President Releases Fiscal Year 2012 Budget Proposal - February 16, 2011

On Feb. 14, the Administration released its federal fiscal year (FY) 2012 budget request. The President’s budget proposal calls for "fiscal responsibility" and reduces the size of the deficit by more than $1 trillion by 2017. Most notably, the budget includes a two-year fix in the formula for Medicare physician payments. The budget proposes to offset this fix with $62 billion in reductions to other health care programs, including reducing permissible levels for Medicaid provider taxes beginning in 2015, and basing Medicaid Disproportionate Share Hospital (DSH) allotments on 2020 levels for 2021 and beyond. The provider tax reduction totals $18 billion over ten years and would reduce the threshold from 6% in 2014 to 4.5% in 2015 to 4% in 2016 and to 3.5% in 2017 and beyond.

NAPH released a press statement on the President's proposal and an initial analysis on Monday. NAPH, in collaboration with its counsel at Ropes & Gray, will be conducting a more in depth analysis of the budget proposal to share with members in the coming days. Congress will be taking up its own budget proposals in the next month, with the House expected to significantly increase the size of the health care cuts, including the Medicaid cuts. NAPH will be working with you to minimize the impact on Medicaid and safety net hospitals. We encourage you to come to our legislative event on March 7 and 8 to educate your delegation on the importance of Medicaid to your systems.