The health reform law will save taxpayers nearly $8 billion over the next two years, according to the results of a CMS study released Aug. 2. These savings will increase exponentially to more than $575 billion over the next decade, according to the study.
TIP: You can download a copy of the 11-page "Implementing Medicare Cost Savings" study results from HHS here.
"In addition to bringing some much-needed fairness to our health insurance markets, the new law also makes a wide range of improvements to Medicare that will cut waste and fraud and shift resources towards high-quality care," HHS Secretary Kathleen Sebelius said in a statement. "[The] report shows how big -- and how fast -- an impact these reforms will have."
In a press release touting the study's rosy projections, CMS cited a bevy of factors, consisting mostly of the usual suspects we've written about, as being key to producing the savings:
- Reducing unnecessary hospital readmissions
- Reducing the number of hospital acquired conditions
- Creating bundled payments for ESRD patients
- Creating Accountable Care Organizations
- Establishing the Center for Medicare and Medicaid Innovation
- Creating an Independent Payment Advisory Board
- Phasing out excessive payments to Medicare Advantage plans
- Implementing improvements to productivity and market basket adjustments in certain provider settings
- Modifying the equipment utilization factor for advanced imaging
- Rewarding better care (no specifics on this one)
- Implementing administrative simplification measures
- Continuing the competitive bidding program for durable medical equipment.
CMS also said it expects to generate savings via intensified fraud and abuse countermeasures, working in conjunction with OIG and the Department of Justice in general. Some of these efforts will include:
- Implementing targeted and efficient anti-fraud activities
- Ensuring patients have face-to-face encounters with their providers before receiving home health services or durable medical equipment use
- Ensuring transparency of ownership and ensures provider compliance with Medicare's requirements
"We are working diligently to implement the new law," said newly appointed CMS Administrator Donald Berwick, MD. "We plan to issue additional guidance and regulations to assist Medicare and Medicaid providers with implementation."
For our part, we'll be staying on top of whatever Berwick's administration issues. Stay tuned!