New Medicare payment reforms might not keep costs from rising, study says

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The Affordable Care Act's Medicare payment reforms have the potential to underperform unless they're closely monitored, an analysis finds.

“Several current reforms, such as bundled payments and accountable care organizations, show promise for lowering the long-run spending trajectory,” authors of a recent study wrote in Health Affairs. “However, experience amply demonstrates that persistent cost containment is not a given.”

Even after changes to a prospective payment system in 1998 for skilled nursing facilities, there was only a temporary period when payments were reduced, the study noted. Afterwards, a combination of payment rate increases and provider behavior resulted in Medicare spending growth.

Between 2001 and 2010, spending on Medicare beneficiaries needing post-acute services has jumped from $26.6 billion to $58 billion.

“Policy makers will need to be vigilant in monitoring the rate of growth and be prepared to amend payment policies as necessary to achieve long-term containment of spending and longer-term financial sustainability for Medicare,” the authors wrote.

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