President proposes $320 billion in Medicare, Medicaid reductions, -and- Brown OKs Health Industry Fees, Vetoes Budget-Related Measure

Fri Sep 30 10:41:03 PDT 2011

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Description: CAL/AAEM: California Chapter of the American Academy of
Emergency Medicine

September 19, 2011

President proposes $320 billion in Medicare, Medicaid reductions

AHA News <http://www.ahanews.com/ahanews_app/index.jsp> 

President Obama today proposed $320 billion in reductions to Medicare and
Medicaid as part of a $3 trillion deficit reduction plan he submitted to the
Joint Select Committee on Deficit Reduction. The president's plan calls for
cutting Medicare by $248 billion and Medicaid by $72 billion over 10 years.
Among other Medicare reductions, the plan would reduce Medicare payments for
bad debt, cut indirect graduate medical education by 10%, and reduce payment
updates for post-acute providers. The administration also proposes three
changes to payments for rural providers. First, starting in fiscal year
2013, it proposes to end add-on payments for hospitals and physicians in
low-population frontier states. Next, it would reduce Critical Access
Hospital payments from 101% to 100% of reasonable costs. Finally, it would
eliminate the CAH designation for hospitals that are fewer than 10 miles
from the nearest hospital. The administration also proposes to reduce the
growth rate target for Medicare's Independent Payment Advisory Board from
GDP per capita plus 1% to GDP plus 0.5%. Medicaid savings include limiting
Medicaid provider taxes beginning in 2015; replacing the current Medicaid
payment formulas with a single matching rate specific to each state; and
reducing Medicaid disproportionate share payments for hospitals in 2021. AHA
members today received a Special Bulletin with more on the proposed cuts.
The committee, authorized by last month's Budget Control Act, is charged
with crafting by Nov. 23 a far-reaching plan to reduce the national deficit
by at least $1.2 trillion. AHA President and CEO Rich Umbdenstock said,
"President Obama's proposal will make it harder for America's seniors to
receive the care they need and will result in the loss of jobs in
communities across the nation. Today's plan to cut Medicare and Medicaid
funding would translate into at least 200,000 job losses to hospitals and
the businesses they support by 2021. This is the wrong prescription to
create a healthier America and sustain job growth in a sector of the economy
that is actually adding jobs."

September 19, 2011

Brown OKs Health Industry Fees, Vetoes Budget-Related Measure

CaliforniaHealthline
<http://www.californiahealthline.org/articles/2011/9/19/brown-oks-health-ind
ustry-fees-vetoes-budget-related-measure.aspx#ixzz1ZEEbv1qY> 

Gov. Jerry Brown (D) has signed two bills to extend revenue-generating
initiatives for the health care industry and vetoed a bill that would have
required the state finance director to consult with lawmakers before making
emergency budget cuts, the San Jose Mercury News reports (Harmon, San Jose
Mercury News, 9/17).

Details of the Approved Bills

Brown approved a bill (SB 335), by Sen. Ed Hernandez (D-West Covina) and
Senate President Pro Tempore Darrell Steinberg (D-Sacramento), that would
extend through 2013 a fee on hospitals to draw down additional federal funds
for Medi-Cal services. Medi-Cal is California's Medicaid program.

The bill is designed to generate $5.2 billion in higher Medi-Cal payments to
hospitals and cut $875 million from general fund spending by the end of
2013.

The measure still requires a federal waiver to become law, according to the
Sacramento Business Journal.

Brown also signed a bill (ABX1 21), by Assembly member Bob Blumenfield
(D-Woodland Hills), to extend a tax on Medi-Cal managed care plans for
another year (Robertson, Sacramento Business Journal, 9/16).

The Medi-Cal managed care plan tax extension aims to help finance Healthy
Families, California's Children's Health Insurance Program.

Brown said the measure will save the state's general fund $103 million this
year (Sanders, Sacramento Bee, 9/18).

Details of the Vetoed Bill

Meanwhile, Brown vetoed a bill (SBX1 6), introduced by the Committee on
Budget and Fiscal Review, that would have required the director of the state
Department of Finance to consult with legislative leaders on alternatives to
automatic cuts outlined in the state budget package (Sacramento Business
Journal, 9/16).

Under current law, an additional $2.5 billion in cuts could be made to
education, public safety, and health and human services programs if state
revenue falls short of expectations (Sacramento Bee, 9/18).

Read more:
http://www.californiahealthline.org/articles/2011/9/19/brown-oks-health-indu
stry-fees-vetoes-budget-related-measure.aspx#ixzz1ZEEbv1qY

Marcus Williams &
Brian Potts MD, MBA
Managing Editors, CAL/AAEM News Service

Contact us at: calaaem.news.service1 at gmail.com

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