Surgery News - March 2008 - (Page 5) MARCH 2008 • SURGERY NEWS NEWS 5 Bush Proposes Cuts to Medicare, Medicaid in FY 2009 B Y M A RY E L L E N S C H N E I D E R Else vier Global Medical Ne ws I n the final budget proposal of his presidency, President Bush is suggesting substantial cuts to hospitals, skilled nursing facilities, and graduate medical education, but he does not address the 10.6% physician pay cut slated for July. Leaders in the Democratic-controlled Congress instantly declared the proposal dead on arrival. Under the plan, the Bush administration has put forth legislative and administrative proposals that would cut $12.8 billion from the Medicare program in fiscal year 2009 and about $183 billion over the next 5 years, largely from hospital and other provider payments. The idea is to slow down the growth rate of the program from 7.2% to 5% over 5 years. But critics say the cuts would harm hospitals that treat low-income patients and train physicians. The FY 2009 budget proposal calls for freezing payments to inpatient hospitals, long-term care hospitals, skilled nursing facilities, hospices, outpatient hospitals, and ambulance services from 2009 through 2011. Annual payment updates would then be 0.65 percentage points lower under the proposal. (Payments to these providers will not go down; they will just get a smaller increase.) The proposal also outlines a payment freeze for inpatient rehabilitation facilities and ambulatory surgical centers in 2010 and 2011, followed by annual cuts in the normal inflation update. And home health agencies would also see a 0% update from 2009 through 2013 followed by smaller annual payment increases. Indirect medical education add-on payments would drop from 5.5% to 2.2% over the next 3 years, and the duplicate hospital indirect medical education payment for Medicare Advantage beneficiaries would be eliminated. Hospitals would also face 5% cuts in capital payments in 2009, and a 30% drop in disproportionate share payments over the next 2 years. The FY 2009 budget plan also includes proposed legislative and administrative changes aimed at cutting nearly $18 billion from Medicaid over the next 5 years. The administration’s budget would reauthorize the State Children’s Health Insurance Program (SCHIP) through 2013. The plan calls for a $19.7 billion increase to the program over 5 years, including $450 million in outreach grants to states and other organizations to help enroll uninsured children in the program. In total, the administration is requesting $711.2 billion for the Centers for Medicare and Medicaid Services to cover mandatory and discretionary outlays for the Medicare, Medicaid, and SCHIP programs. The request is a $32.7 billion increase over the FY 2008 funding level. Federal research agencies are also facing funding cuts or freezes under the FY 2009 budget proposal. The administration is proposing no increase for the National Institutes of Health, keeping the agency’s budget at approximately $29.5 billion. Health advocates say the failure to expand NIH funding will hurt research efforts in several critical areas. For example, the National Institute of Diabetes and Digestive and Kidney Diseases would receive a $2.6 million increase, but that amounts to only a 0.15% increase over FY 2008. The American Diabetes Association is urging Congress to instead provide $112.5 million in additional funding. The administration’s budget proposal also calls for $8.8 billion in funding for the Centers for Disease Control and Prevention, a $412 million drop from FY 2008. Funding for CDC’s Prevention Block, which is used to fund state emergency medical services programs, would be eliminated entirely. Injury-related programs conducted by the Health Resources and Services Administration, such as the Emergency Medical Services for Children and Traumatic Brain Injury program, would be eliminated as well. The Agency for Healthcare Research and Quality would also face a cut under the proposal. The president is calling for $326 million in funding for the agency, a $9 million decrease from FY 2008. The Food and Drug Administration would receive a $130 million increase over FY 2008, bringing the total funding to $2.4 billion in FY 2009. The FDA budget proposal includes increases in the human drugs and devices programs at FDA. Under the plan, the human drugs program would receive $984 million in FY 2009, an increase of $68 million. The increase includes estimated user fees coming into the agency. The increases are slated to fund improvements in drug safety and regulation of biologic therapies. ■ New InfoV.A.C. 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