Provisions in the healthcare law to introduce efficiencies, combat fraud and reduce payments in the Medicare program are expected to save $7.8 billion through next year and $418 billion by 2019, according to a CMS report.
CMS said the changes brought on by the Patient Protection and Affordable Care Act would extend the life of the Medicare Trust Fund by 12 years from 2017 to 2029.
The report listed some key changes:
Reducing hospital readmissions. The hospital readmissions reduction program will help hospitals smooth transitions for patients and reward hospitals that are successful in reducing avoidable readmissions. This will reduce Medicare costs by $8.2 billion through 2019. Regulations will be issued next year.
Rewarding better care. Physician payments will become more closely linked to value with the launch of a physician value-based payment system and implementation of a "value-modifier" rewarding physicians who deliver better care. This is estimated to reduce Medicare costs by more than $1.9 billion over the next 10 years.
Accountable Care Organizations. ACOs meeting certain quality and efficiency benchmarks may receive a share of the savings. The CMS Office of the Actuary estimates this provision will be budget-neutral, but the CBO projected that it will reduce Medicare spending by nearly $5 billion over the next ten years. The program becomes operational on Jan. 1, 2012. Proposed rules will be issued later this year. "CMS and its partner organizations will continue to hold public forums to foster ACO development," the agency states.
Center for Medicare and Medicaid Innovation. The center will help develop new models of payment and delivery. The new law invests $10 billion in the center over the next 10 years to test payment and delivery innovations and identify successes. "These funds will produce returns on investment and reduce Medicare spending over the long-term."
Independent Payment Advisory Board. The advisory board, which begins its work in 2012, will recommend policy revisions to Congress to contain Medicare cost growth. The IPAB’s proposals are binding when Medicare cost projections exceed certain targets, unless Congress acts to reduce expenditures in other ways. The board is expected to reduce Medicare costs by almost $24 billion by 2019.
Fighting waste, fraud and abuse. The Affordable Care Act includes a range of provisions to reduce waste fraud and abuse, such as expanding Recovery Audit Contractors, requiring face encounters with physicians before receiving certain services and requiring greater data matching capabilities. This expected to save $5 billion over 10 years
Reducing hospital-acquired infections. Extending this program would save $3.2 billion.
Ending overpayments to Medicare Advantage plans. Cutting subsidies for the Medicare Advantage managed care program would save $145 billion
Read CMS report on the healthcare reform law (pdf).
CMS said the changes brought on by the Patient Protection and Affordable Care Act would extend the life of the Medicare Trust Fund by 12 years from 2017 to 2029.
The report listed some key changes:
Reducing hospital readmissions. The hospital readmissions reduction program will help hospitals smooth transitions for patients and reward hospitals that are successful in reducing avoidable readmissions. This will reduce Medicare costs by $8.2 billion through 2019. Regulations will be issued next year.
Rewarding better care. Physician payments will become more closely linked to value with the launch of a physician value-based payment system and implementation of a "value-modifier" rewarding physicians who deliver better care. This is estimated to reduce Medicare costs by more than $1.9 billion over the next 10 years.
Accountable Care Organizations. ACOs meeting certain quality and efficiency benchmarks may receive a share of the savings. The CMS Office of the Actuary estimates this provision will be budget-neutral, but the CBO projected that it will reduce Medicare spending by nearly $5 billion over the next ten years. The program becomes operational on Jan. 1, 2012. Proposed rules will be issued later this year. "CMS and its partner organizations will continue to hold public forums to foster ACO development," the agency states.
Center for Medicare and Medicaid Innovation. The center will help develop new models of payment and delivery. The new law invests $10 billion in the center over the next 10 years to test payment and delivery innovations and identify successes. "These funds will produce returns on investment and reduce Medicare spending over the long-term."
Independent Payment Advisory Board. The advisory board, which begins its work in 2012, will recommend policy revisions to Congress to contain Medicare cost growth. The IPAB’s proposals are binding when Medicare cost projections exceed certain targets, unless Congress acts to reduce expenditures in other ways. The board is expected to reduce Medicare costs by almost $24 billion by 2019.
Fighting waste, fraud and abuse. The Affordable Care Act includes a range of provisions to reduce waste fraud and abuse, such as expanding Recovery Audit Contractors, requiring face encounters with physicians before receiving certain services and requiring greater data matching capabilities. This expected to save $5 billion over 10 years
Reducing hospital-acquired infections. Extending this program would save $3.2 billion.
Ending overpayments to Medicare Advantage plans. Cutting subsidies for the Medicare Advantage managed care program would save $145 billion
Read CMS report on the healthcare reform law (pdf).