The White House’s proposed budget includes $81 billion in Medicare payment reductions to long-term care providers. The reductions would take place over 10 years, as part of the Obama administration’s plan to reduce healthcare spending by $400 billion.
The proposed Medicare cuts to skilled nursing and inpatient rehabilitation facilities would be through adjusting payment updates and “equalizing payments” for commonly treated conditions, according to the budget document released Wednesday. The White House plan also includes “incentivizing” SNFs to reduce hospital readmissions, which the administration estimates will lead to about $500 million in deficit reduction by 2018.
Long-term care advocates sharply criticized the budget. The American Health Care Association and the Alliance for Quality Nursing Home Care both noted that these payment reductions would come after substantial Medicare cuts enacted over the last several years.
“These proposed reductions will not solve the underlying, structural problems with our nation’s budget,” said AHCA President and CEO Mark Parkinson. “Reform is necessary and skilled nursing hopes to be part of the solution. Our members are eager to participate in discussions of real and lasting reforms.”
LeadingAge was more supportive of the budget, stating that Obama’s decision to protect Medicaid from cuts is “greatly appreciated.” However, the group expressed “major concern” over a proposed restriction on income tax deductions for charitable contributions, which could limit donations to nonprofit providers.
The White House budget includes more spending cuts than the Democratic plan that came out of the Senate last month, as the president tries to pave the way for a “grand bargain” with Republicans. However, GOP leaders have dismissed Obama’s budget due to its tax increases.
Budget negotiations will likely become serious when Congress faces the next deadline to raise the debt limit this summer, according to The Associated Press. Obama began his own efforts to broker a deal by hosting a White House dinner with a dozen Republican senators Wednesday night.