Learning Objectives:
Overview
Overview
Overview
Overview
of
of
of
of
3rd party payment
Medicare
Medicaid
Healthcare Reform
Major Take Home Message about
Healthcare Reform!!!!!
2010 Healthcare Reform
Benefits are determined by the employer or
the Federal/state governments.
Networks are determined by the employer
or the Federal/state governments.
Rates of compensation is determined by
contract rates between the provider and
payer.
Transaction takes place between the
provider-both of whom are removed from
the payment process.
Covered benefits – both type and
number of services
Provider participation in network
Medical necessity of services
Member eligibility at time of service
Patient
Seeking
Care
Provider
in the
Network?
Yes
Provider paid
contracted rate
for covered
services
NO
Provider paid a
rate negotiated
with patient
Claim submitted
to payer for
reimbursement
to patient
2010 Healthcare Reform
Medicare
Title 18 or the 18th Amendment to the
Social Security Act
Currently has 3 functional parts:
Part A covers hospitalizations and is a
benefit of Social Security
Part B covers reimbursement for physician
services and requires a premium payment.
Part C is the ability to participate in a
Medicare Advantage plan.
Part D covers pharmacy and requires
participation in Part B. There is a premium
for Part D in addition to Part B.
Medicare is partially financed by payroll taxes imposed
by the Federal Insurance Contributions Act (FICA) and
the Self-Employment
Contributions Act of 1954.
In the case of employees, the tax is equal to 2.9% (1.45%
withheld from the worker and a matching 1.45% paid by
the employer) of the wages, salaries and other
compensation in connection with employment.
Beginning January 1, 1994, the compensation limit was
removed. A self-employed individual must pay the entire
2.9% tax on self employed net earnings, but may deduct
half of the tax from the income in calculating income tax.
Beginning in 2013, the 2.9% hospital insurance tax rises to
3.8% for individuals making over $200,000 or jointly filing
couples making in excess of $250,000
All persons 65 years of age or older who have been legal residents
of the United States for at least 5 years are eligible for Medicare.
All people with disabilities in the United States, so long as their
condition(s) is/are congenital or otherwise permanent, are
inherently entitled to Medicare, regardless of age because these
individuals are inherently entitled to SSI income.
Medicare part 'A' premiums are waived entirely if the following
circumstances apply:
They are 65 years or older and U.S. citizens or have been
permanent legal residents for 5 continuous years, and they or
their spouse has paid Medicare taxes for at least 10 years.
They are under 65, disabled, and have been receiving either Social Security
benefits or the Railroad Retirement Board disability benefits for at least 24
months from date of entitlement (first disability payment).
They get continuing dialysis for end stage renal disease or need a kidney
transplant.
They are eligible for Social Security Disability Insurance and have
amyotrophic lateral sclerosis (known as ALS or Lou Gehrig's disease).
Medicare
2010 Healthcare Reform
Title 19 or the 19th Amendment to the Social Security Act.
It is a means tested program that is jointly funded by the state
and federal governments, and is managed by the states.
Among the groups of people served by Medicaid are certain
eligible U.S. citizens and resident aliens, including low-income
adults and their children, and people with certain disabilities.
Poverty alone does not necessarily qualify an individual for
Medicaid.
Medicaid is the largest source of funding for medical and
health-related services for people with limited income in the
United States.
Because of the aging World War II/Korean War generation, the
fastest growing aspect of Medicaid is nursing home coverage.
As the Baby Boomer generation begins to reach nursing home
age in 2020 to 2040, the nursing home aspect of Medicaid will
boom, causing concerns for federal and state budgets.
Each state has to come up with their portion of
dollars to MATCH the federal government’s stipend.
No two state Medicaid plans are alike
Benefits will depend on category of funding.
Categories inclusive of:
TANF
Aged/blind/disabled
Pregnancy
The minimum benefits are inclusive of:
EPSDT screenings for covered lives 0-21 years of age
Dental services for covered lives 0-21 years of age
Ambulatory medical services
Inpatient coverage which may be limited
Drug benefits which may be limited
Coverage of prenatal and pregnancy services for women
All but 1 state in the union has a full managed
care option for covered members to participate
in.
Medicaid is the payer of last resort. Have to bill
other payers before Medicaid.
Providers are paid directly from state or by
managed care company.
No option other than to take assignment as
opposed to Medicare. Cannot bill the Medicaid
recipient other than for applicable copays.
2010 Healthcare Reform
2010
2011
2012
2013
2014
2015
2016
2018
– 25 specific changes
– 21 specific changes
- 10 specific changes
– 13 specific changes
– 20 specific changes
– 1 specific change
– 1 specific change
- 1 specific change
Review of Health Plan premium increases – requires federal
government to set up a process by which Insurance companies
have to justify rate increases. Grants available to states to
review rate increases.
Reduce annual market basket updates for Medicare payments
to providers.
Include un-insured adults into Medicaid and Adult HIP
managed by states
Establishes a non-profit Patient-Centered Outcomes Research
Institute to conduct research that compares the clinical
effectiveness of medical treatments
Appropriates $5 billion for fiscal years 2010 through 2014 and
$2 billion for each subsequent fiscal year to support prevention
and public health programs.
Provides a $250 rebate to Medicare beneficiaries who reach
the Part D coverage gap in 2010. Further subsidies and
discounts that ultimately close the coverage gap begin in 2011
Provides tax credits to small employers with no more than 25
employees and average annual wages of less than $50,000 that
provide health insurance for employees. Phase I (2010-2013): tax
credit up to 35% (25% for non-profits) of employer cost; Phase II
(2014 and later): tax credit up to 50% (35% for non-profits) of
employer cost if purchased through an insurance Exchange for two
years.
Increases the Medicaid drug rebate percentage for brand name drugs
to 23.1% (except the rebate for clotting factors and drugs approved
exclusively for pediatric use increases to 17.1%) and to 13% of
average manufacturer price for non-innovator, multiple source drugs.
Extends the drug rebate to Medicaid managed care plans.
Establishes the Federal Coordinated Health Care Office to improve
care coordination for dual eligibles (people eligible for both Medicare
and Medicaid).
Authorizes the Food and Drug Administration to approve generic
versions of biologic drugs and grant biologics manufacturers 12 years
of exclusive use before generics can be developed
Imposes additional requirements on non-profit hospitals to conduct
community needs assessments and develop a financial assistance
policy and impose a tax of $50,000 per year for failure to meet these
requirements
Creates a state option to provide Medicaid coverage to
childless adults with incomes up to 133% of the federal
poverty level. (States will be required to provide this coverage
in 2014.)
Creates a temporary reinsurance program for employers
providing health insurance coverage to retirees over age 55
who are not eligible for Medicare.
Creates a temporary program to provide health coverage to
individuals with pre-existing medical conditions who have been
uninsured for at least six months. The plan will be operated by
the states or the federal government.
Creates the National Prevention, Health Promotion and Public
Health Council to develop a national prevention, health
promotion and public health strategy.
Requires the Department of Health and Human Services to
develop an internet website to help residents identify health
coverage options.
Imposes a tax of 10% on the amount paid for indoor tanning
services.
Expands eligibility for the 340(B) drug discount program to solecommunity hospitals, critical access hospitals, certain children’s
hospitals, and other entities.
Extends dependent coverage for adult children up to age 26 for all
individual and group policies.
Prohibits individual and group health plans from placing lifetime limits
on the dollar value of coverage, rescinding coverage except in cases
of fraud, and from denying children coverage based on pre-existing
medical conditions or from including pre-existing condition exclusions
for children. Restricts annual limits on the dollar value of coverage
(and eliminates annual limits in 2014).
Requires new health plans to implement an effective process for
allowing consumers to appeal health plan decisions and requires new
plans to establish an external review process
Requires new health plans to provide at a minimum coverage without
cost-sharing for preventive services rated A or B by the U.S.
Preventive Services Task Force, recommended immunizations,
preventive care for infants, children, and adolescents, and additional
preventive care and screenings for women.
Permanently authorizes the federally qualified health
centers and NHSC programs and increases funding for
FQHCs and for the NHSC for fiscal years 2010-2015.
Establishes the National Health Care Workforce Commission
to coordinate federal workforce activities and make
recommendations on workforce goals and policies and
establishes the National Center for Health Workforce
Analysis to undertake state and regional workforce data
collection and analysis.
Provides states with new options for offering home and
community-based services through a Medicaid state plan
amendment to certain individuals and permits states to
extend full Medicaid benefits to individuals receiving home
and community-based services under a state plan
Requires health plans to report the proportion of premium dollars
spent on clinical services, quality, and other costs and provide rebates
to consumers if the share of the premium spent on clinical services
and quality is less than 85% for plans in the large group market and
80% for plans in the individual and small group markets.
Requires pharmaceutical manufacturers to provide a 50% discount on
brand-name prescriptions filled in the Medicare Part D coverage gap
beginning in 2011 and begins phasing-in federal subsidies for generic
prescriptions filled in the Medicare Part D coverage gap.
Provides a 10% Medicare bonus payment for primary care services;
also, provides a 10% Medicare bonus payment to general surgeons
practicing in health professional shortage areas
Eliminates cost-sharing for Medicare-covered preventive services that
are recommended (rated A or B) by the U.S. Preventive Services Task
Force and waives the Medicare deductible for colorectal cancer
screening tests; authorizes Medicare coverage for a personalized
prevention plan, including a comprehensive health risk assessment.
Freezes the income threshold for income-related Medicare Part B premiums for
2011 through 2019 at 2010 levels resulting in more people paying incomerelated premiums, and reduces the Medicare Part D premium subsidy for those
with incomes above $85,000/individual and $170,000/couple
Restructures payments to private Medicare Advantage plans by
phasing-in payments set at increasingly smaller percentages of
Medicare fee-for-service rates; freezes 2011 payments at 2010 levels;
and prohibits Medicare Advantage plans from imposing higher costsharing requirements for some Medicare covered benefits than is
required under the traditional fee-for-service program.
Creates a new Medicaid state option to permit certain Medicaid
enrollees to designate a provider as a health home and provides
states taking up the option with 90% federal matching payments for
two years for health home-related services.
Provides 3-year grants to states to develop programs to provide
Medicaid enrollees with incentives to participate in comprehensive
health lifestyle programs and meet certain health behavior targets.
Establishes a national, voluntary insurance program for purchasing
community living assistance services and supports (CLASS program).
Requires the Secretary of the Federal Department of Health and
Human Services to develop and update annually a national quality
improvement strategy that includes priorities to improve the delivery
of health care services, patient health outcomes, and population
health
Excludes the costs for over-the-counter drugs not prescribed by a
doctor from being reimbursed through a Health Reimbursement
Account or health Flexible Spending Account and from being
reimbursed on a tax-free basis through a Health Savings Account or
Archer Medical Savings Account. Increases the tax on distributions
from a health savings account or an Archer MSA that are not used for
qualified medical expenses to 20% of the amount used.
Provides grants for up to five years to small employers that establish
wellness programs.
Establishes Teaching Health Centers and provides payments for
primary care residency programs in community-based ambulatory
patient care centers.
Authorizes $50 million for five-year demonstration grants to states to
develop, implement, and evaluate alternatives to current tort
litigations
Provides grants to states to begin planning for the establishment of
American Health Benefit Exchanges and Small Business Health
Options Program Exchanges, which facilitate the purchase of
insurance by individuals and small employers
Requires disclosure of the nutritional content of standard menu
items at chain restaurants and food sold from vending
machines.
Prohibits federal payments to states for Medicaid services
related to certain hospital-acquired infections.
Increases the number of Graduate Medical Education (GME)
training positions by redistributing currently unused slots and
promotes training in outpatient settings.
Establishes an Independent Advisory Board, comprised of 15
members, to submit legislative proposals containing
recommendations to reduce the per capita rate of growth in
Medicare spending if spending exceeds targeted growth rates.
Creates the State Balancing Incentive Program in Medicaid to
provide enhanced federal matching payments to increase noninstitutionally based long-term care services and establishes
the Community First Choice Option in Medicaid to provide
community-based attendant support services to certain people
with disabilities
Allows
providers
organized
as
accountable
care
organizations (ACOs) that voluntarily meet quality
thresholds to share in the cost savings they achieve for the
Medicare program.
Reduces rebates paid to Medicare Advantage plans and
provides bonus payments to high–quality plans.
Creates the Independence at Home demonstration program
to provide high-need Medicare beneficiaries with primary
care services in their home
Adds a productivity adjustment to the market basket
update for certain providers, resulting in lower rates than
otherwise would have been paid.
Establishes procedures for screening, oversight, and
reporting for providers and suppliers that participate in
Medicare, Medicaid, and CHIP; requires additional entities
to register under Medicare
Imposes
new
annual
fees
on
the
pharmaceutical
manufacturing sector.
Creates new demonstration projects in Medicaid for up to eight
states to pay bundled payments for episodes of care that
include hospitalizations and to allow pediatric medical
providers organized as accountable care organizations to share
in cost-savings.
Requires enhanced collection and reporting of data on race,
ethnicity, sex, primary language, disability status, and for
underserved rural and frontier populations.
Establishes a hospital value-based purchasing program in
Medicare to pay hospitals based on performance on quality
measures and requires plans to be developed to implement
value-based purchasing programs for skilled nursing facilities,
home health agencies, and ambulatory surgical centers.
Reduces Medicare payments that would otherwise be made to
hospitals to account for excess (preventable) hospital
readmissions.
States indicate to the Secretary of HHS whether they will
operate an American Health Benefit Exchange.
Begins
phasing-in
federal
subsidies
for
brand-name
prescriptions filled in the Medicare Part D coverage gap
(reducing coinsurance from 100% in 2010 to 25% in 2020, in
addition to the 50% manufacturer brand-name discount).
Establishes a national Medicare pilot program to develop and
evaluate making bundled payments for acute, inpatient
hospital services, physician services, outpatient hospital
services, and post-acute care services for an episode of care.
Provides a one percentage point increase in federal matching
payments for preventive services in Medicaid for states that
offer Medicaid coverage with no patient cost sharing for
services recommended (rated A or B) by the U.S. Preventive
Services Task Force and recommended immunizations
Increases Medicaid payments for primary care services
provided by primary care doctors to 100% of the Medicare
payment rate for 2013 and 2014 (financed with 100% federal
funding)
Increases the threshold for the itemized deduction for
unreimbursed medical expenses from 7.5% of adjusted
gross income to 10% of adjusted gross income; waives the
increase for individuals age 65 and older for tax years 2013
through 2016.
Limits the amount of contributions to a flexible spending
account for medical expenses to $2,500 per year, increased
annually by the cost of living adjustment.
Increases the Medicare Part A (hospital insurance) tax rate
on wages by 0.9% (from 1.45% to 2.35%) on earnings
over $200,000 for individual taxpayers and $250,000 for
married couples filing jointly and imposes a 3.8%
assessment on unearned income for higher-income
taxpayers.
Eliminates the tax-deduction for employers who receive
Medicare Part D retiree drug subsidy payments.
Imposes an excise tax of 2.3% on the sale of any taxable
medical device.
Requires disclosure of financial relationships between health
entities, including physicians, hospitals, pharmacists, other
providers, and manufacturers and distributors of covered
drugs, devices, biologicals, and medical supplies.
Creates the Consumer Operated and Oriented Plan (CO-OP)
to foster the creation of non-profit, member-run health
insurance companies.
Extends authorization and funding for the Children’s Health
Insurance Program (CHIP) through 2015 (current
authorization is through 2013).
Expands Medicaid to all individuals not eligible for Medicare
under age 65 (children, pregnant women, parents, and adults
without dependent children) with incomes up to 133% FPL and
provides enhanced federal matching payments for new
eligibles.
Allows all hospitals participating in Medicaid to make
presumptive eligibility determinations for all Medicaid-eligible
populations.
Requires U.S. citizens and legal residents to have qualifying
health coverage (there is a phased-in tax penalty for those
without coverage, with certain exemptions).
Requires employers that offer coverage to their employees to
provide a free choice voucher to certain employees. Vouchers
are available to employees with incomes less than 400% of the
federal poverty level whose share of the premium under the
employer-sponsored coverage exceeds 8% but is less than
9.8% of their income and who choose to enroll in a plan in a
health insurance Exchange.
Creates state-based American Health Benefit Exchanges and
Small Business Health Options Program (SHOP) Exchanges,
administered by a governmental agency or non-profit
organization, through which individuals and small businesses
with up to 100 employees can purchase qualified coverage.
Exchanges will have a single form for applying for health
programs, including coverage through the Exchanges and
Medicaid and CHIP programs.
Provides refundable and advanceable tax credits and cost
sharing subsidies to eligible individuals. Premium subsidies are
available to families with incomes between 133-400% of the
federal poverty level to purchase insurance through the
Exchanges, while cost sharing subsidies are available to those
with incomes up to 250% of the poverty level.
Requires guarantee issue and renewability of health insurance
regardless of health status and allows rating variation based
only on age (limited to a 3 to 1 ratio), geographic area, family
composition, and tobacco use (limited to 1.5. to 1 ratio) in the
individual and the small group market and the Exchanges.
Prohibits annual limits on the dollar value of coverage.
Creates an essential health benefits package that provides a
comprehensive set of services, limiting annual cost-sharing to
the Health Savings Account limits ($5,950/individual and
$11,900/family in 2010). Creates four categories of plans to
be offered through the Exchanges, and in the individual and
small group markets, varying based on the proportion of plan
benefits they cover.
Requires the Office of Personnel Management to contract with
insurers to offer at least two multi-state plans in each
Exchange. At least one plan must be offered by a non-profit
entity and at least one plan must not provide coverage for
abortions beyond those permitted by federal law.
Creates a temporary reinsurance program to collect payments
from health insurers in the individual and group markets to
provide payments to plans in the individual market that cover
high-risk individuals.
Permits states the option to create a Basic Health Plan for
uninsured individuals with incomes between 133-200% FPL
who would otherwise be eligible to receive premium subsidies
in the Exchange.
Assesses a fee of $2,000 per full-time employee, excluding the
first 30 employees, on employers with more than 50
employees that do not offer coverage and have at least one
full-time employee who receives a premium tax credit.
Employers with more than 50 employees that offer coverage
but have at least one full-time employee receiving a premium
tax credit, will pay the lesser of $3,000 for each employee
receiving a premium credit or $2,000 for each full-time
employee, excluding the first 30 employees.
Requires Medicare Advantage plans to have medical loss ratios
no lower than 85%.
Permits employers to offer employees rewards of up to 30%,
potentially increasing to 50%, of the cost of coverage for
participating in a wellness program and meeting certain
health-related standards; establishes 10-state pilot programs
to permit participating states to apply similar rewards for
participating in wellness programs in the individual market.
Imposes new fees on the health insurance sector.
Establishes an Independent Advisory Board, comprised of
15 members, to submit legislative proposals containing
recommendations to reduce the per capita rate of growth in
Medicare spending if spending exceeds a target growth
rate.
Reduces Medicare Disproportionate Share Hospital (DSH)
payments initially by 75% and subsequently increases
payments based on the percent of the population uninsured
and the amount of uncompensated care provided.
Reduces states’ Medicaid Disproportionate Share Hospital
(DSH) allotments and requires the Secretary to develop a
methodology for distributing the DSH reductions.
Reduces Medicare payments to certain hospitals for
hospital-acquired conditions by 1%.
Provides for a 23 percentage point increase in the
Children’s Health Insurance Program (CHIP) match rate up
to a cap of 100%.
Permits states to form health care choice compacts and
allows insurers to sell policies in any state participating in
the compact.
Imposes an excise tax on insurers of employer-sponsored
health plans with aggregate expenses that exceed $10,200
for individual coverage and $27,500 for family coverage.