Health Care Reform Update -- April 30, 2012

In This Issue:

Implementation of the Affordable Care Act (ACA); Other HHS and Federal Regulatory Initiatives; Other Congressional and State Initiatives; and Other Health Care News.

Excerpt from Implementation of the Affordable Care Act (ACA)

On April 23rd the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary released a report finding that the ACA will save the Medicare program over $200 billion through 2016. The report estimates $68 billion in savings from reducing excessive payments to Medicare Advantage (MA) plans, $85 billion related to improved productivity by health care providers, $10 billion in savings due to patient safety initiatives in the Partnership for Patients program, and $8 billion related to fighting fraud, and $41 billion net savings in other areas.

On April 23rd the Government Accountability Office (GAO) released a report recommending that CMS cancel the MA Quality Bonus Payment Demonstration. Under the program, CMS has proposed to test an alternative method for awarding quality bonuses to MA plans. The GAO report finds that the program will cost over $8 billion over ten years, much of which will be paid to plans with mediocre ratings. The report also emphasizes that the demonstration plan differs significantly from the quality bonus program described in the ACA and that its design makes it impossible to credibly evaluate the results of the demonstration.

Please see full update below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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