HHS budget proposes Medicare and Medicaid reforms for long-term deficit reduction

The fiscal year 2013 U.S. Health and Human Services budget strives to make prudent investments while being fiscally responsible, HHS officials said this week during a live web broadcast announcing its budget proposal.

“This budget also recognized our solemn responsibility to safeguard taxpayer dollars and to make the most of every investment by spending wisely,” said Bill Corr, HHS’ deputy secretary during his opening remarks on Feb. 13.

HHS’ budget proposes $941 billion in outlays; 56 percent is for Medicare, 30 percent for Medicaid and 8 percent for discretionary programs.

The budget request includes more than $2.1 billion in terminations and reductions, including a $452 million cut to the Low Income Home Energy Assistance Program, a $177 million cut to the Children’s Hospital Graduate Medical Education Payment Program and a $327 million cut to Community Services Block Grants as well as the elimination of the Preventive Health and Health Services Block Grant.

“In many areas we made cuts because our nation’s fiscal health and tight budget times demand action,” said Corr. “Our budget helps reduce the deficit by $366 billion over 10 years, almost all of which comes from reforms from Medicare and Medicaid. These are significant but they are carefully crafted to protect beneficiaries.”

Proposed savings of $358.5 billion over the next decade in Medicare and Medicaid would come from changes such as aligning Medicare drug payments with Medicaid policies for low-income beneficiaries; realigning payments for post-acute care providers such as long-term care hospitals and skilled nursing facilities; gradually reducing payments to teaching hospitals for the indirect costs of medical education; introducing a home health co-payment for new Medicare beneficiaries; and prohibiting brand and generic drug companies from delaying the availability of new generic drugs and biologics.

On the investment side, the budget requests $1 billion to continue implementing the Affordable Care Act; $2 billion for the Administration on Aging to help seniors remain independent; $599 million for effectiveness research; and more than $8 billion for the Head Start program.

Corr also noted that the HHS budget invests in expanding America’s network of community health centers. “Together with 2012 resources, our budget will create more than 240 new access points for patient care.  And overall, our investment in health centers will provide access to quality care for 21 million people, 300,000 more patients than last year, in addition to creating new jobs across the country.”

Follow Stephanie Bouchard on Twitter @SBouchardHFN.

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