House Subcommittee Approves Appropriations Bill Cutting Funding for ACA Programs

In a formal mark-up session on July 17, the U.S. House of Representatives Appropriations Committee’s Labor, Health and Human Services, Education, and Related Agencies Subcommittee approved a draft fiscal year 2013 Labor, Health and Human Services funding bill, which would establish a blueprint for the funding of these agencies’ regulatory activities.

Generally, the draft bill includes $150 billion in discretionary funding, which is $6.3 billion below the 2012 fiscal year level and $8.8 billion below President Obama’s budget request for the forthcoming fiscal year. Most notably, the measure would actively defund and prohibit new discretionary spending on implementation of the ACA.

According to a press release and bill summary prepared by the subcommittee, “the legislation contains several policy provisions … [that] will help reduce harmful and unnecessary regulations that tie the hands of employers and undermine job creation, ensure the protection and respect of human life, and limit bureaucratic overreach.”

In particular, the measure would:

· Cut $409 million in program management funding for the Centers for Medicare and Medicaid Services (CMS) and prohibit any new funds for the new Center for Consumer Information and Insurance Oversight, the regulatory body within CMS responsible for implementing state-based health insurance exchanges.

· Effectively eliminate the Agency for Healthcare Research and Quality (AHRQ) – the federal agency charged with improving health care quality, safety, efficiency, and effectiveness – by cutting its budget entirely.

· Eliminate funding for patient-centered outcomes research. (The Patient-Centered Outcomes Research Institute (PCORI) established under the ACA is partially funded through fees paid by issuers of certain health insurance policies and plan sponsors of certain self-insured health plans.)

We know that many coalitions' programs could be affected by these cuts, if they proceed. However, it is important to keep in mind that this vote was one House Subcommittee. The measure would still need to pass the full House Appropriations Committee, and a full House vote. Efforts could be made in the Senate to impose similar restrictions on its version of appropriations measures, but they are unlikely to succeed in the Democratically controlled Senate. If no agreement is reached, the agencies will eventually need to be funded through a “continuing resolution,” which would maintain current funding levels. HHS has been funded through a continuing resolution for the past few years, and continuing resolutions are not uncommon in election years.