Obama opens the door for drastic new Medicare, Medicaid cuts for nursing homes

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Obama opens the door for drastic new Medicare, Medicaid cuts for nursing homes
Obama opens the door for drastic new Medicare, Medicaid cuts for nursing homes
Frayed nerves were showing in the provider community Monday after President Obama announced his intentions Saturday to cut $313 billion more from Medicare and Medicaid over the next 10 years. The proposed new cuts are in addition to the $635 billion in Medicare and Medicaid spending reductions already included in the president's FY 2010 budget, and include billions in potential payment reductions.

Nursing homes, long-term care hospitals and rehabilitation facilities, would see their share of Medicare and Medicaid money reduced by $14.4 billion over the next decade under Obama's new proposal. That includes $110 billion in reductions through “productivity adjustments” to their Medicare reimbursements. All told, Obama's proposed cuts now total $948 billion over 10 years. Obama made the announcement during his weekly radio address.

Administration officials say many of the reductions are to programs that will become extraneous if significant healthcare reform is achieved. For example, $106 billion of the new cuts would be to reimbursements for hospitals that treat uninsured patients. If more people have health insurance through new reforms, that money could be saved, according to Obama. Nursing homes, however, would not necessarily enjoy the same trade-off provisions and figure to be among the hardest hit provider groups should the Obama proposal go through.