The 2010 health care law gives Medicare and Medicaid more authority to track and reject payments for medical procedures believed to be overused, such as those involving hospital giant HCA and its alleged overuse of stents in cardiac patients, records and interviews with health care experts show.
Also, the law and 2009 stimulus act will change payment incentives and allow physicians to use electronic records to limit unnecessary medical testing. Private insurers will also be able to work with government agencies to combine billing data to spot trends in overused procedures.
"The health care law is helping us implement new incentives for doctors, hospitals and health care providers to provide better quality care, and not just a greater quantity of services," Medicare spokesman Brian Cook said.
HCA, a for-profit hospital chain with 163 hospitals, discovered that several of its cardiologists could not justify cardiac procedures they performed, according to a New York Times investigation this week. Insurers and the government then paid for those unnecessary procedures.
In 2010, the Department of Health and Human Services reported $48 billion in improper payments through Medicare. Those payments were due to unnecessary procedures and tests, medical errors and inadequate documentation.
The problem stems from an antiquated fee-for-service system that encourages health providers to perform as many procedures as possible, said Jordan Battani, managing director for CSC's Global Institute for Emerging Healthcare Practices.
"The Affordable Care Act is changing the way we pay for health care," she said. "We have incentives to do a lot of stuff: The more you do, the more you get paid."
But that's changing from "stuff" to "outcomes," she said. For example, in the bundled payment system, the government is working to identify how many Medicare patients fall into a hospital's service area, and to then pay the hospital for that whole population.
So, the provider ends up with both healthy patients who don't need a lot of care, as well as patients with diabetes or heart disease who need more care. The provider receives a budget, and makes money based on how much can be saved. To make sure providers continue to give good care - rather than cutting tests or procedures to save money - the government has also created quality measures.
Accountable care organizations, or groups of providers - such as hospitals and family practitioners - who work together, aim to save money for Medicare and then receive part of those savings at the end of the year.
Private insurers and providers have already made some of the changes because large employers are also seeking savings and an end to unnecessary payments, Battani said.
The 2009 stimulus act also provided up to $44,000 in incentives for doctors who properly use electronic health records, said Matt Hawkins, CEO of Vitera Healthcare Solutions, which provides records for 80,000 physicians. "Meaningful use" means the records are used to stop errors and encourage more effective care.
A doctor using the records can see what tests have been ordered, but it also can include clinical guidelines to show what tests and procedures should be performed. The database also allows providers to see what medications a person takes and whether any newly prescribed medications will cause bad interactions with the old prescriptions, Hawkins said.
"When they're fully deployed, or working the way they're designed to with all the bells and whistles turned on, they provide decision support," Battani said. "But they take a long time to implement. Everyone needs to know how to use those records."