Hospitals push back on Obama budget proposal

Hospitals oppose proposed reductions in the Obama administration's budget request for fiscal 2015, which includes $414.3 billion in reductions to Medicare and Medicaid over the next 10 years, according to AHA News Now.

The cuts include $407 billion in reductions to Medicare over the next decade, achieved through a reduction in bad debt payments, drug payments, graduate medical education (GME) payments--including the elimination of GME payments to children's hospitals--and payment update adjustments for post-acute providers, according to AHA News Now and the National Council on Aging.

Skilled nursing facilities also will reeive penalties for hospital readmissions, according to Family Practice News.

The proposal also calls for $7.3 billion in cuts to Medicaid, according to AHA News Now. However, President Obama's proposal also includes $5.4 billion in fiscal 2015 to continue to pay primary care physicians at higher Medicare and Medicaid rates under the auspices of the Affordable Care Act, Family Practice News reported.

And the budget also includes financial support for the controversial Independent Payment Advisory Board (IPAB). Currently, the IPAB's ability to set payment rates is in stasis unless medical prices rise at a higher rate than inflation. However, the provider community fiercely opposes the panel over concerns that providers will lose their ability to offer input on rate settings if the IPAB becomes active in the future.

"Today's budget proposal includes some problematic policies that would undermine the ability of hospitals to improve the healthcare system and, ultimately, puts access to services at risk for the patients and communities we serve," said AHA President and CEO Rich Umbdenstock.

Umbdenstock is especially concerned over the proposed cuts for medical education at a time of a nationwide physician shortage, cuts to post-acute facilities and the continued support for the IPAB.

To learn more:
- read the AHA News Now article
- check out the National Council on Aging article
- here's the Family Practice News article