The 2007 budget President Bush presented to Congress on Monday included $36 billion in Medicare cuts over five years, with $20 billion of those cuts resulting from lower reimbursement to hospitals. In a White House press briefing yesterday, Office of Management and Budget Director Joshua Bolten said that “this budget will reduce the rate of growth over the next 10 years in Medicare spending from about 7.8% per year to about 7.5%. So these are modest reductions in the rate of growth, and we believe that they can be done without undermining the support that [Medicare was] intended to provide.” The budget would reduce annual hospital payment increases from 3.4% to less than 3%, which Bolten characterized as “a very small reduction” that “will produce substantial savings.”
The budget also includes a federal spending ceiling for Medicare beyond which Congress would be required to reduce the government’s share of Medicare costs. “If the Congress does not act…that reduction will happen automatically,” said Bolten.
HFMA President and CEO Richard L. Clarke, DHA, FHFMA, commented, “While the White House contends that these are 'modest reductions in the rate of growth,’ many providers will feel the pinch in that costs are rising faster than Medicare payments. Medicare already pays hospitals less than the cost of providing service and these budget cuts only exacerbate that trend.”
American Hospital Association President Dick Davidson said the budget “is a step backwards in protecting access to care for all Americans.”
Read the New York Times and Los Angeles Times accounts of the budget.
