HS Ch. 8: Test 3

Medicaid/Chip Enrollment: Who DID NOT expand coverage to low income adults?

-Texas -Oklahoma -Missouri -Mississippi

Individual Private Health Insurance (Private)

-The risk is determined by the individual's health -Premiums, deductibles, and copayments are much higher for this type

Coinsurance

-A type of copayment that is a part of a fee for service, the patient pays a percentage of the cost of the service -Normally a 20/80 percentage with the patient being 20

Indian Health Care Improvement Act (IHCIA):

-ACA allowed comprehensive health services for all American Indians & Alaskan Natives. -Goal: Improve access and quality of care, including mental health services and alcohol and drug abuse programs

Funds Disbursement

-AKA *claims processing* -Is carried out in accordance with the administrative procedures of the program

Ambulatory Patient Groups & Ambulatory Payment Categories

-APG: A system of codes that explain the number and type of services used in an ambulatory visit. Implemented in late 1980s. -APC: Implemented in 2000 and were adapted from APGs. They divide all outpatient services into 300 procedural groups or classifications based on similar clinical content, such as surgical, medical, and ancillary services.

Prior to ACA

-Annual or lifetime cap on reimbursement. -No coverage for pre-existing conditions. -Dependent coverage stopped at age 25 years. -Health insurance companies denied insurance or increased premiums based on family type, geography, tobacco use, age.

Medicaid/Chip Enrollment: Who DID expand coverage to low income adults?

-Arkansas -Louisiana -New Mexico

Health Insurance Marketplaces

-Central locations for healthcare consumers to purchase health insurance coverage -Provides standardized information on the different types of coverage available to them

Managed Care Plans

-Combine health services & health insurance functions (decrease administrative costs). -Example: Employers contract with a health plan for services on behalf of their employees. -Employer is required to pay a set amount per enrolled employee on a monthly basis.

Contracted Health Plan

-Contract with certain providers to whom it pays a fixed rate per member on a monthly basis for certain services -Enrolled employees must cost share with a copayment -There is no deductible.

Indemnity Plans or Fee For-service Plans:

-Contracts between a beneficiary & health plan but no contract between health plan & providers. -Beneficiary pays a premium to the health plan. -When the beneficiary receives a healthcare service, the plan will reimburse the beneficiary based on an established fee for a particular service regardless of the provider's fees. -Beneficiary will reimburse the provider directly.

Usual, customary, and reasonable (UCR) services

-Created in response to the development of various mechanisms aimed at standardizing reimbursement for healthcare services -Based on community and state surveys of provider charges

ACA

-Eliminated annual & lifetime cap on reimbursement. -Pre-existing conditions are covered. -Dependent coverage until age 26 years (even if not living with parents). -Consumers could purchase health insurance from state/regional exchanges based on what they can pay.

Resource Utilization Groups (RUGs)

-Prospective payment for skilled nursing facilities and home health and provides for a per diem based on the clinical severity of patients -Designed to differentiate patients based on how much they use the resources of the facility

Home Health Resource Group (HHRG)

-Prospective payment that pays a fixed predetermined rate for a 60-day episode of care regardless of the services -A *bundled rate* groups together a set of services for one rate -Categories: They have seven different categories of quality improvement projects for payment and care models, including accountable care organizations, value-based purchasing, and coordinated and prevention care.

Strengthening Quality Affordable Care

-Title X of ACA. -Physician Compare Website: Research info on physicians who accept Medicare. -Nursing Home Compare Website: Research info on nursing homes & hospice care in the U.S. who are Medicare and Medicaid certified. -Cures Acceleration Network: Grants for research in the cure and treatment of diseases. *All of these target primary prevention, increasing consumer awareness of their healthcare, and providing incentives for disease research.

Unlike countries that have universal healthcare systems, payment of healthcare services in the US is derived from:

1. Out-of-pocket payments from patients who pay entirely or partially for services rendered. 2.Health insurance plans, such as indemnity plans or managed care organizations. 3.Public/government funding such as Medicare, Medicaid, & other government programs. 4.Health savings accounts.

Third Party Payers

Insurance companies, managed care organizations, & government

Healthcare Financial Management

-*Chief Financial Officer (CFO)* supervises the *comptroller* who is charged with accounting & reporting functions. -*Treasurer* is responsible for cash management, banking relations, accounts payable. -*Internal Auditor* reports to the CFO, ensures that accounting procedures are performed in accordance with appropriate regulations.

ACA: Legal Issues

*U.S. citizens & legal residents must purchase health insurance or pay an annual fine (individual mandate): -20 States filed lawsuits -stating unconstitutional -June 28, 2012: U.S. Supreme Court upheld ACA. *May 13, 2016: Department of Health and Human services issued final mandate of ACA: health insurance companies cannot discriminate against LGBTQ, transgender, & gender non-conforming people. *December 2018: Conservative Federal judge in Fort Worth: ruled that individual mandate was unconstitutional. *May 24, 2019: DHHS removed pregnancy & gender identity discrimination protection (no coverage for gender transition services).

Independence at Home Program

-Provides Medicare beneficiaries with at-home primary care and allocates any cost savings of this type of care to healthcare professionals who reduce hospital admissions and improve health outcomes -14 sites. Started in 2012. -Program saved a net of ~ 48 million in healthcare expenditure during year 2 of the project. -Goal: Compare the cost of this type of care to hospital care of those Medicare beneficiaries who are chronically ill

Medicare cont.

-*Part C*: Medicare Advantage: Covers all services in Parts A & B. Voluntary. Designed to move Medicare patients into more cost-effective health insurance programs such as health maintenance organizations (HMOs) or preferred provider organizations (PPOs). Medicare pays a fixed amount to the companies offering this service. -*Part D*: Prescription Drug Plan: Affordable drugs. -*Medigap or Medicare Supplemental Plan*: Cover copays, deductibles, & coinsurance. Vary by state. This is how extra coverage is provided.

Historical Health Insurance

-1847: Boston insurance company offered sickness insurance to its consumers. -19th Century: Big companies provided company doctors for their employees (medical services). -1913: International Ladies Garment Workers (union) negotiated health insurance as part of employment contracts. -1929: Teachers in Texas asked for group hospital insurance. Became foundation for Blue Cross Blue Shield.

Historical Health Insurance Cont.

-1935: Social Security Act. -1965: President Johnson: Medicare and Medicaid -1973: President Nixon: Health Maintenance Act -1990s: President Clinton administration proposed universal health coverage -did not pass. Balanced Budget Act was passed (1997). -2006: Massachusetts: Health coverage for all citizens. 3% uninsured in Massachusetts in 2018*. -2010: ACA. Decrease in uninsured to 8.8% (2016).

Program of All-Inclusive Care for the Elderly (PACE)

-A comprehensive healthcare delivery system funded by Medicare and Medicaid -Focuses on providing community-based care and services to people who otherwise need nursing home levels of care

ACA: Health Insurance Marketplaces

-Ambulatory patient services and Emergency services -Hospitalization -Maternity and newborn care -Mental Health and substance abuse -Prescription drugs -Rehabilitation and Laboratory -Preventive and Wellness -Pediatric services

TRICARE

-As active duty military numbers increased, this program was developed to respond to the growing needs of retired members -Combines the healthcare resources of the uniformed services with networks of civilian healthcare professionals, institutions, pharmacies, and suppliers to provide access to high quality healthcare services

Workers Compensation

-Employer is financially liable for employees who become injured or ill as a result of work conditions -Programs are funded by the employer which either contracts with a commercial insurer or self insures -*Experience rating*: how often they have used the workmen's compensation program for employees who have been injured on the job -State-administered program -Employees may receive cash for lost wages, payment for medical treatment, survivors death benefits, and indemnification for loss of skills -Eligibility: medical care, death, disability, and rehab services -*No-fault liability*: developed to avoid costly legal fees because there is no process to assess blame

Medicare

-Entitlement program: after paying into the program for years from their wages, they are entitled to receive benefits -*Part A*: primarily financed from payroll taxes and is considered hospitalization insurance. Covers hospital care, skilled nursing facility care, nursing home care, hospice, and home health -*Part B*: Supplemental health plan, cover physician services. Financed 24% from enrollee premiums & 76% from federal treasury funds. The two types of services include: medically necessary services and preventive services.

Medicaid (Title XIX - SSA)

-Health insurance to the medically indigent. A welfare program: State government level. -Serves 45 million low-income Americans. Spending varies based on status of the U.S. economy. -Not a federally mandated program, but all states have it ACA created "Community First Choice": an optional Medicaid benefit -community health services to Medicaid enrollees with disabilities. -Consumers receive care at home or at community health centers rather than a hospital or their facility. -Will enable lower income consumers to have access to affordable healthcare

Medicare Hospital Reimbursement

-In 1982, Congress passed the *Tax Equity and Fiscal Responsibility Act* and the *Social security amendments of 1983* to manage Medicare cost controls -The CMS reimburses hospitals per admission and diagnosis which is based on a *DRG* - a prospective payment system for hospitals established through the SSA of 1983 -*Inpatient Prospective Payment System (PPS)* for inpatient hospital stays. Each patient case is assigned a *Medical severity -Diagnosis Related Group based on diagnosis and other information

Prospective Reimbursement

-Most common type is a service benefit plan -Used primarily by managed care organizations (MCOs). -Employers purchase plans. Health plan contracts with certain providers & facilities to provide services at a specified rate. Makes payments directly to the providers for services.

Interesting Facts

-Nearly 60% of Medicare enrollees are female. -Out-of-pocket spending on healthcare grew 1.3% in 2014 (11% of total national health expenditures). -Medicare and Medicaid are the 2 largest government-sponsored health insurance programs in the US.

Major Medical Policies

-Opposite of comprehensive health insurance policies -Only reimburse hospital services such as surgeries & any expenses related to hospitalization

Deductibles

-Payments that are required prior to the insurance paying for services rendered in a fee-for-service plan -They cover one calendar year

Copayments

-Payments that patients must pay at the time they receive the service -Used in both fee for service and prepayment plans -A designated dollar amount

Medicare Hospital Readmission Reduction Program

-Penalizes most acute care hospitals with higher Medicare readmission rates within a 30 day period than the national average. Penalties are levied across all of the Medicare admissions, not just readmissions. -The *Excess Readmission Ratio (ERR)* is based on the treatment of 6 conditions and treatments: PNA, MI, Heart failure, COPD, and hip/knee replacements -Speciality hospitals, such as children's cancer, psychiatric, and rehabilitative are exempt

Cost-Plus Reimbursement

-Reimbursement rates for institutions are based on the total costs incurred in operating the institution that are used to calculate the per diem or per patient day rate. -Common form for hospitals

Resource-Based Relative Value Scale (RBRVS)

-Reimburses physicians according to a relative value assigned to each physician service -Physician extender services are reimbursed: physician work, practice expenses, and malpractice insurance -Medicare Part B reimbursement services -Physicians who had not signed a Medicare participation agreement were prevented from *balance billing* so they can not bill the patient the difference between Medicare payments and their charges

Chronic Disease Prevention & Improving Public Health

-Title II of ACA: There will be no copayment for Medicare annual wellness visits and the development of a patient prevention program. -The Prevention and Public Health Fund: Established to provide funding for public health programs. -Most of the funding was allocated to the CDC and Administration for Community Living.

Consumer-Driven Health Plans (CDHPs)

-Tax advantage plans with deductible coverage. -Health Reimbursement Arrangements (HRAs): 2001 ⧫Funded by employer but owned by employees; remains with the company if employee leaves-no portability. -Health Savings Account (HSA): 2003 ⧫ Authorized by the Medicare Prescription Drug, Improvement, and Modernization Act ⧫High deductible plans ⧫Transfers to another employer when employee changes jobs-fully portable ⧫Consumers are cost conscious -they use their own funds for healthcare services.

Veterans Health Administration (VHA)

A system of hospitals, clinics, counseling centers, and long-term care facilities that provides care to military veterans

Improving Quality & Efficiency of Health Care

-Title III of ACA. -Center for Medicare and Medicaid Innovation: To research different payment and delivery systems and to support the development and testing of innovative healthcare payment and service delivery models. -The Patient-Centered Outcomes Research Institute (PCORI) (2010): Compares outcomes of disease treatments. Responsible for providing physicians, assistants, and policy makers and improving health outcomes and performing research that targets quality and efficiency of care. *Research focus: DM, obesity, breast cancer, HTN, heart disease.

Revenue Provisions

-Title IX of ACA. Employee's annual W-2 Form: -Report value of benefit by employer Annual Flat fee on: -Branded prescriptions Pharmaceutical companies -Medical devices manufacturers -Health Insurance providers -Indoor tanning services *Money used to contribute to the operation of the healthcare reform mandates -Cafeteria Plan: Employer-sponsored benefit plan that allows employees to select the type of benefits appropriate for their lifestyle.

Transparency and Program Integrity

-Title VI of ACA. -Publish standardized information on long-term care (at DHHS) -Patient access to employee background checks -Screening process for Medicare and Medicaid providers -Elder Justice Act: targets abuse, neglect, and exploitation of the elderly

The increase in healthcare spending can be attributed to:

1. When prices increase in an economy overall, the cost of medical care will increase and even when prices are adjusted for inflation, medical prices have increased 2. As life expectancy increases in the US, more individuals will require more medical care for chronic diseases --> there will be more healthcare expenses 3. As healthcare technology and research provide for more sophisticated procedures, there will be an increase in healthcare expenses

Cost Sharing

A contribution from the covered individual in the form of a copayment, deductible, or coinsurance

Managed Care Plans (Private)

A type of health program that combines administrative costs and service costs for cost control

Voluntary Health Insurance

A type of private health insurance that is provided by nonprofit and for-profit health plans such as BCBS

Reinsurance

An arrangement by which the primary insurer that initially writes the insurance transfers to another insurer part or all of the potential losses associated with such insurance

Group Insurance (Private)

Anticipates that a large group of individuals will purchase insurance through their employer and the risk is spread among those paying individuals

Children's Health Insurance Program (CHIP)

Authorized by the Balanced Budget Act of 1997, & coded as Title XXI of the Social Security Act, the State Children's Health Insurance Program (SCHIP), now Children's Health Insurance Program (CHIP): Initiated in response to number of children who are uninsured in the US.

Public Welfare Insurance

Based on financial need Ex: Medicaid

Insurance pays vs. You Pay

Bronze: -I: 60 -Y: 40 Silver: -I: 70 -Y: 30 Gold: -I: 80 -Y: 20 Platinum: -I: 90 -Y: 10

Disease-specific Policies

Cancer

Catastrophic Health Insurance Policies

Cover unusual illnesses: high deductible & lifetime reimbursement caps

ACA Titles

I: Affordability & accessibility of healthcare. II: Role of public programs: Medicaid, CHIP, Medicare. III: Improving the quality & efficiency of healthcare. IV: Prevention of chronic disease & improving public health. V: Healthcare workforce. VI: Transparency & program integrity. VII: Access to innovative medical therapies. VIII: Community living assistance services & supports. IX: Revenue provisions X: Strengthening quality affordable care.

Comprehensive health insurance policies

Includes outpatient & inpatient services, surgery, lab testing, medical equipment, therapies, mental health, rehabilitation, & prescription drugs

Consumer Operated and Oriented Plans (CO-OPs)

Member-run health organizations in all 50 states and must be consumer focused with profits targeted to lowering premiums and improving benefits.

Samaritan Ministries

Members receive support from other members and pay their healthcare providers directly from other members

Summary of benefits and coverage

Offers consumers the opportunities to easily compare health insurance plans

Per Diem Rates

Per patient per day rates. Defined dollar amount per day for care provided. Hospitalizations.

Medigap, Medicare Supplement, Medsup

Provide supplemental insurance coverage for Medicare patients

Social Insurance

Provided by the government at all levels: federal, state, local Ex. Medicare

Capitated Rate

Set rate for serving enrolled patients regardless of how much care the provider gives.

Prepayment

The individual pays a fixed, predetermined amount for the services rendered

Reimbursement Methods: Governmental

Uses several programs to control healthcare expenditures: -Diagnosis-related groups (DRGs) -Ambulatory payment categories (APCs) -Home health resource groups (HHRGs) -Resource utilization groups (RUGs) -Resource-based relative values scales (RBRVSs) Cost shifting: Issue created by reducing Medicaid reimbursements. Healthcare organizations must find other ways to be reimbursed or they will not be profitable, so they raise the prices to privately insured patients to offset the small reimbursement changes of Medicaid and Medicare.

Retrospective Reimbursement

Determines amount of reimbursement after the delivery of services. Minimal financial risk to providers. Contributed to increase in healthcare costs

Fee for Service

Developed by BCBS based on the concept of a person purchasing coverage for certain benefits, using the health insurance coverage for these designated benefits, and paying the provider for these services provided

Consumer-Driven Health Plans (CDHPs) cont.

Flexible Spending Accounts (FSAs): -Provide employees with option of setting aside pretax income to pay for out-of-pocket medical expenses. -Drawback: amount set aside must be spent within 1 year. Any unspent money can NOT be rolled over. Medical Savings Accounts (MSA): -Allows workers employed in firms with 50 or less employees & have high deductible health insurance plans, to set aside pretax dollars to use for healthcare premiums & non reimbursed healthcare expenses.

Self-Funded or Self Insurance (Private)

Health insurance programs that are implemented and controlled by the company itself