HHS Deputy Secretary Eric Hargan assured U.S. House of Representatives lawmakers on Tuesday that the $845 billion Medicare spending cut over the next decade won't amount to slashing care.
A large portion of the seeming cuts stems from a change in how hospitals are paid for uncompensated care and graduate medical education. Instead of taking those dollars from the Medicare trust fund, they will come from the general fund, shrinking the gap to around $500 billion, Hargan said during a House Budget Committee hearing.
"By moving those out to the general fund we are extending the life of the Medicare trust fund by years," Hargan said. "The reckoning is delayed by a number of years."
But the move sparked an outcry from hospital groups and some Democrats who charge that the Trump administration is imperiling funding for seniors. Hargan said at a hearing of the House Budget Committee that the proposed changes shore up Medicare by lowering spending growth.
Medicare's trust fund is projected to be depleted by 2026, according to the 2018 Medicare Trustees Report.
Hargan added that the Trump administration wants to lower the rate of growth in Medicare spending from 7.8% per year to 6.9% per year.
The lower spending will occur through a series of "common sense" reforms, Hargan said, including site-neutral payments.
A final rule that went into effect in January cut payment rates for evaluation and management services given out at hospital sites so they align with payments to physician offices. Dozens of hospitals have sued HHS over the rule, charging that the agency didn't have the authority to implement it and that congressional action was needed.
Hospital groups have bashed the cuts and vehemently opposed any site-neutral payment reforms.
The Federation of American Hospitals said when the budget was released that the changes were "draconian" and would impact out-of-pocket costs for seniors.
It is highly unlikely that Congress will adopt the budget proposal, but the document and Hargan's comments give an idea of the Trump administration's priorities for Medicare and hospital payments.
Hargan also defended the administration's push for states to adopt Medicaid work requirements.
So far the CMS has approved work requirements for able-bodied Medicaid beneficiaries in eight states. Three states—Arkansas, Indiana and New Hampshire—have implemented the requirements, and 16,000 people have lost coverage in Arkansas.
But Hargan claimed the coverage losses were normal churn under the program, as people shift out of Medicaid if they get a new job or get married or some other life event.
"It is very early days in Arkansas' implementation of that community engagement requirement," he said. "Numbers show an average number of people passing out of the program."
A December 2018 report from the research firm Kaiser Family Foundation found that enrollees had problems reporting under the program, due in part to limited access to computers or the internet that made monthly reporting online difficult.