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THE AFFORDABLE CARE ACT: STRENGTHENING MEDICARE IN 2011

THE AFFORDABLE CARE ACT: STRENGTHENING MEDICARE IN 2011

In 2011, millions of seniors and people with disabilities enjoyed lower costs and improved benefits thanks to the Affordable Care Act.  This report details how over 25.7 million Americans in traditional Medicare received free preventive services in 2011.  In Medicare Advantage, last year 9.3 million Americans – 97 percent of those in individual Medicare Advantage plans – were enrolled in a plan that offers free preventive services.

Assuming that Medicare Advantage beneficiaries utilized preventive services at the same rate as beneficiaries in traditional Medicare, an estimated 32.5 million beneficiaries benefited from Medicare’s coverage of prevention with no cost sharing.  Last year 3.6 million Americans also saved $2.1 billion on their prescription drugs as a result of provisions in the Affordable Care Act.

In addition, seniors are benefitting as the Affordable Care Act is fully implemented:

• By 2020, the “donut hole” coverage gap will be closed;
• Premiums have remained low for seniors and people with disabilities in traditional Medicare;
• Medicare will have stronger tools to fight fraud;
• Those enrolled in Medicare Advantage and Medicare Part D plans continue to enjoy low premiums and broad choice in coverage;
• Quality improvements will help prevent medical errors and promote coordination of care across Medicare and the health care system.

OVER 25 MILLION IN MEDICARE – REPRESENTING 73 PERCENT OF THOSE ELIGIBLE – USED ONE OR MORE FREE PREVENTIVE SERVICE IN 2011

One of the major goals of the Affordable Care Act is to help people stay healthy by giving them the tools they need to take charge of their own health, fostering a culture of prevention that encourages patients to partner with their physicians and other caregivers.

Beginning January 1, 2011, the Affordable Care Act eliminated Part B coinsurance and deductibles for recommended preventive services, including many cancer screenings and key immunizations. The law also added an important new service — an Annual Wellness Visit with a health professional — at no cost to beneficiaries.

According to preliminary numbers, at least 25,720,996 million Americans took advantage of at least one free preventive benefit in Medicare in 2011, including the new Annual Wellness Visit.  This represents 73.3% of Medicare fee-for-service beneficiaries, including 2,404,792 African-American beneficiaries, 537,110 Hispanic beneficiaries, 104,393 American Indian beneficiaries, and 508,398 Asian-American beneficiaries.

In addition, Americans in Medicare Advantage plans had access to free preventive services, as many private insurance plans matched Medicare in offering many preventive services without charge. Last year 9.3 million Americans – 97 percent of those in individual Medicare Advantage plans – were enrolled in a plan that waives cost-sharing for  free preventive services.*  In 2012, all Medicare Advantage plans are required to cover the same free preventive services.

The free preventive services include the following, along with their utilization rates in 2011:

Previously subject to both the Part B deductible and coinsurance/copayment:

• Bone Mass Measurement:                                                2,750,966
• Hepatitis B (HBV) Vaccine:                                                156,077
• Tobacco Cessation Counseling:                                             48,806
• Medical Nutrition Therapy:                                                  185,212

Previously exempt from the Part B deductible, but subject to coinsurance/copayment:

• Pap Tests (that require physician interpretation):                 1,204,446
• Pelvic Examination:                                                            1,413,706
• Screening Mammography:                                                  6,045,754
• Most screening procedures for colorectal cancer:                1,167,358
• Ultrasound Screening for Abdominal Aortic Aneurysm:            59,573

Previously exempt from both the Part B deductible and coinsurance/copayment:

• Pap Tests (that do not require physician interpretation):       1,508,962
• Fecal Occult Blood Test for colorectal cancer screening:     1,089,026
• Prostate-specific Antigen (PSA) Test:                                 2,627,254
• Diabetes Screening Test:                                                     2,383,445
• Cardiovascular Disease Screening Blood Tests:                 20,060,998
• Seasonal Influenza Virus Vaccine:                                      14,551,349
• Pneumococcal Vaccine:                                                       1,838,442
• Human Immunodeficiency Virus (HIV) Screening:                     30,289

New services added during 2011

• Annual Wellness Visit
• Alcohol Misuse Screening and Behavioral Counseling in Primary Care
• Obesity Screening and Intensive Behavioral Therapy in Primary Care
• Annual Depression Screening in Primary Care
• Intensive Behavioral Therapy in Primary Care for Cardiovascular Disease Risk Reduction
• STI Screening and Counseling in Primary Care

STATE-BY-STATE – UTILIZATION OF FREE PREVENTIVE SERVICES

*Note – these figures are only for individual MA plans and do not include employer-based MA plans.

3.6 MILLION IN MEDICARE SAVED MORE THAN $2.1 BILLION ON PRESCRIPTION DRUGS IN THE DONUT HOLE IN 2011

The Affordable Care Act includes benefits to make your Medicare prescription drug coverage (Part D) more affordable.   When the Part D program was created, there was a gap in coverage, where most beneficiaries would pay 100 percent of their drug costs while still paying their premiums.  This gap – which occurs after the plan pays a certain amount, but before beneficiaries hit catastrophic coverage and they only are responsible for a small percent of their drug costs, usually around 5 percent – is called the “donut hole.”

The Affordable Care Act is closing the donut hole over time, and has already saved seniors and people with disabilities over $3 billion on prescription drugs since the law was enacted in March 2010.  In 2011, seniors and people with disabilities who reached the coverage gap in Medicare Part D coverage automatically received a 50% discount on covered brand-name drugs and a 7% discount on generic drugs.  These discounts will continue to grow over time until the donut hole is closed. To receive the discount, no special action is required. Seniors simply purchase drugs at the pharmacy and receive the discount automatically.

In 2011, about 3.6 million Medicare beneficiaries benefited from discounts on prescription drugs in the donut hole coverage gap.  These seniors and people with disabilities received more than $2.1 billion in discounts, or an average of $604 per beneficiary.

Women who hit the donut hole benefitted from this provision in the Affordable Care Act, with 2.05 million women saving a total of $1.2 billion on their prescription drugs.  Beneficiaries also received a 7 percent savings on generic drugs in the donut hole in 2011, with 2,814,646 beneficiaries receiving $32.1 million in savings on generic drugs.

The HHS Assistant Secretary for Planning and Evaluation released a brief today projecting that the average Medicare beneficiary will save approximately $4,200 from 2011 to 2021, while those with high prescription drug spending will save much more – nearly $16,000 over the same period.  These findings, along with the data from 2011, show that while all individuals will benefit from lower costs thanks to the Affordable Care Act, those with high drug costs are seeing considerable savings which will continue to grow.

In 2011, seniors and people with disabilities saved money on a wide variety of drugs, including:

• Blood sugar lowering drugs- $300,259,057
• Triglyceride and Cholesterol lowering drugs- $263,182,711
• Asthma and Other Lung Related (non-cancer) Disease drugs- $228,522,896
• Drugs used to lower Blood pressure - $120,214,657
• Psychiatric drugs- $101,511,953
• Drugs Used to Prevent Platelets from Clotting Blood - $195,230,876
• Anti-dementia drugs- $108,868,359
• Anti-depression drugs- $72,917,239
• Cancer drugs- $71,854,747
• Drugs Used to Treat Ulcers- $70,007,664
• All Other Drug Therapeutic Uses- $626,822,848

Most of these drugs are for chronic conditions, suggesting that the discounts are helping people pay for expensive medications that they must take on an ongoing basis.  Making such prescriptions more affordable also helps prevent more costly care that often results from conditions like high blood pressure and cholesterol.  About 13 percent of the savings were for drugs to help manage mental illness which also helps keep beneficiaries active and living at home.

Last year’s progress builds on the savings in 2010, when nearly 4 million beneficiaries who hit the donut hole received a $250 rebate under the Affordable Care Act to help them afford prescription drugs in the coverage gap.

Seniors and people with disabilities will receive additional savings on covered brand-name and generic drugs while in the coverage gap until the gap is closed in 2020. See the schedule below for information on what Part D beneficiaries will pay for drugs while in the coverage gap:

• 2012: Medicare Part D beneficiaries will save 50% on brand-name drugs and 14% on generic drugs
• 2013: Medicare Part D beneficiaries will save 52.5% on brand-names and 21% on generics
• 2014: Medicare Part D beneficiaries will save 52.5% on brand-names and 28% on generics
• 2015: Medicare Part D beneficiaries will save 55% on brand-names and 35% on generics
• 2016: Medicare Part D beneficiaries will save 55% on brand-names and 42% on generics
• 2017: Medicare Part D beneficiaries will save 60% on brand-names and 49% on generics
• 2018: Medicare Part D beneficiaries will save 65% on brand-names and 56% on generics
• 2019: Medicare Part D beneficiaries will save 70% on brand-names and 63% on generics
• 2020: Medicare Part D beneficiaries will save 75% on brand-names and 75% on generics

STATE-BY-STATE – DISCOUNTS IN THE DONUT HOLE

MEDICARE BENEFICIARIES ENJOYING LOWER PREMIUMS

Many seniors and people with disabilities continue to see low premiums in Medicare.  The standard Medicare Part B premium will be $99.90 a month in 2012, $6.70 lower than the amount projected earlier this year.  Part B enrollees who paid the higher standard Part B premium in 2011 of $115.40 will see their premiums decrease by $15.50.

The majority of people with Medicare have paid $96.40 per month for Part B since 2008, due to a law that prevents their Social Security check from decreasing as a result of an increase in the Part B premium.  In 2012, these people will pay the standard Part B premium of $99.90, which amounts to a monthly increase of $3.50, or 3.6%.   The Social Security cost-of-living adjustment for 2012 is also 3.6 %, meaning that Medicare Part B premiums for these beneficiaries will be the same percent of their Social Security check in 2012 as they were in the last three years, and Social Security benefits net of Medicare premiums will be increasing again.

In 2012, the Part B deductible fell by $22 to $144 – the first time in Medicare’s history when the deductible was lower.  This happened because Medicare cost growth is low.

HHS announced that average Medicare Advantage premiums for 2012 have decreased by 7% and enrollment has risen by 10%.  Almost all (99.7%) of seniors and people with disabilities continue to enjoy access to a Medicare Advantage plan, and benefits remain consistent with those offered in 2011.

CMS used authority provided by the Affordable Care Act to protect people with Medicare Advantage from significant increases in costs or cuts in benefits in 2012, contributing to average premium declines for the second year in a row: 2012 premiums are 16% below 2010 premiums.

Average prescription drug plan premiums will remain virtually unchanged in 2012.  Based on plans’ projections, the cost of the average Medicare prescription drug plan premium in 2012 will be about $30 – the average premium in 2011 was $30.76.  New tools from health reform and slow growth in Medicare have kept the cost of prescription drug coverage from growing.

IMPLEMENTING PROVISIONS TO IMPROVE HEALTH CARE QUALITY IN MEDICARE

Medicare is continually improving. The Affordable Care Act provides new incentives and programs that will reward doctors and hospitals that coordinate care better and will improve the program for all seniors and people with disabilities.  Some of these programs include:

Partnership for Patients:   A public-private partnership that aims to improve the quality, safety, and affordability of health care for all Americans by keeping patients from getting injured or sicker, and helping them heal without complication.  The Partnership for Patients brings together leaders of major hospitals, employers, physicians, nurses, and patient advocates along with state and federal governments in a shared effort to make hospital care safer, more reliable, and less costly.  More than 7,100 partners, including over 3,200 hospitals as well as physicians and nurses groups, consumer groups, and employers, have pledged their commitment to the Partnership for Patients.

Achieving these goals could save Medicare and patients as much as $50 billion and save tens of thousands of lives.  Hospitals and doctors are now beginning to communicate through the Partnership for Patients on best practices to improve patient safety.

Accountable Care Organizations: People with Medicare are starting to benefit from a new program designed to encourage primary care doctors, specialists, hospitals, and other care providers to coordinate their care.  These groups of providers – called Accountable Care Organizations (ACOs) – are in the process of forming.  If a Medicare beneficiary’s doctor is enrolled in an ACO, he or she will still have the option to see all participating doctors in Medicare.  The first ACOs have started at the beginning of 2012, and doctors and hospitals have started to sign up for demonstrations that emphasize coordination centered on primary care, and bundling payments to providers for episodes when patients are treated by several different providers.

Value-Based Purchasing: The Affordable Care Act puts into place Medicare payment incentives for doctors, hospitals, health plans, and other providers who deliver better quality care – rewarding how well they do for patients, instead of how much they do for patients.

Seniors in Medicare Advantage plans will also see better quality thanks to incentives in the Affordable Care Act.  Medicare Advantage plans that achieve “three-star” or better quality ratings will receive bonus payments, giving an incentive for all plans to improve care for patients.  The best Medicare Advantage plans that achieve a five-star rating will be able to market to and enroll seniors all year round, not just in the open enrollment period – giving seniors the ability to move to the best plans any time.

PROTECTING SENIORS AND TAXPAYERS FROM MEDICARE FRAUD

Seniors and people with disabilities in Medicare are benefitting from a more secure program.  The Affordable Care Act contains new steps and enhanced authority to crack down on criminals who are looking to defraud Medicare.  These provisions, many of which have already gone into effect, will protect seniors from fraudsters and protect taxpayers.

The Affordable Care Act takes several critical steps to help fight fraud, including:

• Increasing the federal sentencing guidelines for health care fraud offenses by 20-50% for crimes that involve more than $1 million in losses. The law establishes penalties for obstructing a fraud investigation and makes it easier for the government to recapture any funds acquired through fraudulent practices;
• Using the sophisticated predictive analytics technology employed by the credit card and telecommunications industries to identify patterns of fraud and prioritize targets for fraud investigators and prosecutors;
• Stopping bad actors from entering the system, by making providers and suppliers who have historically posed a higher risk of fraud or abuse undergo a higher level of scrutiny than others before enrolling or re-enrolling in the Medicare, Medicaid, or CHIP;
• Fostering better coordination among states, CMS, and law enforcement partners at the Office of the Inspector General and Department of Justice.  New rules authorize CMS to suspend Medicare payments to providers or suppliers during the investigation of a credible allegation of fraud;
• Requiring certain claims data from Medicare, Medicaid and CHIP, the Veterans Administration, the Department of Defense, the Social Security Disability Insurance program, and the Indian Health Service to be centralized, making it easier for agency and law enforcement officials to identify criminals and prevent fraud on a system-wide basis;
• Providing an additional $350 million over 10 years to ramp up anti-fraud efforts, including increasing scrutiny of claims before they’ve been paid, investments in sophisticated data analytics, and more “feet on the street” law enforcement agents and others to fight fraud in the health care system.

In concert with the new Affordable Care Act authorities, the Obama Administration has expanded funding for Senior Medicare Patrols – groups of senior citizen volunteers to educate and empower their peers to identify, prevent and report health care fraud.  The Obama Administration has also increased government collaboration through the Health Care Fraud Prevention and Enforcement Action Team (HEAT).  This is a joint cabinet-wide effort between HHS and DOJ to fight health care fraud by increasing coordination, intelligence sharing, and training among investigators, agents, prosecutors, analysts, and policymakers.  A key component of HEAT is the Medicare Strike Force teams which are comprised of interagency teams of analysts, investigators, and prosecutors who can target emerging or migrating fraud schemes, including fraud by criminals masquerading as health care providers or suppliers.

In 2011, HEAT coordinated the largest-ever federal health care fraud takedown, measured by number of defendants and measured by fraudulent billings.  In one action, Strike Force teams charged 115 defendants in nine cities, including doctors, nurses, health care company owners and executives, for their alleged participation in Medicare fraud schemes involving more than $240 million in false billing.  In a simultaneous takedown, Strike Force prosecution teams charged 91 defendants in eight cities for their alleged participation in a Medicare fraud scheme involving more than $290 million in false billings.

The Administration’s overall efforts have led to record recoveries of health care fraud, with $4.1 billion recovered in Fiscal Year 2011 alone, the highest amount to date.

Click here for a PDF copy of this report: http://www.cms.gov/apps/files/MedicareReport2011.pdf.