Medicare safe from ACA-mandated cuts, official says

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Potential Medicare cuts called for by the Affordable Care Act will not occur, a chief government actuary has announced. Long-term care organizations said the news comes as a relief for providers who have weathered a series of recent payment reductions.

Under the ACA, the projected five-year growth rate for Medicare for the period 2010-2015 cannot exceed a specified limit. The limit is based on the projected five-year growth rate of certain parts of the Consumer Price Index. If Medicare spending is projected to exceed this target, the Independent Payment Advisory Board would have to find ways to trim Medicare spending in 2015. 

Based on numbers in the recently proposed White House budget, the Medicare growth rate will not exceed the target, according to Paul Spitalnic, acting chief actuary for the Centers for Medicare & Medicaid Services. Medicare per-capita spending is expected to grow at an average rate of 1.15% annually through 2015, which is well below the 3.03% limit, Spitalnic said in an April 30 letter to CMS Acting Administrator Marilyn Tavenner.

AHCA President and CEO Mark Parkinson said this is “good news for our sector.” LeadingAge said the Medicare growth rate shows healthcare reform has made progress.

“Medicare has been innovating and this has slowed the growth of costs,” said LeadingAge President and CEO Larry Minnix. “We are very pleased that there will be no additional Medicare cuts immediately.”

CMS will recalculate the projected Medicare growth rate when the 2013 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds is released. Growth projections in future years will be based on the figures in this Trustees' Report.

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