Obama budget calls for Medicare cuts for SNFs, penalizes rehospitalizations

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Mark Parkinson
Mark Parkinson
While President Obama's proposed 2013 budget contains expected Medicare cuts, long-term care groups have expressed their disappointment.

Among other proposals, the American Health Care Association criticized a provision of the budget that would “align Medicare policy more closely with private sector standards by reducing bad debt payments to 25% for all eligible providers over three years starting in 2013.”

According to AHCA President and CEO Mark Parkinson, this bad debt provision “is tantamount to cutting Medicare benefits.”

In order to tackle rehospitalizations, Obama's plan proposes reducing “SNF payments by up to 3% beginning in 2016 for facilities with high rates of care-sensitive, preventable hospital readmissions.”

The Alliance for Quality Nursing Home Care contends that SNFs are already slated to absorb $127 billion in Medicare reductions over the FY 2012-21 budget window, and that additional payment cuts in next year's federal budget will further jeopardize seniors' access to quality care.

In the realm of Medicaid, the president calls for aligning Medicare drug payment policies with Medicaid policies for low-income beneficiaries. This proposal would allow “Medicare to benefit from the same rebates that Medicaid receives for brand name and generic drugs provided to beneficiaries who receive the Part D Low-Income Subsidy beginning 2013.”

The president's proposal also would place new limits on provider taxes that go toward paying the state's share of Medicaid via taxation. Obama's plan would include lowering the current tax limit, which is 6%, to 4.5% in 2015, 4% in 2016 and 3.5% in following years. Opponents of this provision will pass the cuts on to providers and beneficiaries.

Click here to read President Obama's Medicare savings plan.

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