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

Frayednerves were showing in the provider community Monday afterPresidentObama announced his intentions Saturday to cut $313 billion more fromMedicare and Medicaid over the next 10 years. The proposed new cutsare in addition to the $635 billion in Medicare and Medicaid spendingreductions already included in the president’s FY 2010 budget, andinclude billions in potential payment reductions.

Nursinghomes, long-term care hospitals and rehabilitation facilities, wouldsee their share of Medicare and Medicaid money reduced by $14.4billion over the next decade under Obama’s new proposal. Thatincludes $110 billion in reductions through “productivityadjustments” to their Medicare reimbursements. All told, Obama’sproposed cuts now total $948 billion over 10 years. Obama made theannouncement during his weekly radio address.

Administrationofficials say many of the reductions are to programs that will becomeextraneous if significant healthcare reform is achieved. For example,$106 billion of the new cuts would be to reimbursements for hospitalsthat treat uninsured patients. If more people have health insurancethrough new reforms, that money could be saved, according to Obama.Nursing homes, however, would not necessarily enjoy the sametrade-off provisions and figure to be among the hardest hit providergroups should the Obama proposal go through.