President Obama’s FY 2011 Budget Proposal

President Obama released his fiscal year (FY) 2011 budget proposal today. As expected, the $3.8 trillion budget would freeze discretionary spending for three years, with the exception of Medicare, Medicaid and Social Security. The Administration’s proposed budget is predicated on the passage of health care reform, which, of course, has not passed and may not pass. Therefore, unlike previous years, many proposals to make adjustments in Medicare and Medicaid spending, which are usually included in an Administration’s budget, are omitted. The budget details are available at

The provisions of specific interest to hospitals are:

  • $25.5 billion for a six-month extension, through June 2011, of the American Recovery and Reinvestment Act’s Federal Medical Assistance Percentage increase. This six-month extension would provide California an additional $2.38 billion.
  • $110 million for continuing efforts to strengthen health information technology policy, coordination and research activities.
  • $286 million for comparative effectiveness research of different medical treatment options.
  • $169 million to the National Health Service Corps to place primary health care providers, such as physicians and nurse practitioners, in medically underserved areas in exchange for payments to their student loans.
  • $79 million to strengthen regional and local partnerships among rural health care providers, increase the number of health care providers in rural areas, and improve the performance and financial stability of rural hospitals.
  • $250 million to reduce Medicaid, Medicare and Children’s Health Insurance Program fraud, waste and abuse initiatives.
  • $318 million for children’s hospital graduate medical education.

As further details emerge on the President’s FY 2011 budget proposal, CHA will work with the California congressional delegation to provide a full understanding of its impact on California hospitals.

For more information, please contact Anne O’Rourke, CHA senior vice president, federal relations, at [email protected] or (202) 488-4494.