CMS Highlights 2012 Accomplishments in Financial Report

Changing Medicare rules — cutting provider reimbursements, increasing the eligibility age, means testing premiums — is a major focus of the negotiations in Congress as the January 1, 2013 “fiscal cliff” looms.  Medicaid — the program for the poor that is jointly administered by the federal government and the states — is expanding (at least in some states) as the result of the Affordable Care Act.

As both programs endure the glare of being debated at all levels of government, the annual release  of the CMS Financial Report provides an opportunity to review the demographics and recent accomplishments of both programs.

The 200-page report is full of numbers, charts, financial statements, and informative graphics. For example —

  • The two programs combined account for 37 percent ($732 billion) of all health care spending in the U.S. More specifically the two programs account for 54 percent of all nursing home spending, 49 percent of all hospital spending, and 33 percent of all physician spending.
  • Hospital spending accounted for 54 percent of all spending in traditional Medicare Part A.
  • In 2012, Medicaid enrollment averaged 57 million people — about 18 percent of the U.S. population. The elderly and disabled accounted for 27 percent of Medicaid enrollees, but 64 percent of all Medicaid spending.
  • The cost of Medicaid is shared between the states and the federal government, but the federal share varies from state to state depending on the benefits offered by an individual state. So, while on average the federal government provides about 57 percent of all Medicaid funding, that varies from a low of 50 percent to a high of 74.2 percent.
  • Slightly less than 9 percent of all Medicare payments were made in error in 2012, with $28.5 billion in overpayments and $1.1 billion in underpayments.

In the report, Acting CMS Administrator Marilyn Tavenner highlighted eight accomplishments within CMS during 2012 —

  1. the continuing implementation of electronic health records;
  2. the amount of savings Medicare beneficiaries have seen through participation in the prescription drug benefit program (Medicare Part D);
  3. the number of shared savings or accountable care organizations that have been established since health care reform was enacted;
  4. regulatory reforms relating to hospitals and critical access hospitals;
  5. continued interest on the part of Medicare beneficiaries in Medicare Advantage programs (Medicare Part C);
  6. reduction in fraud, waste, and improper payments in federal healthcare programs;
  7. aggressive work to recover improper payments from healthcare providers; and
  8. the ongoing work to establish state-based Affordable Insurance Exchanges.