Provisions under the 4-month-old health reform law that hit the provider and payer communities the most are expected to save Medicare $7.8 billion through 2011 and $418 billion over the next decade, according to a report released by the CMS.
“Because we began making changes right away, the savings from Medicare add up fast,” HHS Secretary Kathleen Sebelius said during a conference call with reporters.
The report focuses primarily on the scores of measures aimed at changing how care is delivered and paid for, and which made up the spine of the massive legislative package passed this year.
Programs meant to reduce the number of hospital readmissions, 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.
Sebelius and other ranking officials at the agency level have said Medicare would lead the private sector when it comes to delivery system reforms.
“I think when you look at the history of hospital and provider payments, when large payers like the Medicare program place continued financial pressure, hospitals become more productive,” said Jonathan Blum, deputy administrator of the CMS and director of the Center for Medicare at CMS.
The CMS estimates that changes to the Medicare Advantage program and how the agency plans to reimburse providers will save $145 billion and $205 billion over 10 years respectively.
But the report also takes into account a number of changes that impact the actual delivery of care, as well. For instance, measures 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 CMS to document more clearly the cost and spending structure of the new law.
Jonathan Blum discusses Medicare's challenges in an exclusive Modern Healthcare video interview. See the video. »
