NATIONAL HEALTH EXPENDITURES

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• NATIONAL HEALTH EXPENDITURES

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• HEALTH CARE SPENDING IN THE UNITED STATES IS
  PROJECTED TO REACH 2.5 TRILLION IN 2009,
• 4.3 TRILLION IN 2018, UP FROM 1.3 TRILLION IN
  2000.
• CURRENT SPENDING ABOUT 2.7 TRILLION DOLLARS.

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Comparison of NHE/GDP
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• Some really pretty color charts

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Percentage of National Health Spending
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Source of Dollars for National Health Spending
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Where the money goes
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Where the money goes - percentage
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Total National Health Expenditures, 20082017
Projected and Various Scenarios
Dollars in trillions
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(No Transcript)
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• INTERNATIONAL COMPARISON
• 2009 U.S. SPENT 17.3 OF GDP ON HEALTH
• GERMANY SPENT 10.7
• CANADA SPENT 9.7

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• GROWTH IN HEALTH CARE SPENDING IN THE UNITED
  STATES IS PROJECTED TO BE 5.7 IN 2009.
• AVERGE ANNUAL GROWTH IS EXPECTED TO REMAIN THE
  SAME RATE THROUGH 2017.

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• AS A PERCENTAGE OF GROSS DOMESTIC PRODUCT (GDP),
  HEALTH CARE SPENDING IS PROJECTED TO INCREASE TO
  17.6 PERCENT IN 2009. IT IS EXPECTED THAT HEALTH
  CARE SPENDING WILL REACH OVER 4.3 TRILLION AND
  BE 19.5 OF GDP. (2007-17)

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• THE GROWTH IN PRESCRIPTION DRUG SPENDING IS
  EXPECTED TO DECELERATE FROM 17.3 PERCENT IN 2000
  TO 10.1 PERCENT IN 2011. PRESCRIPTION DRUGS WILL
  STILL REMAIN THE FASTEST GROWING HEALTH SECTOR.

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• IN JUST THREE YEARS, THE MEDICARE AND MEDICAID
  PROGRAMS WILL ACCOUNT FOR 50 OF ALL NATIONAL
  HEALTH SPENDING.

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• MEDICARES HOSPITAL INSURANCE TRUST FUND IS
  EXPECTED TO PAY OUT MORE IN HOSPITAL BENEFITS
  THAN IT RECEIVES IN TAXES AND OTHER DEDICATED
  REVENUES

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• NURSING HOME SPENDING IS PROJECTED TO ACCELERATE
  MORE RAPIDLY THAN PREVIOUSLY ANTICIPATED.

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• INSURANCE PREMIUMS FOR EMPLOYER-BASED HEALTH
  INSURANCE ROSE 7.7 IN 2006
• SMALL EMPLOYERS 8.8
• BUSINESS WITH LESS THAN 24 EMPLOYEES 10.5

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• SINCE 2000 EMPLOYMENT BASED PREMIUMS HAVE
  INCREASED BY 87.
• IN CONTRAST, INFLATION OVER THE SAME PERIOD
  ACCUMULATED AT 18
• HEALTH INSURANCE PREMIUMS ARE THE FASTEST GROWING
  COMPONENT FOR EMPLOYERS AND MAY OVERTAKE PROFITS
  BY 2008.

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• THE AVERAGE EMPLOYEE CONTRIBUTION TO COMPANY
  BASED HEALTH INSURANCE HAS INCREASED 143 SINCE
  2000.
• AVERAGE OUT-OF-POCKET COSTS FOR COPAYMENTS AND
  DEDUCTIBLES HAVE INCREASED BY 115 SINCE 2000

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• MEDICAL INFLATION WILL INCREASE.

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• COMMERCIAL MANAGED CARE WILL SEE SLOWER
  MEMBERSHIP GROWTH AND FEWER MEDICAL CONTROLS
  WHICH WILL CONTRIBUTE TO HIGHER HEALTH CARE
  COSTS.

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• AFTER 2002, GOVERNMENT SPENDING WILL ACCELERATE
  AS AGING BABY BOOMERS DEMAND MORE GOVERNMENT
  SUPPORT FOR THEIR CARE.

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• THE PRIVATE SECTORS ABILITY TO HOLD DOWN HEALTH
  CARE COSTS THROUGH MANAGED CARE HAS REACHED A
  LIMIT.

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• COST SAVINGS FROM MANAGED CARE RESULTED PRIMARILY
  FROM LOWER PAYMENTS TO PROVIDERS, NOT BY
  IMPROVING HEALTH STATUS AND REDUCING UTILIZATION.

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• FINANCIAL STRUGGLES EXPERIENCED BY HMOS WILL
  RESULT IN HIGH COSTS FOR HEALTH CARE COVERAGE.

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• CONTAINING DRUG COSTS WILL BE ONE OF THE GREATEST
  CHALLENGES THE HEALTH CARE SYSTEM WILL FACE.

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• PRESCRIPTION DRUG COSTS WILL CONTINUE TO
  ESCALATE, FUELED BY DIRECT MARKETING TO CONSUMERS
  AND NEW DRUGS TO IMPROVE LIFESTYLE AND ADDRESS
  CHRONIC CONDITIONS OF AN AGING POPULATION.

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• THE NEW MEDICARE PRESCRIPTION PLAN HAS BEEN
  INTRODUCED TO THE PUBLIC WITH MIXED REVIEWS. THE
  COST FIGURES PROVIDED ARE SUSPECT. A LARGE
  QUESTION REMAINS ABOUT SENIORS UNDERSTANDING THE
  NEW SYSTEM AND LEARNING HOW TO USE IT.

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• RISING HEALTH CARE COSTS REDUCE THE AFFORDABILITY
  OF HEALTH CARE COVERAGE FOR ALL CONSUMERS.

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• EMPLOYERS WILL SHIFT MORE OF THE COST OF HEALTH
  CARE TO EMPLOYEES SINCE EMPLOYEES ABILITY TO
  NEGOTIATE LOWER PRICES WITH MANAGED CARE
  COMPANIES WILL BE LIMITED IN LIGHT OF THE
  FINANCIAL LOSSES INCURRED BY THE PLANS.

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• SOME EMPLOYERS WILL DECIDE NOT TO OFFER COVERAGE.
  THE END RESULT WILL BE MORE UNINSURED CITIZENS.

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• IMPACT OF RISING HEALTH CARE COSTS.
• PRIMARY REASON PEOPLE DO NOT HAVE HEALTH
  INSURANCE
• 23 OF THE INSURED REPORT THAT LIFESTYLES HAVE
  BEEN DRAMATICALLY CHANGED DUE TO MEDICAL BILLS.

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• ONE IN FOUR AMERICANS HAVE HAD DIFFICULTY IN
  PAYING FOR MEDICAL CARE.
• 50 OF ALL BANCRUPTCY FILINGS PARTIALLY RESULTANT
  FROM MEDICAL EXPENSES.

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• IF ONE MEMBER OF A FAMILY IS UNINSURED AND HAD
  MEDICAL BILLS, IT CAN EFFECT THE ECONOMIC
  STABILITY OF THE WHOLE FAMILY.

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• ALL OF THESE PROJECTIONS AND ESTIMATES OF THE
  FUTURE MAY BE CHANGED WITH THE ELECTION OF A NEW
  ADMINISTRATION IN THE NOVEMBER ELECTION OF 2008.
• STILL UNDER CONSIDERATION AS WE SPEAK

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• EXPERTS AGREE THAT OUR HEALTH CARE SYSTEM IS
  RIDDLED WITH INEFFICIENCIES, EXCESSIVE
  ADMINISTRATIVE EXPENSES, HIGH PRICES, POOR
  MANAGEMENT,
• AND INAPPROPRIATE CARE, WASTE, AND FRAUD.

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• End of Presentation for 6th Period Lecture for
  September 26TH 2011
• QUESTIONS?
• DISCUSSION?

39

• MEDICARE IN DETAIL

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• MEDICARE IS A FEDERAL HEALTH INSURANCE PROGRAM
  WHICH PROVIDES MEDICAL COVERAGE FOR PEOPLE 65 AND
  OLDER, FOR CERTAIN DISABLED PEOPLE, AND SOME
  PEOPLE WITH END-STATE RENAL DISEASE.

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• THE PROGRAM BEGAN IN JULY OF 1966 AND WAS
  ESTABLISHED BY CONGRESS THROUGH TITLE XVIII OF
  THE FEDERAL SOCIAL SECURITY ACT.

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• MEDICARE IS MANAGED BY THE CENTERS FOR MEDICARE
  AND MEDICAID SUPPORT (FORMERLY KNOWN AS HCFA),
  WHICH IS A BRANCH OF THE HEALTH AND HUMAN
  SERVICES (HHS) OF THE U.S. FEDERAL GOVERNMENT.

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• HOW BIG IS THE MEDICARE PROGRAM?

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• IN 2007MEDICARE
• PROCESSED MORE THAN 900 MILLION CLAIMS

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• PAID OUT MORE THAN 330 BILLION IN BENEFITS
• HAD 42.5 MILLION BENEFICIARIES RECEIVING BENEFITS

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• WHAT IS MEDICARE PART A?

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• PART A OF THE MEDICARE PROGRAM IS HOSPITAL
  INSURANCE. THIS PROGRAM IS FINANCED BY

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• TAXES PAID BY EMPLOYERS AND EMPLOYEES THROUGH THE
  FICA MECHANISM.
• SELF-EMPLOYED INDIVIDUAL CONTRIBUTIONS.

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• RAILROAD WORKERS, THEIR EMPLOYERS THROUGH THE
  RRA.
• ORGANIZATIONS WHICH ADMINISTER MEDICARE PART A
  ARE CALLED FISCAL INTERMEDIARIES

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• PART A COVERAGE HELPS PAY FOR (NOT LIMITED TO)
• INPATIENT HOSPITAL CARE.
• INPATIENT CARE IN A SKILLED NURSING FACILITY
  FOLLOWING A COVERED HOSPITAL STAY.

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• HOME HEALTH CARE.
• HOSPICE CARE.

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• WHAT IS MEDICARE PART B?

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• PART B OF THE MEDICARE PROGRAM IS MEDICAL
  INSURANCE. FINANCING FOR THIS PART OF THE
  PROGRAM IS OBTAINED FROM
• PREMIUM PAYMENTS BY ENROLLEES.

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• OCCASIONAL CONTRIBUTIONS FROM THE FEDERAL
  GOVERNMENT.
• INTEREST EARNED ON THE PART B TRUST FUND.

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• ORGANIZATIONS WHICH ADMINISTER MEDICARE PART B
  ARE CALLED CARRIERS.
• PART B COVERAGE HELPS TO PAY FOR (NOT LIMITED TO)

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• MEDICALLY NECESSARY DOCTORS SERVICES PROVIDED IN
  A VARIETY OF MEDICAL SETTINGS.
• CHARGES FROM LIMITED LICENCED PRACTITIONERS SUCH
  AS INDEPENDTLY PRACTICING PHYSICAL THERAPISTS,
  ETC.

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• WHAT IS MEDICARE PART C?

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• A MEDICARE BENEFICIARY MAY CHOOSE TO HAVE COVERED
  ITEMS AND SERVICES FURNISHED TO HIM/HER THROUGH A
  MANAGED CARE PLAN INSTEAD OF THE TRADITIONAL
  MEDICARE PROGRAM.

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• MEDICARE-CHOICE OR MEDICARE PART C IS A NEW
  SET OF HEALTH CARE OPTIONS CREATED BY THE
  BALANCED BUDGET ACT OF 1997.

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• CHOICES INCLUDE
• HEALTH MAINTENANCE ORGANIZATIONS (HMO)
• POINT OF SERVICE (POS) OPTION

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• PROVIDER SPONSORED ORGANIZATION (PSO)
• PREFERRED PROVIDER ORGANIZATION (PPO)

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• WHAT IS MEDICARE PART D?
• Part D is the new prescription benefit provided
  under Medicare. It is very new, and has a
  multiple private insurance plans that are
  involved.

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• THE BIG ISSUE IS THE SO-CALLED
• DOUGHNUT HOLE AND IS AN ISSUE IN THE CURRENT
  REFORM LEGISLATION PROPOSALS.

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• WHO IS ELIGIBLE FOR MEDICARE?

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• THE AGED 65 YEARS OLD OR OLDER AND IS ELIGIBLE
  FOR MONTHLY SOCIAL SECURITY ALLOTMENTS.

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• THE DISABLED ONE IS ENTITLED TO SOCIAL
  SECURITY, RAILROAD RETIREMENT OR OTHER FEDERAL
  PROGRAMS BY VIRTUE OF A DISABILITY.

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• THOSE WITH END-STAGE RENAL DISEASE INDIVIDUALS
  WHO RECEIVE DIALYSIS OR A KIDNEY TRANSPLANT FOR
  END-STAGE RENAL DISEASE.

68

• DO MEDICARE BENEFICIARIES HAVE ANY SPECIAL
  RIGHTS?

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• PROTECTION WHEN THEY GET HEALTH CARE SERVICES
• ASSURED ACCESS TO NEEDED HEALTH CARE SERVICES

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• PROTECTION AGAINST UNETHICAL PRACTICES
• THE RIGHT TO RECEIVE EMERGENCY CARE WITHOUT PRIOR
  APPROVAL

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• THE RIGHT TO APPEAL THE ORIGINAL MEDICARE PLANS
  DECISION ABOUT PAYMENT/SERVICES PROVIDED.
• THE RIGHT TO INFORMATION ABOUT ALL TREATMENT
  OPTIONS.

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• THE RIGHT TO KNOW HOW THEIR MEDICARE HEALTH PLAN
  PAYS ITS DOCTORS

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• THE BBA OF 1997 GIVES THE BENEFICIARY THE RIGHT
  TO REQUEST AND RECEIVE AN ITEMIZED STATEMENT OF
  SERVICES PERFORMED.

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• MEDICAID

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• THE MEDICAID PROGRAM IS A JOINT FEDERAL/STATE
  HEALTH PLAN FOR BENEFICIARIES THAT ARE NOT ABLE
  TO FINANCIALLY OBTAIN HEALTH INSURANCE.

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• FOR PHYSICIANS WHO ACCEPT MEDICAID ASSIGNMENT,
  THE TOTAL MEDICARE AND MEDICAID PAYMENTS
  REPRESENT PAYMENT IN FULL FOR SERVICES RENDERED.

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• REIMBURSEMENT

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• IN GENERAL, THE MEDICARE PROGRAM IS DESIGNED ONLY
  TO PROVIDE PAYMENT FOR SERVICES WHICH ARE
  CONSIDERED TO BE MEDICALLY REASONABLE AND
  NECESSARY TO THE OVERALL DIAGNOSIS AND TREATMENT
  OF THE PATIENTS CONDITION.

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• FOR EVERY SERVICE BILLED, THE PROVIDER MUST
  INDICATE THE SPECIFIC SIGN, SYMPTOM, OR PATIENT
  COMPLAINT NECESSITATING THE SERVICE.

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• ROUTINE/PREVENTATIVE SERVICES ARE GENERALLY
  CONSIDERED SCREENING SERVICES AND ARE NOT COVERED.

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• FRAUD AND ABUSE

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• THE ESTIMATED COSTS FOR MEDICARE FRAUD EXCEED 33
  BILLION.
• SOME EXPECT IT TO REACH 70 BILLION.

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• THE BILLIONS OF TAXPAYER DOLLARS LOST TO HEALTH
  CARE FRAUD ARE THE FINANCIAL RESOURCES THAT
  SHOULD BE USED TO PAY FOR SERVICES THAT KEEP
  BENEFICIARIES IN GOOD HEALTH.

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• THE MEDICARE PROGRAM HAS BECOME BIG BUSINESS AND
  HAS ATTRACTED AS BIG BUSINESSES SOMETIME DO A
  FEW UNSAVORY CHARACTERS TAKE ADVANTAGE.

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• IT IS BECOMING VERY IMPORTANT THAT PROVIDERS TO
  BE CAUTIOUS.

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• WHAT IS FRAUD?

87

• FRAUD IS DEFINED AS KNOWINGLY AND WILLFULLY
  EXECUTING, OR ATTEMPTING TO EXECUTE, A SCHEME OR
  ARTIFACE TO DEFRAUD ANY HEALTH CARE BENEFIT
  PROGRAM OR TO OBTAIN BY MEANS OF FALSE AND
  FRAUDULENT PRETENSES, REPRESENTATIONS, OR
  PROMISES, ANY OF THE MONEY OR PROPERTY OWNED BY,
  OR UNDER THE CUSTODY OR CONTROL OF, ANY HEALTH
  CARE BENEFIT PROGRAM.

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• EXAMPLES OF FRAUD

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• BILLING FOR SERVICES NOT TENDERED
• SOLICITING, OFFERING, OR RECEIVING A KICKBACK,
  BRIBE, OR REBATE

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• USING AN INCORRECT OR INAPPROPRIATE PROVIDER
  NUMBER IN ORDER TO BE PAID (E.G. USING A DECEASED
  PROVIDERS NUMBER)

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• SIGNING BLANK RECORDS OR CERTIFICATION FORMS THAT
  ARE USED BY ANOTHER ENTITY TO OBTAIN MEDICARE
  PAYMENT.

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• SELLING OR SHARING PATIENTS MEDICARE NUMBERS SO
  FALSE CLAIMS CAN BE FILED.

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• FALSIFYING INFORMATION ON APPLICATIONS, MEDICAL
  RECORDS, BILLING STATEMENTS, AND/OR COST REPORTS
  OR ON ANY STATEMENT FILED WITH THE GOVERNMENT

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• MISREPRESENTING AS MEDICALLY NECESSARY,
  NON-COVERED SERVICES BY USING INAPPROPRIATE
  PROCEDURE OR DIAGNOSIS CODES.

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• WHAT IS ABUSE?

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• ABUSE MAY, DIRECTLY OR INDIRECTLY, RESULT IN
  UNNECESSARY COSTS TO THE MEDICARE OR MEDICAID
  PROGRAM, IMPROPER PAYMENT, OR PAYMENT FOR
  SERVICES WHICH FAIL TO MEET PROFESSIONALLY
  RECOGNIZED STANDARDS OF CARE, OR THAT ARE
  MEDICALLY UNNECESSARY.

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• EXAMPLES OF ABUSE

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• USING PROCEDURE OR REVENUE CODES THAT DESCRIBE
  MORE EXTENSIVE SERVICES THAN THOSE ACTUALLY
  PERFORMED.
• ROUTINELY SUBMITTING DUPLICATE CLAIMS.

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• BILLING FOR SERVICES GROSSLY IN EXCESS OF THOSE
  NEEDED BY PATIENTS

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• ACTIONS AGAINST PROVIDERS WHO COMMIT FRAUD OF
  ABUSE

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• BECAUSE IT IS A CRIME TO DEFAUD THE UNITED STATES
  GOVERNMENT OR ANY OF ITS PROGRAMS, AN INDIVIDUAL
  MAY BE SENT TO PRISON, FINED OR BOTH.

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• CRIMINAL CONVICTIONS USUALLY INCLUDE RESTITUTION
  AND SIGNIFICANT FINES.
• PROVIDERS MAY LOSE THEIR LICENSES.

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• CONVICTION MANDATORILY RESULTS IN EXCLUSION FROM
  MEDICARE AND OTHER FEDERAL HEALTH PROGRAMS FOR A
  SPECIFIC LENGTH OF TIME.

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• ACTIONS RESULTING FROM KICKBACKS, BRIBES, FALSE
  STATEMENTS, AND REBATES MAY RESULT IN BEING FOUND
  GUILTY AS A FELON AND UPON CONVICTION BE FINED
  NOT MORE THAN 50,000 PER VIOLATION OR IMPRISONED
  FOR NOT MORE THAN FIVE YEARS PER VIOLATION, OR
  BOTH.

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• WELFARE REFORM

106

• A POLICY ISSUE UNINTENDED CONSEQUENCES OF AS OF
  1997, APPROXIMATELY 675,000 LOW-INCOME PEOPLE HAD
  LOST MEDICAID COVERAGE AND BECOME UNINSURED DUE
  TO WELFARE REFORM.

107

• IT IS NOW GENERALLY ACCEPTED THAT WELFARE REFORM
  HAS CONTRIBUTED TO THE GROWTH IN THE NUMBER OF
  AMERICANS WITHOUT HEALTH INSURANCE.

108

• CHILDREN ACCOUNT FOR TWO-THIRDS OF THOSE WHO LOST
  MEDICAID COVERAGE DUE TO WELFARE REFORM.

109

• THE DECLINE IN CHILDRENS INSURANCE COVERAGE,
  HOWEVER, HAS BEEN OFFSET TO SOME EXTENT BY THE
  IMPLEMENTATION OF THE CHILDRENS HEALTH INSURANCE
  PROGRAM IN SOME STATES.

110

• PARENTS WHO HAVE MOVED FROM WELFARE TO WORK OFTEN
  HAVE JOBS THAT DO NOT PROVIDE COVERAGE OR HAVE
  INCOMES SO LOW THAT THEY ARE UNABLE TO PURCHASE
  THEIR OWN COVERAGE.
• THIS REMAINS A PROBLEM.

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• MEDICARE SOLVENCY
• MEDICARE TRUSTEES MEDICARE WILL BE BANKRUPE IN
  THE YEAR 2041 AT WHICH POINT IT WILL BE ABLE TO
  PAY ONLY ABOUT 75 OF PROMISED BENEFITS

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• END OF LECTURE FOR September 28th, 2011 6th
  Period Lecture
• QUESTIONS?
• DISCUSSION?

113
HEALTH INSURANCE
114

• Add slide from Health 2000

115

• HEALTH INSURANCE PROVIDES PEOPLE WITH A WAY TO
  PROTECT THEMSELVES AGAINST FINANCIAL CATASTROPHE
  AND TO ASSURE THEMSELVES AND THEIR FAMILIES OF
  ACCESS TO THE HEALTH CARE SYSTEM.

116

• PRIVATE INSURANCE COMPANIES DETERMINE PREMIUMS
  THROUGH ACTUARIAL ASSESSMENTS OF THE RISK
  ASSOCIATED WITH THE INSURED GROUP.

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• RISING HEALTH CARE COSTS CONTINUE TO BE THE MOST
  PRESSING PROBLEM OF THE HEALTH CARE SYSTEM.

118

• MOST COMMERCIAL HEALTH INSURANCE COMPANIES
  PROVIDE TWO BASIC CATEGORIES OF COVERAGE
• MEDICAL EXPENSE INSURANCE AND DISABILITY INCOME
  INSURANCE.

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• MEDICAL EXPENSE INSURANCE PROVIDES BROAD BENEFITS
  THAT CAN COVER VIRTUALLY ALL EXPENSES CONNECTED
  WITH HOSPITAL AND MEDICAL CARE AND RELATED
  SERVICES.

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• DISABILITY INCOME INSURANCE PROVIDES PERIODIC
  PAYMENTS WHEN THE INSURED IS UNABLE TO WORK AS A
  RESULT OF SICKNESS OR INJURY.

121

• PLANS ADMINISTERED BY EMPLOYERS, LABOR

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• HMO IS BOTH THE INSURER AND PROVIDER IN BEING
  OBLIGATED TO FURNISH NEEDED CARE AS SPECIFIED IN
  THE SUBSRIBERS CONTRACT.

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• SELF-INSURANCE PLAYS AN IMPORTANT ROLE IN THE
  PRIVATE COVERAGE SYSTEM. EMPLOYERS, NOT
  INSURERS, ASSUME THE RISK.

124

• UNIONS, FRATERNAL SOCIETIES, COMMUNITIES, AND BY
  RURAL AND CONSUMER HEALTH COOPERATIVES OFTEN MAKE
  INSURANCE AVAILABLE TO SPECIFIC GROUPS OF PEOPLE
  WHO ARE NOT COVERED UNDER CONVENTIONAL PLANS.

125

• PRIVATE HEALTH INSURANCE

126

• HOSPITAL/MEDICAL INSURANCE
• HOSPITAL EXPENSE COVERAGE PROVIDES SPECIFIC
  BENEFITS FOR DAILY HOSPITAL ROOM AND BOARD AND
  USUAL HOSPITAL SERVICES AND SUPPLIES DURING
  HOSPITAL CONFINEMENT.

127

• MAJOR MEDICAL EXPENSE INSURANCE
• MAJOR MEDICAL COVERAGE OFFERS BROAD AND
  SUBSTANTIAL PROTECTION FOR LARGE, UNPREDICTABLE
  MEDICAL EXPENSES. IT COVERS A WIDE RANGE OF
  MEDICAL CHARGES WITH FEW INTERNAL LIMITS AND A
  HIGH OVERALL MAXIMUM BENEFIT.

128

• MEDICARE SUPPLEMENT POLICY
• MEDICARE SUPPLEMENTAL INSURANCE, OFTEN REFERRED
  TO AS A MEDIGAP OR MEDSUP POLICY, IS ACCIDENT
  AND SICKNESS INSURANCE DESIGNED PRIMARILY AS A
  SUPPLEMENT FOR HOSPITAL, MEDICAL, OR SURGICAL
  EXPENSES FOR PERSONS COVERED BY MEDICARE.

129

• DISABILITY INCOME INSURANCE
• DISABILITY INCOME COVERAGE REPLACES INCOME LOST
  BY AN EMPLOYEE WHEN INJURY OR ILLNESS PREVENTS
  THE INDIVIDUAL FROM WORKING.

130

• DENTAL EXPENSE INSURANCE
• DENTAL EXPENSE INSURANCE REIMBURSES FOR EXPENSES
  OF DENTAL SERVICES AND SUPPLIES AND ENCOURAGES
  PREVENTATIVE CARE.

131

• PLANS NORMALLY INCLUDE SUBSTANTIAL CONSUMER
  COPAYMENTS, ALTHOUGH COPAYMENTS MAY BE LOWER FOR
  PREVENTATIVE SERVICES.

132

• LONG TERM CARE INSURANCE
• LONG TERM CARE INSURANCE CONTINUES BROAD-RANGED
  MAINTENANCE AND HEALTH SERVICES TO THE
  CHRONICALLY ILL OR DISABLED.

133
HIPAA

• The Health Insurance Portability and
  Accountability Act of 1996

134

• GOALS AND OBJECTIVES OF HIPAA.
• 1. Streamline industry inefficiencies
• 2. Detect and prosecute fraud
• 3. Reduce paperwork
• 4. Enable workers to change jobs even with
  pre-existing medical conditions

135

• 2. Reduce healthcare fraud and abuse
• 3. Enforce standards for health information
• 4. Guarantee security and privacy of health
  information

136

• HIPAA Organization
• TITLE I
• Guarantees health insurance access, portability
  and renewal.
• Guarantees coverage and renewal
• Eliminates some pre-existing condition exclusions
• Prohibits discrimination based on health status.

137

• TITLE II
• Preventing healthcare fraud and abuse
• Fraud and abuse controls
• Administration Simplification (AS)
• Medical Liability Reform

138

• TITLE III
• Medical Savings Accounts
• Health Insurance tax deduction for self-employed

139

• TITLE IV
• Enforcement of group health plan provisions

140

• TITLE V
• Revenue offset provisions

141

• Rules that have been implemented
• Standards for privacy of individually
  identifiable Health Information
• National Provider identifier
• Employer identifier
• Security and Electronic Signatures

142

• National Individual Identifier
• Has run afoul of protests from citizens about
  big brother having the ability to infringe on
  the privacy of the individual

143

• PROTECTING THE PRIVACY OF PATIENTS HEALTH
  INFORMATION
• Access to Medical Records
• Notice of Privacy Practices
• Limits on the Use of Personal Medical Information

144
The government is watching you!
145

• THE BLUES
• A LITTLE BIT OF HISTORY

146

• THE EARLY DAYS OF BLUE CROSS AND BLUE SHIELD MARK
  THE BIRTH OF PREPAID HEALTH CARE COVERAGE IN
  AMERICA.

147

• BLUE SHIELD PLANS WERE ESTABLISHED TO COVER
  PHYSICIANS SERVICES.

148

• NOW, BOTH BRANDS REPRESENT THE FULL SPECTRUM OF
  HEALTH CARE COVERAGE.

149

• IN NEARLY EVERY STATE, BCBS PLANS HAVE EVOLVED
  INTO SINGLE CORPORATIONS OR COOPERATE CLOSELY.
  IN A FEW LOCATIONS, THEY REMAIN SEPARATE
  OPERATIONS.

150

• THE BLUE SYSTEM IS A FEDERATION OF 43
  INDEPENDENT LOCALLY OPERATED PLANS UNITED THROUGH
  MEMBERSHIP IN THE BLUE CROSS AND BLUE SHIELD
  ASSOCIATION.

151

• THE 81.5 MILLION AMERICANS SERVED BY BLUE PLANS
  REPRESENT 28.6 PERCENT OF THE U.S. POPULATION.

152

• BLUE PLANS OFFER HEALTH INSURANCE COVERAGE IN ALL
  50 STATES, THE DISTRICT OF COLUMBIA AND PUERTO
  RICO.
• THE BLUES COVER ALL SEGMENTS OF THE POPULATION,
  INCLUDING LARGE EMPLOYER GROUPS, SMALL
  BUSINESSES, INDIVIDUAL CONSUMERS AND THEIR
  FAMILIES.

153

• MORE THAN 80 PERCENT OF U.S. HOSPITALS AND
  NEARLY 100 PERCENT OF U.S. PHYSICIANS ACCEPT BLUE
  CROSS AND BLUE SHIELD CARDS.

154

• MORE THAN ¾ OF FORTUNE 100 COMPANIES AND ½ OF
  ALL FORTUNE 500 COMPANIES OFFER BLUE CROSS AND
  BLUE SHIELD TO THEIR EMPLOYEES.

155

• BLUE PLANS COLLECTIVELY PAY 111 BILLION IN
  CLAIMS EACH YEAR.

156

• KEY INITIATIVES
• FEP FEDERAL EMPLOYEE PROGRAM..THE LARGEST
  PRIVATELY UNDERWRITTEN HEALTH INSURANCE CONTRACT
  IN THE WORLD ENROLLS 4 MILLION FEDERAL
  EMPLOYEES, RETIREES, AND THEIR FAMILIES.

157

• MEDICARE IS THE LARGEST SINGLE PROCESSOR OF
  MEDICARE CLAIMS HANDLING MORE THAN 90 PER CENT
  OF ALL CLAIMS FROM HOSPITALS AND INSTITUTIONS
  (PART A) AND NEARLY 60 PERCENT OF CLAIMS FROM
  PHYSICIANS AND OTHERS (PART B)

158

• TEC TECHNOLOGY EVALUATION CENTER EXAMINES THE
  BEST SCIENTIFIC EVIDENCE TO DETERMINE THE SAFETY
  AND EFFICACY OF NEW MEDICAL PRODUCURES, DEVICES ,
  AND TECHNOLOGIES.

159

• BLUE CROSS ROOTS

160

• IN 1929, AN OFFICIAL AT BAYLOR UNIVERSITY IN
  DALLAS INTRODUCED A PLAN TO GUARANTEE SCHOOL
  TEACHERS 21 DAYS OF HOSPITAL CARE FOR 6 A YEAR.

161

• OTHERS FOLLOWED WITH SIMILAR PLANS.
• IN 1933, A PLAN IN MINNESOTO BEGAN TO USE THE
  BLUE COLORED CROSS TO IDENTIFY THE HOSPITAL CARE
  PROGRAM.

162

• BY 1939, THE BLUE CROSS SYMBOL WAS OFFICIALLY
  ADOPTED BY A COMMISSION OF THE AMERICAN HOSPITAL
  ASSOCIATION AS THE NATIONAL EMBLEM FOR PLANS THAT
  MET CERTAIN GUIDELINES.

163

• IN 1960, THE COMMISSION WAS REPLACED BY THE BLUE
  CROSS ASSOCIATION, WHICH WAS INDEPENDENT OF THE
  AMERICAN HOSPITAL ASSOCIATION.

164

• THE BLUE SHIELD CONCEPT GREW OUT OF THE LUMBER
  AND MINING CAMPS OF THE PACIFIC NORTHWEST AT THE
  TURN OF THE CENTURY.

165

• EMPLOYERS MADE ARRANGEMENTS WITH PHYSICIANS WHO
  WERE PAID A MONTHLY FEE FOR THEIR SERVICES.

166

• THESE CONTRACTS LED TO THE CREATION OF MEDICAL
  SERVICE BUREAUS COMPOSED OF GROUPS OF
  PHYSICIANS.

167

• THE FIRST WAS ORGANIZED IN 1917 IN TACOMA,
  WASHINGTON.

168

• THESE PIONEER PROGRAMS PROVIDED THE BASIS FOR THE
  FIRST MODERN BLUE SHIELD PLAN WHICH WAS FOUNDED
  IN CALIFORNIA IN 1939.

169

• IN 1948, THE BLUE SHIELD WAS REGISTERED AS A
  TRADEMARK.
• IN 1982, THE BLUE CROSS BLUE SHIELD ASSOCIATION
  WAS CREATED AS THE RESULT OF THE TWO PLANS.

170

• AND HOW BIG IS BLUE CROSS BLUE SHIELD?

171

• TOGETHER, 47 INDEPENDENT BLUE AND BLUE SHIELD
  MEMBER PLANS MAKE UP THE BLUE CROSS BLUE SHIELD
  SYSTEM.

172

• THIS SYSTEM IS COORDINATED BY THE BLUE CROSS BLUE
  SHIELD ASSOCIATION, HOWEVER, ALL MEMBER PLANS
  FUNCTION AS INDEPENDENT, LOCALLY OPERATED
  COMPANIES.

173

• COLLECTIVELY, BLUE CROSS AND BLUE SHIELD PLANS
  PROVIDE HEALTH CARE COVERAGE FOR 75 MILLION
  PEOPLE IN THE 50 STATES, THE DISTRICT OF COLUMBIA
  AND PUERTO RICO.

174

• THIS REPRESENTS 27 OF THE US POPULATION.
• BLUE CROSS AND BLUE SHIELD ASSOCIATION, WITH
  HEADQUARTERS IN CHICAGO, HAS APPROXIMATELY 800
  EMPLOYEES.

175

• THE MEMBER PLANS HAVE 150,000 EMPLOYEES
  NATIONWIDE, MAKING THE BLUES COLLECTIVELY THE
  19TH LARGEST EMPLOYER IN THE UNITED STATES.

176

• THE BLUE CROSS AND BLUE SHIELD PLANS AND THEIR
  SUBSIDIARIES COLLECTIVELY REPORTED REVENUE OF
  97.3 BILLION FOR THE YEAR ENDED DECEMBER 31,
  1999.

177

• WHILE COSTS FOR OPERATING COMMERCIAL INSURANCE
  CAN RUN AS HIGH AS 25 PERCENT, COLLECTIVELY,
  THESE BLUE CROSS AND BLUE SHIELDS PLANS
  ADMINISTRATIVE COSTS AVERAGE 11.9 PERCENT AS OF
  DECEMBER 31, 1999.

178

• COLLECTIVELY, BLUE CROSS AND BLUE SHIELD PLANS
  COMPRISE THE NATIONS LARGEST PROVIDER OF MANAGED
  CARE SERVICES. MORE THAN 52 MILLIONS PEOPLE
  ROUGHLY 1 IN 6 AMERICANS ARE ENROLLED IN A BLUE
  CROSS AND BLUE SHIELD MANAGED CARE PLAN.

179

• BLUE CROSS AND BLUE SHIELD MEDICARE CONTRACTORS
  ARE COLLECTIVELY THE LARGEST PROCESSOR MEDICARE
  CLAIMS. IN 1999, BLUE COMPANIES PAID 135
  BILLION IN BENEFIT PAYMENTS ON BEHALF OF THE
  PROGRAMS BENEFICIARIES.

180

• IN FY 99, BLUE CROSS AND BLUE SHIELD MEDICARE
  CONTRACTORS PROCESSED 89 PER CENT OF THE CLAIMS
  FROM HOSPITALS AND OTHER PROVIDER INSTITUTIONS
  (PART A) AND 59 PERCENT OF THE CLAIMS FROM
  PHYSICIANS AND OTHER HEALTH CARE PRACTITIONERS
  (PART B).

181

• THE ADMINISTRATION OF MEDICARE IS THE NATIONS
  MOST SUCCESSFUL PARTNERSHIP BETWEEN PRIVATE
  INDUSTRY AND THE GOVERNMENT. BLUE PLANS HAVE
  BEEN PROCESSORS SINCE THE INCEPTION OF MEDICARE
  IN 1966, MARKING 30-PLUS YEARS OF SERVICE TO
  MEDICARE BENEFICIARIES.

182

• END OF LECTURE FOR September 28th , 2011, 7th
  Period.
• QUESTIONS?
• DISCUSSION?