Both Medicare and Medicaid, managed by the Centers for Medicare and Medicaid Services (CMS), provide medical and health-related services to eligible patients in the United States. More hospitals will be rewarded with extra payments for improved care this year under the Medicare program compared to those with shrinking payments due to poor ratings. On the other hand, federal reimbursements for treating Medicaid patients will drop to 2012 levels starting 2015.

Extra Medicare Payments

The CMS recently announced that 1,714 hospitals will receive incentives this year for improved care whereas 1,375 hospitals will receive fewer payments due to poor ratings. It signals the success of ObamaCare and its incentive strategy in improving quality of care.

On the other hand, a focus on quality helps optimize treatment costs as hospitals become focused to reduce hospital acquired infections during patients’ stay. Emphasize on patient score also allows patients to rate certain aspects of their treatment including whether they understood the treatment plan, communication of the staff and cleanliness among others.

The federal government started considering these scores while calculating Medicare reimbursements under the Affordable Care Act to make sure hospitals focus on improving the quality of care delivered to patients.

Subsidized Medicaid Payments

Medicaid program aims at covering certain people with low socio-economic status. The federal government provided to cover the higher rates only in 2013 and 2014 in its 2010 law. However, the recent spending bill passed last week, didn’t provide for continuation of such higher rates in 2015. As a result, federal reimbursements for doctors providing Medicaid services would drop to 2012 levels starting next month.

Medicaid serves more than 63 million enrollees and spent $449 billion last year, of which more than 50% was funded by Washington. As Medicaid fees are generally lower than Medicare fees, only half of family doctors accepted Medicaid in 2013 according to a 15-city survey by Merritt Hawkins.

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