Corporate Compliance

Note from the instructor: Clarification regarding $716 billion in cost savings to Medicare Program under the Affordable Care Act

Medicare Insider, October 30, 2012

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Editor’s note: Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc., is the author of this week’s note from the instructor.

Ever since the creation of the Medicare Program—designed to provide health coverage for certain vulnerable portions of the population (the aged, disabled and those with end-stage renal disease [ESRD]) —Medicare, at the direction of Congress, has been attempting to assure that its beneficiaries have access to high quality care, while at the same time containing the costs of that care to assure the economic viability of the program itself. Several important steps in that direction were incorporated into the Affordable Care Act (ACA), some of which have already been implemented, and several of which are being implemented as of the beginning of FY 2013.

Early cost containment efforts

These efforts have led to the development of prospective payment methodologies (e.g., the Inpatient Prospective Payment System [IPPS] and Outpatient Prospective Payment System, [OPPS], etc.) that encourage providers to be more cost effective. They have also led to a number of demonstration projects designed to provide alternative delivery mechanisms to improve the coordination and efficiency of care provided. In recent years, particularly with respect to inpatient stays, CMS has been moving toward pay for performance, which is designed to reward those hospitals that meet and/or exceed certain quality of care standards. CMS has also attempted to assure that those hospitals who fail to provide an acceptable level of care during an inpatient stay are not rewarded for their failure to meet such standards.

Continue reading Judith’s note at the Medicare Mentor Blog.

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