The fiscal year 2008 budget and related regulations proposed by the Bush Administration have the potential to diminish Medicare and Medicaid payments to Southeastern Pennsylvania hospitals by $160 million during fiscal years 2007 and 2008. Totaling more than $1 billion in reductions over the next five years, the cuts would further erode the financial foundation of essential safety-net health care programs serving children, senior citizens and the disabled as well as medical education programs training the next generation of doctors and nurses.

For fiscal years 2007 and 2008, the impact of these proposed reductions on Southeastern Pennsylvania hospitals include:

• More than $130 million in funding cuts for academic medical centers, including reductions of more than $75 million in Medicare indirect medical education funding and nearly $60 million in Medicaid graduate medical education funding
• Cuts in funding for graduate medical education for children’s hospitals and nurse education

These funding streams are especially important to Southeastern Pennsylvania hospitals, which include a high concentration of academic medical centers that train physicians for the region, state and nation.

In addition to these budget cuts, the administration also seeks regulatory Medicaid cuts proposed by the Centers for Medicare & Medicaid Services as well as further cuts to both Medicare and Medicaid disproportionate share payments to fund the President’s proposal to help uninsured individuals purchase private health insurance.

Related Resources on the HAP (The Hospital & Healthsystem Association of Pennnsylvania) website:

• Highlights of the President’s Budget for Fiscal Year 2008
• PA Hospitals: President's Medicare/Medicaid Budget Devastating to Our Most Vulnerable Citizens

• Southeastern PA Hospitals Urge Congress to Maintain Medicare Funding for Most Vulnerable Citizens
  News Release