The Congressional Budget Office (CBO) recently released “Options for Reducing the Deficit: 2025 to 2034”, which covers options to reduce mandatory and discretionary spending and increase revenues over the next decade. CBO releases this report annually as part of its role to review policy options that alter federal spending or revenues.
The report includes several policy options that would reduce hospital payments.
Options to Reduce Medicaid Spending
- Establish caps on federal spending, on the overall program or per enrollee
- Limit state taxes on health care providers, including lowering the tax threshold and eliminating taxes altogether
- Reduce the federal matching rate by using the same matching rate for administrative services, removing the federal medical assistance percentage floor, and reducing the matching rate for the expansion population
Options to Reduce Medicare Spending
- Increase Medicare Part B premiums
- Reduce Medicare’s coverage of bad debt, including by capping it at 25 or 45 percent or eliminating coverage
- Consolidate and reduce Medicare payments for graduate medical education at teaching hospitals
- Implement site-neutral policies
The CBO report also models the effects of reducing payments for drugs delivered by 340B Drug Pricing Program hospitals.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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