The Accountable Care Act has already resulted in improved care and reduced cost according to a report from the CMS's Office of the Actuary and it is expected to save over $200 Billion through 2016. The majority of savings shall be generated through reduced payments healthcare providers through increased efficiency, quality and patient safety initiatives.
The existing benefits from the ACA include the expansion of preventive benefits that bear no co-pay, closing the prescription drug "donut hole" coverage gap, and the increase of revenue generated from health care fraud fighting efforts. In 2011, there were 32.5 million Medicare beneficiaries who used at least one preventive benefit, and more than 5.1 million saved more than $3.2 billion in 2010 and 2011 on prescription drugs. Fraud prevention efforts generated $10.7 billion over three years, at all time highs.
Savings to beneficiaries and the program itself will continue through the ACA and also through other health quality of care initiatives. The CMS estimates are as follows:
Health Care Reforms Savings from ACA
from the Affordable Care Act enactment to 2016
Reforming provider payments, including
improved productivity $85 billion
Reducing excessive Medicare payment
s to private insurers who operate in
Medicare Advantage $68 billion
Improving patient safety through
the Partnership for Patients $10 billion through 2013
Recovering for Fraud and abuse
in the Medicare system and getting
best value for durable medical equipment $7.8 billion
Additional provisions, including net effect
of expanded benefits, lowered payments
for HACs, readmission reductions and
adjustment to premium subsidies $41 billion
Medicare Advantage reduced payments were commenced in 2011 and despite these reductions, CMS states that Medicare Advantage has continue to grow and there is access throughout the country for 99.7% of the Medicare beneficiaries.
Providers continue to be expected to cut cost, yet improve efficiencies and outcomes. CMS estimates that it will be able to reduce market updates, saving approximately $85 billion through 2016, through expected improved efficiencies and productivity. Additional savings will be generated through Pay for Performance. Although the program is designed to be budget neutral, CMS believes savings will still be generated through care improvements and greater efficiencies.
Partnership for Patients, an incentive based program to reduce preventable hospital acquired conditions by 40%, prevent 1.8 million avoidable complications, reduce 20% of hospital readmissions and averting 60,000 deaths of hospital inpatients b the end of 2013, is expected to save $10 billion for Medicare alone and $35 billion across the health care system in 3 years.
The Health Care Fraud and Abuse Control (HCFAC) activities resulted in $107 billion in recoveries over the last three years and criminal prosecutions have also risen substantially, from 797 in 2008 to 1,430 in 2011. CMS also reactivated their competitive bidding program for durable medical equipment in nine metropolitan areas, saving $202 million in the first year and expected to generate $27 billion through 2022.
Reduced payments for hospital readmissions and HACs, new quality reporting programs, reductions in payment s for uncompensated care as less Americans are uninsured, and adjustments to premium subsidies for high-income beneficiaries will create even more cost savings. The Innovation Center continues to test alternative payment models and incentive programs slated to generate improved care and reduced cost:
• Primary Care Bonus: 10% incentive payment for primary care providers
• Comprehensive Primary Care Initiative: public/private collaboration to provide addition funding for advanced primary care and an opportunity to share net savings. (late summer/early fall 2012)
• Health Center Advanced Primary Care Practice Demonstration: $42 million in funding over 3 years to community health centers to improve coordination and quality of care
• Multi-payer Primary Care Practice Demonstration: State led, multi-payer collaborations to help primary care practices reduce unjustified utilization and expenditures, improve safety and quality of care, patient involvement, and increase availability of care in underserved areas.
• Independent at Home Demonstration: Provision of primary care services in the home for chronically ill patients. (summer 2012)
Accountable Care Organizations
• Medicare Shared Savings Program: 27 ACOs participating in April 2012 and over 150 applications for the July 2012 Shared Savings Program.
• Pioneer Accountable Care Organization Model: Select organizations will coordinate care and share additional responsibility for the cost and quality of care received. 32 organizations began participating on Jan. 1, 2012.
• Advance Payment ACO Model: Pre-payment of a portion of future shared savings. 5 of the 27 groups involved in the Shared Savings Program are utilizing this option.
• Physician Group Practice (PGP) Transition Demonstration: Physician groups earn incentive payments for quality of care and estimated savings they generated.
• Bundled payment for Care Improvement Initiative: Offers four patient centered episode-of-care models where applicants propose a discount from the current cost of care for the episodes covered. Applications under consideration.
• Financial Alignment Initiative: States can test new payment and service delivery models. (2013)
Paying for Performance
• Hospital VBP: Includes over 3500 hospitals and takes effect for hospitalizations beginning on October 1, 2012
• Physicians: Strengthening the Physician Quality Reporting System through the 2012 Physician Fee Schedule
• Medicare Advantage Plans: Five star plan bonus system that accelerates and increases the incentives for improvement in the quality of care.
• Home Health Agencies: $15 million in shared savings from providing better care at lower cost.
• Health Care Innovation Challenge: $1 billion in grants to applicants who put into practice the most compelling new ideas for better health, improved care and lower costs.
• Strong Start for Mothers and Newborns: Grants for prenatal care.
• Medicaid Emergency Psychiatric Demonstration: 12 states participating to see if coverage for emergency service for mental diseases will improve care and lower cost for mental illness.
• Medicaid Incentives for Prevention of Chronic Diseases Program: Financial and non-financial incentives to Medicaid beneficiaries who participate in prevention programs.
The ACA continues to be under attack, but CMS has been proactive in moving forward and these initiatives will likely continue to move forward despite findings on the constitutionality of the Health Care Reform Act. If provisions on universal insurance coverage are stricken, however, the revenue savings and resources for these innovations will similarly be put into question and it will remain to be seen if funding will be sought from pharmaceutical companies, providers, taxpayers, or all of the above.