PPACA to Save Medicare $200B Through 2016

The CMS Office of the Actuary released a new report (pdf) today, indicating the Patient Protection and Affordable Care Act will achieve short-term savings in Medicare of more than $200 billion through 2016.


The PPACA is also projected to lower costs for Medicare beneficiaries (excluding Medicare Advantage beneficiaries) by $208 billion through 2021 through lower premiums and smaller out-of-pocket costs.

CMS said there are five main areas of the PPACA that will lead to the $200 billion in savings by the end of 2016:

•    $68 billion: reducing excessive Medicare payments to Medicare Advantage insurers.

•    $85 billion: reforming payments through technology and efficiency training.

•    $10 billion: improving patient safety through the Partnership for Patients (assuming CMS reaches its goals of reduced readmissions and hospital-acquired conditions).

•    $7.8 billion: enhancing Medicare fraud and abuse measures while also negotiating the best rates for durable medical equipment.

•    $41 billion: expanding several health provisions, such as increasing benefits, lowering hospital payments for HACs and adjusting premium subsidies.

More Articles on Medicare:

GAO: HHS Should Cancel $8.4B Medicare Advantage Bonus Demonstration

Report: Medicare, Medicaid Spending Driven by Enrollment, Not Costs

CMS Adds "Spending Per Hospital Patient With Medicare" to Hospital Compare

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