CBO estimate left out hospital exemption; Baucus savings likely lower

Oct 1 2009

The Congressional Budget Office "did not consider that hospitals would be exempt from a Medicare cost-cutting commission in Senate Finance Chairman Max Baucus' healthcare overhaul mark, an omission that will slash a conservative $11 billion from $23 billion in savings the commission was expected to produce," CongressDaily reports.

"A CBO e-mail obtained by CongressDaily reveals the agency did not assume hospitals and hospices would be exempt from the commission's recommendations on reducing Medicare spending that, under the mark, would go into effect unless Congress intervenes." The email added that the savings would be reduced by at least half. "Hospitals and hospices account for 75 percent of Medicare fee-for-service spending that CBO assumed the commission would likely target, the e-mail continued. Finance staffers are working with CBO to resolve the funding gap, a committee aide said."

"The conceptual language in Baucus' mark does not explicitly mention hospitals are exempt. Hospital associations and committee staff said Tuesday they negotiated a pass for hospitals based on the $155 billion cost-cutting deal the industry struck with Baucus and the White House" (Edney, 10/1).