White House proposes more than $400 billion in Medicare reductions

President Obama today released a fiscal year 2016 budget request that includes $431 billion in proposed reductions to Medicare, of which $350 billion would come from health care providers and $83.8 billion from structural reforms. “The cuts to hospital care are bad medicine for our nation’s seniors and other vulnerable patients,” AHA President and CEO Rich Umbdenstock said in a statement. “Hospitals are implementing enormous changes while they continue to improve the quality of care, but the Administration today proposes further cuts to hospital care. These reductions are short-sighted at a time when our nation’s health care infrastructure needs to be strengthened.” Specifically, the budget proposal would reduce payments to providers by $29.5 billion by implementing site-neutral policies; cut bad debt payments to providers, including hospitals, by $31.1 billion; reduce Medicare graduate medical education payments by $16.3 billion; reduce critical access hospital payments from 101% to 100% of reasonable costs for a savings of $1.73 billion; and eliminate the CAH designation for hospitals located fewer than 10 miles from the nearest hospital for savings of $770 million. It also proposes to reduce the payment updates for post-acute care providers for savings of $102.1 billion and make other post-acute program changes. Later this afternoon, the Department of Health and Human Services provided more details on the president’s FY 2016 discretionary budget request. AHA members received a Special Bulletin with more information. For more on the AHA’s reaction to the budget, see today’s AHASTAT blog post.