Fiscal Year 2010 Budget in Brief
American Recovery and Reinvestment Act
The American Recovery and Reinvestment Act was signed into law by President Obama on February 17, 2009. The Recovery Act provides funding for Health IT, Comparative Effectiveness Research, Prevention and Wellness, Scientific Research, Social Services and Medicaid relief to the States.
The American Recovery and Reinvestment Act (Recovery Act) includes an estimated $167 billion over ten years for programs at HHS.
The Recovery Act will increase HHS mandatory Budget Authority by an estimated $144 billion, with most of the increase in FY 2009 and FY 2010, and predominantly directed to Medicaid.
HHS also received $22 billion in discretionary budget authority. The majority of these funds will be obligated by September 2010 to achieve the most rapid impact for citizens and States affected by the current economic downturn.
HHS Recovery Act activities support efforts to increase access to health care, protect those in greatest need, expand educational opportunities, and modernize the Nation's infrastructure. HHS is committed to quickly and carefully distributing Recovery Act funds in an open and transparent manner that will achieve the objectives of the Recovery Act. HHS quickly established new policy and technical processes to review spending plans and to implement the Recovery Act requirements for transparency and accountability. To coordinate and manage the complexity of HHS’ role and processes in the Recovery Act, HHS established an Office of Recovery Act Coordination. This Office will ensure that HHS fully implements the Act’s requirements and OMB’s guidance including meeting reporting due dates, establishing and tracking performance outcomes, mitigating risks of fraud and abuse, and keeping the public informed through the web and other means of communication.
HHS Recovery Act activities touch the lives of Americans and pave the way for health care reform by:
- Improving and Preserving Health Care;
- Accelerating the Adoption of Health IT;
- Strengthening Scientific Research and Facilities;
- Improving Children and Community Services;
- Strengthening Community Health Care Services;
- Supporting Comparative Effectiveness:
- Promoting Prevention and Wellness; and
- Improving Accountability and IT Security.
MAKING AN IMMEDIATE IMPACT
HHS released over $16 billion in Recovery Act funds within the first 30 days of enactment, including crucial fiscal relief to States through increased Medicaid funding, funds for Community Health Centers, and funds for Foster Care and Adoption Assistance. Overall, HHS will distribute more than 90 percent of its increased discretionary funding, and approximately two-thirds of its increased mandatory spending, within two years of enactment.
IMPROVING AND PRESERVING HEALTH CARE
FMAP Increase: The Recovery Act temporarily increases the Medicaid Federal share of expenditures by an estimated $87 billion through a 6.2 percentage point increase in the Federal Medical Assistance Percentage (FMAP) for all States, with additional relief tied to rates of unemployment. Territories also benefit from increased Medicaid funding.
Temporary Increase in DSH Allotments: The Recovery Act provides an estimated $770 million in increased State Disproportionate Share Hospital (DSH) payments through a 2.5 percent increase in FY 2009 and FY 2010 allotments. These payments assist hospitals that serve a disproportionate share of low income or uninsured patients.
Transitional Medical Assistance: The Recovery Act provides an estimated $915 million in additional Medicaid expenditures by extending Transitional Medical Assistance (TMA) through December 31, 2010, including provisions to allow States to provide assistance for longer periods and to waive some requirements for families seeking assistance.
Qualified Individuals Program: The Recovery Act provides an estimated $563 million to extend premium assistance for Medicare beneficiaries who are Qualified Individuals (incomes of 120 135 percent of the poverty line) through December 31, 2010.
Health Professions: The Recovery Act provides $200 million to a range of programs that can address critical shortages in primary care, nursing, and public health.
Medicaid and CHIP Provisions to Benefit American Indians and Alaska Natives: The Recovery Act provides protections for Indians under the Medicaid and CHIP programs, including requirements for managed care organizations, limits on cost-sharing, and exclusion of certain property for purposes of determining eligibility for Medicaid and CHIP.
ACCELERATING THE ADOPTION OF HEALTH IT
The Recovery Act includes both additional resources and a new authorization to guide the Federal government's Health Information Technology (IT) activities. Medicare and Medicaid estimates for Health IT reflect revised actuarial estimates of the enacted legislation.
Incentives for Electronic Health Records: The Recovery Act provides an estimated $44.7 billion in incentives through Medicare and Medicaid to encourage physicians and hospitals to adopt certified electronic health record (EHR) technology.
Medicare Incentives
($23.1 billion): For each qualified physician, incentive payments to encourage EHR adoption would be a maximum of $18,000 in 2011, decreasing to zero by 2015. Physicians not adopting EHRs will see their fee schedule payments reduced by 1 percent in 2015, growing to 3 percent in 2017 and between 3 to 5 percent thereafter. For hospitals, incentive payments will vary based on Medicare inpatient days, hospital discharges, and charity care. Hospitals not adopting EHR by 2014 will receive a reduced market basket update beginning in 2015.
Medicaid Incentives
($21.6 billion): The Recovery Act also provides 100 percent Federal match for State expenditures for incentive payments to eligible Medicaid providers for certified EHR technology and 90 percent Federal match for related State and administrative expenses. Physician payments are subject to provider dollar limits and hospital payments are based on a formula prescribed in statute and are available over a six-year period.
Office of the National Coordinator for Health IT: The Recovery Act authorizes Federal Health IT efforts through the Health Information Technology for Economic and Clinical Health Act (HITECH Act) and provides $2 billion for those efforts. These activities include the creation of a Health IT Standards + Policy Committees, support for regional or sub-regional efforts towards a health information exchange, and funding for the National Institute of Standards and Technology.
The HITECH Act also enhances privacy protections by expanding the Health Insurance Portability and Accountability Act (HIPAA) to include Medicare Part D, applying HIPAA security standards and privacy rules to business associates, and increasing enforcement and penalties for violations.
STRENGTHENING SCIENTIFIC RESEARCH AND FACILITIES
NIH: The Recovery Act provides a total of $10 billion to NIH, including $8.2 billion for general biomedical research, of which $800 million will be distributed by the Office of the Director for specific trans-NIH challenges and priority projects; $1.3 billion for extramural research infrastructure, including laboratories and shared equipment; and $500 million for intramural facility construction, repairs, and renovations. In addition, $400 million will be transferred to NIH for comparative effectiveness research, as described below.
IMPROVING CHILDREN AND COMMUNITY SERVICES
Child Support Enforcement: The Recovery Act provides an estimated $1 billion to the States through FY 2010, to match Federal incentive payments that are reinvested into State programs. The funding will improve and strengthen child support enforcement efforts, which generally become more difficult in times of economic hardship.
Foster Care and Permanency: The Recovery Act provides an estimated $806 million through a 6.2 percentage point FMAP increase through December 2010 for maintenance payments to the States and Puerto Rico for foster care, adoption, and kinship guardianship assistance programs.
Temporary Assistance for Needy Families (TANF): The Recovery Act provides $5 billion to States, Territories, and Tribes through a new Emergency Contingency Fund to assist low-income families during the economic downturn.
States can request Emergency Funds if they have increased TANF caseloads and related basic assistance spending; increased spending on non-recurrent short-term benefits; or increased spending on subsidized employment.
The Recovery Act also includes $319 million to extend TANF Supplemental grants through FY 2010. These grants provide additional assistance to 17 States with historically high population growth or increased poverty.
Child Care and Development Block Grant (CCDBG): The Recovery Act provides $2 billion for supplementing State funds for child care assistance to low-income families. A portion of the funds are also reserved for quality improvement activities.
Head Start and Early Head Start: The Recovery Act provides $2.1 billion for Head Start, including $1.1 billion for Early Head Start. This significant increase expands Head Start and Early Head Start services to approximately 70,000 additional children, 55,000 of whom are infants and toddlers. Additionally, the Recovery Act enabled all grantees to receive their full cost of living increase for FY 2009.
Community Services Block Grant (CSBG): The Recovery Act provides $1 billion to States to distribute to community action agencies to reduce poverty and assist low-income residents in becoming self-sufficient. Eligible entities can serve individuals with incomes up to 200 percent of the poverty line – an increase above the previous limit of 125 percent of the poverty line.
Strengthening Communities Fund: The Recovery Act provides $50 million to build the capacity of nonprofits, including faith and community-based organizations, and government entities to address the needs of low-income and disadvantaged populations.
Nutrition Programs for Seniors: The Recovery Act includes $100 million for nutrition programs for seniors. The funds will bolster assistance provided through Congregate Nutrition Services, Home-Delivered Nutrition Services, and Native American Nutrition Services.
STRENGTHENING COMMUNITY HEALTH CARE SERVICES
HRSA Health Centers and National Health Service Corps: The Recovery Act provides $1.5 billion to modernize, renovate and repair health centers. These funds will also be used for the acquisition of health IT systems. An additional $500 million is provided to support new health center sites and service areas, increase services at existing sites, and provide supplemental payments for spikes in uninsured populations.
The Recovery Act also provides $300 million to increase the ranks of National Health Service Corps by placing clinicians in health professional shortage areas.
IHS Facilities: The Recovery Act provides $415 million for building maintenance and repair, the construction of priority health care facilities and water sanitation projects, and the purchase of medical equipment. In addition, $85 million is provided for health IT activities including telehealth and infrastructure developments.
SUPPORTING COMPARATIVE EFFECTIVENESS
The Recovery Act provides $1.1 billion in total for comparative effectiveness research, including $300 million for AHRQ, $400 million for NIH, and $400 million allocated through the Office of the Secretary. The Recovery Act also establishes a Federal Coordinating Council for Comparative Effectiveness Research to reduce duplication of these activities within the government. The Council and a mandated report from the Institute of Medicine will guide the Secretary in allocating this funding.
PROMOTING PREVENTION AND WELLNESS
A total of $1 billion is provided through the Recovery Act for the prevention and wellness activities. Of this amount, $300 million is for the CDC Section 317 Immunization Program and $50 million is to be provided to States to implement health care associated infections reduction strategies. The remaining $650 million is for evidence-based clinical and community-based prevention and wellness strategies that address chronic disease rates.
IMPROVING ACCOUNTABILITY AND IT SECURITY
IT Security: The Recovery Act provides $50 million to improve the security of the HHS IT infrastructure. The Recovery Act funding will support agency-wide investments and accelerate efforts by HHS to improve security architecture. Funds will also support security tools to protect sensitive information and strengthen computer defense mechanisms against attacks.
Accountability: The Recovery Act provides $48 million for the Office of Inspector General to enhance accountability and enforcement activities to prevent waste, fraud and abuse.
(dollars in millions)
Appropriations are two-year budget authority funds unless otherwise noted.
Discretionary Programs (Budget Authority) | 2009 |
Health Resources and Services Administration |
|
Community Health Centers | 2,000 |
Health Centers Modernization, Renovation, and Repair | 1,500 |
Health Care Services | 500 |
Health Professions | 500 |
2,500 |
|
|
|
Buildings and Facilities | 415 |
Health IT | 85 |
500 |
|
|
|
Section 317 Immunization Program | 300 |
300 |
|
|
|
Scientific Research | 8,200 |
Extramural Lab Construction and Renovation | 1,000 |
Buildings and Facilities | 500 |
Shared instrumentation grants/contracts | 300 |
Comparative Effectiveness (Transfer from AHRQ) | 400 |
10,400 |
|
|
|
Child Care and Development Block Grant (CCDBG) | 2,000 |
Early Head Start | 1,100 |
Head Start | 1,000 |
Community Services Block Grant (CSBG) | 1,000 |
Strengthening Communities Fund | 50 |
5,150 |
|
|
|
Congregate Nutrition Services and Home-Delivered Nutrition Services | 65 |
Home-Delivered Nutrition Services | 32 |
Native American Nutrition Services | 3 |
100 |
|
|
|
Oversight and Audits of Programs, Grants and Projects | 17 |
| 50 |
| 2,000 |
|
|
Evidence-based Clinical and Community-based Prevention Strategies | 650 |
Healthcare Associated Infection Reduction Strategies in States (CDC, CMS) | 50 |
700 |
|
|
|
AHRQ | 300 |
Department-wide | 400 |
| 700 |
Total HHS Discretionary | 22,417 |
1/ The Recovery Act includes $1,000 million for Prevention and Wellness; $300 million is statutorily transferred to CDC.
2/ The Recovery Act includes $1,100 million for Comparative Effectiveness; $400 million is statutorily transferred to NIH.
Mandatory Programs | 2009 | 2010 | 2009-2019 |
Centers for Medicare & Medicaid Services (CMS) | |||
Medicare | |||
HIT Incentive Payments to Providers | -- | -- | 23,100 |
Moratorium on Medicare Regulations (Hospice, IME Reduction) | 300 | * | 200 |
Subtotal, Medicare | 300 | -- | 23,300 |
| |||
HIT Incentive Payments to Providers | -- | -- | 21,640 |
State Administrative Costs for HIT Implementation | -- | 30 | 1,055 |
Subtotal, Medicaid HIT (non-add) | -- | 30 | 2,695 |
Temporary Increase in Medicaid FMAP | 35,200 | 41,400 | 87,450 |
Temporary Increase in Disproportionate Share Hospital (DSH) Allotments | 250 | 520 | 770 |
Transitional Medical Assistance (TMA) Extension | 30 | 480 | 915 |
Qualified Individuals (QI) Extension | -- | 413 | 563 |
Protections for Indians Under Medicaid and CHIP | 5 | 10 | 150 |
Interaction of Section 5001 with Other Medicaid Provisions | 5 | 90 | 115 |
Subtotal, Medicaid | 35,490 | 42,943 | 112,658 |
| -- | -- | 44,740 |
| |||
TANF | |||
Emergency Fund | 5,000 | -- | 5,000 |
Supplemental Grants | -- | 319 | 319 |
Subtotal, TANF | 5,000 | 319 | 5,319 |
| 426 | 590 | 1,016 |
| 354 | 359 | 806 |
| 41,570 | 44,211 | 143,099 |
| |||
CMS Program Management | |||
Medicare HIT Implementation | 100 | 100 | 745 |
Medicaid HIT Implementation | 40 | 40 | 300 |
Medicare Moratoria | 2 | -- | 2 |
| 142 | 140 | 1,047 |
| |||
Medicaid FMAP Implementation | 5 | -- | 5 |
OIG Medicaid Oversight | 31 | -- | 31 |
| 36 | -- | 36 |
| 178 | 140 | 1,083 |
| 41,748 | 44,351 | 144,182 |
Total HHS Recovery Act Discretionary Budget Authority | 22,417 | -- | 22,417 |
| 64,165 | 44,351 | 166,599 |
| 37,189 | 45,502 | 141,771 |
/1 Equals Budget Authority (BA) in all cases other than TANF where the estimate was $2.4 billion less than BA over 2009-2019. Unobligated balances for the TANF Emergency Contingency Fund are carried forward through FY 2010.
*Indicates negligible savings.