Midterm notes POL 536
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POL 536 Midterm Review Unit 1 Glossary Terms Accountable Care Organization ACO A network of health care providers that band together to provide the full continuum of health care services for patients The network would receive a payment for all care provided to a patient and would be held accountable for the quality and cost of care Proposed pilot programs in Medicare and Medicaid would provide nancial incentives for these organizations to improve quality and reduce costs by allowing them to share in any savings achieved as a result of these e o s Centers for Medicare and Medicaid Services CMS Previously known as the Health Care Financing Administration HCFA CMS is a federal agency within the United States Department of Health and Human Services HHS that administers the Medicare Program and works in partnership with state governments to administer Medicaid the State Children s Health Insurance Program SCHIP and health insurance portability standards In addition to these programs CMS has other responsibilities including the administrative simpli cation standards from the Health Insurance Portability and Accountability Act of 1996 HIPAA quality standards in longterm care facilities more commonly referred to as nursing homes through its survey and certi cation process clinical laboratory quality standards under the Clinical Laboratory Improvement Amendments and oversight of HealthCaregov Children39s Health Insurance Program CHIP Enacted in 1997 CHIP is a federalstate program that provides health care coverage for uninsured low income children who are not eligible for Medicaid States have the option of administering CHIP through their Medicaid programs or through a separate program or a combination of both The federal government matches state spending for CHIP but federal CHIP funds are capped Department of Health and Human Services HHS HHS is the US government39s principal department for protecting the health of all Americans and providing essential human services Employersponsored insurance Health insurance coverage provided to employees and in some cases their spouses and children as bene ts as part of theirjobs Medicaid Enacted in 1965 under Title XIX of the Social Security Act Medicaid is a federal entitlement program that provides health and longterm care coverage to certain categories of lowincome Americans States design their own Medicaid programs within broad federal guidelines Medicaid plays a key role in the US health care system lling large gaps in the health insurance system nancing longterm care coverage and helping to sustain the safetynet providers that serve the uninsured The ACA expands Medicaid eligibility to nearly all low income adults with incomes at or below 138 of the federal poverty level Each state will decide whether to adopt the Medicaid expansion Patient Protection and Affordable Care Act PPACA ACA quotObamacarequot On March 23 2010 President Obama signed this comprehensive health reform into law The law and the changes made to the law by subsequent legislation focus on provisions to expand coverage control health care costs and improve the health care delivery system PowerPoint Notes Health policy in uences a variety of activities 0 Public Health sanitation disease control infant mortality nutrition occupational health and environmental health 0 Health Care access service delivery and standards for practice and treatment 0 Public Health Achievements in the 20th century immunizations motor vehicle safety workplace safety control of infectious diseases declines in deaths from heart disease and stroke safer and healthier foods healthier mothers and babies family planning uoridation of drinking water and identifying tobacco as a health hazard o Phases of the Evolution of Health Care 0 Era 1 Emerging System 0 Pre19105 Minimal licensure and professional standards No standards for medical education No health insurance Minimal public investments Leading cause of death infectious disease Average life expectancy 46 years 0 Era 2 Growing and Implementing New Standards 0 191019605 Huge breakthroughs in science antibiotics polio vaccine etc Licensure professional standards and public sector regulation all took hold Development of modern health insurance and insurance regulation Federal support medical education facilities and research Chronic disease emerges as leading cause of death Era 3 Government Regulation 0 1965Iate 19805 Federal role in healthcare broadened Passage of Medicare and Medicaid programs Cost control becomes a major public priority Governmentprivate sector partnership Life expectancy ate 705 Era 4 Market Dominance o 19905today Looking for private solutions to healthcare problems managed care 1993 President s Clinton s national healthcare reform starts off with broad support and is then defeated 1994 midterm elections republicans win majority in both houses of Congress 1995 major cuts to Medicare and Medicaid programs 2005 Employersponsored health insurance declines number of uninsured rises 2007 SCHIP State Children Health Insurance Program reauthorization vetoed twice by President Bush before the 2009 Children s Health Insurance Program Reauthorization Act CHIPRA 2009 Health spending accounts for record 176 of US Gross Domestic Product GDP up from 96 in 1981 2010 President Obama signs Patient Protection and Affordable Care Act PPACA into law 0 Implementation begins The Healthcare Patchwork 0 Employed voluntary insurance provided by personal and employer contributions 0 Aged Medicare and supplemental coverage 0 Poor Medicaid program via federal and state revenues 0 Special Populations direct care from federal government for veterans merchant seaman Native Americans members of the armed forces Congress and the executive branch 0 Other exchanges and expansions of Medicaid Obamacare ALL LEVELS OF GOVERNMENT ARE INVOLVED IN HEALTH CARE POLICY Role of the Federal Government 0 Department of Health and Human Services HHS Agencies include National Institutes of Health Centers for Disease Control Food and Drug Administration Programs include Medicare Medicaid State Children s Health Insurance Program Family Planning Administrator of Healthcaregov the federally operated health insurance exchange website 0 Internal Revenue Service Responsible for enforcing the individual and employer mandates through tax penalties determining individual health insurance premium tax credit eligibility and collecting excise tax on highcost coverage or Cadillac Tax 2018 0 Department of Labor Working jointly with the Department of Health and Human Services and Treasury to implement and enforce Affordable Care Act provisions 0 Role of the States 0 Departments of Health Human Services or Social Services Divisions of Insurance 0 Regulation of health care costs and insurance carriers Financial support for treatment of poor and disabled 0 Medicaid welfare Quality assurance and oversight of health care practitioners and facilities eg state licensure and regulation Health personnel training Local government health services 0 Role of Local Government 0 Departments of Public Health Clinical prevention eg adult and child immunizations Population based interventions eg communicable disease and environmental health surveillance 0 Congress and Health 0 Health policy is a bipartisan priority 0 Authority spread across several committees House and Senate 0 Involvement includes regulatory programmatic nancing and oversight The Role of Interest Groups 0 Interest groups are groups of people working in strong support of a piece of legislation industry concern or sector of the population 0 Characteristics of a powerful interest group Size of its membership Financial and personnel resources Astuteness of its representatives Soundness of the issues Notes on the Readings Health System Review Organization and Governance reading Private sector stakeholders play a stronger role in the US healthcare system than in other highincome countries The private sector led the development of the health system in the early 19305 Both public and private payers purchase healthcare services from providers subject to regulations imposed by federal state and local governments as well as by private regulatory organizations Due to the multiplicity of actors strengthening the use of health information systems to link different actors has become a priority of the federal government The largest public purchaser of healthcare coverage is Medicare Private insurance falls predominantly into three categories health maintenance organizations HMOs preferred provider organizations PPOs and highdeductible plans The majority of Americans with private insurance obtain it through an employer Regulation of the US healthcare system occurs at three levels federal state and private 0 Most of the regulation at the federal level comes under the department of health and human services HHS o The HHS oversees programs issues regulations and carries out federal government policy on a number of healthcare and related matters Government39s Role in Protecting Health and Safety reading 0 Public health initiatives include efforts to promote free and open information to facilitate informed decision making protect individuals from being harmed by other individuals and groups and facilitate societal action to promote and protect health 0 Free and open information empowers people to make informed choices and reduces the likelihood that misinformation or hidden information will endanger health 0 Laws may require disclosure of factual information eg product content provide for government transparency freedom of information or prevent dissemination of inaccurate or misleading information o Other examples include calories labeling in restaurants graphic warnings on tobacco packages and antitobacco advertising to encourage smoking cessation 0 Another key role of government is to protect individuals from preventable harm caused by other individuals or groups 0 Government has a responsibility to protect individuals from unhealthy environments whether the sources of health risks are natural eg mosquito infestation or created by people or organizations 0 Examples preventing sales of contaminated food water and medications reducing alcoholimpaired driving or protecting workers and communities from industrial toxins Another key role of government is to protect and promote health through populationwide action 0 Examples include immunization mandates uoridation of water iodization of salt micronutrient forti cation of our zoning laws that require or provide incentives to create bicycling and walking paths or that reduce the neighborhood density of liquor stores 0 These actions serve entire communities and individuals cannot implement them on their own 0 Bene ts of public health action include 0 Economic health care and productivity gains 0 Longer healthier lives Opponents of public health action argue that o The health burden is low 0 Intervention is too costly or is likely to be ineffective o The expected bene ts don t warrant the costs 0 Loss of perceived autonomy or the belief that these actions will undermine selfreliance or individual choice Chapter 2 Public Insurance Medicaid Glossary Terms Capitation A method of paying for health care services under which providers receive a set payment for each person or quotcovered lifequot instead of receiving payment based on the number of services provided or the costs of the services rendered These payments can be adjusted based on the demographic characteristics such as age and gender or the expected costs of the members Cost sharing A feature of health plans where bene ciaries are required to pay a portion of the costs of their care Examples of costs include co payments coinsurance and annual deductibles Deductible A feature of health plans in which consumers are responsible for health care costs up to a speci ed dollar amount After the deductible has been paid the health insurance plan begins to pay for health care services Dual eligibles A term used to describe an individual who is eligible for Medicare and for some level of Medicaid bene ts Most dual eligibles qualify for full Medicaid bene ts including nursing home services and Medicaid pays their Medicare premiums and cost sharing For other duals Medicaid provides the quotMedicare Savings Programsquot through which enroees receive assistance with Medicare premiums deductibles and other cost sharing requirements Electronic Health RecordElectronic Medical Record EHREMR Computerized records of a patient s health information including medical demographic and administrative data This record can be created and stored within one health care organization or it can be shared across health care organizations and delivery sites Federal Medical Assistance Percentage FMAP The statutory term for the federal Medicaid matching rate ie the share of the costs of Medicaid services or administration that the federal government bears In the case of covered services FMAP varies from 50 to 76 percent depending upon a state s per capita income on average across all states the federal government pays 57 percent of the costs of Medicaid Feeforservice A traditional method of paying for medical services under which doctors and hospitals are paid for each service they provide Bills are either paid by the patient who then submits them to the insurance company or are submitted by the provider to the patient s insurance carrier for reimbursement Health maintenance organization HMO A type of managed care plan that offers prepaid comprehensive health service coverage for hospital and physician services relying on its medical providers to minimize the cost of providing medical services HMOs contract with or directly employ participating health services providers Enrollees must pay the full cost of receiving service from nonnetwork providers Managed care organization MCO A health delivery system that seeks to control access to and utilization of health care services both to limit health care costs and to improve the quality of the care provided Managed care arrangements typically rely on primary care physicians to act as gatekeepers and manage the care their patients receive All managed care plans exert some control over how where when by whom and in what quantity healthcare is delivered Network A group of affiliated contracted healthcare providers physicians hospitals testing centers rehabilitation centers etc such as an HMO PPO or Point of Service plan Outofpocket costs Health care costs such as deductibles copayments and coinsurance that are not covered by insurance Outof pocket costs do not include premium costs Participating Physician or Provider Healthcare providers who have contracted with a managed care plan to provide eligible healthcare services to members of that plan Premium The amount paid often on a monthly basis for health insurance The cost of the premium may be shared between employers or government purchasers and individuals Primary care Nonspecialty care provided by doctors nurses and others Underinsured People who have health insurance but who face outof pocket health care costs or limits on bene ts that may affect their ability to access or pay for health care services PowerPoint Notes 0 Health Insurance Coverage in the US O O O O 57 are covered by private health insurance companies 16 are covered by MedicaidCHIP 15 are covered by Medicare 12 are uninsured 0 KerrMills Act of 1960 0 Provided federal grants to support staterun medical assistance programs for elderly persons who could not afford adequate medical care Forerunner to Medicaid Safety Net Who is Covered by Medicaid O 0000 O 67 million lowincome Americans Lowincome children and adults 51 million Elderly and persons with disabilities including children 17 million Dual eligiblesquot 96 million Medicaid enrollees are sicker and more likely to be disabled than the privately insured Children below 100 FPL Federal Poverty Line and Nursing Home Residents are the largest sectors of Medicaid coverage at 70 and 63 respectively 0 Dual Eligibles O O Enrolled in both Medicare and Medicaid 96 million Among the sickest and poorest in either program 60 elderly 65 years 40 lt65 years and disabled Rely on Medicaid to pay Medicare premiumscostsharing and cover bene ts Medicare does not cover eg longterm care dental care eyeglasses 0 Partial dual eligible bene ciaries do not qualify for full Medicaid bene ts but receive assistance with premiums through the Medicare Savings Program UnderEnrollment 0 Lack of awareness on program eligibility Parent ineligibility may lead to confusion about child eligibility o Burdensome enrollmentrenewal requirements eg citizenship documentation Policy improvements 0 States receive federal bonuses for surpassing enrollment and retention targets set by CHIPRA 2009 Financing and Administration of Medicaid o Jointly nanced by federal and state governments Federal government matches state spending 0 Federal Medical Assistance Percentage or FMAP No cap on funding 0 State agencies administer Medicaid Oversight by CMS Centers for Medicare amp Medicaid Services and HHS 0 Federal law outlines minimum requirements for state programs quotcore bene tsquot 0 States have exibility to broaden eligibility bene ts provider payment etc Medicaid Bene ts 0 Mandatory Items and Services Physicians services Laboratory and xray services inpatient hospital services outpatient hospital services early and periodic screening diagnostic and treatment EPSDT services for individuals under 21 family planning rural and federallyquali ed health center FQHC services nurse midwife services nursing facility NF services for individuals 21 or over home health care for NFeligibles and transportation services 0 quotOptionalquot Items and Services Prescription drugs clinic services dental services dentures physical therapy and rehab services prosthetic devices eyeglasses primary care case management intermediate care facilities for the mentally retarded lCFMR services inpatient psychiatric care for individuals under 21 home health care services personal care services and hospice services Enrollment and Spending in Medicaid 0 Medicaid enrollment Children 47 Adults 28 Blind and disabled 16 and aged 9 0 Medicaid spending Blind and Disabled 44 children 21 aged 20 adults 15 o By 2024 C30 estimates that Children and adults Will account for 8 in 10 enrollees and nearly half of spending on bene ts Medicaid Health Care Delivery 0 Varies by state 0 Feefor service o Managed care organization MCOs Paid on a capitation basis 0 Primary care case management PCCM Primary care provider receives small fee per person per month to provide basic care and coordinate need for other services Access to Care 0 Limits on costsharing for Medicaid enrollees facilitate access 0 On measures of access to preventive and primary care Medicaid enrollees tend to lag behind those with private insurance 0 Low provider payment and participation rates hamper access Quality of Care 0 States are increasingly collecting and reporting data on quality measures To help bene ciaries choose plans To drive improvements by rewarding highperforming providers 0 Use of electronic health records EHRs Coordination of care Reduction of medical errors duplicative care Children39s Health Insurance Program CHIP 0 Created under balanced budget act of 1997 to provide coverage to uninsured children in families with income too high to be eligible for Medicaid 0 Extended by the Children s Health Insurance Program Reauthorization Act CHIPRA of 2009 Affordable Care Act Medicaid Expansion 0 The ACA expands Medicaid eligibility to include all nonelderly lt65 years with income at or below 138 FPL o The 2012 Supreme Court decision upholding the constitutionality of the ACA made Medicaid expansion optional for states To date 27 states and DC have expanded Medicaid additional states may expand moving forward In states that do not expand Medicaid under the ACA there will be large gaps in coverage available for adults CBO estimates that there Will be 26 million fewer uninsured in 2024 due to the ACA Financing of Medicaid Expansion Under the ACA 0 States had the option to begin or phasein coverage of the newly eligible group as of April 1 2010 rather than waiting until 2014 0 Federal Medicaid matching funds were available at the regular rate un l2014 2014 enhanced ACA federal match rates takes effect Federal government will nance full cost of covering newly eligible group through 2016 phasing down to 90 in 2020 and thereafter CHIP funding extended through 2015 Video Notes MEDICAID Origins o Enacted in 1965 as companion legislation to Medicare parts AampB title XIX o Entitles eligible individuals to de ned set of bene ts 0 Guarantees participating states federal matching funds on openended basis 0 Meanstested with focus on welfare population children single parents with dependent children aged blind amp disabled 0 Jointly nanced by federal and state government 0 Mandatory services and populations for participating states States have some exibility to set eligibility bene ts and establish payment design and care delivery Overview Coverage 9 million children and 15 million adults in low income families 15 million elderly and persons with disabilities Assistance to Medicare bene ciaries 89 million aged and disabled 21 of Medicare bene ciaries Long term care assistance 1 million nursing home residents 28 million community based residents Support for health care system and safety net 16 of national health spending 40 of long term care services State capacity for health coverage federal share can range from 50 to 83 for FFY 2012 ranges 50 to 742 Percent with Coverage Poor 42 Lowincome children 56 Nursing home residents 70 Births pregnant women 41 People with HIVAIDS 44 Enrollees vs Expenditures c Total 595 million enrollees 3177 billion dollars spending 0 49 children 20 spending 0 15 disabled 43 spending Expenditures by service 0 Longterm care 33 total 0 O O 0 Home health and personal care 14 Mental health 1 Nursing facilities 14 Payments to medicare 3 0 Acute care 62 total 0 O O O O 0 Physician Iab xray 4 Outpatient clinic 7 Drugs 4 Other acute 8 Payments to managed care organizations 21 Inpatient 14 Total 3665 billion Mandatory bene ts physician services 0 CO 00000 0 Laboratory and xray Inpatient hospital services Early and periodic screening diagnostic and treatment services for individuals lt age 21 Family planning services Rural and federally quali ed health center services Nurse midwife services Nursing facility services for individuals gt21 yr old Smoking cessation services for pregnant women Free standing birth center services 0 Optional bene ts 0 0000000 0000 Prescription drugs Clinic services Dental services dentures Physical therapy and rehab Primary care case management Intermediate care facilities for the mentally retarded Inpatient psychiatric care for individuals lt21 Home health care and other services provided under home and community based waivers Personal care services Hospice services Health home for individuals with chronic condition Home and community based attendant services and supports 0 Must be 133 FPL 24353 for family of 3 in 2010 Notes on Readings Medicaid Moving Forward Medicaid is the nation s main public health insurance program for people with low incomes and the single largest source of health coverage in the US Medicaid is administered by the states within broad federal requirements and states and the federal government nance the program jointly Medicaid plays many roles in our health care system 0 Medicaid coverage facilitates access to care for bene ciaries connecting many with managed care plans and their networks of providers covering a broad range of bene ts and limiting outofpocket medical costs 0 Medicaid is a core source of nancing for safetynet hospitals and health centers that serve lowincome communities including many of the uninsured o the main source of coverage and nancing for nursing home and communitybased long term care 0 Medicaid nances 16 of total personal health spending in the US The ACA expanded the Medicaid program signi cantly as part of a broader plan to cover millions of uninsured Americans 0 ACA expanded Medicaid eligibility to reach nearly all non elderly adults with incomes at or below 138 of the federal poverty level 0 ACA required that states simply and modernize their enrollment processes and create a new coordinated enrollment system for Medicaid the Children s Health Insurance Program CHIP and coverage through the new Marketplaces 0 Also established an array of new authorities and funding opportunities for delivery system and payment reform initiatives in Medicare Medicaid and CHIP to promote better models of care and costeffective care for those with high needs and high costs 0 Provided new options and incentives to states to rebalance their Medicaid longterm care programs in favor of communitybased services and supports rather than institutional care Who Medicaid Covers 0 State Medicaid programs must cover people in the federally speci ed groups with income levels up to the federal mandatory minimum thresholds and states have the option to expand coverage to individuals at higher income levels Many states have taken up options to expand coverage for children Together Medicaid and CHIP cover more than 1 in every 3 children States generally must provide Medicaid automatically to seniors and people with disabilities who receive Supplemental Security Income SSI bene ts In 2010 14 of all Medicaid enrollees more than 9 million were quotdual eligiblequot seniors and younger persons with disabilities who are also covered by Medicare Medicaid assists them with their Medicare premiums and costsharing and covers full Medicaid bene ts for a large majority of them most importantly long term services and supports for which Medicare coverage is very limited In the states not currently expanding Medicaid under the ACA nearly 5 million uninsured nonelderly adults with incomes above the states limited eligibility levels but below 100 FPL fall into a coverage gap They cannot qualify for Medicaid because their income exceeds their state s eligibility cutoff but they do not earn enough to qualify for federal subsidies to purchase coverage through the Marketplaces States also have the ability to use Medicaid dollars to purchase private coverage on behalf of Medicaid bene ciaries who have access to employersponsored health insurance an approach known as quotpremium assistancequot 0 States must generally provide wraparound services and cost sharing protection to ll in any gaps between the private coverage and Medicaid How do Medicaid Bene ciaries get care 0 Over half of Medicaid bene ciaries nationally and mostly children and parents are enrolled in comprehensive managed care organization MCO that contract with states on a capitation or risk basis to deliver Medicaid services A smaller but still signi cant number of bene ciaries are enrolled in Primary Care Case Management PCCM programs in which states continue to pay feefor service but also pay primary care providers a small monthly fee to coordinate care for their Medicaid patients Children39s Health Coverage Medicaid CHIP and the ACA 2013 over 28 million children were enrolled in Medicaid and another 57 million were enrolled in CHIP From 19972012 the number of uninsured children were cut in half from 14 to a low of 7 Despite the success of Medicaid and CHIP over 7 million children remain uninsured The ACA requires states to better align coverage for children by transitioning coverage for all children up to 133 FPL to Medicaid 0 Further streamlines enrollment processes increases outreach efforts for adults which could increase enrollment of children and calls for additional nancing for CHIP through the scal year of 2015 and enhanced nancing for CHIP Medicaid spending reached 415 billion in 2012 0 Children represent about 20 of Medicaid spending Medicaid s size and scope is broader compared to CHIP Both Medicaid and CHIP are matching programs however the CHIP match rate is higher than Medicaid and CHIP nancing is capped 0 Under both programs the federal government matches states spending on eligible program bene ciaries according to formula that relies on states relative per capita income 0 On average the federal government s share of Medicaid spending is 57 but it is 70 under CHIP 0 Under Medicaid federal matching funds are guaranteed with no preset limits 0 Under CHIP federal funds are capped nationwide and each state operates under an allotment Compared to Medicaid states receive more exibility around bene ts and costsharing when operating separate CHIP programs 0 Medicaid requires certain bene ts that are not required in CHIP including Early and Periodic Screening Diagnosis and Treatment EPSDT longterm care services provided at Federally Quali ed Health Centers FQHCs and many rehabilitative services 0 States are generally prohibited from imposing premiums and costsharing for mandatory coverage of children in Medicaid but state have more exibility to use premiums and costsharing in separate CHIP programs Experience with Medicaid and CHIP demonstrates that the combined effects of eligibility expansions enrollment simpli cations and outreach efforts lead to increased coverage and reductions in the number of uninsured children over time While Medicaid and CHIP help ll gaps in private coverage geographic disparities in coverage remain 0 Nearly half of all uninsured children live in just six states AZ CA FL GA NY and TX 0 Medicaid and CHIP cover more than one in three 37 children and play a particularly important role for all lowincome children and children of color 0 Children with Medicaid and CHIP coverage have signi cantly better access to care than uninsured children and their access is comparable to privately covered children 0 Under the ACA eligibility for children through Medicaid and CHIP remains strong 0 The ACA and new guidance also help strengthen coverage for children and nancing for CHIP Under the ACA streamlined enrollment processes outreach efforts and new coverage gains for parents will spur increased enrollment of children Where Are States Today Medicaid and CHIP Eligibility Levels for Children and NonDisabled Adults as of April 1 2014 Medicaid and CHIP coverage for children remains strong across states 0 Most states continue to cover pregnant women in Medicaid and CHIP above the federal minimum standards 0 The Medicaid expansion signi cantly increased eligibility for adults in the 27 states implementing the expansion 0 Many poor adults remain ineligible for coverage in the 24 states not expanding Medicaid at this time Chapter 3 Public Insurance Medicare Glossary Terms Activities of daily living ADL Tasks used to measure a person s functional status including eating bathing dressing using the toilet and walking Coinsurance A method of costsharing in health insurance plans in which the plan member is required to pay a de ned percentage of their medical costs after the deductible has been met Costsharing Any contribution consumers make towards the cost of their health care as de ned in their health insurance policy Examples include co payments coinsurance and annual deductibles De cit A government39s de cit can be measured with or without including the interest it pays on its debt The primary de cit is de ned as the difference between current government spending and total current revenue from all types of taxes The total de cit which is often just called the 39de cit39 is spending plus interest payments on the debt minus tax revenues quotDonut holequot A gap in prescription drug coverage under Medicare Part D where bene ciaries enrolled in Part D plans pay 100 of their prescription drug costs after their total drug spending exceeds an initial coverage limit until they qualify for catastrophic coverage Under the standard Part D bene t Medicare covers 75 of total drug spending below the initial coverage limit 2830 in 2010 and 95 of spending above the catastrophic level 6440 in 2010 These thresholds are indexed to increase over time The doughnut hole or coverage gap speci cally refers to the range between these two levels 3610 in 2010 in which bene ciaries are responsible for all costs incurred for prescription drugs The coverage gap will be gradually phased out under health reform so that by 2020 bene ciaries will only be responsible for 25 of all prescription drug costs up to the catastrophic level Fee for service FFS A traditional method of paying for medical services under which doctors and hospitals are paid for each service they provide Bills are either paid by the patient who then submits them to the insurance company or are submitted by the provider to the patient s insurance carrier for reimbursement Longterm care Health and social services for people with permanent disabilities or chronic illnesses Care may be provided in a residential facility at home or elsewhere in the community Medicaid is the primary payer for longterm care Many of these services are not covered by Medicare or private insurance Medicare Enacted in 1965 under Title XVII of the Social Security Act Medicare is a federal entitlement program that provides health insurance coverage to 45 million people including people age 65 and older and younger people with permanent disabilities endstage renal disease and Lou Gehrig s disease Medicare is organized into four parts Part A Covers inpatient hospital stays skilled nursing facility stays home health visits also covered under Part B and hospice care Part A bene ts are subject to a deductible and coinsurance Part B Covers physician visits outpatient services preventive services and home health visits Part B bene ts are subject to a deductible and cost sharing generally applies Part C Refers to the Medicare Advantage program through which bene ciaries can enroll in a private health plan such as a health maintenance organization HMO and receive all Medicarecovered bene ts Part D Voluntary subsidized outpatient prescription drug bene t with additional subsidies for bene ciaries with low incomes and modest assets The Part D program is offered through private plans that contract with Medicare both standalone prescription drug plans PDPs and Medicare Advantage prescription drug plans MAPDs PowerPoint Notes Medicare is governmentsponsored healthcare for seniors and the disabled Created in 1965 0 Designed for people on Social Security 0 Not the same thing as Medicaid Government pays for care instead of a private insurance company How to qualify over age 65 permanently disabled or kidney failure requiring dialysistransplant Has 4 parts 0 Part A Hospital Insurance HI Program covers inpatient hospital services skilled nursing facilities home health hospice health 0 Part B Supplementary Medical Insurance SMI Program covers physician outpatient home health preventative services 0 Part C Medicare Advantage Plan I Combines A B and sometimes D coverage Private insurer approved by Medicare Private health plans provide benefits Can offer better coverage than parts A and B Created in an effort to increase private sector participation in Medicare to reduce growth in spending 0 Allows beneficiaries to enroll in a private plan eg HMO PPO private feeforservice as an alternative to traditional feeforservice Medicare 0 Funding private plans receive payments from Medicare to provide benefits covered under parts A B and D 0 Enrollees pay part B premium and often an additional premium directly to their plan 0 Costsharing and benefit structure vary Widely by plan 0 Nearly 16 million beneficiaries 30 of all beneficiaries are enrolled in Medicare Advantage plans 0 Enrollment has increased since 2004 due to increased Medicare payments to plans 0 Part D prescription drug benefit I Private health plans provide benefits 0 Gaps in Medicare39s Bene t Package 0 No coverage for Longterm ca re services Dental ca redentu res Vision ca reeyeglasses Hearing examshea ring aids 0 Health spending is still a nancial burden among bene ciaries High deductibles and costsha ring No stoploss bene t that limits annual outofpocket s p e n d i n g Additional premiums for supplemental coverage until 2020 a coverage gap quotdonut holequot in prescription d ru 9 b e n e t Supplemental Insurance 0 Medigap policies are private plans to help cover Medicare cost sharing and ll gaps in the bene t package 0 Employersponsored retiree health plans 0 Medicaid supplements Medicare coverage for bene ciaries with low incomes and modest assets known as quotdual eligiblesquot Physician Reimbursement o Reimbursement is based primarily on Medicare s Resource Based Relative Value Scale RBRVS Relative value units RVUs the relative resources associated with the physician s work time practice expenses and malpractice expenses Conversion factor dollar amount used to convert RVUs into a payment amount for service Geographic adjustment factor accounts for geographic differences in the costs of maintaining a medical practice Affordable Care Act Reducing Spending 0 Medicare accounts for 14 of the Federal budget 0 Medicaid accounts for 8 of the Federal budget Federal De cit The Basics 0 Amount by which government spending exceeds tax revenue in a scalyear The difference is made up for by borrowing from the public National debt is the sum of all previously incurred federal de cits that remain outstanding ie unpaid o Mediumterm de cit IraqAfghanistan wars Medicare Part D Bush tax cuts current recession and resulting stimulus package 0 Longterm de cit Projected growth of Medicare Medicaid and Social Security Future Financing Challenges 0 Medicare spending is projected to grow at a faster rate than the overall economy due to Rising health care costs Aging population Decline in the number of workers per bene ciary Increasing life expectancy Conclusion 0 Medicare is an entitlement program providing health insurance to the elderly and disabled 0 Impact of the ACA on Medicare Closing of the donut hole Increased revenues payroll tax Reduced spending reduced federal payments to Medicare Advantage plans freezing of income thresholds for Part B and D premiums Independent Payment Advisory Board pilot projects 0 Medicare spending will continue to be a political issue Notes on Readinds Medicare at a Glance 2013 composition of people on Medicare 0 Half of all people on Medicare had incomes below 23500 per person 14 of all bene ciaries reported being in fair or poor health 310 had a cognitive or mental impairment 16 of bene ciaries are nonelderly people with disabilities 135 are age 85 or older 0 5 lived in a longterm care facility Outof pocket spending 0 In 2010 Medicare bene ciaries spent 4734 out of their own pockets for health care spending on average including premiums for Medicare and other types of supplemental insurance and costs incurred for medical and longterm care services 0 Bene ciaries in poorer health who typically need and use for medical and longterm care services tend to have higher outof pocket costs Medicare is projected to grow at a slower pace than private health insurance spending on a per person basis over the same time period 0000 The Facts on Medicare Spending and Financing Medicare spending growth has slowed in recent years and is expected to grow at a slower rate in the future than in the past and even slower than was projected just a few years ago Net Medicare spending is projected to be a roughly constant share of the federal budget and the nation s economy in the coming decade Medicare spending in 2014 was 1000 per person than was expected due to the passage of the ACA The Medicare Part D Prescription Drug Bene t Enrollment in Medicare drug plans is voluntary 2014 more than 37 million Medicare bene ciaries are enrolled in Part D 0 Part D enrollment is highly concentrated with ve rms UnitedHealth Humana CVS Caremark Express Scripts and Aetna accounting for 63 of enroees in 2014 0 Part D spending depends on several factors the number of Part D enroees their health status and drug use the number of lowincome subsidy recipients and plans ability to negotiate discounts and rebates with drug companies and manage use eg promoting use of generic drugs prior authorization step therapy quantity limits and mail order Chapter 4 Private Insurance and the Uninsured Glossary Terms Adverse Selection The tendency for utilization of health services in a population to be higher than the average From an insurance perspective adverse selection occurs when people with poorer than average health status apply for or continue insurance coverage to a greater extent than people with average or better health expectations Bene t Package The set of services such as physician visits hospitalizations prescription drugs that are covered by an insurance policy or health plan The bene t package will specify any costsharing requirements for services limits on particular services and annual or lifetime spending limits Community Rating A method for setting premium rates for health insurance plans under which all policy holders are charged the same premium for the same coverage based on the average cost of providing health care Copayment A method of costsharing in health insurance plans where the patient pays a xed dollar amount at the time of receiving a covered health care service from a participating provider The required fee varies by the service provided ex Physician visit specialist visit prescription drug etc and by the health plan Essential Health Bene ts A package of bene ts set by the Secretary of Health and Human Services that insurers will be required to offer under the exchanges Health Insurance Exchange A marketplace created to give individuals small businesses and others access to affordable private health insurance Medical Loss Ratio The percentage of premium dollars an insurance company spends on medical care as opposed to administrative costs or pro ts Medical Underwriting The process of determining whether or not to accept an applicant for health care coverage based on their medical history This process determines what the terms of coverage will be including the premium cost and any preexisting condition exclusions New rules under the Affordable Care Act will end medical underwriting and preexisting condition exclusions Moral Hazard occurs when the behavior of the insured party changes in a way that raises costs for the insurer since the insured party no longer bears the full costs of that behavior Because individuals no longer bear the cost of medical services they have an added incentive to ask for pricier and more elaborate medical service which would otherwise not be necessary In these instances individuals have an incentive to over consume simply because they no longer bear the full cost of medical services PointofService Plan POS A POS plan is an quotHMOPPOquot hybrid sometimes referred to as an quotopenendedquot HMO when offered by an HMO POS plans resemble HMOs for innetwork services Services received outside of the network are usually reimbursed in a manner similar to conventional indemnity plans eg provider reimbursement based on a fee schedule or usual customary and reasonable charges Preexisting condition Health problems that existed before the policy was purchased Before the implementation of the Affordable Care Act insurance policies often excluded preexisting conditions Preferred Provider Organization Plan PPO An indemnity plan where coverage is provided to participants through a network of selected health care providers such as hospitals and physicians The enroees may go outside the network but would incur larger costs in the form of higher deductibles higher coinsurance rates or nondiscounted charges from the providers Risk pool Bringing several risks together for insurance purposes in order to balance the consequences of the realization of each individual risk Insurance companies usually try to have the largest pool possible in order to balance out the costs of those who are high consumers of healthcare services versus those who are low consumers A larger risk pool is a nancial bene t for an insurance company Utilization review Review by an insurer of health care services to evaluate the appropriateness necessity and quality of a requested service PowerPoint Notes First health insurance plans were from Civil War and were only for accident insurance In the 20th century there was not a lot of health care to buy so there was no need for plans 1929 hospitals formed Blue Cross alliance 1939 physicians formed Blue Shield alliance Blue CrossBlue Shield merged in 1982 Employersponsored insurance became popular during WWII 0 Due to wage control companies had to offer other bene ts to compete for employees Truman wanted to ditch employersponsored insurance for universal health care 0 Hospitals physicians and labor unions would ve had something to lose with the switch so they shut the initiative down I Still the elderly poor unemployed couldn t get insurance 0 Johnson signed Medicare and Medicaid into law 0 Today both plans cover 13 of Americans We need insurance because health care is very expensive 27 trillion of US spending in 2012 was for health care 0 18 of GDP Health insurance pools risk and money goes to who needs it o Transfers money from healthy to sick 0 Insurers want to avoid attracting a disproportionate share of people in poor health into a risk pool this leads to higher costs Plans differ by actuarial value 0 The percentage of the cost of care that insurance will cover 0 60 actuarial value insurance covers 60 you cover 40 percent 0 Plans with higher actuarial value cost more upfront but less later Insurers create networks of physicians that they ve negotiated lower rates with Premium the monthly recurring cost of an insurance plan Deductible after the premium the amount the insured must pay out of pocket before the insurance starts to pay 0 Insurance companies think you re less likely to spend your own money on unnecessary care Copay a set amount paid by the insured each time a medical service is accessed Coinsurance the amount you pay for a service calculated as a set percentage of the total cost 0 Linked to actuarial value Out of pocket maximum doesn t include premium 0 Family at most 12700year 0 Individual at most 6350year We all chip in with our insurance premium each month even when we re healthy so the money is there when we need it Risk Pooling o Pooling the health care risks of a group makes individual costs more predictable and manageable If you get insurance at work your employer probably pays most of the premium and the rest is deducted from your paycheck automatically Medicaid you probably have no premium at all 0 It s paid for by federal amp state governments Those insured through the new health insurance marketplace depending on income may be eligible for a tax credit that pays part of your premium 0 All new plans provide free preventive care Your plan has lots of details that affect how much you pay 0 If you have Medicaid your services may be free 0 Otherwise you will pay something for medical services I It s called a copay when it s a set amount I It s called coinsurance when it s a set percentage I Deductible your outofpocket before insurance kicks in You have an outofpocket maximum per year and insurance pays for 100 of care after this 0 Exception no maximum for outofnetwork Formulary list of prescriptions insurance plan will pay for but prices vary Provider network doctors and hospitals that have negotiated discounts with your insurer 0 Some plans like HMOs and EPOs will pay nothing if you go out of network 0 PPOs will cover some of out of network costs but you ll pay a much higher rate for care Specialists sometimes require a referral from your primary care physician Staying innetwork can be hard especially in hospitals 0 Don t be afraid to appeal to your insurer There are tradeoffs between plans The Purpose of Health Insurance 0 To enable people to get rid of uncertainty ie the possibility they will have a large medical expense 0 Health insurance converts the uncertainty of a large medical expense to a certain but smaller expense ie the cost of health insurance Adverse Selection and the Death Spiral 0 Disproportionate number of sick people enroll in a risk pool I health plan incurs higher costs than expected I health plan raises premiums for the following year I healthy people drop coverage to seek a risk pool with lower premiums or bear risk themselves I sicker individuals remain in the risk pool health plan costs continue to rise health plan raises premiums for the following year etc 0 Under the ACA insurers are no longer permitted to deny coverage or charge higher premiums on the basis of health status Private Insurance 0 Provided primarily through benefit plans sponsored by the employers 0 People Without access to employersponsored coverage may obtain health insurance through the private individual health insurance market 0 Private insurance covers 57 of all the insured in America 0 Different types of private health plans I Traditional Indemnity I Health maintenance organization HMO I Preferred Provider Organization PPO I PointofService Plan POS I High deductible health plans with health savings accounts has I Health Reimbursement Account HRA 0 Traditional Indemnity I Feeforservice payment insurance pays the provider or reimburses the patient a predetermined amount for the medical service provided I Patients select own physicians I Downside is that it led to rapidly rising costs I Tendency of physicians to prescribe lowbenefit care I Rapid introduction of new technology regardless of marginal benefit I Patients do not bear the full cost of excessive care Market Response Managed Care 0 Under managed care insurers intervene in the providerpatient relationship health delivery system I Insurers in uence decision to hospitalize length of stay specialist referrals types of drugs prescribed Health Maintenance Organization HMO 0 Operates as insurer by spreading health care costs across enrollees and provider by directly arranging care for enrollees I Providers are employed by or under contract with HMO I Enrollees bear the full cost of services for outof network providers 0 Focus on prevention keeping enrollees healthy 0 Downside physicians may receive bonuses if enrollees medical costs are below capitation payments incentive to underprovide care Pointof Service Plan P08 0 A type of HMO that permits its enrollees access to nonpaticipating providers if the enrollees are willing to pay a high copayment each time the use such providers 0 Premiums tend to be higher than under the standard HMO model Preferred Provider Organization PPO 0 An insurer contracts with a group of providers who provide services at discounted fees in return for prompt payment and a guaranteed patient volume 0 Enrollees have lower copayments for innetwork providers I Incentive to stay innetwork Who are the Uninsured 0 Nearly 41 million americans under age 65 were uninsured in 2014 0 Key predictors I Young adults age 2544 years I Less formal education I Low income I More than threequarters of the uninsured are in a working family 0 Medical Consequences I The uninsured are lei likely than those with insurance to receive any medical care following a health shock be screened for cancer be diagnosed with advanced cancer survive cancer I The uninsured are m likely than those with insurance to be hospitalized for preventable conditions die in the hospital I About half of all families filing for bankruptcy do so as the result of a serious medical problem Notes on the Readings Key Facts about the Uninsured Population The high cost of insurance has been the main reason why people go without coverage Most of the uninsured are in lowincome families People without insurance coverage have worse access to care than people who are insured The uninsured are less likely than those with insurance to receive preventive care and services for major health conditions and chronic diseases The Uninsured A Primer 0 Historically the majority of employers offered group health insurance policies to their employees and to their employees families 0 Not all workers had access to employersponsored insurance however I Cost was a barrier to expanding employersponsored coverage 0 The availability of employersponsored coverage has eroded over time and declines in employer coverage accelerated during the economic downturn 0 Adults were more likely to be uninsured than children 0 Minorities were much more likely to uninsured than whites 0 In states that do not expand Medicaid millions fall into a coverage gap of earning too much to qualify for traditional Medicaid but not enough to qualify for other ACA coverage provisions 0 Even in states that do expand Medicaid undocumented immigrants and many recent lawfully present immigrants will remain ineligible 0 Medicaid enrollment has grown under the ACA Chapter 5 Health Care Delivery Cost and Quality mm Gross Domestic Product GDP the total value of goods produced and services provided in a country during one year Pay for Performance A health care payment system in which providers receive incentives for meeting or exceeding quality and sometimes cost benchmarks Some systems also penalize providers who do not meet established benchmarks The goal of pay for performance programs is to improve the quality of care over time Payment Bundling A mechanism of provider payment where providers or hospitals receive a single payment for all of the care provided for an episode of illness rather than per service Total care provided for an episode of illness may include both acute and postacute care Stakeholder Any organization governmental entity or individual that has a stake in or may be impacted by a given approach to environmental regulation pollution prevention energy conservation etc In healthcare this may include but is not limited to insurance companies health organizations providers and groups who are the consumers of healthcare individuals covered through government programs or private insurers System Fragmentation Having multiple decision makers make a set of health care decisions that would be made better through uni ed decision making PowerPoint Notes 0 Americans spend over twice as much per capita on healthcare as the average developed country does 0 Health Care spending is highly concentrated 0 Top 5 of spenders account for almost half of spending 0 Top 1 of spenders account for gt20 of spending 0 High senders are older 0 Geographic Variation in Health Spending 0 Variation in cost is greatest when there is little consensus on treatment guidelines Whether to recommend a mammogram for a 50 year old woman small variation O O O Whether to perform surgery on a patient with lower back pain large variation States with higher Medicare spending often associated with lower quality of care Minimum cost discounted price for largest insurers Maximum cost cashpaying customers or small insurers Why Does the Level of Health Spending Matter 0 O 0 Health care spending accounts for approximately 18 of GDP State governments have had to divert funds from education to health care Lower salaries at public universities Rising cost of employersponsored insurance leads to stagnating wages andjobs Health care costs add more than 1500 to the price of every care manufactured by GM 0 Why Are Health Costs 50 High 0 0 System fragmentation Lack of coordination of care especially for patients with multiple health problems Administrative waste Patients do not have access to reliable information on cost quality and outcomes Aging population with increasingly chronic multiple conditions Underinvestment in population health Health determinants other than health care Continuous emergence of new therapies drugs and technologies Perverse economic and practice incentives Feefor service reimbursement system rewards quantity of services not necessarily quality Medical errors and preventable complications Hospital acquired infections adverse drug events provider error 0 Quality of Medical Care 0 O 6 domains of Quality Effectiveness safety timeliness patientcenterdness equity ef ciency Poor quality can result from Too much care overutilization risks outweigh harms Antibiotics for upper respiratory infections Too little care underutilization Childhood immunization The wrong care 0 Medication errors in hospitals 0 Summary of Health Care Delivery Cost and Quality 0 O O O The US spends more than any other country on health care Rising health care costs threaten the US economy We aren39t getting our money39s worth The politics of cost reduction are dif cult CLICKER QUESTIONS Unit 1 1 US health policy and programs are developed and implemented by a The federal Government b All levels of government c The private sector d Local government AnswerB 2 is the US government39s principle department for protecting the health of all Americans and providing essential human services a CMS b HHS c CDC d ACO AnswerB Unit 2 1 Medicare is a federal entitlement program that provides health and longterm care coverage to certain categories of lowincome Americans a True b False FALSE 2 quotDual Eligiblequot is a term used to describe an individual who is eligible for Medicare and for some level of Medicaid bene ts a True b False True 3 Medicaid is nanced by a Federal government b State government c Private insurance d Federal and state governments AnswerB 4 is a traditional method of paying for medical services under which doctors and hospitals are paid for each service they provide a Feeforservice b Capitation c Cost sharing d Pay for performance AnswerA 5 is a federalstate program that provides health care coverage for uninsured lowincome children who are not eligible for Medicaid a ACA b CHIP c FMAP d MCO AnswerB 6 The ACA expands Medicaid eligibility to include all nonelderly adults with income at or below of the federal poverty level a 138 b 100 c 133 d 160 AnswerA 7 States are not required to adopt the Affordable Care Act39s Medicaid expansion a True b False True Unit 3 1 Medicare is a federal entitlement program that provides health insurance coverage to individuals With end stage renal disease Age 65 and older With permanent disabilities With Lou Gehrig39s disease All of the above Duncp Answer E 2 Which part of Medicare covers physician visits outpatient services preventative services and home health visits a PartA b PartB c PartC d PartD AnswerB 3 Part A of Medicare covers a Outpatient services b Physician visits c Inpatient services d Prescription drugs Answer C 4 Is the voluntary subsidized outpatient prescription drug bene t with additional subsidies for bene ciaries with low incomes and modest assets a PartA b Part B c PartC d Part D AnswerD 5 Refers to the Medicare Advantage program a PartA b Part B c PartC d Part D Answer C 6 Medicare is the primary payer for long term care a True b False False Unit 4 1 is the amount paid often on a monthly basis for health insurance a Deductible b Premium c Coinsurance d Copayment AnswerB 2 is a feature of health plans in which consumers are responsible for health care costs up to a speci ed amount After this has been paid the health insurance plan begins to pay for health care services a Deductible b Premium c Coinsurance d Copayment AnswerA 3 a xed dollar amount paid by the individual at the time of receiving a covered health care service from a participating provider a Deductible b Premium c Coinsurance d Copayment AnswerB 4 Pooling the health care risks of a group makes individual costs less predictable and manageable a True b False False 5 occurs when people with poorer than average health status apply for or continue insurance coverage to a greater extent than people with average or better health expectations a Moral hazard b Underwriting c Adverse selection d Community rating Answer C 6 is a health care system that assumes the nancial risks associated with providing comprehensive medical services and the responsibility for health care delivery a HMO b ACA c PPO d POS AnswerA 7 Capitation is a traditional method of paying for medical services under which doctors and hospitals are paid for each service they provide a True b False False 8 is a health care delivery system that seeks to control access to and utilization of health care services both to limit health care costs and to improve the quality of the care provided Health insurance exchange Managed care Point of service Traditional Indemnity plan apem Answer B 9 is a type of HMO that permits its enrollees access to nonparticipating providers if the enrollees are willing to pay a higher copayment each time they use such providers a MCO b MSO c POS d PPO AnswerD Unit 5 1 The top 1 of the US population accounts for more than 20 of healthcare spending a True b False True is the total value of goods produced and services provided in a country during one year a GNP b GDP GDP 3 Which of the following contributes to the high cost of healthcare in the US a System fragmentation b Aging population c Medical errors and preventable complications d All of the above AnswerD 4 Higher spending always leads to better population health a True b False False
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