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Hospital Groups Rap Trump Budget Proposal

Analysis  |  By John Commins  
   February 10, 2020

The $4.8 trillion proposed budget is not expected to get much traction in Congress. However, critics say it demonstrates the administrations efforts to shred the safety net.

President Donald Trump's proposal to cut nearly $1 trillion from Medicaid, the Affordable Care Act and other safety net programs over the next decade was greeted with a chorus of boos from the nation's hospital lobby.

The proposal, put forward Monday in Trump's $4.8 trillion 2021 budget, is not expected to get much traction in Congress. However, critics say it demonstrates the administrations ongoing efforts to shred the safety net.

"Every year, the Administration aims to gut our nation's healthcare infrastructure," American Hospital Association President and CEO Rick Pollack said in prepared remarks.

"The proposals in this budget would result in hundreds of billions of dollars in cuts that sacrifice the health of seniors, the uninsured and low-income individuals. This includes the one in five Americans who depend on Medicaid, of which 43% of enrollees are children," he said.

Russ Vought, acting director of the White House Office of Management and Budget, defended the budget Monday at a press briefing, and said spending for Medicare and Medicaid will go up 6% and 3% annually, respectively.

"We have reforms, as it pertains to on the payment side, where you’re buying and reimbursing for healthcare costs. That has to be allocated and it shows a savings in a budget," he said.

Vought said the proposal to impose site-neutral payments for hospital outpatient services could save about $266 billion.

"I’ve talked about site neutrality to make sure that a CAT scan that costs $118 in a physician's location and costs $230 at an outpatient hospital costs the same thing to taxpayers and, in the Medicare program, doesn’t lead to people choosing where they refer a patient for the purposes of reimbursement," Vought said.

Pollack says the site-neutral payments "fail to recognize the crucial role hospitals serve for their communities, such as providing 24/7 emergency services."

"Post-acute cuts threaten care for patients with the most medically complex conditions," he said.  "The cuts also undermine medical advances and the availability of around-the-clock services exclusive to teaching hospitals, and the training they provide to those who will become our nation’s future physicians."

The proposal cuts $3 billion in funding for National Institutes of Health, the Health Resources and Services Administration), and other health agencies, along with cuts to Medicare funding for graduate medical education public service loan forgiveness, and the 340B Drug Pricing Program.

Federation of American Hospitals President and CEO Chip Kahn called the budget proposal "bad medicine for the most vulnerable American patients."

"The arbitrary cuts to healthcare programs envisioned in the budget will make the job of America’s caregivers much more difficult," Kahn said. "This proposal combined with already issued regulations will result in a reduction in coverage, putting the healthcare of millions of patients at risk."

The Catholic Hospital Association said it was "deeply disappointed" with the budget.

"CHA believes that our nation's spending priorities should reflect our moral commitment to assisting the least among us," CHA said in a statement.

"For the millions of Americans who rely on Medicaid and other healthcare programs, as well as housing and nutrition programs that promote healthier lives, cuts to these programs will have devastating consequences."

CHA noted that adding "burdensome" work requirements to Medicaid "will further restrict access to affordable healthcare."

"While we do commend the Administration's proposal to expand the mental health services available under Medicaid, that effort would only be negated by the budget’s cuts and other harmful program requirements," CHA said.

Association of American Medical Colleges President and CEO David J. Skorton, MD, said the cuts to Medicaid would disproportionately hurt AAMC-member hospitals, which represent only 5% of all hospitals, but account for 26% of all Medicaid hospitalizations. 

Skorton noted that much of the research performed by NIH takes place at medical schools and teaching hospitals, and that the $3 billion in cuts proposed to NIH-funded research "would thwart scientific progress on strategies to prevent, diagnose, treat, and cure medical conditions that affect countless patients nationwide."

"Likewise, the president's proposal to reduce and consolidate Medicare, Medicaid, and Children’s Hospital GME into a single grant program would exacerbate the projected physician shortage by forcing teaching hospitals to absorb $52 billion in untenable cuts," he said.


“Every year, the Administration aims to gut our nation's healthcare infrastructure.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


The proposal pushes site-neutral payments and cuts $3 billion in funding for NIH, HRSA, and other federal health agencies.

Stakeholders say the cuts to Medicaid would disproportionately hurt teaching hospitals, which represent 5% of hospitals but account for 26% of Medicaid admissions.

The White House defended the budget and said spending for Medicare and Medicaid will go up 6% and 3% annually, respectively.

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