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Financing of Health Care Presentation

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Meilani Jamias

on 24 January 2014

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Transcript of Financing of Health Care Presentation

Financing of Health Care Presentation
4 Parts of Medicare
Part A

covers

inpatient hospital stays
, care in a skilled nursing facility, hospice care, and some home health care
.
MEDICAID
BY POPULATION


Children
~ medicaid and CHIP ; Connecting Kids to Coverage
Challenge


Non-Disabled Adults
~ non-elderly low-income parents,
other caretaker relatives & other disabled adults


Pregnant Women
~ child and maternal health


Individuals with Disabilities
~ non-elderly individuals with
disabilities, including people who are working or
who want to work


Seniors & Medicare and Medicaid Enrollees
~ low-income
seniors

Center for Medicare and Medicaid Services, 2014
Advantages of Fee for Service (FFS) Plans
1. The
most flexible
type of health insurance available to consumers

2. Doctors can be seen
wherever needed
, including out of state for the insurance policy

3.
No waiting periods
required for seeking the advice and consultation of a specialist
What is Medicare Fee-for-Service ?
It is a Medicare program that provides hospital insurance (Part A) and supplementary medical insurance (Part B) to eligible citizens. It takes place when a health provider was
paid for rendering a service
(office visit, test, procedure, etc.) to a patient. Payments are made after the service.
Fee -for- Service
Fee-for-Service Medicare Funding
Documentary: Why Does U.S. Health Care Cost So Much?
Fee-for-Service Medicare Funding
Disadvantages of Fee per Service (FFS) Plans
1.
Most expensive premiums
of all types of health insurance

2.

Deductible amounts
must be met before co-payments kick in

3. Members are typically responsible for
20%-25%

of their medical expenses

4. Services must be paid for
out of pocket
by the member until they can be reimbursed

5. Members are responsible for all
paperwork
associated with their medical claims

6.
Little attention is provided to preventive medicine
and care in fee for service plans
William Amistad, Meilani Jamias, and Meliza Salandanan
Nur 550 Issues in Advanced Practice
January 24, 2014
Dr. Patricia Shannon
2001
2007
2013
MEDICAID


RELEVANT INFORMATIONS

FINANCING & REIMBURSEMENT
~ Funded by the federal government and states

~ Federal Medical Assistance Percentage (FMAP)

~ Medicaid State Plan determines State payment methodology
for Medicaid services

~ Service Delivery & Provider payment rates = fee-for-service

~ How States change their payment methodology

~ CMS review of reimbursement methodologies
MEDICAID ELIGIBILITY

~ Affordable Care Act - fills in current gaps in coverage
- minimum Medicaid income eligibility
- January 2014 ~ under 65 yrs old ~ below
133% of the FPL


AREAS OF INTEREST

~ Medicaid and CHIP eligibility and enrollment
~ Early option to provide Medicaid to adults prior to 2014
~ Maintenance of Effort
~ Former foster care children
~ Family Planning
~ Presumptive Eligibility in Hospitals
~ Real time determinants


Center for Medicare and Medicaid Services, 2014
2001
2007
2013
What is Medicaid?
Medicaid is a jointly funded, Federal-State health insurance program for low-income and needy people. It covers children, the aged, blind, and/or disabled and other people who are eligible to receive federally assisted income maintenance payments.
~ Arizona Health Care Cost Containment System (AHCCCS)
~ Governor Brewer - AHCCCS Restoration Program - 1/1/2014
~ Marketplace - does not determine AHCCCS eligibility but it
does screen applicants for AHCCCS based on
your income
~ Apply directly if eligible for AHCCCS
~ MAGI - Modified Adjusted Gross Income
Fee-For-Service

PROS
~ its emphasis on productivity
~ encourages the delivery of care and maximizing patient visits
~ relatively flexible
~ accountability for patient care

CONS
~ it offers little or no incentive to deliver efficient care or prevent
unnecessary care
~ generally limited to face-to-face visits
2001
2007
2013
FEE-FOR-SERVICE
Types of Healthcare System
Timeline of Healthcare Services in the United States
Fee-for-service
Definition
Types
Medicare
Medicaid
Private
Advantages
Disadvantages
TYPES OF HEALTHCARE SYSTEM
Closed system- internally structured and controlled

Open system- people continues to interact and negotiate with parties outside of the system



TIMELINE OF HEALTHCARE SERVICES IN THE USA
2001
2013
Pres. Bush launches Health Center Growth Initiative to increase the number of community health centers

Medicare Drug Improvement & Modernization Act was passed to create voluntary & subsidized prescription drug benefit. It is now known as Medicare Part D

Health Savings Account was created to allow individuals to set aside pre-tax dollars to pay current & future medical expenses.
Timeline of Health Services in the USA
Early 1900s

Organized Medicine takes shape

Evolution of Medical Schools

1912
Bill drafted for compulsory health insurance
2006-2010
Massachusetts implements Mandated Health Insurance Law. It required all residents to obtain health insurance either through employer sponsored or state subsidized programs.

Introduction of Health Americans Act that requires individual to obtain health insurance coverage through state health insurance purchasing pools.

Pres. Obama signs Patient Protection & Affordable Care Act that requires all individuals to have health insurance beginning 2014.
(Payment Accuracy, 2013)
Part B

covers certain doctors' services,
outpatient care
, medical supplies, and preventive services.
Part C
also known as
Medicare Advantage Plan
, is an add on to Medicare Part A and Medicare Part B coverages. It has
extra benefits
like prescription drugs, vision and dental coverages.
Part D

adds prescription drug coverage
to Original Medicare. The extent of the costs and the access to medication will depend on the specific plan.
2004
2007
2010
2013
2 types of Insurance
Fee-for-service (FFS) or Indemnity Plan
FFS non PPO ( non Provider Preferred Organization)
FFS with PPO

Managed Care
Health Maintenance Organization (HMOs)
Closed Panel
Open Panel
PPOs
POS
Fee-For-Service
Monthly premiums- amount paid to insurance on a regular basis

Co-pay - flat dollar amount paid for covered services like doctor visit

Deductible- amount paid by the insured for covered medical care before health insurance starts to share the cost

Co-insurance- share of cost an individual pays for healthcare received after deductible is met

Maximum Out-of-pocket- largest amount of money you will be responsible for a calendar year
Fee for service (FFS) is a payment model where
services are paid for separately
. In health care, it gives an incentive for physicians to provide more treatments because payment is
dependent on the quantity of care
, rather than quality of care. FFS is the dominant physician payment method in the United States.
Example: You have a deductible of $1,000, a coinsurance of 20%, and an out-of-pocket limit of $5,000 per year.

You break your ankle when you trip over your cat while walking down the stairs. You’re taken to surgery that night. Your surgical site becomes infected. You’re hospitalized for two weeks, have two surgeries, and get IV antibiotics at home through home health care for another three weeks.

• Your emergency room bill is $4,000.
you pay $1,000 deductible and $600 in coinsurance ($ 3,200 (80%)- paid by insurance)

• Your hospital bill is $40,000.
Without an out-of-pocket limit, you pay $8,000 coinsurance. (40,000 x 20%)
With an out-of-pocket limit, you pay only $3,400. You've reached your out-of-pocket maximum and you stop paying.
( $5,000- 600 ( co-insurance for ER bill,) = $ 4, 400
( $4,400- $1,000 deductible)= $ 3,400

• Your home health care bill is $3,000.
Without an out-of-pocket limit, you pay $600 coinsurance.
With an out-of-pocket limit, you don't pay anything. Your health insurer pays the entire cost of your home health care because you've already reached the out-of-pocket maximum.


2004
2007
2010
2013
The total cost of your broken ankle is $47,000

Without an out-of-pocket limit, you pay $10,200; your insurer pays $36,800.

With the out-of-pocket limit, you pay $5,000; your insurer pays $42,000.

• You need more health care services later in the year.
Without an out-of-pocket limit, you pay the 20 percent coinsurance
With the out-of-pocket limit, you pay nothing
Fee-for-Service
ADVANTAGES
Unlimited choice of doctors
No delay
Timeline of Healthcare Services in the USA
Medicare.gov, 2014
Part A
2.9% Payroll Tax
(Taxes that employers are required to pay when they pay their staff their salaries)
(Inpatient Stay)
(Medicare.gov, 2014)
In 2011, Medicare spending accounted for about
15%
or
$532.5 billion
of the federal budget.
Part B
(Outpatient Services)
Medicare
Premiums
General
Fund
Revenue
Part B Premium Surtax
(An added tax to higher-income seniors to partially fund Part D)
and
Part D
(Prescription Drug)
(Medicare.gov, 2014)
(40%)
(38%)
(13%)
~ Eligibility
~ Benefits
~ Cost Sharing
~ Waivers
~ Long-Term Services & Supports
~ Delivery Systems
~ Quality of Care
~ Financing & Reimbursement
~ Data & Systems
~ Outreach & Enrollment
~ Program Integrity
~ CHIP

(Go Insurance Rates, 2009)
(Go Insurance Rates, 2009)
Social Security, 2014
Center for Medicare and Medicaid Services, 2014
Center for Medicare and Medicaid Services, 2014
ARIZONA MEDICAID MOVING FORWARD
2014
Arizona Health Care Cost Containment System, 2014
Silversmith (2011)
Early 1900s
1920s
1930s
1912
Bill drafted for compulsory health insurance
1930s
Social Security Act established to address old age benefits provided grants for Maternal & Child health services
1960s
1970s
1990s
1980s
1950s
1940s
1960s
Medicare- Medicaid Law was signed by President Johnson.
Medicare provides healthcare for people 65 yrs & older
Medicaid supports state run program to cover long term care of the uninsured and disabled
1970s
HMO Act was signed by Pres. Nixon as a strategy to reduce healthcare cost.

Amendment to Medicare coverage included people under 65 with long term disabilities or ESRD.

National Health Plan was proposed by Pres. Carter that would consolidate Medicare and Medicaid into one federal funded program.


1980s
Katie Becket option provided Medicaid benefit to children with disabilities and cared for at home

Medicare introduces Diagnostic Related Group (DRG) - a prospective payment system for hospital

Budget Act of 1986 allowed employee who looses job to continue with health plan for 18 months

Budget Act of 1989 provided coverage of pregnant women and children under 6 yrs old that are 133% of federal poverty level
1990s
Pres. Clinton introduced Health Security Act to provide health coverage for all Americans.

State Children Health Insurance Program extends health care coverage to children of low income families who do not qualify for Medicaid.

HIPAA restricts use of pre-existing condition in health insurance coverage determination

Mental Health Parity Act prohibits health plan from having lower annual or lifetime dollar limit for mental health benefit
1940s
Outline of Bill of Rights included adequate medical care & achieving good health

Businesses offered health benefits to attract workers
(started the employer based healthcare system)

Hill Burton Act provides grants to states for construction of Public Health Centers.
Ensured provision of care regardless of race, nationality or religion

1950s
Internal Revenue Act was signed that created exclusion for many employer provided benefits like retirement, child care and medical expenses

Military Medicare program was enacted
(Medicare.gov, 2014)
(You tube, 2012)
2002-2003
Mason, Leavitt & Chaffee, 2007
(CNN, 2009)
Timeline of Healthcare Services
in the USA

1920s
Baylord Hospital started prepaid hospital insurance plan for school teachers
---- BLUE CROSS

Sheppard-Towner Act provided matching funds to states for prenatal & child health centers
kaiserfamilyfoundation, 2013
CNN, 2009
kaiserfamilyfoundation, 2013
kaiserfamilyfoundation, 2013
kaiserfamilyfoundation, 2013
kaiserfamilyfoundation, 2013
kaiserfamilyfoundation, 2013
kaiserfamilyfoundation, 2013

Mason, Leavitt & Chafee, 2007
bls.gov, 2002
youtube, 2008

Disadvantage
Expense- High premiums, out-of-pocket and may pay what is left on "usual,customary & reasonably charge" bill
Paperwork for reimbursement
Little or no preventive health
Medicaid F-F-S
~ providers are paid for each service like office visit, test, or procedure
~ States describes payment methodologies in medicaid state plan. The CMS review all state plan amendments to make sure reimbursement methodologies are consistent with federal statutes and regulations.

HOW F-F-S PROVIDER RATES ARE SET

1. The cost of providing the service.
2. A review of what commercial payers pay in
the private market.
3. A percentage of what medicare pays for
equivalent services.
Full transcript