Medicare’s delivery system reform initiatives achieve significant savings and quality improvements – off to a strong start

The Affordable Care Act is providing millions of Americans with access to quality, affordable health coverage—many for the very first time. But fixing America’s health care system means making health care affordable and high quality, as well as accessible.

Results we’ve released today show the progress we’ve made on slowing the rise in health care spending—bending the cost curve—while improving health care quality.

One of the key reforms in the Affordable Care Act is creating Accountable Care Organizations (ACOs). ACOs, are groups of doctors, hospitals, and other health care providers that have agreed to work together to give their Medicare patients better coordinated, high quality care. To the extent that they succeed in providing more effective and efficient care, they can share in the savings to the Medicare program. Interim financial results for 114 ACOs that began work in 2012 show that they generated $128 million in savings for the Medicare trust fund in the first year —while maintaining high quality patient care.

Additionally, initial results from an independent evaluation of 23 Pioneer ACOs, which are those that have more experience with coordinated care, show that they saved the Medicare program $147 million in their first year of operation.

ACOs are helping to improve the quality of health care and, in doing so, lowering costs for taxpayers and patients. While still early in the program, with some ACOs making greater progress than others, the $275 million in savings—and the high quality of care that has accompanied it—are admirable results. ACOs are designed to achieve savings over several years, not always on an annual basis, but this is a very strong start. Moreover, through regular webinars; tools for sharing information and best practices; opportunities for ACOs to connect with one another; and other activities, we’re providing ACOs the infrastructure and resources to learn from one another and to then diffuse what’s working and what’s not.

Delivery system reform takes time, but ACO’s are committed to the program. Dr. Kenneth W. Wilkins, President of Coastal Carolina Health Care said that “Our experience has shown that ACOs can increase quality while lowering costs. As a result of the programs we’ve initiated, our patients have experienced better access to their primary care physician, higher quality measures, and fewer trips to the hospital. We look forward to making continued progress and seeing future results.”

Additionally, as part of the largest and most ambitious test ever of a bundled payment model in Medicare, or any other payer in the U.S., 232 provider groups, hospitals and others have agreed to participate in the Medicare Bundled Payments for Care Improvement initiative. Bundling payment for services that patients receive across a single episode of care, such as heart bypass surgery or a hip replacement—instead of making payments to providers for every single service—rewards the quality of care instead of the quantity of services, and encourages better care coordination.

Congress is also working on a bipartisan and bicameral basis to pass long-term legislation to reform Medicare’s current physician payment system and replace the Sustainable Growth Rate formula with a system that will reward value over volume—and enable more physicians to participate in new models of care that will reward improvements in patient care and total cost reduction. The results we’ve announced today provide strong evidence that these legislative proposals are the right direction for the Medicare program and our nation’s healthcare delivery system.

CMS Modifies Policy on Disclosure of Physician Payment Information

By: Jonathan Blum, Principal Deputy Administrator

Today the Centers for Medicare & Medicaid Services (CMS) took a step forward in making Medicare data more transparent and accessible, while maintaining the privacy of beneficiaries.  Today’s Federal Register notice modifies the administration’s policy on disclosure of physician payment information.  Going forward, CMS will evaluate requests for individual physician payment information (or requests for information that combined with other publicly available information could be used to determine total Medicare payments to a physician) on a case-by-case basis.  The new policy released today will take effect 60 days after publication in the Federal Register. In addition, CMS will generate and make available aggregate data sets regarding Medicare physician services for public consumption.

In making the decision to replace the prior policy, the agency considered the more than 130 comments representing the views of over 300 organizations and individuals we received (  Numerous of these comments identified ample benefits to releasing Medicare physician payment data, including use of the data by:

  • Providers to collaborate on improved care management and the delivery of healthcare at lower costs;
  • Consumers to gain broader, more reliable measures of provider quality and performance which drives innovation and competition while informing consumer choice; and
  • Journalists and others to identify waste, fraud, and abuse as well as unsafe practices.

The decision to modify the policy also takes into account HHS’ strong commitment to greater data transparency over the past several years.  In 2010, HHS launched the Health Data Initiative to promote transparent, innovative, and safe data use.  As part of this effort, CMS has engaged with a wide range of public, non-profit, and private sector stakeholders to foster the availability and use of health care data to drive innovations that improve health and health care. 

Given the advantages of releasing information on Medicare payment to physicians and the agency’s commitment to data transparency, we believe replacing the prior policy with a new policy in which CMS will make case-by-case determinations is the best next step for the agency.  However, CMS also recognizes the valid concerns raised by many stakeholders over protecting the integrity of the data.  As CMS makes a determination about how and when to disclose any information on a physician’s Medicare payment, we intend to consider the importance of protecting physicians’ privacy and ensuring the accuracy of any data released as well as appropriate protections to limit potential misuse of the information.  And as always, we are committed to protecting the privacy of Medicare beneficiaries.

This policy change follows other CMS efforts to make more data available to the public.  Since 2010, the agency has released an unprecedented amount of aggregated data in machine-readable form, with much of it available at  These data range from previously unpublished statistics on Medicare spending, utilization, and quality at the state, hospital referral region, and county level, to detailed information on the quality performance of hospitals, nursing homes, and other providers. 

In May 2013, CMS released information on the average charges for the 100 most common inpatient services at more than 3,000 hospitals nationwide

In June 2013, CMS released average charges for 30 selected outpatient procedures

Combating fraud and abuse in the Medicare Prescription Drug Program

By Jonathan Blum, CMS Principal Deputy Administrator

The Centers for Medicare & Medicaid Services (CMS) takes prescription drug abuse very seriously and actively works to detect and prevent fraud and abuse in order to protect the Medicare program, its beneficiaries, and taxpayers.

The Medicare Part D prescription drug benefit provides prescription drug coverage to more than 39 million seniors. CMS strives to ensure that beneficiaries have the medications they need while at the same time is being vigilant to safeguard the program from inappropriate use. 

A centerpiece of our strategy to combat fraud and abuse in Medicare Part D is the identification of Part D enrollees who have potential opioid or acetaminophen overutilization issues that may present a threat to patient safety. Overutilization of opioids or acetaminophen products can result in serious adverse events or death. The Medicare Part D Overutilization Monitoring System was implemented in 2013 to help CMS ensure that Part D plan sponsors are meeting CMS requirements to establish reasonable and appropriate drug utilization management programs to prevent overutilization of these medications.  Comparing recent data with 2011 Part D data that pre-dates the implementation of the monitoring system shows that there has been a substantial reduction in the number of opioid and acetaminophen overutilizers in Medicare Part D.  In 2011, more than 172,000 Part D enrollees were identified as meeting CMS criteria for potential opioid or acetaminophen overutilization.  Between January and June 2013, the number of Part D enrollees with potential opioid or acetaminophen issues dropped to approximately 35,600 – a rate that would represent a reduction of nearly 60 percent if maintained throughout 2013.  

CMS also released a proposed rule today that seeks to employ new tools when problematic prescribers and pharmacies are identified. Some of the proposed key fraud and abuse provisions include:

  • ·       Requiring prescribers of Part D drugs to enroll in Medicare and revocation such enrollment in cases of abusive prescribing practices and patterns;
  • ·       Allowing CMS to request and collect information directly from pharmacy benefit managers, pharmacies and other entities that contract with Part D sponsors to better detect fraud; and
  • ·       Improving CMS’ ability to collect identified Medicare overpayments from MA plans and Part D sponsors.

Combined with our ongoing efforts, the fraud and abuse provisions in the proposed rule will ensure that Medicare beneficiaries have access to affordable prescription drugs while making certain that plans provide value to Medicare and taxpayers.

For more information about our efforts to combat fraud, waste and abuse in Medicare Part D, please visit:

To read the proposed rule, please see: The proposed rule will be published in the Federal Register on January 10, 2014.  CMS will accept comments on the proposed rule until March 7, 2014. 

%d bloggers like this: