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President Biden’s Proposed FY 2023 Budget Could Affect ASCs

Policies and programs might impact surgery centers in terms of spending and surveys

BY ALEX TAIRA | APRIL 2022

In President Biden’s proposed budget for 2023 federal spending, Medicare Part B fee-for-service (FFS) spending, which covers physician services, outpatient hospital services and ASCs among other programs, is expected to total $227.7 billion in 2023 alone. This represents a 3 percent increase over the $221.2 billion Part B spending in 2022. Part B spending is expected to exceed Part A (inpatient hospital services) spending, which shows the extent of the shift toward outpatient services, even among the elderly population. The administration is requesting $1.42 trillion alone for the Centers for Medicare & Medicaid Services (CMS) programs, an increase of $53 billion over 2022 spending. Notably, the administration is requesting some $26 billion less for the Medicaid program in 2023 compared to 2022. However, this decrease is offset by an $83.7 billion increase in Medicare spending. Together, Medicaid and Medicare account for $1.38 of the $1.42 trillion requested for 2023 CMS expected spending.

The White House released Biden’s proposed budget on March 28, 2022.

The other notable policies and programs included in the 174-page US Department of Health & Human Services (HHS) budget brief that might impact the ASC community include:

Consolidation of Medicare Vaccine Coverage: Currently, Medicare coverage of vaccines is split between Part B and Part D (prescription drug coverage). The administration is proposing to move payment and administration costs of all vaccines to Part B, as well as requiring that Medicare Advantage (MA) plans cap their beneficiary cost sharing of vaccines at the levels of regular Medicare. The administration also proposes to change the calculation for the amount that Medicare will pay for vaccines, from 95 percent of the average wholesale price to 103 percent of the wholesale acquisition cost (the price manufacturers sell to wholesalers). This change is expected to cost $3.6 billion over 10 years.

Disclosure of Accreditation Surveys: A notable policy that does not involve any extra allocation of funds is a budget proposal that would remove the prohibition on the HHS secretary from disclosing accreditation surveys, except for those surveys related to CMS enforcement actions. Although details of this proposal are still relatively vague, it seems as though the administration is asking for the ability to post survey information on facilities found to be out of compliance, so that the public can be better informed when choosing a site of service for their care. ASCs are not specifically named as a site that would be subject to this proposal but it is likely that ASC surveys would be among those allowed to be disclosed if the proposal is finalized.

COVID-19 and Future Pandemics: The nation is still under an ongoing public health emergency (PHE) declaration first put in place by then HHS Secretary Alex Azar on January 31, 2020. Combating the ongoing pandemic remains a key focus for the Biden administration that proposes several new discretionary spending policies aimed at the pandemic and future pandemics. This includes $200 million for the Centers for Disease Control and Prevention's (CDC) Data Modernization Initiative, $353 million for Global Public Health Protection and $975 million for the Strategic National Stockpile, the nation’s primary repository for medication and other crucial medical supplies in case of emergency.

Background

Although annual federal spending is ultimately determined by Congress, which is tasked with passing appropriations bills that allocate funds to carry out government programs, the president’s budget request remains an integral part of assessing federal policies and spending. Given this, a review of President Biden’s proposed 2023 budget reveals important insights about the current state of federal health spending and future policy priorities for the administration.

Federal spending can be categorized as either mandatory or discretionary. Mandatory spending refers to funds controlled by non-appropriation laws, essentially programs where the funding is not subject to changes year-to-year. Most mandatory spending relates to entitlement programs such as Social Security, Medicare and Medicaid. Because HHS is responsible for administering Medicare and Medicaid, the agency has mandatory budgets that are much higher than other federal agencies. For 2023, the Biden administration proposes a massive $1.7 trillion in mandatory funding for HHS alone, representing almost one-third of funds in the entire $5.8 trillion federal budget. It is important to reiterate that as mandatory programs, funding Medicare and Medicaid is not subject to the congressional appropriations process and is generally seen as a noncontroversial component of presidential budget proposals.

What will be subject to congressional appropriations is the $127.3 billion requested by the Biden administration for HHS discretionary spending. These are funds requested by the administration for new programs or the expansion/modification of existing programs across the wide array of HHS sub-agencies such as CMS, the US Food & Drug Administration, CDC and the National Institutes of Health.

As a reminder, these are just a few policy proposals that may or may not translate to actual rules and regulations in the future. Review the entire FY 2023 President’s Budget. Write Alex Taira with any questions.