CBO Targets Health Care in Options for Reducing Deficit

Every year the Congressional Budget Office publishes a menu of options for reducing federal spending and the federal budget deficit.  As in the past, this year’s compendium includes a number of options to reduce federal health care spending and raises federal revenue through health care initiatives.

The cost-cutting options include:

  • establish caps on federal spending for Medicaid
  • limit states’ taxes on health care providers
  • reduce federal Medicaid matching rates
  • change the cost-sharing rules for Medicare and restrict Medigap insurance
  • raise the age of eligibility for Medicare to 67
  • reduce Medicare’s coverage of bad debt
  • consolidate and reduce federal payments for graduate medical education at teaching hospitals
  • use an alternative measure of inflation to index social security and other mandatory programs

Options to raise additional revenue include:

  • increase premiums for Parts B and D of Medicare
  • reduce tax subsidies for employment-based health insurance
  • increase the payroll tax rate for Medicare hospital insurance

Many of these proposals, if implemented, would be damaging for private safety-net hospitals.

Learn more about the CBO’s recommendations, how they might be implemented, and their potential implications in the CBO report Options for Reducing the Deficit: 2019 to 2028.


NAUH Asks Budget Conferees Not to Cut Medicare, Medicaid

As the congressional budget conference committee begins work, the National Association of Urban Hospitals (NAUH) has asked the committee’s members to protect urban safety-net hospitals from further Medicare and Medicaid cuts.

NAUH LogoIn a message sent to all of the conferees, NAUH notes the numerous cuts these hospitals have only recently incurred ­– Medicare disproportionate share (Medicare DSH) and Medicaid DSH cuts, Medicare bad debt reimbursement reductions, and others – and noted that any further cuts could jeopardize jobs and access to care in communities served by urban safety-net hospitals across the country.

Read NAUH’s complete message to the budget conferees here, on the NAUH web site.

Sequestration 101

Unless Congress and the President act in the next week, a process called “sequestration” – a product of the federal Budget Control Act of 2011 – will take effect in which significant cuts in federal spending will automatically and immediately take effect.

Significantly, from the perspective of hospitals, all Medicare payments to hospitals will be cut two percent.  (Medicaid is not affected by sequestration).  Such a cut would be especially damaging to the nation’s private, non-profit urban safety-net hospitals.

But what is sequestration and what are its implications for Medicare and those who depend on Medicare to pay for their patients’ services?

Learn more about sequestration hereCongress Chamber, on The Medicare Newsgroup web site, where you also will find several FAQs on different aspects of sequestration and its implications for Medicare.

Medicaid Safe, White House Aide Says

While the Obama administration is willing to discuss further Medicare cuts as part of a broader effort to reduce federal spending, it opposes any further cuts in Medicaid, according to a White House aide.

Speaking at a Families USA conference, economic advisor Gene Sperling explained that the administration now opposes even the Medicaid cuts it proposed last year but is willing to negotiate changes in Medicare that could result in reduced spending on that program.

Read more about the White House’s emerging priorities in this articleiStock_000005787159XSmall from The Hill.

A Medicare Cuts Menu

As policy-makers in Washington, D.C. continue to talk about ways to reduce federal spending, or at least the growth of federal spending, it is clear they also will continue to look at Medicare as a potential source of savings.

When they do, they will draw from a variety of past efforts to cut Medicare costs – recommendations from congressional committees, presidential commissions, MedPAC, and others.

The National Association of Urban Hospitals (NAUH) is naturally concerned about the prospect of additional Medicare cuts because the Affordable Care Act and other recent federal legislation and programs have already resulted in billions of dollars in future Medicare payment cuts for hospitals.  NAUH has identified some of the cuts and potential cuts that trouble urban safety-net hospitals the most in its 2013 advocacy agenda, which can be found here, and intends to be an active participant in the public dialogue and debate that addresses additional changes in Medicare reimbursement policy.

The Kaiser Family Foundation has pulled together many of these Medicare proposals in a single document that promises to be an important resource for federal officials in the coming months.  Find the report, Policy Options to Sustain Medicare for the Future, hereCongress Chamber on the web site of the Kaiser Family Foundation.

How Hospitals Staved Off Threatened Fiscal Cliff Cuts

Hospitals were spared three of the major Medicare cuts they feared most in the fiscal cliff solution – bad debt reimbursement, graduate medical education payments, and outpatient evaluation and management (E&M) fees – through vigorous lobbying of Congress.

As the fiscal cliff deadline drew nearer, according to the publication Politico, hospital associations, ad hoc coalitions of providers, and individual hospitals communicated directly with their members of Congress and deployed their lobbyists to make their case to Congress.  Consequently, while hospitals did suffer some Medicare cuts in the fiscal cliff solution, they were spared the cuts they feared the most.

And they still face the possibility of cuts later this year as part of the second half of the fiscal cliff crisis – the new March 1 deadline for the two percent sequestration cuts in Medicare payments – and if Congress and the administration take up entitlement reform, as is widely expected.

The success of the hospital industry’s lobbying on these vital issues speaks to the value of having a strong presence in Washington, D.C. and asserting that presence at the right time.  The National Association of Urban Hospitals (NAUH) provides that strong presence on behalf of urban safety-net hospitals and was very much involved in lobbying Congress during the fiscal cliff crisis – lobbying that proved successful in preventing the Medicare and Medicaid cuts that urban safety-net hospitals feared most.

The fiscal cliff crisis is not over, however, and Medicare and Medicaid will continue to be vulnerable to cuts in the coming year.  If you are concerned about the possibility of such cuts, we invite you to consider joining NAUH and helping make our voice even louder and stronger.

To learn more about how the hospital industry managed to hold off major Medicare cuts, read this Politico article.  To contact NAUH and learn more about the organization and membership, go hereCongress Chamber.

Will Fiscal Cliff Deal Make Medicare, Medicaid More Vulnerable?

The relative lack of spending cuts included in the fiscal cliff/Medicare doc fix deal passed by Congress last week could increase the pressure to reduce costs in key safety-net programs like Medicare, Medicaid, and Social Security.

Or so some policy analysts believe.

Many members of Congress supported the fiscal cliff bill only reluctantly because of it lacked the bigger spending cuts they sought, the thinking goes.  Now, with another fiscal cliff deadline looming on March 1, when the previously passed sequestration law takes effect, many who compromised last week will be demanding bigger cuts in exchange for their vote.

As a result, Medicare and Medicaid, two of the federal government’s fastest-growing expenses, are expected to be targets for those in search of cuts.  In addition, Medicare has proven to be among the first places many officials look in their search for savings.

Any attempt to implement additional reductions in Medicare and Medicaid, beyond those already scheduled to take effect through the Affordable Care Act and last week’s fiscal cliff bill, would be especially damaging to the nation’s private, non-profit urban safety-net hospitals.  The National Association of Urban Hospitals (NAUH) can be expected to lobby vigorously against any further Medicare or Medicaid cuts.

Read more about how last week’s budget solution is far from the end of the threat to Medicare and Medicaid in this Boston Globe articledollars.

Could Safety-Net Hospitals Fall Off Fiscal Cliff?

Hospitals are increasingly worried that policy-makers in Washington will seek to pay their way out of the fiscal cliff crisis with painful Medicare and Medicaid cuts.

Medicare, in particular, seems to be in the sights of fiscal cliff negotiators, and among the cuts being mentioned are reducing outpatient fees, cutting payments to teaching hospitals and rural hospitals, raising the age for Medicare eligibility to 67, and requiring higher-income seniors to pay higher Medicare premiums.

Hospital officials, noting that they already face significant Medicare cuts as part of implementation of the Affordable Care Act, suggest that such cuts could jeopardize access to care for some low-income seniors and lead them to reduce or cut money-losing but essential services.

Such cuts could be especially harmful to the nation’s urban safety-net hospitals, which care for especially large numbers of low-income seniors and depend on medical education payments and outpatient fees to help pay for that care.  These hospitals are already girding for upcoming cuts in their Medicare disproportionate share hospital payments (Medicare DSH) beginning this fall.

Read more about the prospect of Medicare cuts and the potential implications of those cuts in this New York Times articledollars.

NAUH Asks Congress for Help

The National Association of Urban Hospitals has again asked members of Congress to oppose any attempt to address this year’s Medicare SGR patch or the fiscal cliff challenge with still more Medicare or Medicaid cuts, noting the degree to which urban safety-net hospitals have already undergone such cuts and are awaiting others that will soon take effect.

Read NAUH’s message to Congress hereNAUH Logo.

Medicare Doc Fix: Robbing Peter to Pay Paul?

Finding $25 billion to implement a Medicare “doc fix” may necessitate cutting other payments vital to health care providers – and to the nation’s private, non-profit urban safety-net hospitals

According to observers in Washington, D.C., among the areas where Congress may look for savings to pay for another Medicare doc fix are Medicare outpatient evaluation and management (E&M) fees; Medicaid disproportionate share hospital payments (Medicaid DSH); and the enhanced payments to Medicaid primary care providers that are supposed to take effect on January 1, 2013.

Medicaid DSH and the enhanced primary care payments are considered especially important by urban safety-net hospitals.

Read more about the cost of another Medicare doc fix and the challenges lawmakers face in trying to find the money to pay for that fix in this CQ Roll Call articleiStock_000014445371XSmall presented by the Commonwealth Fund.