Medicare is in trouble, and the only way to save it is to reform the program and cut costs. But how to do this? It turns out the Affordable Care Act (aka “Obamacare”) provides some answers to this vexing question. The Affordable Care Act will cut or save billions of dollars for Medicare through new tools and resources to help crack down on fraud, waste, and abuse in the Medicare system, as well as reforming payment systems to reward high quality care. These efforts are aimed at creating better health, better care, and lower costs for patients, providers, and taxpayers, according to the Centers for Medicare and Medicaid (CMS).
Here is how Medicare will save $120 billion over the next four years:
|Health Care Delivery System Reforms||Savings through 2015|
|Reforming provider payments — rewarding quality of care||$55 billion|
|Improving patient safety — lowering hospital readmissions and hospital-acquired conditions||$10 billion through 2013|
|Cracking down on fraud and abuse in the Medicare system||$1.8 billion|
|Getting the best value for Medicare beneficiaries and taxpayers for durable medical equipment||$2.9 billion($17 billion over ten years)|
|Reducing excessive Medicare payments to insurance companies||$50 billion|
This last area of savings ($50 billion) is the amount of money Medicare expects to cut from Medicare Advantage plans. I wonder if this number has been adjusted for recent changes that have been made to lessen the impact of payment cuts on the 11 million people enrolled in these private Medicare plans? In Arizona over 45% of seniors in Maricopa, Pima, and Pinal counties are enrolled in Medicare Advantage plans.
Originally, Medicare was only going to reward top performing Advantage plans that earned 4 and 5 stars in the Medicare rating system. The reward is more money. Earlier this year, Medicare said it would also reward 3 star-rated Advantage plans. This is good news for Arizona as most of our Advantage plans get just 3 stars, meaning they are good but not excellent. I wrote about the Medicare Advantage star rating system late last year.
So, while Medicare will be taking away money from Medicare Advantage plans with one hand, with the other hand Medicare will give money to plans for providing high quality service to their members. The end result could be lower savings for Medicare, but happier seniors, who will not experience drastic changes in their Medicare coverage.
The full report on Medicare savings can be found at: http://www.cms.gov/apps/files/medicare-savings-report.pdf