CMS Report: ACA Will Save $200B

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The Centers for Medicare & Medicaid Services (CMS) projects more than $200 billion in Medicare savings through 2016 as a result of the Affordable Care Act, according to a new report released by CMS. More than $200 billion in short-term savings will come from ending excessive payments to insurers who offer Medicare Advantage plans, implementing anti-fraud measures, and changing provider payment policies to reflect improvements in productivity, CMS says. Seniors and others in the traditional Medicare program should see nearly $60 billion in savings during that time through lower cost-sharing and premiums.

CMS announced the selection of the first accountable care organizations (ACOs) to participate in the Medicare Shared Savings Program, naming 27 healthcare organizations that will be responsible for improving care to nearly 375,000 beneficiaries in 18 states. Under the Shared Savings Program, the ACOs are responsible for providing high-quality care and meeting strict quality standards, as measured by performance on 33 quality measures, in return for the opportunity to share in savings realized through improved care.

Recent CMS transmittals of note for healthcare finance professionals include Transmittal R2453CP: CY 2012 OPPS Payment Adjustment for Certain Cancer Hospitals (April 26, 2012); Transmittal R207FM: Notice of New Interest Rate for Medicare Overpayments and Underpayments- 3rd Notification for FY 2012 (April 12, 2012); Transmittal R1079OTN: New Occurrence Code to Report Date of Death (April 27, 2012); Transmittal R2457CP: Revisions of the Financial Limitation for Outpatient Therapy Services- Section 3005 of the Middle Class Tax Relief and Job Creation Act of 2012 (April 27, 2012); Transmittal R451PR1: Section 905.6, Inflation Factor, Provides for Calendar Year (CY) Inflation Factors to Update Previous Years' Reasonable Compensation Ranges (April 20, 2012). To view CMS transmittals, go to transmittals.


The Department of Health and Human Services (HHS) has awarded $728 million in Affordable Care Act grants to nearly 400 community health centers for construction and renovation projects. Nearly $630 million in grants are earmarked for 171 health centers to expand facilities and improve services, while 227 health centers will receive $99 million for facilities needs and equipment, HHS says. The Affordable Care Act allocates $9.5 billion over five years to expand services at health centers and $1.5 billion for health center construction and renovation. During the next two years, the reform law Is projected to support 485 health center construction and renovation projects.

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A new report by the Institute of Medicine (IOM) recommends that the United States invest more money in its public health system and spend public health dollars more efficiently. A small fraction of U.S. health dollars goes toward government-administered public health- just 3.1 percent in 2009, amounting to $251 per person in public health spending, according to CMS. To guide a more appropriate allocation of public health dollars, the IOM report calls for the National Prevention, Health Promotion, and Public Health Council to oversee the development of a minimum package of public health services that every community should receive from its state and local health departments.


The National Quality Forum (NQF) addressed preventable hospitalizations by endorsing two measures that address all-cause unplanned readmissions in hospitals. The first measure, developed by the National Committee for Quality Assurance, uses the number of inpatient stays followed by an acute readmission for any diagnosis within 30 days to predict the probability of a readmission. The second measure, developed by CMS and researchers at Yale University, estimates the risk of unplanned readmissions based on conditions or procedures. Research shows an avoidable hospital readmission can mean prolonged illness, emotional distress, and loss of productivity.

FAIR PAY: Physicians are nearly evenly split about whether they feel fairly compensated, according to a survey by Medscape.

WRONG TURN: 42 percent of executives responding to a HealthLeaders survey say the healthcare industry is on the "wrong track," while only 24 percent say it is headed in the right direction.

FINANCING NEEDS: About 77 percent of CFOs believe their financing needs will remain the same in 2012 as in 2011, according to a GE Capital survey.

Copyright: (c) 2012 Healthcare Financial Management Association
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