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A deal to avert a debt-ceiling crisis and fund the government next year could place new limits on federal health spending while also giving a boost to healthcare fraud and abuse investigations.

Experts reviewing a 99-page proposal ahead of a vote needed by next Monday identified several provisions that could affect the Department of Health and Human Services and related agencies.

Chief among the measures included is a clawback of roughly $30 billion in unspent and uncommitted COVID-19 funds, which could potentially impact skilled nursing providers who had asked for a redetermination of their eligibility for Provider Relief Funds. 

The bill removes COVID funding from about 20 programs, including those at the Centers for Medicare & Medicaid Services, the Centers for Disease Control and Prevention and the National Institutes of Health.

The American Health Care Association on Tuesday declined to comment on specifics included in the proposal. But in a statement to McKnight’s Long-Term Care News, the association praised government leaders for reaching a tentative deal and encouraged members of Congress to “support its swift passage before the deadline on Monday.”

Most importantly for providers, sealing this deal would keep Medicare and Medicaid payments flowing after June 5. But the same deal could ultimately control federal spending on healthcare through new means.

More automatic cuts?

Non-defense spending levels will be kept roughly flat for 2024 and then given a 1% increase in 2025, so departments throughout the administration would have to limit spending.

A new administrative type of PAYGO provision would also require agencies to “pay as they go” for major new initiatives through 2024, Inside Health Policy reported Tuesday.

It would be triggered when agencies, including HHS agencies such as CMS and the CDC, adopt administrative rules that cost more than $1 billion over 10 years or $100 million in any single year.

A broader anti-deficit PAYGO rule routinely threatens skilled nursing providers and physicians by requiring automatic cuts to the Medicare program. But Congress traditionally averts such cuts at the last minute.

But Cynthia Morton, executive vice president of ADVION, said her concerns about this new provision were “not too high.”

“It does what is described (having to offset new rules by repealing other ones), however, the text lets them waive this requirement whenever they want so it really isn’t binding on anything,” she said in an email. “Administrative PAYGO was a Trump administration idea about repealing regs dollar-for-dollar with new regs. And this being easily bypassed is something house conservatives are mad about.” 

In fact, the bill outlines a process for the Office and Management and Budget director to waive the new requirements if an agency action is necessary for the delivery of essential services or program delivery.

But the proposal could theoretically limit the ability of CMS to help fund or incentivize providers to meet a new federal staffing minimum expected to be published later this spring. 

More scrutiny ahead

While providers might get less financial support for rules they are expected to follow in coming years, they’ll certainly be expected to comply with them. The bill calls for a significant increase in Health Care Fraud and Abuse Control funding, with more than $1.2 billion in new dollars over the next two years.

“The increased funding level for the healthcare fraud program is significant and signals an increased and intense focus on COVID-related fraud issues as well as more traditional concerns in connection to quality of care, kickback arrangements, and billing compliance,” Kathleen McDermott, partner at the law firm Morgan Lewis, told McKnight’s. “In recent months there has been an uptick in federal and state enforcement agencies issuing requests for information in all of these areas to post-acute providers.”

Nursing home staffing could be a key area of focus for enforcement agencies, McDermott added. Officials with HHS and its Office of Inspector General had recently pleaded with members of Congress for more money for fraud investigations and even routine inspections.

“With increased funding, enforcers will need to show results and that means there will be more enforcement activity for even older allegations that are stale, such as those that took place before the COVID-19 pandemic,” McDermott said.