Section 6/Week 6 Flashcards
Who is eligible for Medicare?
- all people age 65+
- all permanently disabled adults
- all people with End-Stage Renal Disease
Medicare Part A
Service plan: Healthcare paid directly by the government.
What kind of care does Medicare Part A provide?
Inpatient care, within hospitals.
How is Medicare Part A funded?
- Payroll taxes that fuel the Medicare Trust Fund, paid for by current working population for the elderly
- All elderly people pay a yearly deductible
- Employers match every dollar of Medicare tax paid by the employee
How are beneficiaries enrolled in Medicare Part A?
All people over the age of 65 are automatically enrolled.
Which services does Medicare Part A cover?
- In hospital care
- Skilled nursing home care for 20 days
- Hospice
How does Medicare Part A work with fiscal intermediaries?
Fiscal intermediaries are contracted to accept bills from the hospitals and are reimbursed by the Medicare Trust Fund.
Medicare Part B
Insurance Plan: Healthcare paid for by the patient, who is reimbursed by the government.
What kind of care does Medicare Part B provide?
Outpatient care, outside of hospital, physician care.
How is Medicare Part B funded?
Funding is complex and includes:
- Income taxes
- 20% co-payment from patient
- yearly deductible from patient
- 25% of premium from patient
How are beneficiaries enrolled in Medicare Part B?
Enrollment is voluntary.
How are fiscal intermediaries managed in Medicare Part B?
Fiscal intermediaries are contracted to accept bills from physicians (and practices) and are reimbursed by general tax revenues.
What is an allowable fee
The fee determined by the Center for Medicare and Medicaid to be appropriate for the service provided.
What does it mean if a physician is accepting
They will receive 80% of the allowable fee.
What does it mean if a physician is not accepting
They can charge the patient up to 115% of the allowable fee.
The patient is then reimbursed 80% of the allowable fee.
What is the personal contribution when you are enrolled in Medicare? Probably through Medigap Insurance.
- Part A deductible for each time in the hospital
- Part B yearly deductible $155
- 20% of allowable charges covered by Part B
- 25% premium
- If your physician IS NOT ACCEPTING, you will pay up to 115% of allowable charges and then be reimbursed for up to 80% of the allowable fee by Medicare (paying 35% total)
What is the societal contribution to Part B?
General tax revenues account for 75% of part B.
What is the employer contribution to part A?
For every dollar the employee contributes to the Medicare Trust Fund, the employer must match that dollar.
What are the four principal ways beneficiaries to obtain Medigap coverage?
- Private insurance (19% of beneficiaries do this)
- Retirement benefits from former employer (25%)
- Medicaid if eligible (19%)
- Medicare managed care plan (23%)
What are Resource Based Relative Value System/Unit (RBRVS/U)
A billing system used in Medicare for physician reimbursements. Each service has a particular RBRVU value. Each RBRVU equals a certain dollar amount. Congress can adjust the rate of each RBRVU.
What was the schedule of acceptable fees for physician services originally based on?
Original schedule of acceptable fees for physician services was based on a weighted average of what other physicians in the same community charged for the same service, referred to as the usual, customary, and reasonable (UCR) charge.
Original Part B payment schedule would pay physicians 80% of UCR. Due to rising costs, Congress asked for a study of revaluation which resulted in the RBRVU system.
What is the difference between RBRVU and PPS?
- PBRBU: doctor, outpatient services
- PPS: hospital inpatient services
What are the 4 components of the RBRVU
- inflation
- change in # enrolled in FFS
- GDP per capita growth
- new legislation
How are RBUs regulated by the government?
The sustainable growth rate (SGR) adjusts per RVU based on the % the aggregate exceeds the global budget.
What happened to the cost of Part B over time after the RBRVS was put in place?
Doctors have responded by both “churning” (treating patients more often and using more resources for each treatment) causing Medicare Part B to go over budget on a regular basis
Re-mention “doc fix”
Describe the skewed nature of the Medicare population
- The acre of 10% of the elderly population uses 60% of Medicare funds
- The healthiest 22% accounted for 1% of Medicare funds
What is an RVU
Resource Based Value Unit-takes into account time, training, stress and resources that go into a given procedure. Medicare gives each procedure a certain number of RVUs and assigns a dollar value to each RVU.
What is skilled nursing care?
Specially trained nurses provide care to help someone recover from a specific illness or injury. This type of nursing care is provided for through Medicare.
Kerr-Mills Program
Prior to 1965, Kerr-Mills program distributed federal funds to each of the states to assist in paying for medical care for elderly poor people.
What were the four principal characteristics of the Kerr-Mills
- Combination of federal and state funding
- Administered by the states under broad federal guidelines
- Eligibility for the program was tied to eligibility for cash welfare grants
- As long as the basic benefits required by the federal government were provided, each state was free to set its own level of additional benefits.
In a service plan…
All participants are provided with a given level of service
In an insurance plan…
Participants receive reimbursement for the cost of services they obtain
Initial Medicare proposal was to
create a service plan covering hospital care, elderly simply go to the hospital when needed and provider would get paid directly from government
What was the AMA’s problem with the original Medicare program
AMA was opposed to the service plan and wanted Medicare to be more of an insurance plan, with a federal premium subsidy for low-income seniors
How did AMA see Medicare
They viewed it as an unwarranted intrusion by the government into clinical practice, and threatened to organize a doctors’ strike if it was enacted.
AMA dissent led to complicated Medicare system we have now.
In order for the system to work
there have to be enough workers paying enough taxes to pay for the care needed by the elderly
In 1996, Medicare cost $194 Billion. In 2012, Medicare cost $536 Billion. In 2018, Medicare is expected to cost…
$871 Billion
Where is the most Medicare growth
in Part B, outpatient care
How much do most retirees get in Medicare benefits
5-10X what they actually paid into the system in payroll taxes when they were working
What are two ways in which we are changing Medicare in an effort to control costs
- changing the way doctors are paid
2. enrolling Medicare patients in HMOs
How are we changing the way doctors are paid
-Medicare changed to its own fee schedule, based on the amount of resources that go into providing a service
Traditional Medicare
Usual premium, deductible, co-payment
Medicare HMO
Usual premium, no deductibles or co-payment, broader benefits
Did Medicare HMOs work?
- No apparent savings generated by enrolling Medicare patients in HMOs
- Ended up costing more to have Medicare patients in HMOs
How is the ACA impacting rates paid to Medicare Advantage Plans
They will be gradually reduced, by 2014 they will be equivalent to the average cost under traditional Medicare
How is the ACA changing payments
Payments to MA plans will be risk-adjusted based on an enrollee’s current and previous health status, so as to avoid favorable selection
How is the ACA changing the Part A Medicare payroll tax
Increased from 1.45% to 2.35% for high-income taxpayers
Payments to primary care physicians will be
increased by 10%
Future payments increases to non-physician providers will be reduced by
1%, which will keep future Part B costs at constant share of GDP
Center for Medicare and Medicaid Innovations
(CMMI) created by ACA to study new arrangements for care
ACA established an Independent Payment Advisory Board (IPAB)
with the explicit responsibility to monitor the rate at which Medicare’s per-beneficiary costs increase
What are IPABs limited from doing
rationing health care, raising revenues or Medicare beneficiary premiums, or increase Medicare beneficiary cost sharing
Options for making Part A Trust Fund financially sound
- Increase payroll taxes
- Decrease payment rates to hospitals
- Increase the amount patients pay for care
- Limit care available
Options for reducing Part B deficit
- increase premiums and co-payments for all patients
- institute a sliding scale of premiums and payments for Medicare patients
- decrease payment to doctors
- raise income taxes
