2016 budget aims for $400 billion in Medicare reductions

2016 budget aims for $400 billion in Medicare reductions
2016 budget aims for $400 billion in Medicare reductions

Nursing homes will be asked to deliver care much more efficiently and for significantly less over the next 10 years based on proposals in the 2016 federal budget released on Monday.

The budget would extract close to $400 billion over the next 10 years from Medicare, Medicaid and other programs. Of that amount, about $100 billion would come from reduced inflation updates for providers that care for hospital-discharged Medicare beneficiaries. 

The Medicare cuts are "ill advised," said Mark Parkinson, President and CEO of the American Health Care Association and the National Center for Assisted Living. "In the past, our profession has worked with the White House and Congress to offer better ways of finding  Medicare savings than just across-the-board cuts. I'm confident we can do so again this year.” 

The budget would also impose a single bundled payment for many post-acute care services provided by long-term care facilities, and continue to incentivize nursing homes and home health agencies to deliver care more efficiently through the accountable care organization model. 

Many Medicare beneficiaries would be forced to pay more for their care, including a controversial co-payment for home care services. The plan would also exact a surcharge on beneficiaries who purchase private Medicare supplement coverage, and charge higher physician care and prescription drugs premiums to high-income beneficiaries. 

In addition to reaction from AHCA, the American Hospital Association called the Medicare proposed cuts "short sighted." The National Association for Home Care & Hospice released a statement strongly opposing home health co-payments or cuts, noting previous changes have already cut home health by around $100 billion over 10 years. 

“Essential home health services are at risk,” said NAHC President Val J. Halamandaris. “ ... Congress should therefore reject any additional cuts and any home health copay whether the reason is postponement or elimination of scheduled cuts in physician fees or deficit reduction.”