Dive Brief:
- A new HHS report suggests that Medicare spent $316 billion less between 2009 and 2013 than it would have spent if previous spending trends had continued.
- It notes that from 2000 to 2008, spending on Medicare and Medicare Advantage beneficiaries grew an average of of 5.9% per year. However, that rate dropped to 1.8% from 2009 to 2012, and then dropped to 0.2% in 2013.
- The report concludes that the savings has extended the projected solvency of the Hospital Insurance Trust Fund.
Dive Insight:
According to the report, $198 billion of the savings was from traditional Medicare, while $118 billion was from Medicare Advantage. HHS attributes the spending slowdown to several policies.
Among them are:
- Tying Medicare Advantage benchmarks to traditional Medicare and implementation of the MA Quality Improvement Program
- The implementation of numerous delivery system reforms aimed at improving quality and lowering costs, such as the promotion of ACOs and the testing of bundled payment arrangements
- Promoting better care coordination among providers
- Consolidation of CMS' enforcement efforts, expansion of program integrity activities, enhancement of provider screening, and tougher penalties for fraud
The report notes that the savings are being passed on to beneficiaries. It says Part B premiums have remained the same for two years while premiums for Medicare Advantage have dropped almost 6% since 2010.