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Medicare Blog | Medicare News | Medicare Information

CMS Issues Medicare Savings Report for Next 5 Years

Posted by Lauren Hidalgo on Fri, May 20, 2011 @ 09:52 AM

Medicare SupplementsLast week the Centers for Medicare and Medicaid Services (CMS) released a Medicare Savings Report outlining the Affordable Care Act that will not only improve the care Americans receive but save $120 billion for Medicare through 2015. Some of the improvements including preventive benefits, tying payment to quality standards, investing in patient safety, and offering incentives for those providers who participate in coordinated care have already been implemented.

Some of the Medicare savings to begin now include:

  1. Rewarding Quality and Efficient Care - $55 Billion Savings
    New payment methods reward the quality of care received rather than the quantity of services. Their value-based plan already ties hospital payment to their performance and this system will also begin to apply to skilled nursing facilities, home health agencies, medical labs, clinics, ambulatory surgical centers, dialysis centers, and ambulance services as well. With new benchmarks for Medicare payment in place, this will help improve the quality of care patients receive as well as lower the costs.

  2. Patient Safety – Up to $10 Billion Savings
    When a patient’s physicians and other health care professionals work together across the health care system they improve the patient’s safety. CMS is now providing incentives for those who share solutions and have invested up to $1 billion of the Affordable Care Act’s funding to Partnership for Patients. This organization supports private partnerships to improve the quality, safety, and affordability of health care for all Americans.

  3. Combating Fraud, Waste and Abuse - $1.8 Billion Savings
    The main component of CMS’s anti-fraud campaign is prevention; keeping those fraudulent actors out of Medicare and Medicaid to begin with. They are implementing enhanced provider screening and enrollment requirements along with new tools to target high-risk entities. They have also developed technology similar to credit cards that is used to rapidly identify fraudulent billing patterns.

  4. Access to Durable Medical Equipment - $2.9 Billion Savings
    One benefit that Medicare pays more than other payers is durable medical equipment. This overpayment makes it more susceptible to fraud, abuse and unnecessary utilization. This year CMS instituted competitive bidding for durable medical equipment in nine metropolitan areas. Medicare is now paying 32% less for things in these areas and plans to expand the program over the next several years.

  5. Quitting Excessive Payments to Insurance Companies - $50 Billion Savings
    The Affordable Care Act reduces payment to private insurers contracted with Medicare. Prior to this Medicare Advantage plans were paid approximately 14% more per patient than those in traditional Medicare. Under the new provision Medicare Advantage excess payments will gradually be eliminated and aligned with those of Medicare.


How do you feel about the Affordable Care Act? Do you think these changes it will actually save Medicare $120 billion over the next 5 years?

Source: Centers for Medicare and Medicaid Services


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