, we are confident that decision makers can achieve improved outcomes, increased quality of life and satisfaction and significantly reduce program costs,” PMHC Chairman David J. Totaro said in a statement.

The Good

The “best news” is that the budget does not include direct cuts to Medicare in FY 2018, according to Dombi.

It does include a proposal to repeal the Independent Payment Advisory Board, a 15-member board created under the Affordable Care Act (ACA) that is responsible for recommending Medicare spending within legislated limits to Congress. The board was separate from the Medicare Payment Advisory Commission (MedPAC), an advisory group that has rarely been listened to by Congress when it comes to Medicare spending proposals.

“That is definitely good news,” Dombi said of this proposed elimination. “NAHC opposed the IPAB as it was originally conceived and continued to seek its repeal since the ACA was enacted in 2011.”

The budget also addresses the Medicare appeals backlog, adding $127 million annually aimed to help cut reduce the backlog, which is expected to get worse, according to the Department of Health and Human Services (HHS).

“While that is also good news, it remains to be seen whether the proposed funding increase of $127 million annually is enough to fix a system that has nearly 1 million cases pending before Administrative Law Judges,” Dombi said.

However, the President’s budget proposal is just that—merely a proposal. Congress is charged with the authority to create and affirm federal spending, and it is not unusual for a finally budget to bear little resemblance to the White House’s initial proposal.

Written by Amy Baxter

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