CMS: 5 Ways ACA Will Save Medicare $200 Billion

Posted on by Frank J. Rosello

A new report indicates that the Affordable Care Act will save Medicare more than $200 billion through 2016, announced the Centers for Medicare & Medicaid Services Monday.

According to the report from CMS’ Office of the Actuary, the ACA achieves short-term Medicare savings by:

1. Reducing excessive Medicare payments to private insurers who operate in Medicare Advantage ($68 billion);
2. Reforming provider payments ($85 billion);
3. Improving patient safety ($10 billion through 2013 if the goals of reducing readmissions and hospital-acquired conditions are met);
4. Cracking down on fraud and abuse and getting best value for durable medical equipment ($7.8 billion); and
5. Other efforts, including readmissions reductions and lowered payments for hospital-acquired conditions ($41 billion).

The report also notes that through 2016, traditional Medicare will achieve an estimated $59.4 billion in savings because of lower costs for beneficiaries and savings of $208 billion through 2021 because of lower premiums and out-of-pocket costs.

“The Affordable Care Act is the key to lowering healthcare costs in a way that improves care for beneficiaries, instead of cutting services,” said Marilyn Tavenner, CMS’ acting administrator, in a statement. “In the short term, both taxpayers and beneficiaries will save billions thanks to the health care law. Over the long run, the Affordable Care Act will allow us to invest in new models of providing care that will save money and deliver higher quality care.”

CMS’ positive report was released ahead of the Medicare Trustees’ annual report on Medicare’s finances, which is scheduled to be released Monday afternoon and has been predicted to reaffirm its gloomy outlook from its 2011 report.

Article written by Stephanie Bouchard, Contributing Editor with Government Health IT

Frank J. Rosello

is CEO & Co-Founder of Environmental Intelligence LLC.

Environmental Intelligence, LLC, is a complete, full-service healthcare IT solution provider. With a team having more than 10 years of proven clinical expertise in delivering end-to-end health IT solutions, Environmental Intelligence provides medical practices and facilities onsite expert IT consulting, installation, and implementation that is focused on physicians, their patients, and the quality of their care.

Contact us to learn more about our Physician Focused – Patient Driven® approach to Health IT.

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