iLoveBenefits: Industry News Blog

CMS report: Reforms will save Medicare nearly $8 billion through next year

Editor’s note: This article doesn’t exactly explain the source of the $8 billion. It does demonstrate that a very substantial part of the savings will come from provider’s pockets. While it calls out specifically $205 billion from providers. It also talks to $15 billion of  improved quality and streamlining which it could be reasoned are additional dollars not going to providers.


By Matthew DoBias

Posted: August 2, 2010 – 10:45 am ET


Provisions of the Patient Protection and Affordable Care Act that limit payments for hospital readmissions, overhaul Medicare Advantage payments and steel against waste and fraud are projected to savThe report focuses primarily on the scores of measures aimed at changing how healthcare is delivered and paid for, which made up the spine of the massive legislative package passed earlier this year.

Programs meant to help reduce the number of hospital readmissions and reshape how hospitals and doctors are reimbursed and those that target fraud and abuse are expected to reduce Medicare spending by tens of billions of dollars.

The CMS estimates that over 10 years the savings will be $145 billion in the Medicare Advantage program and $205 billion in how the agency reimburses providers.

But the report also takes into account a number of changes that affect the actual delivery of care as well. For instance, measures meant to improve quality and streamline care are expected to save more than $15 billion, according to the CMS.

The report comes after congressional Republicans have stepped up their calls for HHS and the CMS to document more clearly the cost and spending structure of the new law.