Bush budget would hit providers with market basket cut

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Providers this week expressed outrage towards President Bush's budget proposal. Two issues in particular have sounded alarms: the lack of a market basket update in fiscal year 2007, and the elimination of bad debt payments for all Medicare providers over the next four years.

The president is following MedPAC's recommendation to cut market basket updates for providers in 2007. That represents a projected loss of $660 million, according to the American Health Care Association. The budget also includes a market basket update minus 0.4% for FY 2008 and 2009. While the president is recommending an update cut, only Congress can approve it.

The elimination of bad debt payments for all Medicare providers over the next four years could represent a hit of $150 million in 2007 to long-term care providers, and a $6.2 billion cut from now until 2011, AHCA estimates. Congressional action also would be necessary to reduce the bad debt allowance for nursing facilities and other providers.
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