President Unveils Federal Budget Proposal

VHCA

Advocates for long term care providers expressed concern over the proposed budget for Fiscal Year 2008 unveiled by President Bush earlier this week.  If implemented, it would have a significant negative impact on the nursing home care relied upon daily by 1.5 million frail, elderly and disabled citizens. According to analysis performed by the American Health Care Association (AHCA), payments to skilled nursing facilities account for only 4.8% of the proposed Medicare budget but nursing homes would absorb more than 15% of the proposed cuts.  The budget proposal stipulates more than $10 billion in cuts to Medicare funding for skilled nursing facility (SNF) care over five years. 

Although the initial proposal is not favorable with respect to Medicare and Medicaid funding for providers of long term care services, there are many opportunities for advocates to work throughout the remainder of the budget process to restore dollars associated with the cuts contained within the President’s proposal.

Listed below are several of the more significant provisions of the President’s FY2008 budget proposal that are of interest to long term care providers. These initial assessments provided by AHCA will likely be fine-tuned over the next several weeks.

Medicare SNF Market Basket Update - The budget proposes to eliminate the SNF market basket update for FY2008 and to reduce it by .65% for FY2009 through FY2012.  The Office of Management and Budget (OMB) estimates budget savings of $1.01 billion in FY2008 and five-year savings of $9.2 billion.

Phase Out Medicare Bad Debt - The budget proposes a four-year phase-out of Medicare Part A and Part B reimbursement for allowable bad debt payments to all providers.

Survey and Certification Revisit User Fee - The budget proposes a new user fee for the Survey and Certification Program within the Centers for Medicare & Medicaid Services (CMS). The agency would charge Medicare and Medicaid participating facilities a fee for conducting follow-up surveys to verify that a facility has taken appropriate action to correct identified deficiencies in compliance with specific Federal health, safety, and quality standards.

Clarify Rehabilitation Services - The budget proposes a regulation clearly defining allowable services that may be claimed as rehabilitation services, which are optional Medicaid services typically offered to individuals with special needs or disabilities to help improve their health and quality of life.

Enhancing Asset Verification for Medicaid Eligibility - The budget would expand a Social Security Administration (SSA) pilot using electronic financial records for verifying an applicant’s assets to appropriate HHS programs. State Medicaid agencies would be required to establish pilots in locations where an SSA pilot is already operating.