WASHINGTON--President Bush proposed $36 billion in Medicare funding reductions over five years in his 2007 budget--including shortening the 36-month rental cap on home oxygen to 13 months. But last week, the House of Representatives Budget Committee gave its approval to a $2.8 trillion budget blueprint without the reimbursement cuts, and without any cuts to Medicaid.

While that's hopeful news for the industry, Washington observers say, it's by no means a done deal. Lawmakers are hesitant to cut Medicare in an election year, but there is continuing pressure to trim spending for entitlement programs to keep the nation's deficit in check.

Medicare spending cuts could still be considered by the House Ways and Means Committee this year, which has been instructed to find $4 billion in savings over five years from the programs under its jurisdiction. A committee aide told reporters that target could be met through programs such as welfare, unemployment insurance, trade and pensions, but Budget Committee Chairman Jim Nussle, R-Iowa, said it could come from Medicare.

Health care providers have been urging rejection of any Medicare spending reductions, citing restricted beneficiary access and lowered quality of care.

In mid-March, the Senate Budget Committee also approved a version of the budget that included no Medicare cuts.