The Remington Report

President Obama’s FY11 budget proposes legislative and administrative changes designed to control Medicare and Medicaid waste, while enhancing IT and supporting providers in underserved areas.

The FY11 Health and Human Services budget requests $1.7 billion to combat healthcare fraud, including $561 million in Health Care Fraud and Abuse Control discretionary funding – an increase of $250 million over the FY10 enacted level – to strengthen Medicare and Medicaid integrity activities. The budget includes a set of new program integrity proposals that will give HHS tools to combat healthcare fraud by enhancing provider enrollment security, increasing claims oversight, improving Medicare’s data analysis capabilities, and reducing overuse of Medicaid prescription drugs. The investments are projected to save $9.9 billion over 10 years from increased recoveries and prevention efforts.

In addition, the budget includes $3.6 billion, an increase of $186 million over FY10 funding, to strengthen the Centers for Medicare & Medicaid Services (CMS) by revamping IT systems and increasing staffing. The increase includes $110 million to be used to transform CMS’s data environment from one focused primarily on claims processing to one also focused on state-of-the-art data analysis and information sharing.

The Budget also includes $78 million, an increase of $17 million, to the Office of the National Coordinator for Health Information Technology to accelerate health IT adoption. Also in FY11, incentive payments to support adoption and meaningful use of electronic health records will begin; those payments are estimated at $20.6 billion over 10 years.

In addition, the budget includes $995 million to address the shortage of healthcare providers in underserved areas and increases funding to expand services at health centers by $290 million.

Other items of note:

• The budget includes $25.5 billion for a six-month extension (through June 2011) of the Recovery Act’s temporary increase in Medicaid matching funds. This will help states maintain payment rates and coverage for services at existing levels.

• The budget includes an adjustment of $375 billion over the next 10 years to “promote more honest and transparent budgeting” that reflects the best estimate of future Congressional action related to the sustainable growth rate.

• The budget assumes $150 billion in savings over the next ten years from a yet-to-be passed healthcare reform bill. However, the budget does not include the prior year’s $634 billion “down payment” on universal coverage.