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Obama Proposes $3.5 Billion in Medicare Provider Cuts

From: HFMA News – 3/4/14

Article Excerpt:

Medicare would reduce payments to providers by nearly $3.5 billion under President Barack Obama’s FY15 budget, released Tuesday.  The bulk of the provider cuts would come through $1.5 billion in cuts to post-acute providers and $960 million less for graduate medical education (GME), administration budget tables showed.

Taking a Closer Look

Even as the budget included $14.6 billion in 10-year GME cuts, the administration touted a new competitive graduate medical education program to provide $5.23 billion over 10 years to support 13,000 new residents. The proposed program included $100 million in mandatory FY15 funding to support pediatric training in children’s hospitals.  The Medicare provider cuts, which total $354 billion over 10 years, include boosting the controversial Independent Payment Advisory Board to achieve nearly $13 billion more in savings.

The budget would derive nearly $1.7 billion in savings over the coming decade from reducing critical access hospital (CAH) payments from 101 percent of reasonable costs to 100 percent of reasonable costs. Another $720 million in CAH savings over 10 years will result from prohibiting CAH designations for facilities less than 10 miles from the nearest hospital.

Cuts to bad debt payments for Medicare providers would increase from $340 million in FY15 to $30.8 billion over 10 years.

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Obama budget will seek record funding for new doctors

From: USA Today –  2/27/14

Article Excerpt:

President Obama will propose boosting the National Health Services Corps from 8,900 a year to 15,000 a year over the next five years, as well as spending $5.23 billion to train 13,000 primary care residents over the next 10 years, in his budget next week, administration officials told USA TODAY.

The budget, which Obama will reveal Tuesday, marks the first time Medicare funds will be used to increase the number of medical residents, and it’s the largest-ever proposed increase of the corps, officials said.  The administration hopes to boost both team-based care, as well as send residents out to rural areas and areas with lower access to care, officials said.

The president’s budget proposal:

• Adds $5.23 billion over 10 years to train 13,000 primary care residents in high-need communities, and in team-based care, such as an accountable care organization.

• Extends higher payments to Medicaid providers, including physician assistants and nurse practitioners, by one year at a cost of about $5.44 billion.

• Adds $3.95 billion over the next six years in the National Health Services Corps to support growing the program from 8,900 primary care providers in 2013 to at least 15,000 annually starting in the 2015 fiscal year.

“This is a booster shot unlike any other before now,” said Mary Wakefield, administrator of the Health Resources and Services Administration.

The proposal also addresses a shortage of mental health providers by offering residencies for psychiatrists, psychiatric nurse practitioners and other mental health providers as part of the team-based approach.

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