President Obama announced his proposal for the FY 2012 budget today, proposing to reduce the budget deficit by $1.1 trillion over the next 10 years. Notably, the budget proposes to pay for two years of reimbursements to Medicare physicians at the current payment levels and to offset this cost with $62 billion in specific health savings. In December, the President worked with Congress to prevent a 25 percent cut to Medicare physician payment rates for 2011.

The President’s budget allocates $79.9 billion in discretionary spending for the Department of Health and Human Services (HHS), the principal federal agency charged with protecting the health of Americans. Actual discretionary expenditures by HHS in 2010 totaled $82.3 billion. For FY 2012, the budget allocates approximately $485 billion in mandatory expenditures for Medicare and $279 billion for Medicaid and the Children’s Health Insurance Program (CHIP).

In addition, the President’s budget provides $581 million in discretionary program integrity funding to implement activities to reduce payment error rates and enhance civil and criminal enforcement for Medicare, Medicaid, and CHIP. This funding is in addition to the $53 million allocated by the budget for the operations of the HHS Office of Inspector General (OIG) and $47 million for the HHS Office of Civil Rights (OCR) for FY 2012.

The administration’s fact sheet regarding the FY 2012 budget for the Department of Health and Human Services is available by clicking here. An overview of the FY 2012 budget is available by clicking here.