New federal budget estimates from the Congressional Budget Office show an overall surplus over the next 10 years, but show deficits for the next two years, which may not immediately help healthcare providers who have faced a zero-sum game.
The CBO last week projected mandatory Medicare expenses will total $248 billion in 2002 and will add up to $3.2 trillion in the next 10 years, based on President Bush's 2003 budget plan. The reduced estimates of Medicare costs account for most of the overall budget changes, costing $80 billion less over the 10-year period than the CBO previously estimated.
The reduced projection reflects $30 billion in savings from new rates for Medicare+Choice plans, about $35 billion from changes to hospital payments for certain types of high-technology services, and about $15 billion from new data on co-insurance for outpatient services, CBO Director Dan Crippen told two Senate committees last week.
In an overall budget of trillions of dollars, that is not a lot, said Chip Kahn, president of the Federation of American Hospitals. "I don't see this as changing the budget all that much," he said.
Thomas Nickels, senior vice president of federal relations at the American Hospital Association, agreed. But combined with the administration's acceptance of deficit spending, the revised projections could help providers in their lobbying efforts. "It doesn't throw cold water on budget issues," Nickels said.
The recent attention to homeland security and the economy have trapped other funding, forcing Congress to come up with a budget that reallocates instead of adds dollars. Now lawmakers have to sort through the numbers. The next step in the budget process is for Congress to develop its own budget resolution by April 15. At a U.S. Senate Finance Committee hearing last week, senators questioned whether the Bush administration, which has asked for $232 billion for Medicare overall in 2003 and $190 billion for a Medicare prescription drug program, has budgeted enough funds.
Consumer groups such as the AARP have said they think Congress should allocate far more money for Medicare (Mar. 4, p. 9).
While Congress considers its priorities, provider groups said they would continue with their lobbying efforts such as increasing hospital inflation updates for Medicare payments, despite remarks made last week by Thomas Scully, administrator of the Centers for Medicare and Medicaid Services.
The administration is putting prescription drugs and the uninsured at the top of its healthcare budget priorities, Scully said. Anything for providers "has to come out of the provider pot," he told attendees at the annual meeting last week of the Federation of American Hospitals, the group he headed before joining the CMS.
But Kahn, who took the federation's reins from Scully, doesn't agree with his predecessor's stance on payments to providers. "This is not the time to cut hospitals," Kahn said. "It's bad policy."