On February 14, 2011, the White House released its proposed budget for Fiscal Year 2012. The budget projects a $1.1 trillion reduction in the federal deficit over the next ten years, with two-thirds of the savings expected to come from spending cuts. The budget provides a high-level, generalized discussion of the intent behind various funding decisions. This client alert highlights the budget provisions for the Department of Health and Human Services (HHS) that are particularly relevant for drug and medical device manufacturers. The full budget is available from the Office of Management and Budget at: http://www.whitehouse.gov/omb/budget/Overview/

- Funds Programs to Reduce Fraud, Waste, and Abuse in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). The President’s budget provides $581 million in discretionary program integrity funding to implement activities to reduce the payment error rate and enhance civil and criminal enforcement for Medicare, Medicaid, and CHIP.

- Invests in Prevention. The President’s budget allocates $1 billion within the Prevention and Public Health Fund (which was included in the Affordable Care Act (ACA) for activities that have demonstrated improved health outcomes and will help reduce health care costs.

Please see full Alert below for further information.