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From Health Law Daily, January 17, 2014

Appropriations Act cuts ACA spending

By Jay Nawrocki, MA

The Senate approved a $1 trillion spending bill on the night of January 16, 2014. The Consolidated Appropriations Act of 2014 provides funding for the federal government for the remainder of the 2014 fiscal year. Included in the bill are some cuts to funding for the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) and additional funding for the processing of Medicare claims. The bill was approved by the House of Representatives on Wednesday January 15, 2014. President Obama has indicated that he will sign the legislation.

PPH cut. The Act cuts $1 billion from the Prevention and Public Health (PPH) fund established by section 4002 of the ACA. For fiscal year (FY) 2014, the ACA originally appropriated $1.5 billion for this fund and beginning in FY 2015 and each year thereafter $2 billion was earmarked for it. The stated purpose of this fund, according the ACA, is “to provide for expanded and sustained national investment in prevention and public health programs to improve health and restrain the rate of growth in private and public sector health care costs.” The fact that the money in this fund does not have any specific purpose has led many Republicans to refer to the fund as the ObamaCare slush fund.

IBAP cut. The Act also includes a $10 million reduction in the funding for the Independent Payment Advisory Board (IPAB). Section 3403 of the ACA created the IPAB as a way to keep future Medicare cost increases in control. If CMS’ Chief Actuary determines that the Medicare growth is too high, the IPAB will meet and make recommendations to cut spending. These recommendations will automatically go into effect unless Congress acts otherwise. In 2014, the CMS Chief Actuary determined that Medicare spending growth was not so great as to require the IPAB to act, and as of yet not all of the 15 members who will serve on the IPAB have been appointed. The ACA provided that the IPAB should be funded at $15 million per year, with an annual increase to account for inflation.

Claims processing. An additional $305 million was appropriated in the Act to CMS “for the timely processing and payment of benefits and the continued essential services for the increasing number of Americans who rely on traditional Medicare programs,” according to a summary of the Act from the House Appropriations Committee.

Overall, CMS was appropriated $3.7 billion for management and operations for the remainder of the year. This amount is $195 million less than the amount appropriated in FY 2013 and is in line with the sequester requirements. HHS was appropriated $156 billion in discretionary funding, which is $100 million below the FY 2013 amount and $9 billion less than the president’s request.

MainStory: TopStory SenateNews ReimbursementNews CMSNews HealthReformNews PartANews PartBNews PartCNews PartDNews

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