HHS Budget Plan Released

The fiscal 2010 budget proposal released by the Obama administration recaps the Medicare cuts it proposed earlier this year to pay for a health overhaul, but offers new details on efforts to fight fraud and how it might reduce the cost of legislation erasing deep scheduled Medicare cuts in payments to doctors. According to the HHS Press Release this budget would help control the skyrocketing cost of healthcare.

President Obama proposed Thursday to largely hold flat budgets for agencies under the Department of Health and Human Services in fiscal 2010, as they continue to spend billions of dollars in extra money they received under the economic stimulus law passed in February. He also has proposed some spending cuts and legislative changes for the department that could prove controversial, including the elimination of abstinence-only sex education programs.

Mr. Obama is requesting a total of $828 billion for HHS, including $78.3 billion in discretionary spending, according to the department. The discretionary amount would be slightly less than the $78.5 billion the department received in fiscal 2009. HHS Budget Request (PDF)

The economic stimulus law, however, provides the department an extra $22.4 billion in discretionary funds for fiscal 2009 and fiscal 2010, and $109 billion in total, obviating the budget reduction.

The Food and Drug Administration, which did not receive stimulus money, would get a $367 million increase in its fiscal 2010 budget. Obama also proposes that Congress allow the FDA to begin approving generic competitors to complex biotech drugs, and that it allow the agency to assess a fee for the approval of generic drugs. Obama proposes $141 million in new user fees for the agency, which together with increases in existing fees would provide the agency a $511 million spending increase over fiscal 2009 enacted.

The budget would add $125 million in funding next year to the nearly $1.5 billion now spent on the “HCFAC” program, established under 1996 legislation creating a joint effort by HHS and the Justice Department to crack down on health care fraud. A total of $311 million next year in discretionary funding for the Health Care and Fraud and Abuse Control Program would be allocated as follows: $220 million for Medicare; $31 million for Medicaid; $30 million for the Department of Justice; and $30 million for the HHS Office of the Inspector General.

Part of the Medicare money would be used to go after fraud in the private plan side of Medicare, the Medicare Advantage side offering private health plans and the Medicare Part D side offering coverage through private prescription drug plans.

The HHS Budget in Brief (PDF) (12.6MB) provides an overview of the HHS budget and how the budget supports the major initiatives of the Department. The HHS “Budget in Brief” document notes that “as part of health care reform, the administration would support comprehensive, but fiscally responsible, reforms to this payment formula. Consistent with this goal, the administration will explore the breadth of options available under current authority to facilitate such reforms including an assessment, both substantively and legally, of whether physician administered drugs should be covered under the payment formula.” According to a Centers for Medicare and Medicaid Services (CMS) estimate, not including the cost of those drugs in assessing adherence to physician spending targets would lower the 10-year legislative cost of a freeze from $311 billion to $181.5 billion. But the $129.6 billion reduction in how much the legislation would cost Congress would increase the federal deficit by that amount.

The HHS Performance Highlights (PDF) (1.31MB) summarizes key past performance and financial information and planned performance.

This list of Fiscal Year (FY) 2007 Performance Measures by HHS Strategic Goal and Strategic Objective (PDF) (775KB) provides more detailed information on HHS agencies’ performance measures.