Medicare Savings: End of Life Care
Published September 29, 2015
Third Way asked Avalere Health to estimate the Federal cost or savings associated with a Medicare end-of-life care (EOL) policy that would engage beneficiaries and providers in the EOL care decision-making. The proposed policy would provide one-time incentive payment to a Medicare beneficiary to create an advance directive (AD) starting in FY 2015. The policy would also create a separate billing code and reimbursement under Part B fee-for-service (FFS) schedule for EOL care counseling visit.
We estimate this proposal would reduce federal spending by $13.8 billion over the 2015-2024 federal budget window. This amount reflects a combination of an estimated $7.2 billion in new spending on the incentive payments to Medicare beneficiaries for an AD creation and physician payments for EOL counseling visits offset by an estimated $21.0 billion in savings from the reduced EOL Medicare spending due to lower health care utilization by beneficiaries having ADs.
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