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Home > Medical Professionals > Health Policy and Government Relations > Physician Payment > Large Medicare Reductions in Presidents FY 2009 Budget

Large Medicare Reductions in President's FY 2009 Budget

On February 4, President Bush released details of his Fiscal Year 2009 budget, which includes large Medicare reductions - $178 billion over the next five years.  Significant for vascular surgeons, it does not include any increases for the physician payment update.

Congress passed and the President signed legislation at the end of 2007 that provides a .5% increase for only the first six months of 2008; a 10.6% decrease will take effect on July 1 if Congress does not act to avert this.  If a Medicare package is not passed by Congress by the end of June, the .5% increase will likely be part of an extender for the rest of 2008.

Other provisions in the President’s budget include three year freezes on Medicare payments to hospitals, skilled nursing facilities, hospices, inpatient rehabilitation facilities, long-term care hospitals, ambulatory surgical centers along with outpatient hospital updates. 

However, the budget does not curb the billions of dollars of overpayments being made to private insurance companies that serve Medicare beneficiaries through the Medicare Part C Advantage Program.  It is estimated that private insurers are paid 13% more than it would cost to treat the same beneficiaries under Medicare Part B.

The chairmen of the House Ways and Means and Energy and Commerce Health Subcommittees and the Senate Finance Committee have called the President’s budget “dead on arrival”.  SVS and other physician organizations support an 18 month extension of the .5% increase in the physician payment update and will work to ensure that this is extended through at least 2008.  SVS will be requesting members to email letters to their members of Congress about this issue in the near future.