February 24, 2012
On February 13, 2012, President Obama offered his fiscal 2013 budget proposal, including a $76.4 billion Health and Human Services budget that would trim $360 billion in Medicare and Medicaid payments over the next 10 years, in part by cutting payments to certain providers.
The proposed budget cites the Medicare Payment Advisory Committee (MedPAC) recommendation from June 2010 to support cuts to graduate medical education. Specifically, the budget would reduce the Indirect Medical Education (IME) adjustment by 10 percent beginning in 2014. The IME add-on payments determined by MedPAC are significantly greater than the additional patient care costs that are experienced at teaching hospitals. The Fiscal Commission included a similar recommendation, which projects an estimated savings of over $9 billion over 10 years.
In addition, the budget proposes to update Medicare payments to more appropriately account for utilization of advanced imaging. Citing a MedPAC recommendation from March 2009 in which the Commission stated the volume growth of imaging services over the last decade may signal that these services are mispriced. This recommendation suggested increasing the equipment use standard for expensive imaging machines from 25 hours to 45 hours per week and implementing a prior-authorization in Medicare for advanced diagnostic imaging. The MedPAC recommendations would amount to a projected savings of $820 million over 10 years, if implemented.
The Society of Nuclear Medicine will continue to further analyze the fiscal 2013 budget proposal and provide members with updates as they occur.