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Proposed 2015 budget would have implications for healthcare

Thursday March 6, 2014
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The American Hospital Association expressed disappointment with aspects of President Obama’s proposed budget for fiscal year 2015.

Obama proposes to reduce Medicare payments to healthcare providers by $354 billion as part of $407 billion in overall reductions to Medicare. The budget likely will meet with resistance from Republicans in Congress, meaning its final form remains to be determined.

The budget proposal “includes some problematic policies that would undermine the ability of hospitals to improve the healthcare system and, ultimately, puts access to services at risk for the patients and communities we serve,” AHA President and CEO Rich Umbdenstock said in a news release.

The budget proposal would reduce bad debt payments to providers, including hospitals, by $30.8 billion; Medicare graduate medical education payments by $14.6 billion; and critical access hospital payments from 101% to 100% of reasonable costs, among other cuts to hospitals.

The budget also would save $1.45 billion in FY 2015 and $98 billion through 2024 by adjusting payment updates for post-acute care providers such as skilled nursing facilities, inpatient rehabilitation facilities, long-term care hospitals and home health agencies. The adjustment to payment updates for skilled nursing facilities would be minus-2.5% in FY 2015 and taper down to minus-0.97% in 2024. The adjustment to payment updates for other post-acute providers would be minus-1.1% annually through 2024.

In a statement, Mark Parkinson, president and CEO of the American Health Care Association and the National Center for Assisted Living, said some of the budget proposals for reducing expenditures have merit and are supported by the AHCA/NCAL. He cited ideas to reduce payments to skilled nursing facilities for avoidable hospital readmissions and to bundle payments for post-acute care services.

As for the bulk of the cuts, they would “jeopardize our ability to provide access to quality care,” Parkinson stated.

Programs for nurses

Within the Department of Health and Human Services, $144 million would be allocated for the Health Resource and Services Administration to develop nursing workforce programs. That amount is the same as in the FY 2014 budget. These programs would, among other strategies, support the enhancement of advanced nursing education and practice and increase nursing education opportunities for individuals from disadvantaged backgrounds.

The budget seeks to support ambulatory and preventive care “to advance the administration’s goals of higher-value healthcare that reduces long-term costs.” As part of that effort, the Centers for Medicare & Medicaid Services would devote $5.4 billion to extend enhanced reimbursements to states for primary care through the end of 2015, expand eligibility for these enhanced reimbursements to “mid-level providers” such as nurse practitioners and exclude emergency codes to better target primary care.

The budget would allocate $500 million in FY 2015 to extend and expand the Maternal, Infant and Early Childhood Home Visiting Program, through which states implement evidence-based home visiting programs that enable nurses, social workers and other professionals to meet with at-risk families and connect them to assistance to support the child’s health, development and ability to learn.

Funding for the National Institute of Nursing Research, part of the National Institutes of Health, would remain at the FY 2014 level of $140 million.

The budget would allocate $15 million for a program to expand patient safety initiatives developed by the Agency for Healthcare Research Quality for hospitals to other settings such as primary care practices and nursing homes.

Full HHS budget for FY 2015: www.hhs.gov/budget/fy2015/fy-2015-budget-in-brief.pdf


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