CMS Responds to Congressional Requests for Cost Savings Report

In response to Congressional calls for HHS & CMS to “document more clearly the cost and spending structure of the new [Patient Protection and Affordable Care Act],” CMS estimates that reforms will save Medicare $7.8 billion by the end of 2011 and $418 billion by 2019, according to an article posted at ModernHealthcare.com.  This estimate is based on provisions of the Act that “limit payments for hospital readmissions, overhaul Medicare Advantage payments and steel against waste and fraud”.

CMS projects ten-year cost savings to reach $575 billion.  The savings achieved over the next decade are based on calculations from several parts of the legislation.  Identifying and stopping Medicare fraud account for tens of billions of those dollars.  $145 billion is expected to result from changes in the Medicare Advantage program.  $15 billion should come from “measures meant to improve quality and streamline care”, and a whopping $205 billion is estimated to come from provider reimbursement changes.

For more details on the report, it can be read in full from CMS’ website.