Medicare spent approximately $316 billion less between 2009 and 2013 than would have occurred had pre- 2009 spending trends persisted, according to a new HHS report.
From 2000 to 2008, Medicare spending on beneficiaries — those in traditional Medicare and Medicare Advantage — grew at an average rate of 5.9 percent annually, according to HHS. That annual growth rate plummeted to 1.8 percent from 2009 to 2012, and then to 0.2 percent in 2013.
If the 2000 to 2008 growth rates had continued through 2013, Medicare would have spent $316 billion more during the 2009 to 2013 period, HHS said. Data in the report shows that $198 billion of the savings came from traditional Medicare, while $118 billion came from Medicare Advantage.
HHS said a number of policies contributed to the Medicare spending growth slowdown.
For instance, HHS said, the Medicare program is implementing a wide range of delivery system reforms to improve quality and lower costs such as promoting the growth of accountable care organizations and testing bundled-payment arrangements.
Additionally, CMS has consolidated its enforcement efforts, expanded the scope of its program integrity activities, enhanced provider screening and stiffened the penalties for fraud, according to HHS. HHS also noted that provider payment updates have been lowered by fixed amounts and adjusted for economy-wide productivity, which lowered updates in the hospital inpatient prospective payment system by about one half of one percent in fiscal year 2015.
HHS said based on a Congressional Budget Office analysis in 2013, the recession appears to have played only a small role in reducing Medicare spending.
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