Medicare Compliance & Reimbursement

Funding for oversight and fraud enforcement are among the top budget requests.

With 2024 funding finally in place, the draft for next year is already up for perusal. And as ever, the proposed budget is chock full of policy changes slated to impact Medicare providers in 2025.

Background: On March 11, President Biden released his $7.26 trillion spending plan for the federal government for FY 2025, which begins on Oct. 1. The president’s budget offers a view into what the administration is focusing on next year and runs the gamut from requesting funding for equity initiatives to infrastructure post-COVID to fraud enforcement and oversight of federal healthcare programs.

The staggering budget total includes $130.7 billion in discretionary and $1.7 trillion in mandatory spending for the Department of Health and Human Services (HHS), which includes the Centers for Medicare & Medicaid Services (CMS), HHS notes on its website.

“This budget lays out a vision for a nation that invests in all aspects of health, fosters innovation, and supports its most vulnerable. This budget continues our shift from a nation focused on illness to one that promotes wellness,” said HHS Secretary Xavier Becerra in a release. “HHS is at the center of some of the most important issues for American families. This budget demonstrates the Biden-Harris Administration is deeply committed to this work.”

Of course, the Biden administration’s proposal is far from the last word on the budget.

“Historically, the president’s budget request kicks off the congressional budget process, serving as a starting point for lawmakers to determine funding levels and national spending priorities,” notes the George Washington University in a release analyzing the proposal.

“Congress is under no obligation to adopt all or any of the president’s budget,” point out attorneys Emily Felder and Deema Tarazi and policy advisors Adam Steinmetz and Lauren Mish with law firm Brownstein Hyatt Farber Schreck. “Instead, the president’s budget request is used to indicate the president’s recommended spending and revenue levels along with policies the administration wants to prioritize,” Felder, Tarazi, Steinmetz, and Mish explain in online analysis of the proposal.

Pocket These 7 Key Takeaways

As the administration redirects post-pandemic, the president’s budget aims to cut spending and better align policies with the Inflation Reduction Act of 2022. Read on for what’s at the top of the FY 2025 budget checklist:

1. Drug prices: Access to affordable drugs has never been more critical to Medicare beneficiaries, and the feds want to both cap costs and improve drug-cost negotiation. “The budget also expands Medicare’s new ability to negotiate directly with drug manufacturers to lower the price of some of the costliest single-source brand-name Medicare Part B and Part D drugs,” HHS notes in its summary.

2. Reproductive health: Post-Dobbs decision, HHS has strongly defended patients’ EMTALA rights while championing maternal and reproductive healthcare for women. “The budget provides $390 million, a 36 percent increase above FY 2023, to the Title X family planning program to meet the increased need for family planning services” as well as “$376 million for key programs focused on maternal mortality and maternal health equity,” HHS says.

3. Medicare Advantage: HHS confirms in its budget brief that it will continue to try and rein in inflated and improper payments to Medicare Advantage (MA) plans while acknowledging that “‘payments to plans are higher than they would be to provide Part A and B benefits in Original Medicare, negatively affecting Part A solvency and increasing Part B premiums for beneficiaries,’” reminds health policy advisor Jeffrey Davis with McDermott+Consulting, an affiliate of law firm McDermott Will & Emery, in a rule summary. “However, the budget offers no solution to address this issue,” Davis expounds.