Medicare and Medicaid Analysis

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Government as a Source of Payment
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=Individual programs of reimbursement =Direct payments to vendors =Grants =Matching funds =Subsidies Vendor-purchase relationship -Contracting with service providers -Purchases hospital, home health, nursing home, physician, and other medical services
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Medicare
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Title 18 of the Social Security Act of 1965 -Worker's compensation was first mandated health insurance program -One-half of the elderly had any insurance that covered hospital costs -Now covers 50 million people -Cost 15% of the federal budget
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Medicare Today
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In 2010, 46 million people enrolled Qualifications -Primary (83%) =65 years or older =US citizen =Worked for Medicare-covered employer for at least 10 years -Secondary (17%) =Persons receiving Social Security disability =Persons with end-stage renal disease
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Medicare Qualifications
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Some people do not pay a premium -On Social Security -Had government employment Premiums range from $254-461/month
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Medicare Finance
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The Hospital Trust Fund -Financed through payroll taxes paid by employees and employers- current contribution is 1.45%; self-employed persons pay 2.9% Social Security administers hospital payments through an intermediary -90% choose Blue Cross Joint Commission on Accreditation of Hospitals Accredits hospitals
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Medicare Part A
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-Benefits for hospital care, skilled nursing, short-term home health care post-hospitalization, hospice care -Requires annual deductible be met -Patients cover 20% of hospitalization costs -Lifetime pool of compensated days -\"Medi-gap\" policies =Private, supplemental insurance =Also covers gaps in Part D benefit
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Medicare Part A Coverage
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Hospital or skilled nursing for 90 days per \"benefit period\" -Admission starts benefit period -Benefit period ends 60 days after discharge from hospital or skilled nursing facility -Beneficiary may have multiple benefit periods in one year Beneficiaries also have 60 days lifetime reserve -May be used if hospitalization within benefit period exceeds 90 days Only 190 lifetime days of inpatient psychiatric care -Does not count toward hospitalization benefit
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Medicare Part A Deductible
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-1-60 days of benefit period- amount varies by year- $1,100 in 2010 -61-90 days- 25% of inpatient hospital deductible per day -90+ lifetime- $550 per day
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Medicare Part B
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-Supplemental medical insurance -Voluntary program covering physician services -Services linked to, but external to physician services =Outpatient diagnostic tests, medical equipment and supplies, and home health services -Fee for service =Rate increases led to the resource based relative value scale ->Same payments for generalists and specialists ->Reducing numbers of expensive procedures ->Reducing incentive for physicians to specialize
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Medicare Part B Deductible
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-$155 in 2010 -Then 20% of the approved charge -Contingent on whether provider \"accepts assignment\" =Meaning accepting Medicare-approved fee =If not, patient may have to pay 20% of approved charge PLUS the difference between the billed and Medicare-approved amount =Provider fee cannot be more than 115% of the Medicare-approved fee =Participating physicians receive 5% higher fee than non
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Medicare Part C (Medicare+Choice)
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-Balanced Budget Act of 1997 -Voluntary enrollment =22% of Medicare beneficiaries enrolled by 2009 -2003 revised administration
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Medicare Part C
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-Provide equivalent benefits to traditional Medicare -Plan cost savings are passed onto beneficiaries or given back to Medicare -Overview (2010): =90% had no cost sharing for preventative services =80% limited out-of-pocket spending =90% provided unlimited days of hospital care
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Medicare Part D
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-Medicare Prescription Drug, Improvement, and Modernization Act of 2006 -Voluntary enrollment through: =Enrollment in a freestanding drug plan while getting other Medicare benefits =Enrollment in Medicare advantage plan
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Medicare Part D Deductible
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-About $30/month -Covers ~25% of the cost of the standard drug benefit -$310 deductible25% of the next $2,520 of medication costs (paid $940 of first $2,830, or 33%)100% of next $3,610$4,550 catastrophic limit5% co-insurance or minimal co-payments
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Medicare Part D
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-Numerous issues with eligibility verification in early implementation -27 million enrollees in 2009 -14 from retiree health plans, VA, or HIS -90% of Medicare beneficiaries have coverage
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Medicare Part D
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-Alternative benefit plans =Must be actuarially equivalent =Only 36% charged the deductible =40% charged no deductible at all =Only 11% used 25% co-insurance -ACA impact =$250 rebate to cover \"doughnut hole\" in 2010 =Additional subsidies for generics in 2011 =Phasing out 100% gap to 25% by 2020
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Medicare Cost Containment
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-First ten years =25% of increases attributed to general inflation =2/3 to growth in hospital payroll and non-payroll expenses -1974 resources planning =State approval before starting capital project =Certificate of need =Quantified population-based needs
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Medicare Cost Containment
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1983 -Switch to case payment system -Diagnosis-related groups (DRGs) =Hospital payments are fees based on specific diagnoses =International Classification of Disease codes >10,000; 500 patient categories -Direct cost reimbursement =Medical education expenses for teaching hospitals =Hospital outpatient expenses =Capital expenditures -Improved outcomes =Resulted in 24% reduction in average length of hospital stay =Improvement in mortality rates
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Medicare Cost Containment
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Balanced Budget Act (BBA) of 1997 -Reduce spending through regulatory and payment changes to hospitals, physicians, post-acute-care services and health plans -Increased premiums for Part B -Required prospective payments for long term care and skilled nursing -Outcome =Reduced spending two years by 1.7%, resulting $68 billion savings
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Medicaid
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-1965 enacted as Title 19 of the Social Security Act -Covers 60 million people and costs 25% of state budgets 16% of overall health care spending and 41% of nursing home care -Third largest source of health insurance after employer-based and Medicare -Program requirements are stipulated by state governments
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Medicaid
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3 categories of insured -Mandated categorically needy -Optionally categorically needy -Medically needy
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Medicaid Mandated Categorically Needy
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-Low income families with children -Children under the age of 6 and pregnant women whose family income is below 133% of the FPL ($31,321) -Children under age 19 in families with incomes below the FPL -Disabled persons -Persons receiving Supplemental Social Security
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Medicaid Optionally Categorically Needy
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-Infants through 1 year of age -Pregnant women and families with 185% of FPL income
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Medicaid Medically Needy
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-Qualify under \"Optional\" or \"Mandated\" but have higher income -Medical expenses drastically reduce net income -34 states have program for medically needy
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Medicare ACA
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-Expands coverage to all non-Medicare eligible persons under age 65 with incomes up to 133% of the FPL effective Jan 2014 =100% Federal, then decline to 90% by 2020 -Direct provider reimbursement =Rate setting is determining by each state
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Medicaid Cost Containment
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-BBA allowed managed care mandate -More than 70% enrolled in managed care plans -Recession has accelerated enrollment, spending and growth
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Medicaid Children's Programs
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-Children's Health Insurance Program (CHIP) provides health coverage to nearly 8 million children in families with incomes too high to qualify for Medicaid, but can't afford private coverage -Signed into law in 1997, CHIP provides federal matching funds to states to provide this coverage (at higher rate than Medicaid -States can design their CHIP program in one of 3 ways: =Medicaid expansion (7 states, DC and 5 territories) =Separate Child Health Insurance Program (17 states) =Combination of the two approaches (26 states)
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Medicaid Children's Programs
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Balanced Budget Act (BBA) of 1997 -Created State Children's Health Insurance Program (SCHIP) =Reauthorized in 2009 =Dismissed 2007 directive limiting coverage =Expansion
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