President Bush Proposes Nearly $200 Billion in Medicare and Medicaid Cuts

Michigan Hospitals to Lose $372 Million in First Year and $4.4 Billion in Next Five Years, If Not Challenged

On Feb. 4, President George W. Bush unveiled his fiscal year (FY) 2009 federal budget proposal that would cut an unprecedented $182 billion from Medicare and $17 billion from Medicaid over the next five years.

 Key federal budget proposal reductions include:

• eliminating or reducing annual inflationary updates for FYs 2009 through 2013
• reducing disproportionate share hospital payments
• reducing indirect medical education payments to teaching hospitals
• reducing reimbursement for Medicare bad debts
• reducing hospital capital payments

These reductions would cut Medicare payments to Michigan hospitals and hospital-based skilled nursing facilities, home health agencies, hospices and inpatient rehabilitation providers by an estimated $372 million in FY 2009 and $4.4 billion over the next five years. Nationally, the combined proposals would reduce Medicare and Medicaid spending by nearly $200 billion over the next five years.

An MHA analysis of the president’s Medicare and Medicaid proposals is available online and hospital-specific impacts were e-mailed to hospital chief executive officers, chief financial officers and directors of reimbursement on Feb. 11.

If enacted, the president’s budget would have a disastrous impact on millions of patients who seek treatment at Michigan hospitals. At a time when Michigan’s economy is faltering and the demand for hospital services is rising, these unprecedented cuts would jeopardize hospitals’ ability to provide important services to the state’s most vulnerable populations — children, the elderly and the disabled.

Hospital Community Must Respond

Your U.S. representative and Sens. Carl Levin and Debbie Stabenow must hear from you and your colleagues that the president’s proposed cuts are significantly detrimental to your hospital and the patients you serve. Please immediately contact your federal lawmaker to articulate the financial and human toll that Medicare and Medicaid cuts will have on your community hospital.

Click here for a one-page sheet listing the impact of the Medicare cuts on Michigan hospitals and click here for a sample legislative e-mail/letter.

To locate your federal lawmakers, visit our Legislative Action Center and select My Elected Officials. For instructions on how to use the action center, click here. As a reminder, fax and e-mail are the most effective means of communication at the federal level.

In addition, MHA members are strongly encouraged to register to attend the 2008 American Hospital Association (AHA) Annual Meeting in April to ensure their individual voices and concerns are heard at the federal level. The critical importance of MHA members garnering visibility on the association’s federal advocacy agenda, as well as, a strong presence on Capitol Hill cannot be overstated.