Magazine article Clinical Psychiatry News

Bush Proposal Targets Medicare and Medicaid

Magazine article Clinical Psychiatry News

Bush Proposal Targets Medicare and Medicaid

Article excerpt

The Bush administration's budget proposal for fiscal 2008 could be bad news for physicians and hospitals.

The proposal, which was sent to Congress on Feb. 5, seeks about $600 billion in net outlays to finance the Centers for Medicare and Medicaid Services including Medicare, Medicaid, and the State Children's Health Insurance Program (SCHIP), a $29.2 billion increase over projected 2007 levels. However, the budget also includes legislative proposals that would trim about $4.3 billion from the Medicare program for the fiscal year and $252 billion over 10 years.

In addition, it also calls for Medicaid reforms that would result in about $28 billion in savings in that program over 10 years.

The president's plan outlines a number of provider payment changes including reducing the update factor for inpatient hospitals, outpatient hospitals, hospices, and ambulance services 0.65% each year starting in fiscal year 2008; freezing the update for skilled nursing facilities and inpatient rehabilitation facilities in 2008; freezing updates for home health agencies in 2008; and reducing the update for ambulatory surgical centers for 0.65% starting in 2010.

The proposed budget does not address payments to physicians under Medicare, calling into question whether physicians will get relief from a projected 5%-10% cut in Medicare reimbursement slated for January 2008. However, Leslie Norwalk, acting administrator for the Centers for Medicare and Medicaid Services, said she has "no doubt" that proposals to address the sustainable growth rate formula--which is used to determine physician payments under Medicare--will be on the table for discussion with Congress.

Reductions in traditional entitlement programs such as Medicare, Medicaid, and Social Security are necessary to avoid tax increases, deficits, or cuts in benefits, President Bush wrote in an accompanying statement to Congress.

But the fate of the Bush proposal already is in doubt in the Democrat-controlled Congress. "I doubt that Democrats will support this budget, and frankly, I will be surprised if Republicans rally around it, either," Rep. John Spratt (D-S.C.), chairman of the House Budget Committee, said in a statement.

Physicians organizations also took aim at the proposed budget. Dr. James T. Dove, president-elect of the American College of Cardiology, said the budget fell short in several areas, particularly in the lack of proposals to fix the physician payment formula. …

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