Providers rip Bush's "illogical" proposed budget cuts

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Providers are speaking out against President Bush's FY2006 budget proposal, which would slash nearly $60 billion from the Medicaid budget over the next 10 years and $24 billion from Medicare over the same time period.

"In light of the heightened quality of care in nursing homes we have
attained with the administration through the Nursing Home Quality
Initiative, these proposed Medicare and Medicaid cuts are illogical and ill-considered, because they place seniors' care quality at risk," said Hal Daub, president and chief executive officer of the American Health Care Association.

The Medicaid cuts are intended to curb inappropriate state spending, said Mark B. McClellan, administrator of the Centers for Medicare & Medicaid Services during an event releasing the budget's details. Medicaid pays for the majority of U.S. nursing home costs.

New spending would increase by $16.5 billion, according to the budget. That includes money for long-term care initiatives and children's health programs. The budget also includes $2.9 billion for the president's New Freedom Initiative, a program to encourage more home- and community-based care for Medicaid long-term care patients, as well as $230 million for Medicare Premium Assistance for low-income individuals.

The Medicaid savings in the proposal come from restricting improper use of intergovernmental transfers (IGTs) and stopping states and the federal government from paying too much for prescription drugs, McClellan said. States historically have used IGTs to overstate their Medicaid costs to bring in more federal matching dollars. HHS estimates that by using IGTs, states could shift nearly $40 billion in costs to the federal government over the next 10 years.