WASHINGTON WIRE
February 2, 2008
Issue 159
Bush Administration Releases FY 2009 Budget Request, Includes Cuts to Discretionary Programs
President’s Proposes Major Medicare Cuts in FY 2009 Budget
Senators Request Changes to Medicaid Case Management Rule
Top Story
Bush Administration Releases FY 2009 Budget Request, Includes Cuts to Discretionary Programs
On Monday, President Bush released his fiscal year (FY) 2009 budget, calling for increases in defense spending while making cuts to a variety of domestic programs. Many of the controversial spending cuts would be made to discretionary programs under the Department of Health and Human Services (HHS).
For example, the Centers for Disease Control and Prevention (CDC) would face a 7% cut under the President's budget for a total funding level of $5.7 billion in FY 2009. Likewise, the Administration for Children and Families (ACF) would see a $1.1 billion cut in their budget for a total funding level of $13.3 billion next fiscal year.
The President also proposes to cut the budget for the Health Resources and Services Administration (HRSA) by $995 million for a total funding level of $5.9 billion.
In addition, the National Institutes of Health (NIH) would receive flat funding of $29.4 billion in FY 2009 under the Administration's proposal, a level which many consider insufficient to fund the agency's biomedical research. Funding for the Food and Drug Administration (FDA) would receive an increase of approximately $130 million, or 5.7%, in FY 2009 under the President's budget, but stakeholders argue such an increase is not enough to keep up with the agency's activity on food and drug safety.
The cuts to domestic programs proposed in the budget drew harsh criticism from advocates this week and lead many Democratic lawmakers to label the budget as "dead on arrival." Congress is likely to begin work on its budget resolution in the coming weeks.
Health Care News
President's Proposes Major Medicare Cuts in FY 2009 Budget
The President's FY 2009 budget, released earlier this week, calls for $183 billion in cuts to Medicare spending over five years. According to the Administration, these spending reductions would reduce the rate of growth of the program from 7.2% to 5% annually.
Much of the Medicare savings, approximately $117 billion, would come from reducing scheduled updates to provider payments over the next five years. Hospital payments would be cut by $64.2 billion, skilled nursing facilities would be cut by $17 billion, and inpatient rehabilitation facilities would be cut by $4.8 billion.
On top of the provider cuts, the budget also offers several cost-savings proposals including the introduction of competitive bidding for clinical laboratory services, which would save $2.3 billion over five years. The President also proposes to phase-in a 30% reduction in Disproportionate Share Hospital (DSH) payments over two years to save $20.7 billion over five years. Additionally, the President would find savings in changes to oxygen, wheelchair, dialysis, and indirect medical education payments.
Lawmakers on Capitol Hill had little praise for the President's proposed Medicare cuts this week. And, because nearly all of the President's Medicare proposals would require legislative action, it is up to Congress to decide whether or not to make many of the cuts suggested in the budget request.
Senators Request Changes to Medicaid Case Management Rule
Senate Majority Leader Harry Reid (D-NV) and Senate Finance Committee Chairman Max Baucus (D-MT) delivered a letter to Health and Human Services (HHS) Secretary Michael Leavitt this week that requested he rescind or delay a Medicaid rule to restrict services under the Targeted Case Management benefit.
In early December, the Centers for Medicare and Medicaid Services (CMS) released an interim final rule that was supposed to implement provisions of the Deficit Reduction Act of 2005 (DRA) regarding changes to targeted case management (TCM) services under Medicaid. The interim final rule allowed for a comment period until February 4th, but is scheduled to take effect on March 4th.
The Senators' letter states that the rule goes beyond Congressional intent and will harm beneficiaries with disabilities and chronic conditions. Advocates point to several controversial provisions of the rule, including a restriction on case management services for individuals transitioning to a community setting from the current 180 days to 60 days.
Senator Coleman (D-MN), along with several other Senators including Finance Committee Members Ken Salazar (D-CO) and Jeff Bingaman (D-NM), has introduced legislation to place a one-year moratorium on implementation of the TCM rule. Congressman Keith Ellison (D-MN) has introduced similar legislation in the House.
Upcoming Events
Hearings
Tuesday, February 12, 2008
Heath Care Workforce Issues
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen
Human Growth Hormone and B 12
House Oversight and Government Reform Committee
10 a.m., 2154 Rayburn
Wednesday, February 13, 2008
Care for Sick and Wounded Servicemembers
Senate Armed Services Committee
9:30 a.m., 216 Hart
Oversight of Sales of Private Medicare Plans
Senate Finance Committee
10 a.m., 215 Dirksen
Family and Medical Leave Act
Senate Health, Education, Labor and Pensions - Subcommittee on Children and Families
3 p.m., 430 Dirksen
Thursday, February 14, 2008
Fiscal 2009 Budget: Health Care IT
Senate Budget Committee
10 a.m., 608 Dirksen
Health Bills and Nominations
Senate Health, Education, Labor and Pensions Committee
10 a.m., 430 Dirksen
Fiscal 2009 Budget: Health and Human Services
House Energy and Commerce Committee
10 a.m., 2123 Rayburn
Family Medical Leave Act
House Education and Labor - Subcommittee on Workforce Protections
10 a.m., 2175 Rayburn
Cost to Society of Illnesses
House Appropriations - Subcommittee on Labor, Health and Human Services, Education, and Related Agencies
10 a.m., 2358-C Rayburn
Fiscal 2009 Budget: Medicare
House Ways and Means - Subcommittee on Health
12:00 p.m., 1100 Longworth
Deamonte Driver Medicaid Case
House Oversight and Government Reform - Subcommittee on Domestic Policy
2 p.m., 2154 Rayburn
For More Information
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