February 5, 2015

Administration Issues FY2016 Budget Proposal

On Feb. 2, President Obama issued the proposed budget for fiscal year (FY) 2016, which included $431.3 billion in reductions to Medicare over 10 years. The budget would also increase Medicaid funding by $7.7 billion over 10 years, although there are some program reductions proposed for Medicaid as well.

Key provisions of the proposed budget include:

  • Replace sequestration with other savings opportunities
  • Implement value-based purchasing for skilled nursing facilities, home health agencies, ambulatory surgical centers, hospital outpatient departments, and community mental health centers.
  • Establish a hospital-wide Readmissions measure
  • Eliminate the 190-day lifetime limit on impatient psychiatric facility services
  • Implement bundled payments for post-acute care
  • Reduce Medicare coverage of bad debts
  • Better align graduate medical education payments with patient care costs
  • Reduce Critical Access Hospital (CAH) payments from 101 percent of reasonable cost to 100 percent of reasonable cost
  • Prohibit CAH designation for facilities that are less than 10 miles from the nearest hospital
  • Modify the 60-percent rule for inpatient rehabilitation facilities (IRF) by requiring that 75 percent of IRF patients require intensive rehabilitation services
  • Introduce home health copayments for new Medicare enrollees
For more information,  contact Kathy Reep , vice president of finance, at (407) 841-6230.