Obama Budget proposes cuts in Medicare/Medicaid

Doc groups blast $320B Medicare, Medicaid cuts in 2013

In response to yesterday's release of the White House budget proposal, provider groups are quickly blasting the President's proposed $320 billion cuts to Medicare and Medicaid, fearing repercussions for hospitals and their patients.

First announced in September, the federal plan targets $3.8 trillion in fiscal year 2013, which calls for $268 billion cuts to Medicare and $52 billion reductions to Medicaid over the next 10 years, according to AHA News Now.

"Today's budget is bad news for our nation's seniors and most vulnerable citizens," American Hospital Association (AHA) President and CEO Rich Umbdenstock said in a statement yesterday. "It once again targets funding for hospital care and could result in fewer nurses, less access to cutting-edge treatments and longer waits for emergency care."

The proposal would "thwart hospital job creation," translating into 278,000 lost jobs, according to AHA.

Association of American Medical Colleges (AAMC) President and CEO Darrell G. Kirch echoed the concerns and the budget's effects on academic hospitals specifically. "The cuts to teaching hospitals through the plan's drastic reductions to Medicare will hurt beneficiaries and exacerbate the already critical shortage of doctors in the United States," Kirch said in a statement yesterday.

The proposed budget would cut indirect graduate medical education by 10 percent, according to AHA News Now. Such cuts would mean 10,000 fewer physicians would be trained each year in the face of a 92,000-doctor workforce shortage over the next decade, AAMC noted.

"Cutting the deficit is important for the nation's economy. However, by freezing NIH funding and dramatically cutting funds for doctor training, the administration is jeopardizing the long-term health of the nation in favor of short-term deficit reduction proposals," Kirch continued.

The administration also proposed changes to rural hospitals and critical care. Starting in 2013, the proposed changes, if enacted, would reduce payments from 101 percent to 100 percent of reasonable costs. Starting in 2014, it also would eliminate critical access hospital designation for institutions that are fewer than 10 miles from the nearest hospital.

"Reducing or eliminating the CAH designation will be devastating to rural hospitals and facilities, as well as the rural economy," according to a National Rural Health Association (NRHA) blog post yesterday. "Currently, many CAHs are operating at a net financial loss. Even a 1 percent cut in Medicare reimbursement rates will put more CAHs into the red, inevitably causing hospital doors to close and eliminating access to health care for rural Americans."

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