A plan to lump together payments to all post-acute providers would be a budget cut dressed up as reform, providers said after reviewing the Department of Health and Human Services budget proposal.

The spending plan advanced by the administration Monday would lower annual Medicare increases to skilled nursing, home health agencies, inpatient rehab and long-term care hospitals for fiscal years 2019 through 2023.

After that, HHS would move to a unified post-acute care payment system that pays the same for patient care in any of those settings, based on the episode of care and patient characteristics.

Though the IMPACT Act requires HHS to study a new payment model, Cynthia Morton, executive vice president of the National Association for the Support of Long Term Care, said she was “concerned about rhetoric” in the budget proposal insinuating post-acute providers get excessive payment.

The Centers for Medicare & Medicaid Services “have added new requirements for SNF [skilled nursing facilities] and HH [home health] providers to participate in Medicare but has not provided the funding for those new requirements,” she said in an email to McKnights. “The SNF and HH sector are already under pressure with CMS and Congress dictating new payment models. To layer (a unified payment system) on top and cutting rates may be too much.”

Medicaid, meanwhile would be hit by a switch to government block grants or a per-person cap and tie annual payment increases to inflation instead of medical costs.

“We are disappointed to see proposed cuts to Medicaid and Medicare,” an American Health Care Association/National Center for Assisted Living spokeswoman said. “As the budget process moves ahead, we will continue to share with policymakers the importance of preserving access to long term care for the elderly and individuals with disabilities.”

Broadly, the HHS plan would require lawmakers to eliminate the expansion of Medicaid under the Affordable Care Act and transform the rest of that program into a system of capped payments to states; expand Medicaid waivers to support state-level reform; and narrow the qualifications for Medicaid eligibility.d

Dan Mendelson, president of healthcare consulting firm Avalere Health, told The Washington Post that the Medicaid proposals are “rhetorical,” because “consensus does not exist in Congress for changes of this scale.”

The bipartisan spending deal struck last week in Congress increased funding for some specific Medicaid and Medicare programs — including an expansion of supportive long-term care services through Medicare Advantage — it also included a $1.96 billion reimbursement reduction for skilled nursing.

One idea that might appeal to providers: the HHS budget proposal would reduce the frequency of surveys for top-performing nursing homes as a way of alleviating regulatory burden.

Last week, Clifton J. Porter II, AHCA’s senior vice president of government relations, told McKnight’s he would push for more regulatory relief to help compensate for a freeze in the industry’s market basket share.

Though the administration’s budget proposal carries no requirement to act, it makes clear the president’s agenda and could introduce new points to negotiate as Congress looks for a long-term fix for climbing deficits.

Among its many other proposals, the administration’s plan would also pass on drug manufacturer rebates to Medicare Part D beneficiaries.

Lindsay Bealor Greenleaf, director at ADVI Health, a consulting firm specializing in reimbursement, said it was a “great” step to limit the take of pharmacy benefit managers.

“Reforming the role played by PBM middlemen, and ensuring that patients actually benefit from the discounts PBMs receive, is critical to reducing patient out-of-pocket drug costs,” she said.

But the administration would also exclude manufacturer discounts when calculating out-of-pocket costs, which Greenleaf called “unfortunate” because it increases out-of-pocket spending.