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Government funded healthGovernment funded health
care:care:
Medicare and MedicaidMedicare and Medicaid
Medicare and MedicaidMedicare and Medicaid
►Similarities:Similarities:
 Both are federally supported programs enactedBoth...
Differences in MCare & MCaidDifferences in MCare & MCaid
►Population coveredPopulation covered
 Medicare provides service...
Other differencesOther differences
►Drug coverageDrug coverage
 Until recent law, Medicare did not contribute toUntil rec...
MedicareMedicare
How does Medicare workHow does Medicare work
►Who is eligible?Who is eligible?
 Everyone in the U.S. over the age of 65 w...
Two parts to Medicare: Part ATwo parts to Medicare: Part A
 Part A: hospital coveragePart A: hospital coverage
 Covered ...
Part BPart B
 Part B: outpatient coveragePart B: outpatient coverage
►OptionalOptional
►Recipient must contribute a premi...
Part CPart C
►Covers up to 30 days of long-term careCovers up to 30 days of long-term care
►Who pays after that?Who pays a...
Part DPart D
►Medication coverageMedication coverage
 Started January 1, 2006Started January 1, 2006
 Does not offer sin...
Part DPart D
►Patients must go to Web site and selectPatients must go to Web site and select
individual planindividual pla...
Medicare growth: 1970-97Medicare growth: 1970-97
(enrollees in millions; costs in billions)(enrollees in millions; costs i...
Life expectancy at age 65Life expectancy at age 65
0
2
4
6
8
10
12
14
16
18
1960 1970 1980 1990 2000
Where does Medicare moneyWhere does Medicare money
go?go?
Acute care hospitals:Acute care hospitals: 48%48%
PhysiciansPhys...
Where does Medicare moneyWhere does Medicare money
go?go?
Acute care hospitals:Acute care hospitals: 48%48%
PhysiciansPhys...
What do you get?What do you get?
►Hospital careHospital care
 Medicare pays 80% of the MedicareMedicare pays 80% of the M...
What do you get?What do you get?
►Long term careLong term care
 Medicare only covers up to 30 days in a nursingMedicare o...
Medicare paymentsMedicare payments
►Who pays the other 20% that MedicareWho pays the other 20% that Medicare
doesn’t cover...
Who decides what is “medicallyWho decides what is “medically
necessary”?necessary”?
►Medicare doesMedicare does
►Some serv...
What does Medicare pay?What does Medicare pay?
►Depends on who you areDepends on who you are
►Original Medicare fee schedu...
What if your fee is more than theWhat if your fee is more than the
“Medicare allowable”“Medicare allowable”
►You can choos...
Medicare reimbursementMedicare reimbursement
►Reimbursement has been revisedReimbursement has been revised
periodically ov...
Medicare reimbursement reformMedicare reimbursement reform
►In 1990, Medicare recognized disparity inIn 1990, Medicare rec...
RBRVSRBRVS
►What was developed was the “ResourceWhat was developed was the “Resource
based Relative Value System”based Rel...
Payment reformPayment reform
►Idea was to gradually shift MedicareIdea was to gradually shift Medicare
payment from arbitr...
Examples of RVUsExamples of RVUs
►RVUs for new patient visitsRVUs for new patient visits
9920299202 New patient, briefNew ...
Other RVUsOther RVUs
9921299212 Est patient, briefEst patient, brief 0.940.94
9921399213 Est patient, limitedEst patient, ...
So how does this work?So how does this work?
►You submit your bill with the appropriateYou submit your bill with the appro...
Upcoming changes in RVUsUpcoming changes in RVUs
► CMS updates RVUs periodicallyCMS updates RVUs periodically
► For 2007, ...
Hospital payment: ProspectiveHospital payment: Prospective
payment (DRG) systempayment (DRG) system
►In 1983, Medicare cha...
What is a DRG?What is a DRG?
►DRGs are the 500 most common reasonsDRGs are the 500 most common reasons
why people are hosp...
Example DRGSExample DRGS
DRG Dx Reimbursement LOSDRG Dx Reimbursement LOS
391 Normal newborn $622 2.3391 Normal newborn $6...
How are DRG costs set?How are DRG costs set?
►Based on average cost of caring forBased on average cost of caring for
patie...
Might get reports like thisMight get reports like this
127 HEART FAILURE & SHOCK Number of DRG 24
Total LOS 66
Average LOS...
Shift in Medicare concernsShift in Medicare concerns
►Prior to 1983, Medicare hired utilizationPrior to 1983, Medicare hir...
Other feature of Medicare: GMEOther feature of Medicare: GME
►Gov’t provides an add-on to teachingGov’t provides an add-on...
Future of MedicareFuture of Medicare
►Payment will be linked to quality of servicePayment will be linked to quality of ser...
Report cardsReport cards
►Medicare has started public web sites soMedicare has started public web sites so
that consumers ...
MedicaidMedicaid
MedicaidMedicaid
►Federal-state partnershipFederal-state partnership
►Federal gov’t matches money put up byFederal gov’t m...
Program available for M’caidProgram available for M’caid
►AFDC (Aid to Families with DependentAFDC (Aid to Families with D...
Medicaid Payments (1997)Medicaid Payments (1997)
►Nursing homesNursing homes 25%25%
►Inpatient general hospitalInpatient g...
Medicaid fundingMedicaid funding
►Total amount of funding for state dependsTotal amount of funding for state depends
on ho...
Dealing with lack of MCaid fundsDealing with lack of MCaid funds
►Because services covered by Medicaid areBecause services...
Eligibility requirementsEligibility requirements
►Usually set at different levels for differentUsually set at different le...
Medicaid paymentsMedicaid payments
►Usually very little compared to privateUsually very little compared to private
payersp...
How do states stack upHow do states stack up
http://www2.citizen.org/hrg/medicaid/http://www2.citizen.org/hrg/medicaid/
Oregon Health PlanOregon Health Plan
►In mid-1990’s, Oregon proposed a newIn mid-1990’s, Oregon proposed a new
way of offe...
The Oregon PlanThe Oregon Plan
►Put together their plan based on the threatPut together their plan based on the threat
to ...
Example of the listExample of the list
1.1. Pneumococcal PneumoniaPneumococcal Pneumonia
2.2. Acute AppendicitisAcute Appe...
Legislature provides $200 millionLegislature provides $200 million
1.1. Pneumococcal PneumoniaPneumococcal Pneumonia
2.2. ...
Legislature provides $210 millionLegislature provides $210 million
1.1. Pneumococcal PneumoniaPneumococcal Pneumonia
2.2. ...
Other key component of planOther key component of plan
►Plan required all Oregon employers to offerPlan required all Orego...
Future of MedicaidFuture of Medicaid
►States struggling to fund Medicaid costsStates struggling to fund Medicaid costs
 M...
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Transcript of "Government funded health care: Medicare ..."

  1. 1. Government funded healthGovernment funded health care:care: Medicare and MedicaidMedicare and Medicaid
  2. 2. Medicare and MedicaidMedicare and Medicaid ►Similarities:Similarities:  Both are federally supported programs enactedBoth are federally supported programs enacted in 1965 to provide health care coverage toin 1965 to provide health care coverage to vulnerable populationsvulnerable populations  Services provided under each program areServices provided under each program are mandated by the federal government, i.e. fedsmandated by the federal government, i.e. feds decide what gets covered under each programdecide what gets covered under each program and state or local governments have no inputand state or local governments have no input
  3. 3. Differences in MCare & MCaidDifferences in MCare & MCaid ►Population coveredPopulation covered  Medicare provides services to elderly (over 65)Medicare provides services to elderly (over 65) and disabledand disabled  Medicaid provides services to poorMedicaid provides services to poor ►Funding mechanismFunding mechanism  Medicare is funded totally by federalMedicare is funded totally by federal governmentgovernment  Medicaid cost is shared between federalMedicaid cost is shared between federal government and individual statesgovernment and individual states
  4. 4. Other differencesOther differences ►Drug coverageDrug coverage  Until recent law, Medicare did not contribute toUntil recent law, Medicare did not contribute to cost of prescribed drugscost of prescribed drugs  Medicaid covered prescribed drugsMedicaid covered prescribed drugs
  5. 5. MedicareMedicare
  6. 6. How does Medicare workHow does Medicare work ►Who is eligible?Who is eligible?  Everyone in the U.S. over the age of 65 whoEveryone in the U.S. over the age of 65 who has paid threshold amount (40 quarters) intohas paid threshold amount (40 quarters) into social securitysocial security  People who are under age 65 and disabledPeople who are under age 65 and disabled based on criteria set up by Medicarebased on criteria set up by Medicare  Anyone with End Stage Renal Failure requiringAnyone with End Stage Renal Failure requiring dialysisdialysis
  7. 7. Two parts to Medicare: Part ATwo parts to Medicare: Part A  Part A: hospital coveragePart A: hospital coverage  Covered if patient or spouse has workedCovered if patient or spouse has worked 40 or more quarters and paid SS taxes40 or more quarters and paid SS taxes  Premium of $189/mo if worked 31-39Premium of $189/mo if worked 31-39 quartersquarters  Premium of $343/mo if worked less thanPremium of $343/mo if worked less than 31 quarters31 quarters
  8. 8. Part BPart B  Part B: outpatient coveragePart B: outpatient coverage ►OptionalOptional ►Recipient must contribute a premiumRecipient must contribute a premium each month to maintain coverageeach month to maintain coverage ($93.53/month) plus $131 deductible($93.53/month) plus $131 deductible ►Starting 2007, premium will be ‘needsStarting 2007, premium will be ‘needs based’ – those earning more thanbased’ – those earning more than $80,000 a year ($160,000 for a couple)$80,000 a year ($160,000 for a couple) will pay morewill pay more
  9. 9. Part CPart C ►Covers up to 30 days of long-term careCovers up to 30 days of long-term care ►Who pays after that?Who pays after that?  The patient (or no one if the patient can’t affordThe patient (or no one if the patient can’t afford it)it)  Nursing homes at are risk for not getting paidNursing homes at are risk for not getting paid after the 30 days of Part C run outafter the 30 days of Part C run out  That’s why it’s so hard to get Medicare patientsThat’s why it’s so hard to get Medicare patients into nursing homes!into nursing homes!
  10. 10. Part DPart D ►Medication coverageMedication coverage  Started January 1, 2006Started January 1, 2006  Does not offer single drug plan: instead letsDoes not offer single drug plan: instead lets marketplace develop drug plans with statedmarketplace develop drug plans with stated formularies and co-paysformularies and co-pays  Legislation specifically forbids federalLegislation specifically forbids federal government from using purchasing power togovernment from using purchasing power to negotiate for reduced costs of drugsnegotiate for reduced costs of drugs
  11. 11. Part DPart D ►Patients must go to Web site and selectPatients must go to Web site and select individual planindividual plan ►Patients directed to sign on by specifiedPatients directed to sign on by specified period to participate in planperiod to participate in plan ►If patient did not sign on by deadline, thereIf patient did not sign on by deadline, there is a financial penalty to participate in futureis a financial penalty to participate in future ►Benefits consist of payment for drugs up toBenefits consist of payment for drugs up to $1,500 then catastrophic coverage$1,500 then catastrophic coverage (>$3,000)(>$3,000)
  12. 12. Medicare growth: 1970-97Medicare growth: 1970-97 (enrollees in millions; costs in billions)(enrollees in millions; costs in billions) 21 8 31 72 34 111 38 214 0 50 100 150 200 250 1970 1985 1990 1997 Enrolled Cost 81% 2,575% Cost: $381/ person Cost: $5,631/ person
  13. 13. Life expectancy at age 65Life expectancy at age 65 0 2 4 6 8 10 12 14 16 18 1960 1970 1980 1990 2000
  14. 14. Where does Medicare moneyWhere does Medicare money go?go? Acute care hospitals:Acute care hospitals: 48%48% PhysiciansPhysicians 20%20% Home healthHome health 9%9% Outpatient servicesOutpatient services 8%8% Skilled nursing home careSkilled nursing home care 6%6% Hospice careHospice care 1%1%
  15. 15. Where does Medicare moneyWhere does Medicare money go?go? Acute care hospitals:Acute care hospitals: 48%48% PhysiciansPhysicians 20%20% Home healthHome health 9%9% Outpatient servicesOutpatient services 8%8% Skilled nursing home careSkilled nursing home care 6%6% Hospice careHospice care 1%1% Administrative overhead 0.7%Administrative overhead 0.7% ProfitProfit 0%0%
  16. 16. What do you get?What do you get? ►Hospital careHospital care  Medicare pays 80% of the MedicareMedicare pays 80% of the Medicare allowableallowable costs for “costs for “medically necessarymedically necessary”” servicesservices  Patient has a $876 annual deductible beforePatient has a $876 annual deductible before Medicare pays anything (for stays <60 days)Medicare pays anything (for stays <60 days) ►Ambulatory careAmbulatory care  Only covered if recipient elects to pay for PartOnly covered if recipient elects to pay for Part BB  Covers 80% of medically necessary servicesCovers 80% of medically necessary services after $100 annual deductibleafter $100 annual deductible
  17. 17. What do you get?What do you get? ►Long term careLong term care  Medicare only covers up to 30 days in a nursingMedicare only covers up to 30 days in a nursing homehome ►PharmaceuticalsPharmaceuticals  Medicare only pays part of pharmacy costs ifMedicare only pays part of pharmacy costs if patient enrolls in Part Dpatient enrolls in Part D  Part D supported by additional premium fromPart D supported by additional premium from patient plus co-pay on medicationspatient plus co-pay on medications
  18. 18. Medicare paymentsMedicare payments ►Who pays the other 20% that MedicareWho pays the other 20% that Medicare doesn’t coverdoesn’t cover  The patient orThe patient or  Private insurance either paid for by the patientPrivate insurance either paid for by the patient (Medigap insurance) or by pension plan(Medigap insurance) or by pension plan ►What is the “Medicare allowable cost”?What is the “Medicare allowable cost”?  Whatever Medicare says it will pay for thatWhatever Medicare says it will pay for that service – Hint: it’s usually a lot lower than youservice – Hint: it’s usually a lot lower than you charge!charge!
  19. 19. Who decides what is “medicallyWho decides what is “medically necessary”?necessary”? ►Medicare doesMedicare does ►Some services are never coveredSome services are never covered ►Others are covered on scheduled timelineOthers are covered on scheduled timeline onlyonly  Pap smear covered every year – but must bePap smear covered every year – but must be more than 365 days!more than 365 days!  Mammogram covered every 2 yearsMammogram covered every 2 years
  20. 20. What does Medicare pay?What does Medicare pay? ►Depends on who you areDepends on who you are ►Original Medicare fee schedule based onOriginal Medicare fee schedule based on usual and customary fee (UCF) in 1965usual and customary fee (UCF) in 1965 ►As new services were established, feeAs new services were established, fee schedule based on providers’schedule based on providers’ recommendationrecommendation ►Resulted in discrepancy between cognitiveResulted in discrepancy between cognitive services (pre-1965) and most proceduralservices (pre-1965) and most procedural services (post-1965)services (post-1965)
  21. 21. What if your fee is more than theWhat if your fee is more than the “Medicare allowable”“Medicare allowable” ►You can choose to “participate” inYou can choose to “participate” in Medicare or be a “non-participating”Medicare or be a “non-participating” providerprovider ►Participating providers agree to accept theParticipating providers agree to accept the Medicare allowable as their fullMedicare allowable as their full compensation – can only bill patient thecompensation – can only bill patient the other 20%other 20% ►Non-participating providers can bill theNon-participating providers can bill the entire difference to the patiententire difference to the patient
  22. 22. Medicare reimbursementMedicare reimbursement ►Reimbursement has been revisedReimbursement has been revised periodically over last 40 yearsperiodically over last 40 years ►Payments to hospitals generally very goodPayments to hospitals generally very good ►Payments to physicians generally badPayments to physicians generally bad ►Reimbursement to MUSC/UMA doctorsReimbursement to MUSC/UMA doctors from Medicare around 25% of chargesfrom Medicare around 25% of charges ►Other insurers often base their payments onOther insurers often base their payments on Medicare fee scheduleMedicare fee schedule
  23. 23. Medicare reimbursement reformMedicare reimbursement reform ►In 1990, Medicare recognized disparity inIn 1990, Medicare recognized disparity in reimbursementreimbursement ►Commissioned a study to look at the relativeCommissioned a study to look at the relative worth of each service covered by Medicareworth of each service covered by Medicare ►Worth took into account amount of trainingWorth took into account amount of training needed for the service, time required, riskneeded for the service, time required, risk inherent in the service, and other factorsinherent in the service, and other factors (study done at Harvard and headed by Bill(study done at Harvard and headed by Bill Hsaio)Hsaio)
  24. 24. RBRVSRBRVS ►What was developed was the “ResourceWhat was developed was the “Resource based Relative Value System”based Relative Value System” ►Each service assigned an RVU (relativeEach service assigned an RVU (relative value unit)value unit) ►Rationale behind RVU: something thatRationale behind RVU: something that either requires twice as much training, timeeither requires twice as much training, time or risk should be paid twice as muchor risk should be paid twice as much
  25. 25. Payment reformPayment reform ►Idea was to gradually shift MedicareIdea was to gradually shift Medicare payment from arbitrary amounts to somepayment from arbitrary amounts to some multiple of RVU.multiple of RVU. ►Each year Medicare raising rates forEach year Medicare raising rates for underpaid services and reducing paymentunderpaid services and reducing payment for overvalued servicesfor overvalued services
  26. 26. Examples of RVUsExamples of RVUs ►RVUs for new patient visitsRVUs for new patient visits 9920299202 New patient, briefNew patient, brief 1.671.67 9920399203 New patient, limitedNew patient, limited 2.392.39 9920499204 New patient, extendedNew patient, extended 3.473.47 9920599205 New patient, comprehensive 4.38New patient, comprehensive 4.38
  27. 27. Other RVUsOther RVUs 9921299212 Est patient, briefEst patient, brief 0.940.94 9921399213 Est patient, limitedEst patient, limited 1.321.32 9921499214 Est patient, extendedEst patient, extended 2.062.06 9921599215 Est patient, comprehenEst patient, comprehen 3.063.06 9922199221 Brief hospital admissionBrief hospital admission 1.871.87 9922299222 Moderate hospital admitModerate hospital admit 3.073.07 9922399223 Complex hospital admitComplex hospital admit 4.204.20
  28. 28. So how does this work?So how does this work? ►You submit your bill with the appropriateYou submit your bill with the appropriate CPT code (eg. 99214)CPT code (eg. 99214) ►Medicare then multiplies the RVUs by aMedicare then multiplies the RVUs by a conversion factor (2006= $37.8975/RVU)conversion factor (2006= $37.8975/RVU) and that’s what is “reasonable cost”and that’s what is “reasonable cost” ►But what determines if a visit is a 99212 orBut what determines if a visit is a 99212 or a 99214? – Medicare has rules for that!a 99214? – Medicare has rules for that!
  29. 29. Upcoming changes in RVUsUpcoming changes in RVUs ► CMS updates RVUs periodicallyCMS updates RVUs periodically ► For 2007, CMS changed for RVUs for severalFor 2007, CMS changed for RVUs for several services (called CPT codes).services (called CPT codes). ► RVUs of several procedure codes decreased andRVUs of several procedure codes decreased and RVUs for routine E&M codes increasedRVUs for routine E&M codes increased ► Projected impact of these on payments vary:Projected impact of these on payments vary: Nuclear med - 6.34%Nuclear med - 6.34% Diag Rad - 0.07%Diag Rad - 0.07% Dermatology 2.80%Dermatology 2.80% Opthalmol 5.08%Opthalmol 5.08% Hem/Onc 20.91%Hem/Onc 20.91% Fam Med 25.27%Fam Med 25.27%
  30. 30. Hospital payment: ProspectiveHospital payment: Prospective payment (DRG) systempayment (DRG) system ►In 1983, Medicare changed way itIn 1983, Medicare changed way it reimbursed hospitals for carereimbursed hospitals for care ►Prior to 1983, Medicare paid fee-for-Prior to 1983, Medicare paid fee-for- service based on chargesservice based on charges  Medicare paid more for long stays orMedicare paid more for long stays or excessive use of diagnostic servicesexcessive use of diagnostic services ►In 1983, Medicare started paying basedIn 1983, Medicare started paying based on “Diagnostic Related Groups”on “Diagnostic Related Groups”  Shifted risk of cost to hospitalsShifted risk of cost to hospitals
  31. 31. What is a DRG?What is a DRG? ►DRGs are the 500 most common reasonsDRGs are the 500 most common reasons why people are hospitalizedwhy people are hospitalized ►Eg. “Myocardial infarction withoutEg. “Myocardial infarction without complication” is assigned a DRG codecomplication” is assigned a DRG code ►Every time a Medicare recipient isEvery time a Medicare recipient is hospitalized with this diagnosis, thehospitalized with this diagnosis, the hospital gets a set fee (~$2,400)hospital gets a set fee (~$2,400) ►If the hospital’s cost is less than $2,400If the hospital’s cost is less than $2,400 then they make a profit; if it exceedsthen they make a profit; if it exceeds $2,400 then these lose money$2,400 then these lose money
  32. 32. Example DRGSExample DRGS DRG Dx Reimbursement LOSDRG Dx Reimbursement LOS 391 Normal newborn $622 2.3391 Normal newborn $622 2.3 127 Heart failure/shock $4,154 5.5127 Heart failure/shock $4,154 5.5 143 Chest pain $2,158 2.3143 Chest pain $2,158 2.3 88 COPD $3,907 5.488 COPD $3,907 5.4 88 Simple pneumonia $4,444 6.388 Simple pneumonia $4,444 6.3 (based on 2001 data)(based on 2001 data)
  33. 33. How are DRG costs set?How are DRG costs set? ►Based on average cost of caring forBased on average cost of caring for patient with that clinical conditionpatient with that clinical condition ►Adjusted for local differences in costsAdjusted for local differences in costs ►Adjusted for teaching hospital statusAdjusted for teaching hospital status ►Adjusted for disproportionate share ofAdjusted for disproportionate share of caring for poorer patientscaring for poorer patients ►Not applied for “outliers”, defined asNot applied for “outliers”, defined as people whose episode of care is very longpeople whose episode of care is very long or extremely expensiveor extremely expensive
  34. 34. Might get reports like thisMight get reports like this 127 HEART FAILURE & SHOCK Number of DRG 24 Total LOS 66 Average LOS 2.8 Total Charges $105,164.0 0 Average Total Charge $4,381.83 Total Cost (78% of charges) $82,027.92 Average Total Cost (78% of total charges) $3,417.83 Medicare Average National Payment $4,154.00 Medicare Average LOS 5.5
  35. 35. Shift in Medicare concernsShift in Medicare concerns ►Prior to 1983, Medicare hired utilizationPrior to 1983, Medicare hired utilization reviewers to make sure patients were notreviewers to make sure patients were not staying too long or getting too many testsstaying too long or getting too many tests ►After 1983, Medicare shifted emphasis toAfter 1983, Medicare shifted emphasis to assure that patients were not beingassure that patients were not being discharged too quickly by hospitalsdischarged too quickly by hospitals ►Unintended consequence of DRG was theUnintended consequence of DRG was the birth and flourishing of “home health care”birth and flourishing of “home health care”
  36. 36. Other feature of Medicare: GMEOther feature of Medicare: GME ►Gov’t provides an add-on to teachingGov’t provides an add-on to teaching hospitals to pay for GME (residency)hospitals to pay for GME (residency) trainingtraining ►Hospitals get a premium (25-40%)Hospitals get a premium (25-40%) increase in every DRG depending on theincrease in every DRG depending on the number and types of residents in theirnumber and types of residents in their hospitalhospital  Direct training expenses: salaries, call rooms,Direct training expenses: salaries, call rooms, etc.etc.  Indirect training expenses: added cost of careIndirect training expenses: added cost of care to patient because residents are caring forto patient because residents are caring for themthem
  37. 37. Future of MedicareFuture of Medicare ►Payment will be linked to quality of servicePayment will be linked to quality of service  Hospitals that provide good care will get “raises”Hospitals that provide good care will get “raises”  Hospitals that provide poor care will getHospitals that provide poor care will get reimbursement decreasedreimbursement decreased  Results of quality measures will be made publicResults of quality measures will be made public ►Next initiative to look at physician qualityNext initiative to look at physician quality (P4P = pay for performance)(P4P = pay for performance)  Currently, standards for good care beingCurrently, standards for good care being developeddeveloped
  38. 38. Report cardsReport cards ►Medicare has started public web sites soMedicare has started public web sites so that consumers can compare hospitalthat consumers can compare hospital performance for several diseasesperformance for several diseases ►We can look today atWe can look today at www.HospitalCompare.hhs.govwww.HospitalCompare.hhs.gov andand compare hospitals in the same citycompare hospitals in the same city ►In the near future, patients will be able to doIn the near future, patients will be able to do the same and compare doctorsthe same and compare doctors
  39. 39. MedicaidMedicaid
  40. 40. MedicaidMedicaid ►Federal-state partnershipFederal-state partnership ►Federal gov’t matches money put up byFederal gov’t matches money put up by statestate ►Match depends on program and wealth ofMatch depends on program and wealth of statestate ►Ranges from a 2/1 match ($2 fed/$1 state)Ranges from a 2/1 match ($2 fed/$1 state) to a 4/1 matchto a 4/1 match
  41. 41. Program available for M’caidProgram available for M’caid ►AFDC (Aid to Families with DependentAFDC (Aid to Families with Dependent Children)Children) ►SCHIP (state children’s health insuranceSCHIP (state children’s health insurance program)program) ►Family planning servicesFamily planning services ►HIV care coverageHIV care coverage ►Disability coverageDisability coverage
  42. 42. Medicaid Payments (1997)Medicaid Payments (1997) ►Nursing homesNursing homes 25%25% ►Inpatient general hospitalInpatient general hospital 19%19% ►Mentally retarded intermedMentally retarded intermed care facilitiescare facilities 8%8% ►Prescribed drugsPrescribed drugs 10%10% ►Home healthHome health 10%10% ►Other careOther care 9%9% ►PhysiciansPhysicians 6%6%
  43. 43. Medicaid fundingMedicaid funding ►Total amount of funding for state dependsTotal amount of funding for state depends on how wealthy they are (for match) andon how wealthy they are (for match) and how much they put uphow much they put up ►Poorer states that can afford to put up lessPoorer states that can afford to put up less money for Medicaid then have less to spendmoney for Medicaid then have less to spend for servicesfor services ►So how do they provide care for MedicaidSo how do they provide care for Medicaid recipients if they have less money?recipients if they have less money?
  44. 44. Dealing with lack of MCaid fundsDealing with lack of MCaid funds ►Because services covered by Medicaid areBecause services covered by Medicaid are mandated by federal government, cannotmandated by federal government, cannot cut back on what is available to patientscut back on what is available to patients ►Only ways to deal with less money:Only ways to deal with less money:  Cover fewer peopleCover fewer people  Pay less for servicePay less for service
  45. 45. Eligibility requirementsEligibility requirements ►Usually set at different levels for differentUsually set at different levels for different servicesservices  AFDC usually most restrictiveAFDC usually most restrictive  Pregnancy covered up to 185% of FPLPregnancy covered up to 185% of FPL  sCHIP covered up to 200% of FPLsCHIP covered up to 200% of FPL  HIV care covered regardless of incomeHIV care covered regardless of income
  46. 46. Medicaid paymentsMedicaid payments ►Usually very little compared to privateUsually very little compared to private payerspayers ►Often less than even Medicare payments forOften less than even Medicare payments for same servicessame services ►Results in fewer doctors wanting to care forResults in fewer doctors wanting to care for Medicaid patients (less access to care)Medicaid patients (less access to care)
  47. 47. How do states stack upHow do states stack up http://www2.citizen.org/hrg/medicaid/http://www2.citizen.org/hrg/medicaid/
  48. 48. Oregon Health PlanOregon Health Plan ►In mid-1990’s, Oregon proposed a newIn mid-1990’s, Oregon proposed a new way of offering Medicaid (and healthway of offering Medicaid (and health coverage in general)coverage in general) ►Instead of restricting eligibility, theyInstead of restricting eligibility, they proposed to make everyone eligible butproposed to make everyone eligible but limit what they paid forlimit what they paid for ►And what they would cover, they wouldAnd what they would cover, they would pay for well so that patients would havepay for well so that patients would have accessaccess
  49. 49. The Oregon PlanThe Oregon Plan ►Put together their plan based on the threatPut together their plan based on the threat to health and evidence of benefit ofto health and evidence of benefit of treatment and ranked all common healthtreatment and ranked all common health care servicescare services ►Provide coverage to everyone under theProvide coverage to everyone under the federal poverty level for all approvedfederal poverty level for all approved servicesservices ►Decide how far down on the list the stateDecide how far down on the list the state could go based on the funding providedcould go based on the funding provided
  50. 50. Example of the listExample of the list 1.1. Pneumococcal PneumoniaPneumococcal Pneumonia 2.2. Acute AppendicitisAcute Appendicitis 3.3. ……………… 81. Otitis media age > 6 month81. Otitis media age > 6 month 82. Acne vulgaris82. Acne vulgaris 83. Ingrown toenails83. Ingrown toenails 84. Plantar fasciitis84. Plantar fasciitis 85. Tinea capitus85. Tinea capitus
  51. 51. Legislature provides $200 millionLegislature provides $200 million 1.1. Pneumococcal PneumoniaPneumococcal Pneumonia 2.2. Acute AppendicitisAcute Appendicitis 3.3. ……………… 81. Otitis media age > 6 month81. Otitis media age > 6 month 82. Acne vulgaris82. Acne vulgaris 83. Ingrown toenails83. Ingrown toenails 84. Plantar fasciitis84. Plantar fasciitis 85. Tinea capitus85. Tinea capitus
  52. 52. Legislature provides $210 millionLegislature provides $210 million 1.1. Pneumococcal PneumoniaPneumococcal Pneumonia 2.2. Acute AppendicitisAcute Appendicitis 3.3. ……………… 81. Otitis media age > 6 month81. Otitis media age > 6 month 82. Acne vulgaris82. Acne vulgaris 83. Ingrown toenails83. Ingrown toenails 84. Plantar fasciitis84. Plantar fasciitis 85. Tinea capitus85. Tinea capitus
  53. 53. Other key component of planOther key component of plan ►Plan required all Oregon employers to offerPlan required all Oregon employers to offer either insurance that covered the sameeither insurance that covered the same service of Medicaidservice of Medicaid ►Or employers could pay state equivalent ofOr employers could pay state equivalent of Medicaid cost and employees would beMedicaid cost and employees would be covered by Medicaidcovered by Medicaid
  54. 54. Future of MedicaidFuture of Medicaid ►States struggling to fund Medicaid costsStates struggling to fund Medicaid costs  Most have moved to restrictive drug accessMost have moved to restrictive drug access such as formularies or pre-authorizationsuch as formularies or pre-authorization  Many states have mandated managed care forMany states have mandated managed care for Medicaid or offered patients incentives toMedicaid or offered patients incentives to participate in managed care programsparticipate in managed care programs ►Access continuing to be an issue becauseAccess continuing to be an issue because of poor paymentof poor payment
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