AHA warns against federal cuts

The American Hospital Association began the battle over the fiscal 2008 federal budget, urging members of Congress to reject expected cuts in Medicare and Medicaid funding. President Bush is due to issue his budget proposal Feb. 5, and some policy experts have predicted it will recommend up to $90 billion in Medicare cuts over five years. In its letter, the AHA said hospital costs already outpace federal reimbursement and will worsen with growing shortages of healthcare workers. "Indiscriminate ratcheting of reimbursement for caregivers on the frontlines who provide needed services does nothing to address the underlying challenges," the AHA letter said. In a Jan. 26 interview with the Wall Street Journal, Treasury Secretary Henry Paulson said the budget would have a number of proposals aimed at "slowing the trajectory" of Medicare, according to a transcript of the interview. Read the AHA letter. -- by Matthew DoBias