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HCA 701: Paying for Health Care

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HCA 701: Paying for Health Care Private Insurance, Medicare, Medicaid & Managed Care RESOURCES NEEDED TO MAINTAIN A HEALTH CARE DELIVERY SYSTEM Payment sources and ... – PowerPoint PPT presentation

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Title: HCA 701: Paying for Health Care


1
HCA 701 Paying for Health Care
  • Private Insurance, Medicare, Medicaid Managed
    Care

2
RESOURCES NEEDED TO MAINTAIN A HEALTH CARE
DELIVERY SYSTEM
Financing
Health Care Delivery System
Technology Supplies
Healthcare Professionals
Facilities
Source Williams and Torrens, Introduction to
Health Services, 2002
3
Payment sources and where the money goes
  • Hospital care 33
  • Physician care 23
  • Nursing home care 9
  • Prescription drugs 9
  • Other spending 26

4
Health Insurance vs. Other Insurance
  • Other Insurance
  • Loss is to be avoided
  • Losses are intended to be independent events
  • Loss should be something for which we cant
    adequately budget
  • Health Insurance
  • Ill health cant be avoided
  • Many illnesses imply a great degree of dependency
    among the insured losses
  • First dollar base / major medical health plans
    violate this tenet.

5
Taxonomies of Health Insurance
  • Basic employee coverage
  • The second taxonomy includes the type of
    insurance provided
  • Commercial carriers
  • Blue Cross/Blue Shield
  • Self funded plans
  • Cost shifting to private plans
  • Cost shifting to uninsured
  • Funding mechanism

6
Increases in Health Insurance Premiums compared
to other Indicators
7
of Firms Offering Health Benefits, by Firm Size
8
Health Maintenance Organizations
  • Began in 1929
  • HMO Act of 1973
  • Growth has slowed somewhat due to more enrollment
    in PPOs
  • Guarantee provision of specific services

9
Medicare
  • Title XVIII of the Social Security Act, "Health
    Insurance for the Aged and Disabled" is commonly
    known as Medicare began in 1966.
  • Elderly aged 65 and over
  • Disabled individuals entitled to Social Security
    benefits
  • End stage renal disease.

10
Medicare Part A Coverage (Hospital Insurance)
  • 90 days of inpatient care in a benefit period
  • No limit to number of benefit periods
  • Use of Medigap (about 75 of beneficiaries)
  • Lifetime reserve of 60 days of care once 90 days
    are exhausted
  • 100 days of post-hospitalization in skilled
    nursing facility (or rehab)
  • Home health agency benefits

11
Part B Supplementary Medicare
  • 95 beneficiaries enrolled in Part B
  • Coverage optional
  • Requires beneficiary to meet set deductibles
    (Medicaid programs pay premiums for qualified
    Medicaid enrollees who qualify for Medicare)

12
Medicare Provider Reimbursement
  • Hospitals
  • Physicians
  • Beneficiaries can join Medicare HMOs
  • Catalyst system for new prescription drug benefit
    of Medicare
  • Private insurance participate in supplemental
    policies (most include managed care plans)

13
Medicare Regulatory Initiatives
  • Tax Equity and Fiscal Responsibility Act (TEFRA)
  • Prospective Payment System creates DRGs
  • Resource based relative value scale (RBRVS)

14
Medicare Prospective Payment System
  • Standardized payment amount
  • DRG weights
  • Outliers
  • Quality Indicators
  • Churning multiple admissions for same patient
    with same diagnosis
  • Skimming taking more profitable less severely
    ill
  • Reducing length of stay, procedures, etc which
    may affect morbidity and mortality.
  • Financial performance

15
Medicare Prescription Drug, Improvement and
Modernization Act of 2003
  • Allows elderly and disable beneficiaries to
    enroll in private plans that contract with
    Medicare for drug benefit.
  • Two types of plans
  • Prescription Drug Plan (PDP)
  • Medicare Advantage (MA)
  • Plan is an enticement to get more enrollees in
    Medicare Managed Care
  • Beneficiaries must pay monthly premium and
    deductible

16
Medicare Rx Drug Benefit
  • HHS expects 29.3 million to enroll in Medicare
    drug plans
  • 10.9 million beneficiaries will receive
    low-income subsidies
  • 9.8 million will have drug benefits through their
    employers

17
Drug Benefit Cost Sharing
2006 2010 2014
Average monthly premium 32.20 48.49 64.26
Annual deductible 250 331 437
Coverage gap 2,850 3,774 4,984
18
Medicare Rx Drug Benefit
19
U.S. Medicaid Enrollment (A Federal Perspective)
  • The largest health insurance program in the
    United States.
  • Provides coverage for more than 50 million poor
    and disabled Americans.
  • Spending is in excess of 300 billion a year.
  • Accounts for 20 percent of national health care
    spending.
  • Without it, the ranks of Americas uninsured
    would swell to more than 90 million, 1 of every 3
    citizens.

20
Medicaid
  • Enacted with Medicare as Title 19 of the Social
    Security Act in 1965
  • Joint program financed between the Federal and
    State Governments through use of matching funds
    for
  • Categories of individuals that could be covered
  • Categories of benefits that could be covered
  • Today, 35 million people in low-income families,
    predominately children and pregnant women.

21
Medicaid
  • Dual-Eligibles Supplements Medicare providing
    prescription drugs and long-term care services
    for over 6 million low-income Medicare
    beneficiaries
  • Guaranteed entitlement to states and to
    individuals.
  • States entitled to Federal financing when they
    cover the populations eligible for coverage
    services they expend state dollars for on behalf
    of that population,
  • Entitlement to individuals through automatic
    income eligibility
  • No enrollment caps or limits on the coverage.
  • Medicaid accounts for 43-44 of all Federal
    dollars that go to states in the form of grants
    and aid.

22
Differences in Eligibility by State
  • Eligibility for services differ State by State in
    amount, duration, or scope of services
  • State legislatures may change Medicaid
    eligibility, services, and/or reimbursement
    during the year.
  • Medicaid consists of 56 distinct state-level
    programs with federal guidelines, but
    administered state agencies

23
Minimum Eligibility Requirements
  • Must meet aid to Families with Dependent Children
    (AFDC) or--at State option--more liberal
    criteria.
  • Children under age 6 whose family income is at or
    below 133 percent of the Federal poverty level
    (FPL).
  • Pregnant women whose family income is below
    133 percent of the FPL (services to these women
    are limited to those related to pregnancy,
    complications of pregnancy, delivery, and
    postpartum care).
  • Supplemental Security Income (SSI) recipients in
    most States
  • Recipients of adoption or foster care assistance
    under Title IV
  • Special protected groups
  • All children born after September 30, 1983 who
    are under age 19, in families with incomes at or
    below the FPL.
  • Certain Medicare beneficiaries

24
Medicaid Funding Match
  • Federal government matches state Medicaid
    spending for medical assistance state per capita
    income formula.
  • Federal contribution ranged from 50 77 cents of
    every state dollar spent on medical assistance in
    fiscal year 2004, including
  • Medicaid administrative costs (50 federal match)
  • Skilled professional medical personnel engaged in
    program integrity activities (as much as 75)

25
Nevada Medicaid Enrollment (A State Perspective)
  • Adults with children
  • Children make up the largest portion of the
    population
  • The elderly and disabled recipients
  • Account for 75 of total expenditures.
  • Biggest increase in expenditures, but smallest
    increase in enrollment

26
Nevada Medicaid Enrollment
27
Recent Federal Actions
  • Federal GAO placed the Medicaid Program on the
    2003 list of programs at high risk for fraud,
    waste, abuse and mismanagement.
  • The GAO specifically recommended Congress curb
    state financing schemes, such as
    Intergovernmental Transfers (IGTs).

28
Medicaid The Impact on Business
  • There is a growing impact on the General Fund.
  • The impact is significant because it means far
    fewer resources available for other state funded
    programs that are essential for commerce and
    economic growth.
  • Medicaid siphons dollars from education and
    transportation
  • Economic multiplier effect.

29
Medicaids Impact Health Insurance
  • National trends propose eligibility limits and/or
    reducing providers rate of payment.
  • Both approaches increase the amount of
    uncompensated care and costs are allocated to
    private health insurance premiums through cost
    shifting.
  • The affordability of providing health care
    benefits to employees in the private sector
    creates a burden on business.

30
The Balanced Budget Act of 1997
  • Subtitle H Medicaid
  • The law contains a dramatic expansion in state
    authority with respect to the use of managed
    care.
  • It enables states to require most Medicaid
    beneficiaries to enroll in managed care
    organizations (MCOs) without obtaining a waiver.

31
Waivers Managed Care Growth
  • Managed care programs seek to enhance access to
    quality care in a cost-effective manner.
  • Waivers may provide the States with greater
    flexibility in the design and implementation of
    their Medicaid managed care programs.
  • Waiver authority under sections 1915(b) and 1115
    of the Social Security Act is an important part
    of the Medicaid program.
  • Section 1915(b) waivers allow States to develop
    innovative health care delivery or reimbursement
    systems.
  • Section 1115 waivers allow Statewide health care
    reform experimental demonstrations to cover
    uninsured populations and to test new delivery
    systems without increasing costs.
  • Finally, the BBA provided States a new option to
    use managed care.
  • The number of Medicaid beneficiaries enrolled in
    some form of managed care program is growing
    rapidly, from 14 percent of enrollees in 1993 to
    58 percent in 2002.

32
Medicaid Managed Care Program Successes
  • Managed care is the prevalent delivery system in
    Medicaid, with 59 percent of beneficiaries
    receiving some or all care through managed care
    instead of fee-for-service.
  • Forty-eight states, the District of Columbia and
    Puerto Rico operate Medicaid managed care
    programs, with about 23.1 million beneficiaries
    enrolled in 2002, an increase of over two million
    since 2001.
  • Enhancing access to providers and emphasizing
    preventive and routine care, health plans have
    successfully improved the quality of care
    received by enrollees in the Medicaid managed
    care program.
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