The Essentials of Medicare

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The Essentials of Medicare

• Administration

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Department of Health and Human Services (DHHS)
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Undersecretary for Health
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CMS
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Medicare Components
Part A
Part B
Part C
Part D
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Roughly corresponding services

• Part A primarily institutional
• Part B primarily ambulatory
• Part C more or less comprehensive, managed care
  packages (Medicare Advantage)
• Part D prescription drugs

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Financing Medicare/Medicaid
SHI U.S. Trust Fund
VHI
U.S. General Treasury
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57
100
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Medicare Part A
Medicare Part B
Medicaid
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State Treasuries
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Medicare Insurance Card
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Medicare Part A Essential Coverage

• Hospital in-patient care
• Home health
• 80 of DME under Home Health
• Hospice
• SNF
• Premiums 0 for fully vested 233 for 30-59
  quarters 423 for lt30 quarters (2008 rates)

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Medicare Part A Hospital Benefits per benefit
period

• 1st 60 days no cost
• Except 1024 deductible per benefit period
• Days 61-90 all costs
• Except 256/day coinsurance
• Days 91-150 all costs (at patients discretion)
• Except 512/day
• Limited to 60 reserve days in a lifetime
• 2008 benefits data from http//www.medicare.gov

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Hospital Benefit Gaps (what it does not cover)

• 1st three pints of blood unless the blood is
  replaced
• Private rooms and private nurse
• Convenience items (ex. TV/phone)
• Care in a non-participating hospital
• Care outside the U.S.
• Lifetime maximum of 190 days in psychiatric
  hospitals

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The Part A Benefit Period
The benefit period begins on the first day of
in-patient service. The benefit period ends 60
days from discharge from covered services
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Qualifications for SNF benefits

• Must have qualifying hospital stay of at least
  three consecutive days (not including day of
  discharge) before entering Medicare certified SNF
• Need SNF for condition that was treated during
  hospital stay OR a condition that started during
  Medicare-covered SNF stay
• Admission within 30 days of hospital stay
• Doctor has decided that daily skilled care is
  required

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SNF benefits

• Up to 100 days during a benefit period
• 20 days fully paid
• 80 days with co-payment of 128/day (2008)

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Qualifications for home health benefits

• Physician determines the need for home care and
  makes a care plan
• Need for part-time or intermittent skilled
  nursing, PT, ST or OT services
• Patient is homebound
• Agency is approved for Medicare
• For Part A, 3 consecutive day hospital stay is
  required
• Must be initiated within 14 days of a hospital or
  SNF stay

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Hospice benefits

• Physician services
• Nursing
• Medical appliances and supplies
• Drugs for pain
• Short-term inpatient care (up to 5 days for
  respite care)
• PT, OT, ST
• Dietary and other counseling
• Aides and homemakers

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Hospice costs

• No deductibles
• Up to 5 co-payment for Rxs
• Up to 5 per day for in-patient respite care

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Medicare Part B

• Optional coverage
• Cost goes up 10/year for each year that could
  have had Part B but didnt take it
• For individuals with income 80k and married
  couples with income of 160k, premium may be
  higher (new 2007)
• Deductible 135 of approved CMS price list
  charges per year
• Co-insurance 20 of approved CMS price list
  after the deductible is satisfied
• 50 for out-patient mental health services

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Medicare Part B Monthly Premiums 2008
Source http//www.medicare.gov
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Medicare Part B coverage gaps

• Deductibles and co-insurance
• Most prescription drugs
• Insulin and syringes
• Routine physicals
• Limited preventive services
• Routine eye exams and eyeglasses
• Hearing loss exams and hearing aids
• Routine foot care
• Acupuncture
• Dental care

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Medicare Part B therapy caps

• 1740/year for PT and SLP combined (2006)
• 1740/year for OT (2006)
• Does not apply to hospital out-patient
  departments unless beneficiary resides in
  Medicare-certified SNF bed
• Does apply to private practices, out-patient
  rehab facilities, SNFs for out-patients, at home
  care from non-Medicare certified agencies

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Provider Payment Warning

• All providers MUST collect deductibles!! They
  are prohibited from trying to attract business by
  waiving them.

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Medicare Part C (Medicare Advantage)

• Most are managed care plans
• Floor of benefits traditional Parts A and B
• No need for Medigap policies (plans not allowed
  to sell them)
• Must have Part A Part B. Pay Part B premium to
  Medicare may have to pay additional for
  additional benefits

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Medicare Advantage Rationale

• Premise as efficiency experts, managed care
  could wring waste out of system and use market
  size to negotiate better provider prices

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Medicare Part D(Current prescription drug
coverage under Part B)

• Some antigens
• Injectable drug for osteoporosis under home
  health benefit
• Epoetin alfa for ESRD patients
• Hemophilia clotting factors
• Most injectables given by a licensed practitioner
• Immunosuppresives for transplant patients
• Oral cancer drugs with parenteral counterparts
• Some oral antinausea drugs

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Medicare Part D costs (beginning 2006)
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Part D Doughnut