Medicare spending for COVID-19 treatment could reach $115 billion over the next year, according to estimates from a new study.
Published March 27, 2020
Follow our Medicare Coronavirus News page for related information on coronavirus (COVID-19) and its impact on Medicare beneficiaries.
The novel coronavirus (COVID-19) pandemic has the potential to inflate Medicare spending by up to $115 billion over the next year, according to a recent study released by the National Association of Accountable Care Organizations (NAACOS).2
Learn More About Medicare
Join our email series to receive your free Medicare guide and the latest information about Medicare and Medicare Advantage.
By clicking "Sign me up!” you are agreeing to receive emails from MedicareAdvantage.com.
Thanks for signing up for our emails!
Your Medicare guide will arrive in your email inbox shortly. You can also look forward to informative email updates about Medicare and Medicare Advantage.
If you'd like to speak with an agent right away, we're standing by for that as well. Give us a call!
The study analyzed inpatient admission rates for COVID-19 incidents, the potential spread of infection and the average cost for a 90-day hospital stay due to pneumonia, which is among the deadly complications of COVID-19.
The data included costs for hospitalization, rehabilitation, skilled nursing care, home health care and ambulatory services.
COVID-19 effects on doctors and hospitals
Accountable care organizations (ACOs) may bear the brunt of COVID-19 treatment costs.
An accountable care organization is a network of doctors and hospitals that share a financial and medical responsibility for providing coordinated care to patients. ACOs are created in an effort to limit unnecessary health care spending.
ACOs typically feature a primary care physician (PCP) who coordinates patient care with various specialists throughout the organization’s network. Some types of Medicare Advantage plans (Medicare Part C) operate as an ACO.
The ACO model encourages quality of care by reimbursing providers on a basis of patient outcome as opposed to the number of services rendered.
ACO’s must meet a benchmark spending target. If they stay under that benchmark, they receive a share of the cos savings. But if they exceed the benchmark spending, they must reimburse Medicare for the difference.
Doctors and hospitals in ACOs will most likely face unprecedented treatment costs due to the ongoing COVID-19 outbreak.
The Centers for Medicare & Medicaid Services (CMS) announced several measures of regulatory relief for ACOs and other value-based programs during the COVID-19 outbreak, including the extension of deadlines for quality-of-care reporting.
Notes on the NAACOS study
The NAACOS study authors noted a few caveats to their data:
While the high end of the treatment costs estimate was $115 billion, the low end was $38 billion. The COVID-19 outbreak remains a fluid situation, and its full potential effects remain unknown at this time.
Because the outbreak is still in its relative infancy, there is only a limited amount of data pertaining to health care utilization due to the disease.
Estimates are based on how other countries, like China, have dealt with the disease. Those practices could differ from how patients are treated in the U.S.
The adoption of extreme social distancing measures could also potentially affect infection rates and treatment costs.
About the author
Christian Worstell is a senior Medicare and health insurance writer with MedicareAdvantage.com. He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.
..
Christian Worstell is a senior Medicare and health insurance writer with MedicareAdvantage.com. He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.
Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.
Christian has written hundreds of articles for MedicareAvantage.com that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.
Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.
A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism.
If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at Mike@tzhealthmedia.com.
The COVID-19 coronavirus is affecting people all over the globe, and seniors are at the greatest risk. Stay up to date on Medicare coverage of coronavirus testing and learn how to stay safe during the outbreak.
This report details where Medicare beneficiaries have access to the widest range of quality 2024 Medicare Advantage plans at the most affordable prices.
Analysis of the most recent CMS data shows discarded units of valuable cancer drugs and other single-use drugs account for hundreds of millions of dollars of annual Medicare waste.
Join our email series to receive your Medicare guide and the latest information about Medicare.
By clicking "Sign me up!” you are agreeing to receive emails from MedicareAdvantage.com.
Thanks for signing up for our emails!
Your Medicare guide will arrive in your email inbox shortly. You can also look forward to informative email updates about Medicare and Medicare Advantage.
If you'd like to speak with an agent right away, we're standing by for that as well. Give us a call!