Trump’s HHS budget cuts 16 percent across agency, including NIH, ONC

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The full fiscal year 2018 budget proposal for HHS would include deep cuts to Medicaid, while making immediate cuts to National Institutes of Health (NIH), the Office of the National Coordinator for Health IT (ONC) and almost all HHS agencies.

The details of the proposal were accidentally posted on the HHS website a day early, allowing reporters a glimpse at the cuts. It largely aligns with the budget blueprint released by the Trump administration in March.

“The budget focuses resources on direct services and proven investments while streamlining or eliminating programs that are duplicative or have limited impact,” the proposal said.

The largest cuts would come from Medicaid. On top of banking on $839 billion in cuts to the program by assuming the American Health Care Act (AHCA), which passed in the House on May 4, will become law, the budget proposes an additional $610 billion in reduced funding over the next ten years. Where the cuts would come from wasn’t specified, though the budget did mention switching Medicaid to a per capita cap or block grant program after 2020.

NIH would see its funding reduced by 18 percent compared to fiscal year 2017. As previously reported, the proposal would limit what NIH grant recipients could spend on administrative costs related to their research. All the institutes within NIH would receive lower funding, like a $1.2 billion cut for the National Cancer Institute and a $672 million reduction for the National Heart, Lung and Blood Institute. It would also eliminate the Agency for Healthcare Research and Quality (AHRQ), rolling its functions into NIH.

This is one reason members of Congress, like Sen. John Cornyn, R-Texas, call the White House budget “dead on arrival” like those under past presidents. Increased funding for NIH has been supported by both parties in recent years, with the agency receiving an extra $2 billion in the budget deal for the last five months of FY2017.

Among the other cuts:

  • $1 billion cut from the Centers for Disease Control and Prevention.
  • $403 million from physician training programs.
  • $374 million from the Substance Abuse and Mental Health Services Adminstration.
  • $75 million from rural health programs within the Health Resources and Services Administration (HRSA), a 50 percent cut, including a $7 million reduction for telehealth programs.
  • $27 million from the Hospital Preparedness Program.
  • $22 million cut from ONC.
  • $6 million from the HHS Office of Civil Rights (OCR).

Much of the CMS budget is complicated due to the ongoing debate over repealing the Affordable Care Act and replacing with the AHCA. The budget proposed $636 billion in cuts to CMS benefit programs over the next ten years, while it doesn’t include any “direct Medicare cuts” and would extend the Children’s Health Insurance Program (CHIP) through fiscal year 2019. However, in the agency’s program management budget, a total of $379 million would be cut, and 155 full-time equivalent positions would be eliminated.

One area within CMS which would see a boost in funding is for survey and certification for healthcare facilities. The budget asked for an additional $9 million to “maintain survey frequency levels due to growing numbers of participating facilities and improved quality and safety standards.”

It also would change the frequency of surveys, with 1 percent of accredited hospitals (down from 1.5 percent) to be surveyed per year, non-accredited hospitals now being surveyed every four years, while community mental centers, rural health clinics, and outpatient rehabilitation and physical therapy centers seeing more frequent surveys.

There would be some funding increases in other areas. For example, the budget would include $1.3 billion over the next decade to work through the backlog of Medicaid appeals, and another $70 million would be appropriated for the agency’s health care fraud and abuse prevention efforts. For the U.S. Food and Drug Administration (FDA), while direct funding would be slashed by $854 billion, it would be offset by a $1.3 billion increase in user fees paid by pharmaceutical and medical device manufacturers.