President Releases 2011 Budget Proposal
President Obama released his fiscal year 2011 budget proposal earlier this month. While Congress is not required to act on the President’s $3.8-trillion budget, the plan will be considered by the House and Senate as they develop budget resolutions.
U.S. Department of Health and Human Services officials said there are no new Medicare cuts in the budget. Instead, the budget assumes that the cuts already identified will be enacted in some form through pending health care reform legislation. Since the House and Senate have passed two different versions of health care reform – with the House version containing significantly larger Medicare home health cuts ($54.9 billion over 10 years) than the Senate’s bill ($39.4 billion over 10 years) – the White House used an average of the total savings in the bills in the President’s fiscal plan. What’s not known is the specific impact on the various provider groups.
Some highlights of the budget proposal include:
• $25.5 billion for a six-month extension of Medicaid money under the economic stimulus program for continuation of an increase in the federal match from January 1 to June 30, 2010. Steve Norton of the NH Center for Public Policy Studies estimates NH would receive about $60 million through the extension. (This would go far in addressing DHHS’s share of the $140 million deficit currently estimated by the Governor’s office.)
• An increase of $250 million, for a total of $561 million, to strengthen Medicare and Medicaid program integrity activities, with a particular emphasis on fighting health care fraud in the field, increasing Medicaid audits, and strengthening program oversight.
• $102.5 million in increased funding for a new Caregiver Initiative at the Administration on Aging. This funding includes $50 million for caregiver services, such as counseling, training, and respite care for the families of elderly individuals; $50 million for transportation, homemaker assistance, adult day care, and personal care assistance for elderly individuals and their families; and $2.5 million for respite care for family members of special-needs patients.
• $20 million for a U.S. Centers for Disease Control and Prevention (CDC) initiative to reduce the rates of morbidity and disability due to chronic disease in up to ten of the largest U.S. cities.
• New Medicare and Medicaid demonstration projects at the U.S. Centers for Medicare and Medicaid Services (CMS) that would “evaluate reforms to provide higher quality care at lower costs and better align provider payments with costs and outcomes.” CMS will place a special emphasis on “demonstrations that improve care coordination for beneficiaries with chronic conditions, better integrate Medicare and Medicaid benefits, and provide higher value for dollars spent.”
• Establishment of a reserve fund of more than $630 billion over 10 years dedicated towards financing reforms in the health care system.
• Bundled payments for hospitals that cover not just hospitalization but also care delivered by post-acute providers during the 30 days of care after hospitalization; hospitals with high rates of readmission will be paid less if patients are re-admitted to the hospital within the same 30-day period.