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PRESIDENT’S BUDGET UPDATE

DATE: 06/11/2019

Massive outpatient cuts inbound?

DataGen has completed our analysis of the president’s recently-released 2020 budget proposal. This budget includes significant cuts that, if approved, would have major financial impacts on hospitals. These cuts include Outpatient Prospective Payment System site-neutral payment reductions. The FFY 2020 presidential budget proposed paying excepted sites at the physician office rate for all services in addition to previous cuts that have already been enacted for non-excepted and excepted sites. The budget also proposes that on-campus hospital outpatient departments be paid at the physician office rate for imaging tests, clinic visits and drug administration.

To help understand the enacted and now these two additional proposed outpatient site neutral cuts, The chart at right highlights how the cuts would roll out between now and 2021, and the 10-year estimated financial impact.

These cuts could be devastating to hospitals that are already operating on razor-thin margins. While it’s unlikely that this budget will be approved in its current state by Congress, the president’s proposed budget serves as a guide to the administration’s healthcare policy priorities. Hospitals that will be impacted by these cuts should reach out to their representatives and advocate strongly against the president’s proposed budget.

 

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