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Medicare Says $466 Million Saved in Alternative Pay Programs

By Kerry Young, CQ Roll Call

August 25, 2016 -- Federal officials on Thursday highlighted token Medicare savings as evidence of the success of alternative reimbursement tests, which are meant to lay the groundwork for a broader overhaul of how the nation's single largest purchaser of health care pays for services.

Savings rose to $466 million last year from $411 million the previous year from certain programs meant to tie Medicare payments to judgments about the quality of care, Medicare officials told CQ HealthBeat. These are the combined results of 392 accountable care organizations (ACOs) participating in Medicare's Shared Savings program and the dozen in what's known as the Pioneer Accountable Care model.

Health policy analysts will parse the more detailed ACO results released Thursday, even though the savings represent only a sliver of Medicare's roughly $600 billion in annual spending. These programs are among the most advanced tests done of alternative payment models by the Centers for Medicare and Medicaid Services (CMS). The results seen to date may yield clues about how doctors and other medical professionals and health organizations will fare as Medicare increasingly ties its payments to judgments about the quality of care provided.

"CMS continues to work and partner with providers across the country to improve the way health care is delivered in the United States," said Patrick Conway, the chief medical officer and principal deputy administrator for CMS, in a statement.

The agency is in the midst of creating a new framework for assessing medical care that was mandated by last year's overhaul of Medicare physician payment (PL 114-10). CMS also is working on a new unified payment approach for what's called post-acute care, a roughly $60 billion expense for Medicare to cover services provided to people recovering after strokes and serious illnesses and surgeries.

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