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CHA News

Federal Budget Agreement Has Good and Bad News for Hospitals

The House and Senate Budget Conference Committee announced on Tuesday an agreement to set new federal spending funding levels over the next two years. The Bipartisan Budget Act of 2013 would revise, and raise, limits on discretionary spending for fiscal years 2014 and 2015. It calls for spending $1.012 trillion for FY 2014, while reducing the deficit by $23 billion. While providing relief from sequester limits on the discretionary side, the measure extends for two years — 2022 and 2023 — the Medicare sequestration cuts. 

House and Senate leaders have indicated that a vote could take place on Thursday and are contemplating including a three-month “patch” for the Medicare physician payment schedule (known as the sustainable growth rate). That amendment, as currently drafted, would avert a deep cut to physician payments, as well as delay the scheduled Medicaid disproportionate share (DSH) cuts for two years and extend several important rural hospital programs for three months. The extenders include the Medicare Dependent Hospital program, low volume adjustments, outpatient therapy caps and ambulance payments. The physician fee amendment also contains payment cuts for long-term care hospitals (LTCHs) by establishing more stringent criteria for the increased LTCH rate and delays application of the 25 percent rule for three years.

CHA has supported a delay for both the Medicare and Medicaid DSH cuts and is disappointed to see the sequestration cuts extended. More detail is available in the attached summary.