Hospitals and other healthcare providers would see an across-the-board 0.65% cut in annual Medicare inflation updates under the proposed fiscal 2008 budget unveiled today, a move the CMS said would slow the growth of its Medicare program by almost $40 billion over five years.
The CMS also said it expects to save $190 million over five years by not reimbursing hospitals for their most egregious medical errors, known as "never events." Overall, President Bush’s proposed budget would shave $76 billion in Medicare by way of legislative and administrative changes over five years. The budget also outlines proposals to save nearly $25.7 billion in Medicaid over that same five-year period, largely based on payment revisions.
"While the administration’s budget proposes to limit hospital reimbursement, the costs of caring for patients continue to increase," Richard Umbdenstock, American Hospital Association president, said today in a written statement. "Hospitals absorb many costs that they are simply unable to control, such as prices for drugs, medical devices and supplies."The budget will fund the State Children’s Health Insurance Program with $5 billion more than last year, but with a catch: A provision would tighten the requirement to pay for children from families who are below the 200% poverty level. (In 2007, the federal poverty level is $20,650 for a family of four.) About 16 states currently include children who are at 300% or more of that rate. The budget proposes a total of $700 billion for HHS, an increase of more than $28 billion from 2007.