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White House Releases Budget Proposal

Wednesday, April 10, 2013

On April 10, the White House released the Administration's Fiscal Year (FY) 2014 Budget.  The budget calls for $3.77 billion of spending in FY2014 and would trim $1.8 trillion off the deficit over a ten year time frame.  Additionally, the budget would repeal the sequestration process, including the mandatory two percent reduction to Medicare physician payments.    

In health care spending, the budget calls for $370 billion in Medicare cuts over ten years achieved through a number of tweaks to Medicare spending.  These cuts primarily come from changes to the Medicare Part D program that require drug makers to provide rebates to low income seniors; adjustments to deductibles and copayments including a variation of means-testing, $25 deductible increase for new Medicare enrollees, $100 copayment for home health visits, and a 15 percent Medigap premium surcharge for Medigap programs with low cost-sharing requirements; reduction to Graduate Medical Education through reducing Indirect Medical Education funding by 10 percent; reduction of the Medicare rate of payment for bad debts (non-payment of deductibles and copayments); reduction of payments to Critical Access Hospitals (CAHs) from 101 percent to 100 percent and eliminating the designation of CAHs within 10 miles of another hospital; and "cutting waste, fraud and abuse." 

Of particular interest to anesthesiology, the President’s budget calls for further reducing the rate of Medicare spending growth by lowering the target spending threshold for the Independent Payment Advisory Board (IPAB).  Established as part of the Patient Protection and Affordable Care Act, IPAB consists of an unelected and unaccountable body of 15 individuals tasked with designating Medicare spending cuts.  ASA firmly opposes IPAB.    

Additionally, the Administration's budget calls for a "permanent and fiscally responsible reform" to the Medicare Sustainable Growth Rate (SGR) formula.  The Administration explains that they envision any SGR replacement would "incentivize quality and efficiency" with common attributes such as encouraging care coordination and rewarding or penalizing practitioners by the level of quality care delivered. 

Public reaction from Republicans suggests it is unlikely the President’s budget will be enacted. 

ASA continues to closely monitor the budget proposal. 

Review President Obama's FY2014 Budget.
Review the House Republican'ss response

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