Medicare Budget Battle Ongoing in DC
BWH and the Brigham and Women’s Physicians Organization have a keen interest in partisan budget battles in Washington, D.C., over Medicare and Medicaid spending as the House is debating its version of the fiscal year 2007 budget resolution. In recent years, BWH’s reliance on government payers, including Medicare, has grown from 30 percent of the hospital’s revenues in 2002 to more than 45 percent this year.
The House Budget Committee’s plan is largely similar to President Bush’s proposal for discretionary spending and extensions of expiring tax cuts, but it calls for much less savings from mandatory spending and does not specify cuts to Medicare and Medicaid.
What’s troubling for BWH and the BWPO is that Medicare and Medicaid payments already do not cover costs incurred for services. Allen L. Smith, MD, MS, chief medical officer of the BWPO, said, “The current budget climate in Washington, D.C., risks a widening gap between Medicare reimbursement, and costs to deliver that care only will widen the payment and cost gaps. Moving forward, BWH and PHS financial analysts are projecting increases of approximately 2 percent in government-paid reimbursements as the costs to deliver health care are expected to increase 5 to 7 percent. If this trend continues, it will put a lot more pressure on BWH and BWPO to seek higher reimbursements from other payers.”
Under the plan being considered by the Budget Committee, discretionary spending, which Congress must appropriate annually, would be held to $873 billion, while non-specified mandatory spending would be cut by $6.8 billion over five years. By comparison, the Bush Administration in January requested approximately $36.8 billion in Medicare cuts over five years. The mandatory spending cuts in the House version would be included in a filibuster-proof reconciliation bill. While the plan avoids calling for cuts in health care or student loan programs, it would still be up to individual committees to find savings to meet targets set in the Budget Resolution.
An amendment offered by Rep. Rosa DeLauro, D-Conn., to add $7 billion for education and health care by restoring Labor-HHS funding to the 2005 appropriation level was rejected in March, but it remains possible that the House Resolution may still end up adding funding for health programs. A group of moderate Republicans is seeking to offer a similar amendment when the resolution is expected to reach the floor. A number of Republicans publicly have stated that they will not vote for a House Budget Resolution that would result in cuts to education, health care, housing and other domestic programs. Should they be successful in adding money to the budget it could complicate the prospects for passage of a budget as House GOP conservatives very publicly have stated their opposition to the higher spending levels included in the Senate’s version and adding any funding to the House’s Resolution.
The BWPO will continue to share opportunities for members to inform congressmen or senators about concerns on this issue.