President Barack Obama's 2014 budget proposal, which would cut approximately $400 billion from Medicare over the next 10 years, would put a heavy burden on hospitals with thin balance sheets or high Medicare volumes, according to a report from Fitch Ratings.
Although presidents' budgets are rarely passed, the report notes, they establish administration priorities and act as a weather vane for upcoming policy initiatives. Among the proposed Medicare cuts would be reimbursement reductions for bad debt, medical education funding, rural and critical access hospitals and post-acute care. Non-profit acute care hospitals could see about $300 million trimmed from CMS payments over the next decade, according to the report.
Fitch's provider ratings will be affected differently across sectors of healthcare, but academic medical centers, critical access hospitals and rehabilitation hospitals would see the most targeted hits if the budget is approved. Analysts noted the one-year delay in Medicaid disproportionate share hospital payments would be a positive move for providers.
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Although presidents' budgets are rarely passed, the report notes, they establish administration priorities and act as a weather vane for upcoming policy initiatives. Among the proposed Medicare cuts would be reimbursement reductions for bad debt, medical education funding, rural and critical access hospitals and post-acute care. Non-profit acute care hospitals could see about $300 million trimmed from CMS payments over the next decade, according to the report.
Fitch's provider ratings will be affected differently across sectors of healthcare, but academic medical centers, critical access hospitals and rehabilitation hospitals would see the most targeted hits if the budget is approved. Analysts noted the one-year delay in Medicaid disproportionate share hospital payments would be a positive move for providers.
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