Published on:

Impact of Proposed Federal Budget on Medicare

Federal financial concerns often impact the lives of our most vulnerable community members-including seniors in nursing homes. That is why our Illinois nursing home abuse lawyers closely follow all budgetary political battles which affect programs like Medicare and Medicaid. Changes to these allocations or rules can have ripple effects which dictate the quality of care provided at many long-term care facilities. It is not an exaggeration to say that the prevalence of nursing home neglect and abuse in our area is strongly influenced by some of these financial realities.

Along those lines, last week the President unveiled his proposed federal budget for fiscal year 2013. As summarized by the AMDA, the proposal includes a series of spending cuts as well as revenue increases which together seek to reduce the federal deficit by over $3 trillion over the next ten years. Of that deficit reduction, about 9% would come from Medicare and Medicaid. All told the budget includes a list of Medicare legislative proposals which the administration argues would save $302.8 billion over a decade. This would be accomplished by “aligning payments with costs of care.” In addition, the proposal seeks to reduce the spending by providing more incentives to urge high-quality care which reduce high-cost complications.

Our Chicago nursing home lawyers were interested to learn that part of the package includes adjusting skilled nursing facility payments in an effort to reduce hospital readmission rates. According to current Medicare estimates, at least 14% of patients discharged from a hospital to a nursing home are readmitted to the hospital for conditions which could have been avoided. This is not surprising considering the rampant nursing home abuse and mistreatment that occurs at facilities across the country. The new proposals would reduce payment to facilities by up to 3% for those with preventative readmissions.

Another simple change that might save money, according to the proposed budget, would be to align Medicare drug savings with Medicaid drug savings. Medicaid pays lower rates for brand name and generic drugs. Allowing Medicare to receive the same rebate would save a stagger $155 billion over a ten year period.

In addition, payments for a select group of “post acute care providers” might also be adjusted as a cost-saving measure. Right now researchers believe that Medicare payments exceed the costs of care in post-acute settings. Adjusting those payments would likely save money. This would affect long-term hospitals, skilled nursing homes, inpatient Rehabilitation facilities, and home health groups. All told, the “adjustments” might save as much as $57 billion over a ten year period.

It remains unclear if any of these proposals will come to fruition. Right now they only represent a starting ground, initiated by the President to being the progress with Congress to agree on an actual, final budget. Considering the rough relationship that the President maintains with the GOP controlled House of Representatives, there is a good chance that many of these proposals will have to be changed. In any event, it is important to understand what these possibilities are and how it might ultimately affect the care received by senior friends and loved ones.

See Our Related Blog Posts:

Steep Budget Cut Seen for Home Health Services for Seniors

Nursing Home Advocates Stand Against the “Balanced Budget” Amendment