Healthcare Business News

Spending bill would boost funding for some healthcare services, but not ACA

By Jessica Zigmond
Posted: January 14, 2014 - 4:30 pm ET

The House Appropriations Committee has unveiled a fiscal 2014 omnibus spending package that boosts funding for biomedical research, public health preparedness, and substance abuse and mental healthcare services, but offers no new funding for the president's healthcare reform law.

Healthcare policy experts view the bill—which was tightly negotiated between House and Senate appropriators—as an exercise in compromise and a mixed bag for healthcare. For instance, the National Institutes of Health, the Centers for Disease Control and Prevention and the Food and Drug Administration will see funding increases, while the 2010 Patient Protection and Affordable Care Act will face reductions and restrictions if Congress approves of it.

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The nearly 1,600-page spending package includes all 12 regular appropriations for fiscal 2014, including the Labor, HHS and Education bill (PDF) that includes $156.8 billion in discretionary funding for this year. That's about $100 million below the fiscal 2013 level and about $9 billion below what President Barack Obama had requested for these programs, according to the House Appropriations Committee.

The legislation includes $29.9 billion for the National Institutes of Health, $1 billion above last year's level. The funding is to support basic bio-medical research and translational research through programs such as the Clinical and Translational Science Awards and the Institutional Development Award to support scientists as they search for cures.

While the NIH funding is an increase from last year's levels, it wasn't enough to fully restore funding that has been lost through sequestration and last year's government shutdown, according to Ilisa Halpern Paul, managing government relations director at Drinker Biddle & Reath.

Research! America, a not-for-profit education and advocacy alliance, echoed that sentiment in a statement Tuesday. The group praised funding increases for agencies such as the CDC, the FDA and the Agency and for Healthcare Research and Quality, but it expressed concern about the NIH.

“But funding for the National Institutes of Health has been kept well below the level of scientific opportunity,” Mary Woolley, the group's president and CEO, said in the statement. “We must eliminate sequestration once and for all, and grow our investment in NIH in order to slow and halt the progression of diseases and disabilities ranging from Alzheimer's to diabetes to traumatic brain injury.”

Meanwhile, the bill increases biodefense program efforts at the CDC to $6.9 billion this year, a $567 million increase from last year, and funds the Substance Abuse and Mental Health Administration at $3.6 billion, which is $144 million above 2013 levels.

The legislation also freezes management and operations at the CMS at a level of $3.7 billion, which is equivalent to the amount put in place by sequestration and $195 million below last year's funding level.

“Certainly I think the administration would have liked to see growth in that line to step up and respond to some of the challenges the agency is facing vis-a-vis ACA implementation,” Halpern Paul said, “but I think it's clear that's not an area that others want to see grow.”

Julius Hobson, a senior policy adviser at law firm Polsinelli, said he sees certain funding aspects in the bill as a concession by Republicans that repeal of the Patient Protection and Affordable Care Act is not an option now.

“You knew when you got to January 2014 that repeal would be somewhat of a difficult thing to pull off because you're down the road,” Hobson said. “So what's beginning to happen is, 'restrictions here, restrictions there,' to try and rein it in.”

One such area is the law's Independent Payment Advisory Board, which was reduced by $10 million in the omnibus bill. The law's Prevention Public Health Fund also has been a frequent target for funding cuts from congressional Republicans who have deemed it a “slush fund.” In this omnibus bill, Sen. Tom Harkin (D-Iowa)—author of that provision in the ACA—noted this is the first time Congress actually allocated the fund's resources since its inception.

In February 2012, $6.25 billion over nine years (2013-2021) was cut from the fund to help pay for a temporary fix to the Medicare physician payment formula, and another $51 million was cut last year due to sequestration, according to the American Public Health Association. Then last year, about $453.8 million was diverted from the fund for the health reform law's insurance enrollment efforts, but $121.3 million from other HHS sources was put back in to supplement it, which left $616.5 million for the fund last year.

The spending package released this week directs the transfer of $1 billion from the fund for specific funds and programs within HHS. It also ensures that none of the funds can be used for the health insurance exchanges under the health reform law, and it calls for a $72 million cut due to sequestration.

In a news release, Sen. Tom Harkin (D-Iowa)—author of that provision in the ACA—noted this is the first time Congress actually allocated the fund's resources since its inception.

“This is a biggie,” said Rich Hamburg, deputy director for the Trust for America's Health. “For those of us involved and working on this and advocating for it, the intent of this was for Congress to allocate these funds to supplement existing funds,” he said, adding that hasn't always gone according to plan. “Nonetheless, as of the moment the president signs it, we will have seen most of $4.25 billion in additional dollars for public health prevention efforts.”

The House on Tuesday passed a three-day spending bill so lawmakers can review the full spending package. Funding for government operations is set to expire Wednesday, based on a budget agreement that lawmakers reached last fall.

Follow Jessica Zigmond on Twitter: @MHjzigmond

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