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4 Ways the FY 2019 Budget Will Affect Medical Practices

August 21, 2018

FY 2019 Budget Will Affect Physicians

The U.S. Congress passed the federal budget for the fiscal year (FY) 2019 on February 8, 2018, which will fund the government through September 2019. This budget will increase domestic spending by over $128 billion over the next two years, including areas dealing with healthcare. The most significant areas in the FY 2019 budget for medical practices include the following:

  • Program funding
  • Chronic care under Medicare
  • Relief from regulatory burdens
  • Drug costs

1. Program Funding

The FY 2019 budget authorizes the funding for several major programs, including the Children’s Health Insurance Program (CHIP). This program covers the healthcare costs for about nine million children and was set to expire in FY 2019. The initial authorization for the Community Health Centers (CHC) expired on September 30, 2017, which is the primary source of medical care for many underprivileged communities. Congress passed a short-term extension for the CHC to March 2018, and the 2019 budget re-authorizes CHC for the next two years.

The new budget provides another two years of funding for the National Service Corps (NSC), which trains physicians in underserved communities. The authorization for the Teaching Health Center GME program was also renewed for another two years after running on a short-term extension since 2017. This program funds residency and teaching programs for physicians in community health centers.

2. Chronic Care Under Medicare

The FY 2019 budget also reduces some of the barriers to chronic care under the current Medicare guidelines by extending the Independence At Home Demonstration project. This project provides Medicare beneficiaries with home-based primary care for chronic conditions, which helps keep them out of assisted living facilities. Physicians will also be able to provide telehealth consulting services for acute stroke patients without geographic limits beginning in 2021. The current budget imposes geographic restrictions on these services, essentially requiring the patient to be in an under-served community. The new budget also allows accountable care organizations and Medicare Advantage plans to provide greater telemedicine coverage.

3. Relief from Regulatory Burdens

Congress has introduced several changes in the 2019 budget that will reduce regulatory requirements for physicians. For example, the Secretary of Health and Human Services (HHS) will have greater discretion to determine if a physician meets the standards for Meaningful Use and Advancing Care Information (ACI), which are generally becoming more strict. The HHS Secretary can also decide when physicians meet the requirements for a hardship exemption without requiring them to periodically reapply for the exemption. The specific methods the Secretary will use to implement this discretion are still being developed at this time.

These changes will primarily benefit physicians who are transitioning to the ACI category under the Merit-based Incentive Payment System (MIPS).  These physicians typically find it difficult to meet the Meaningful Use requirements for electronic health records (EHRs). The original HITECH Act mandates that these requirements become more stringent over time, which has resulted in the current untenable situation regarding Meaningful Use for EHRs.

4. Drug Costs

The 2019 budget accelerates the closing of the Medicare Part D coverage gap between the initial coverage limit and the catastrophic-coverage threshold, commonly known as the Medicare donuts hole. This change will benefit both physicians and patients, who must pay high out-of-pocket expenses for drugs when affected by the donuts hole. The new budget also increases the cost-sharing requirements for beneficiaries with higher incomes. The out-of-pocket expenses for beneficiaries in this income bracket will increase from 80 to 85 percent, which will help pay for some of the other health benefits in the budget.


M-Scribe Technologies, LLC can help your practice benefit from the changes in the FY 2019 budget. We are a national leader in medical billing, including auditing and coding. Call us at 7770-666-470 or email me at to learn more about our services.


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