President Trump recently signed into law the Bipartisan Budget Act of 2018, a spending package that significantly impacts health care and marked the end of an hours-long federal shutdown.

The federal government will be funded according to the spending Act until March 23. The new legislation raises 2018 and 2019 budget caps for defense and domestic programs, provides additional funding for community health centers, and extends the Children’s Health Insurance Program (CHIP) by 10 years instead of six. The legislation also includes substantial changes to the Medicare Access and CHIP Reauthorization Act (MACRA), including:

  • The low-volume threshold will continue to be based on the amount of Medicare Part B claims and number of Part B patients treated and will not include Medicare Part B drug costs. Part B drug costs will also not be factored into payment adjustments for the Merit-based Incentive Payment System (MIPS).
  • CMS may only weight the Cost category of MIPS at a minimum of 10% and a maximum of 30% through 2022.
  • Use of the physician-improvement metric in overall performance thresholds will be delayed for three years.
  • The Physician-Focused Payment Model Technical Advisory Committee (PTAC) has been charged with providing initial feedback to entities that submit proposed alternative payments models as part of the MACRA process.

The legislation also includes policy changes to the Medicare program. It addresses the Medicare “doughnut hole,” a coverage gap resulting from caps on prescription drug coverage, by increasing the discounts pharmaceutical companies are required to provide from 50% to 70%.

The Act reduces the Medicare Physician Fee Schedule annual update from 0.5 percent to 0.25 percent in 2019.  Health information technology also will be affected by the implementation of the CHRONIC Care Act, legislation that allows Medicare Advantage plans and accountable care organizations to provide a wider range of procedures via telehealth.