Study: Proposed budget cuts would wreak "havoc" on facilities

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The Bush administration's FY 2006 budget, which proposes Medicare cuts of $1.5 billion to nursing homes, could severely hurt facilities across the country, according to a new report.

The report from Friedman Billings Ramsey & Co., entitled, "Senior Moments: Medicare RUGs Refinement Outlook Varies Widely, but Current Budget Could Disproportionately Hurt Nursing Homes," says the effects of the budget would mimic the financial  "havoc and disruptions wrought by the imposition of Medicare PPS rates in 1997."

The report also warns that the cuts, which would amount to $24 billion over 10 years, might lead to lower quality care, reduced access to services and more stringent admissions processes.

"The findings of this new report are significant and timely because administration officials not only recently praised measurable gains in nursing home care quality, but also emphasized the importance of fostering sector stability to sustain quality gains," said Hal Daub, president and CEO of the American Health Care Association.

For a copy of the report, send a request to