U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES TOUTS $384 MILLION SAVINGS

FROM:  U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
May 4, 2015
Affordable Care Act payment model saves more than $384 million in two years, meets criteria for first-ever expansion

Pioneer ACO Model advances quality and value in health care

Today, an independent evaluation report released by the Department of Health and Human Services showed that an innovative payment model created as a pilot project by the Affordable Care Act generated substantial savings to Medicare in just two years. Additionally, the independent Office of the Actuary in the Centers for Medicare & Medicaid Services (CMS) has certified that this patient care model is the first to meet the stringent criteria for expansion to a larger population of Medicare beneficiaries.

The independent evaluation report for CMS found that the Pioneer Accountable Care Organization (ACO) Model generated over $384 million in savings to Medicare over its first two years – an average of approximately $300 per participating beneficiary per year – while continuing to deliver high-quality patient care. The Actuary’s certification that expansion of Pioneer ACOs would reduce net Medicare spending, coupled with Secretary Sylvia Mathews Burwell’s determination that expansion would maintain or improve patient care without limiting coverage or benefits, means that HHS will consider ways to scale the Pioneer ACO Model into other Medicare programs.

“This is a crucial milestone in our efforts to build a health care system that delivers better care, spends our health care dollars more wisely, and results in healthier people,” said HHS Secretary Sylvia M. Burwell. “The Affordable Care Act gave us powerful new tools to test better ways to improve patient care and keep communities healthier. The Pioneer ACO Model has demonstrated that patients can get high quality and coordinated care at the right time, and we can generate savings for Medicare and the health care system at large.”

The Pioneer ACO Model, one of the first payment models launched by CMS, gives experienced health care organizations accountability for quality and cost outcomes for their Medicare patients. Doctors and hospitals who form Pioneer ACOs can share in savings generated for Medicare if they work to coordinate patient care, keep patients healthy and meet certain quality performance standards, or they may be required to pay a share of any losses generated.
Currently, the Pioneer ACO Model is serving more than 600,000 Medicare beneficiaries. According to today’s report, compared to their counterparts in regular fee-for-service or Medicare Advantage plans, Medicare beneficiaries who are in Pioneer ACOs, on average:

Report more timely care and better communication with their providers.
Use inpatient hospital services less and have fewer tests and procedures.
Have more follow-up visits from their providers after hospital discharge.
Pioneer ACOs are part of the innovative framework established by the Affordable Care Act to move our health care system toward one that rewards doctors based on the quality, not quantity, of care they give patients. HHS earlier this year announced the ambitious goal of tying 30 percent of Medicare payments to quality and value through alternative payment models by 2016 and 50 percent of payments by 2018. More than 3,600 payers, providers, employers, patients, states, consumer groups, consumers and other partners have registered to participate in the Health Care Payment Learning and Action Network, which was launched to help the entire health care system reach these goals.

Pioneer ACOs generated Medicare savings of $279.7 million in 2012 and $104.5 million in 2013. To date, actuarial analyses show that ACOs in the Pioneer ACO Model and the Medicare Shared Savings Program have generated over $417 million in total program savings for Medicare. The primary analyses in the evaluation are also reported in an article published in the Journal of the American Medical Association today.

“This success demonstrates that CMS can design and test innovative payment and service delivery models that produce better outcomes for the Medicare program and beneficiaries,” added Patrick Conway, MD, the acting principal deputy administrator of CMS. “This gives CMS greater confidence in scaling elements of the model to benefit people across the nation, and we are working to determine the best strategies for embedding the lessons we have already learned from the Pioneer Model into permanent Medicare programs and our nation’s health system.”

HHS SAYS AFFORDABLE CARE ACT WILL SAVE SENIORS $5000 OVER 12 YEARS

Photo: HHS Secretary Kathleen Sebelius

FROM: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Through the Affordable Care Act, Americans with Medicare will save $5,000 through 2022
5.5 million seniors saved money on prescription drugs and 19 million got free preventive care in 2012
Because of the health care law – the Affordable Care Act – the average person with traditional Medicare will save $5,000 from 2010 to 2022, according to a report today from the U.S. Department of Health and Human Services. People with Medicare who have high prescription drug costs will save much more – more than $18,000 – over the same period.

HHS Secretary Kathleen Sebelius also announced that, because of the health care law, more than 5.5 million seniors and people with disabilities saved nearly $4.5 billion on prescription drugs since the law was enacted. Seniors in the Medicare prescription drug coverage gap known as the donut hole have saved an average of $641 in the first eight months of 2012 alone. This includes $195 million in savings on prescriptions for diabetes, over $140 million on drugs to lower cholesterol and blood pressure, and $75 million on cancer drugs so far this year. Also in the first eight months of 2012, more than 19 million people with original Medicare received at least one preventive service at no cost to them.

"I am pleased that the health care law is helping so many seniors save money on their prescription drug costs," Secretary Sebelius said. "A $5,000 savings will go a long way for many beneficiaries on fixed incomes and tight budgets."

The health care law includes benefits to make Medicare prescription drug coverage more affordable. In 2010, anyone with Medicare who hit the prescription drug donut hole received a $250 rebate. In 2011, people with Medicare who hit the donut hole began receiving a 50 percent discount on covered brand-name drugs and a discount on generic drugs. These discounts and Medicare coverage gradually increase until 2020, when the donut hole will be closed.

The health care law also makes it easier for people with Medicare to stay healthy. Prior to 2011, people with Medicare had to pay for many preventive health services. These costs made it difficult for people to get the health care they needed. For example, before the health care law passed, a person with Medicare could pay as much as $160 for a colorectal cancer screening. Because of the Affordable Care Act, many preventive services are now offered free to beneficiaries (with no deductible or co-pay) so the cost is no longer a barrier for seniors who want to stay healthy and treat problems early.

In 2012 alone, 19 million people with traditional Medicare have received at least one preventive service at no cost to them. This includes 1.9 million who have taken advantage of the Annual Wellness Visit provided by the Affordable Care Act – almost 600,000 more than had used this service by this point in the year in 2011. In 2011, an estimated 32.5 million people with traditional Medicare or Medicare Advantage received one or more preventive benefits free of charge.