Two-year budget deal repeals therapy caps, cuts skilled nursing spending by $1.96 billion

Last week, President Donald Trump signed a two-year federal budget deal that left long-term care providers sighing with relief at the repeal of therapy caps for Medicare Part B beneficiaries retroactive to January 1, followed by a sigh of disappointment with a $1.96 billion cut to skilled nursing facility (SNF) spending. The cuts include a payment reduction of 15% for therapy assistants, making the actualization of the wished for therapy cap repeal bittersweet.

The budget cut, which will last for a period of ten years according to the deal, is the result of a freeze in SNFs’ Medicare market basket rate, which is set at 2.4% in fiscal year 2019 (to begin October 1 of this year).

The 640 page deal—called the Bipartisan Budget Act—provides additional funding in other areas of healthcare, including:

  • Funding for community health centers for two more years
  • An extra four years of funding for the Children’s Health Insurance Program (an extension from the previously agreed upon six months)
  • A $90 billion disaster aid package with two years of full funding for Puerto Rico’s Medicaid program
  • Six billion dollars allocated to the opioid crisis over a two-year period
  • A two-year delay to payment cuts to Medicaid disproportionate-share hospitals

Other changes, however, were a surprise, like the change to the Medicare Part D donut hole provision for seniors, which increases the discount that drug manufacturers are required to give beneficiaries from 50% to 70%, legislation meant to lower seniors’ out-of-pocket costs when purchasing medications.

The deal also repeals the Independent Payment Advisory Board for Medicare (a plan that was never implemented but caused much controversy among policy makers).

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