President Obama’s recently released 2013 proposed budget seeks a total of $364 billion in healthcare savings over 10 years. The following are some highlights from the President’s proposal that are likely to be of particular interest to those in the healthcare industry.
Reduce coverage of Medicare bad debts from 70 percent to 25 percent over three years starting, in 2013, saving approximately $36 billion over 10 years.
Reduce the Indirect Medical Education (IME) adjustment by 10 percent beginning in 2014 saving approximately $10 billion over 10 years.
Increase income-related premiums under Medicare Parts B and D by 15 percent and maintain the income thresholds until 25 percent of beneficiaries under Parts B and D are subject to these premiums, saving approximately $28 billion over 10 years.
Create a home health copayment of $100 per home health episode for new beneficiaries beginning in 2017 applicable for episodes with five or more visits not preceded by a hospital or other inpatient post-acute care stay, saving approximately $350 million over 10 years.
Strengthen the Independent Payment Advisory Board (IPAB), created by the Affordable Care Act (ACA) to advise Congress on policies to reduce the rate of Medicare growth, by lowering the target growth rate and giving the IPAB additional tools like the ability to consider value-based benefit design.
Reduce payments to CAHs from 101 percent to 100 percent of reasonable costs, effective in 2013, and eliminate the CAH designation for those that are fewer than 10 miles from the nearest hospital, effective in 2014, saving approximately $2 billion over 10 years.
Limit State financing practices, such as intergovernmental transfers, that increase the draw-down of Federal financial participation under Medicaid by decreasing the Medicaid provider tax threshold from the current law level of 6 percent in 2014, to 4.5 percent in 2015, 4 percent in 2016, and 3.5 percent in 2017 and beyond, saving approximately $21.8 billion over 10 years.
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