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Bringing Medicare Advantage Payments in Line with Traditional Medicare Will Yield Substantial Savings, Better Care

New policies enacted as part of the Affordable Care Act will reduce costs and improve quality of care for Medicare beneficiaries, while rewarding high-performing Medicare Advantage plans, a new Commonwealth Fund brief shows. According to George Washington University's Brian Biles, M.D., and colleagues, the new reforms, which eliminate most of the overpayments to Medicare private plans relative to traditional Medicare, would have saved $12.7 billion had they been in effect in 2009, the baseline year used in the study. The new legislation also provides higher payments to plans that perform well on a set of more than 50 measures of prevention, quality of care, and customer service.

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