For many providers, the President’s $3 trillion budget proposal may feel like deja vu all over again. Repeating a theme from recent years, the plan has providers scrambling to deal with cuts in both Medicaid and Medicare. One especially problematic feature is a 0% marketbasket increase in Medicare payments.

The budget proposal “sets out priorities that are completely at odds with the tremendous growth in this country’s aging population,” said Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging.

“These cuts are a particular concern since Medicaid payments for long-term care are likely to shrink in states that are hard-hit by the economic downturn,” added Bruce Yarwood, president and CEO of the American Health Care Association.

But if the document is flawed, it remains the starting point from which the final budget will be crafted. Looks like providers have their work cut out for them in Washington this year.