What you need to know about the forces reshaping our industry.


March 22, 2018

The health care provisions inside the $1.3T 2018 spending bill

Daily Briefing

    Lawmakers late Wednesday unveiled a $1.3 trillion fiscal year (FY) 2018 omnibus spending bill that includes funding bumps for HHS and several of its agencies.

    Here's your cheat sheet for understanding health care's legal landscape

    The measure, which had been expected to be released Monday, was delayed several times as House and Senate negotiators worked to resolve differences related to abortion care funding, immigration, and the Affordable Care Act's exchanges.

    The spending package bundles together the 12 FY 2018 appropriations bills that fund the United States government. According to NPR, the final measure includes White House and GOP priorities, such as increased military spending and restricted funding for new fencing along the United States and Mexico border, as well Democratic priorities, such as domestic spending increases.

    The House is scheduled to vote on the omnibus spending bill Thursday, with the goal of getting it to the Senate ahead of Friday's midnight deadline to avoid a government shutdown. However, some observers have warned that Senate debate on the bill could run past that deadline if any senators choose to filibuster.

    If both chambers pass the bill and President Trump, who has signaled his support, signs the measure into law, it would bring an end to the series of continuing resolutions Congress has passed to keep the federal government funded since FY 2018 began Oct. 1.

    Health care funding details

    Under the final bill, HHS would receive $88.1 billion in FY 2018, a $10.1 billion increase from FY 2017. NIH also would receive a funding bump of $3 billion, bringing total FY 2018 funding to $37.1 billion. That funding includes:

    • $1.8 billion for Alzheimer's disease research, up $414 million from FY 2017;
    • $500 million for opioid misuse research;
    • $400 million for the BRAIN initiative, up $140 million from FY 2017;
    • $351 million for research into antibiotic-resistant bacteria;
    • $290 million for the All of Us precision medicine research initiative, up $60 million from FY 2017; and
    • $100 million toward developing a universal flu vaccine.

    HHS' budget also would allocate:

    • $8.3 billion for CDC, a $1.1 billion bump from FY 2017, including $1.45 billion for CDC programs to respond to bioterror attacks or pandemic disease outbreaks, $480 million for the construction of a new high-security lab, and $335 million for CDC's workplace safety office;
    • $5 billion for the Substance Abuse and Mental Health Administration, a $1.3 billion bump from FY 2017, including $1.7 billion to reduce opioid misuse and $70 million for drug courts;
    • $7 billion for the Health Resources and Services Administration, a $550 million bump from FY 2017 levels;
    • $4 billion for CMS;
    • $334 million for the Agency for Healthcare Research and Quality, a change from previous measures that sought to fold the agency into NIH; and
    • $130 million for the Rural Communities Opioid Response program.

    In addition, the FY 2018 spending bill would allocate:

    • $81.5 billion for the Department of Veterans Affairs (VA), a $7.1 billion increase from FY 2017, including $68.8 billion for VA medical care services and an additional $2 billion for VA hospital maintenance and construction projects;
    • $5.5 billion for Indian Health Service;
    • $5.1 billion for FDA;
    • $300 million for the Cancer Moonshot initiative; and
    • $25 million for abstinence education, a nearly 66% bump over FY 2017.

    According to The Hill, the spending package also contains language clarifying that the 1996 so-called Dickey amendment does not completely prohibit CDC from conducting gun research, but notes that CDC funding cannot be used for research advocating gun control. The spending package also includes bipartisan legislation backed by Trump to change the national gun background check system by improving local records and information-sharing with the federal system.

    Despite pushback from the pharmaceutical industry, CQ News reports that the spending bill maintains changes to Medicare payment ratios included in last month's continuing resolution that makes pharmaceutical companies responsible for 70% of a drug's costs, up from 50%. The change is intended to accelerate efforts to close Medicare's so-called "doughnut hole"—a coverage gap in Medicare prescription drug coverage. Beneficiaries who reach the current coverage limit have to pay out-of-pocket for the full cost of drugs costs until catastrophic coverage kicks in.

    The bill also extends by two years Medicare "pass-through" rules, which allow pharmaceutical companies to receive a higher Medicare reimbursement rate, for drugs that lost pass-through status on Dec. 31, 2017, and for which payment was bundled with other products and services beginning Jan. 1. According to Politico's "Pulse", the change is expected to affect fewer than 24 products.

    In addition, the bill maintains longstanding funding restrictions on abortion care, as well as the so-called "global gag rule," which restricts funding to international aid programs that offer or actively promote abortion care. However, it does not include a proposal to prohibit federal funding from Planned Parenthood or new "conscience" protections for providers.

    Other provisions that did not make it into the final bill include:

    • A bipartisan Senate bill to bolster the Affordable Care Act's exchanges in part by funding cost-sharing reduction payments to insurers and state-run reinsurance programs;
    • A White House proposal to cut the White House Office of National Drug Control Policy budget by 95%; and
    • Federal funding for the Affordable Care Act's risk corridor payments to insurers.


    House and Senate leaders praised the final package, but some Democratic lawmakers expressed concerns that the spending bill does not address the Deferred Action for Childhood Arrivals program, which is set to expire, and some conservative House Republicans have come out against the bill.

    The White House on Wednesday indicated President Trump supports the measure.

    In addition, insurers, including America's Health Insurance Plans, said they were disappointed that the bill to shore up the ACA's exchanges did not make it into the final package.

    Justine Handelman, SVP at the Blue Cross Blue Shield Association, said, "Unless Congress acts now, premiums will again increase significantly and consumers could have even fewer health plan choices" (Snell/Davis, NPR, 3/21; Bade et al., Politico, 3/21; Diamond, "Pulse," Politico, 3/22; McCrimmon, CQ News, 3/22 [subscription required]; Siddons, CQ News, 3/21 [subscription required]; Cowan/Becker, Reuters, 3/21; Weixel, The Hill, 3/21; Sullivan, The Hill, 3/21; Luthi, Modern Healthcare, 3/21; Mershon, STAT News, 3/21; Labor, HHS, Education Funding Bill summary, 3/21; Mejdrich, CQ News, 3/21[subscription required]).

    Just updated: Your cheat sheets for understanding health care's legal landscape


    To help you keep up with the ever-changing regulatory environment, we recently updated our cheat sheets on some of the most important—and complicated—legal landmarks to include a brand new one-pager on the new tax law.

    Check out the cheat sheets now for everything you need to know about MACRA, the Affordable Care Act, antitrust laws, fraud and abuse prevention measures, HIPAA, and the two-midnight rule.

    Get the Cheat Sheets

    Have a Question?


    Ask our experts a question on any topic in health care by visiting our member portal, AskAdvisory.