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Financing Ltc Powerpoint


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Financing Ltc Powerpoint

  1. 1. Financing Senior Care
  2. 2. Financing Broad Meaning <ul><li>Mechanism to pay for health care services </li></ul><ul><li>- Medicaid is the primary source of </li></ul><ul><li>financing nursing home care </li></ul><ul><li>Reimbursement </li></ul><ul><li>- Actual payment for services delivered </li></ul><ul><li>- Methods used to determine the </li></ul><ul><li> amount of payment </li></ul>
  3. 3. Recent Health Policy Objectives <ul><li>Curtail direct reimbursement </li></ul><ul><li>Develop new methods of reimbursement that relate amount paid to the clinical needs of patients </li></ul><ul><li>Enrollment in managed care plans </li></ul><ul><li>Investigate and prosecute fraud and abuse </li></ul>
  4. 4. Private-Pay Rate Setting <ul><li>Non-bundled (room-and-board plus ancillaries) </li></ul><ul><li>Should be higher than Medicare and Medicaid rates on an all-inclusive basis </li></ul><ul><li>Governed by competition </li></ul><ul><li>Extra amenities and quality generally fetch a premium </li></ul>
  5. 5. Medicare (Title 18) <ul><li>Covers three categories of people: </li></ul><ul><li>- Age 65 and over </li></ul><ul><li>- Disabled people on Social Security </li></ul><ul><li>- People with end-stage renal disease </li></ul><ul><li>The program is not comprehensive in scope. Benefits are limited. </li></ul>
  6. 6. Medicare Part A (HI) <ul><li>Covers four main services: </li></ul><ul><li>Hospital inpatient services </li></ul><ul><li>SNF </li></ul><ul><li>Home health for skilled nursing care </li></ul><ul><li>Hospice care in a Medicare-certified hospice </li></ul>
  7. 7. Medicare Part A – SNF coverage <ul><li>Post-acute (at least 3 days of hospitalization is necessary) </li></ul><ul><li>Limited to 100 days per benefit period </li></ul><ul><li>A physician must certify the need for skilled nursing care </li></ul>
  8. 8. Benefit Period <ul><li>Triggered by a specific ‘spell of illness’ </li></ul><ul><li>Continues when the patient is hospitalized or receives services in a SNF </li></ul><ul><li>Terminates when the patient remains out of a hospital or SNF for at least 60 consecutive days </li></ul>
  9. 9. Medicare Part B (SMI) <ul><li>Voluntary program that requires payment of a monthly premium </li></ul><ul><li>Covers outpatient services </li></ul>
  10. 10. Deductible and Copayments <ul><li>Deductible applies to each benefit period </li></ul><ul><li>Generally paid during hospitalization. Hence, most patients have met the requirement before they are admitted to a SNF. </li></ul><ul><li>Copayments apply from days 21 to 100 in a SNF </li></ul>
  11. 11. Skilled Care vs. Custodial Care <ul><li>Custodial care mainly requires ADL assistance or routine basic care </li></ul><ul><li>Skilled care is complex </li></ul><ul><li>Skilled care requires active involvement of professionals such as nurses and therapists </li></ul>
  12. 12. Medicare Part B Benefits <ul><li>Services of attending physician </li></ul><ul><li>Diagnostic services </li></ul><ul><li>Other outpatient services (see Exhibit 4-3) </li></ul>
  13. 13. Medicare Reimbursement <ul><li>Prospective payment system based on case-mix </li></ul><ul><li>Case-mix reflects a facility’s composite of clinical acuity </li></ul><ul><li>Case-mix is determined by an assessment of each patient using a standardized RAI </li></ul><ul><li>Per-diem, all-inclusive (bundled) rate </li></ul>
  14. 14. Case-Mix Process <ul><li>After patient assessment has been completed </li></ul><ul><li>Step 1: The patient is classified into one of </li></ul><ul><li>seven major categories </li></ul><ul><li>Step 2: The patient’s ADL score is calculated </li></ul><ul><li>Step 3: The patient is classified into one of 44 RUG categories based on index maximizing </li></ul>
  15. 15. Medicaid <ul><li>Title 19 </li></ul><ul><li>For the indigent </li></ul><ul><li>Eligibility determined by each state </li></ul><ul><li>‘Spend down’ is required if a person exceeds established resource levels </li></ul><ul><li>Community spouse is protected against impoverishment (Medicare Catastrophic Coverage Act 1988) </li></ul>
  16. 16. Managed Care <ul><li>Primary mechanism for health care delivery in the United States </li></ul><ul><li>Over 95% of employer-based health coverage is through managed care </li></ul><ul><li>But, approximately 57% of Medicaid and 18% of Medicare beneficiaries are covered through managed care </li></ul>
  17. 17. Risk-Bearing Organizations <ul><li>Include MCOs </li></ul><ul><li>They assume financial risk </li></ul><ul><li>Fixed monthly payments to these organizations are set in advance (prepayment) </li></ul><ul><li>The organization must provide all services needed by the beneficiaries </li></ul><ul><li>The organization is at risk of losing money if cost of services exceeds the fixed payments received </li></ul>
  18. 18. Partnerships With Hospitals <ul><li>Sponsorship agreement </li></ul><ul><li>Bed-reserve agreement </li></ul><ul><li>Shared service arrangement </li></ul><ul><li>Management contract </li></ul>
  19. 19. Fraud and Abuse <ul><li>False statements to patients </li></ul><ul><li>False billings </li></ul><ul><li>- billing for services not provided </li></ul><ul><li>- upcoding </li></ul><ul><li>Kickbacks in exchange for patient referrals </li></ul>
  20. 20. Remedies for Fraud and Abuse <ul><li>Criminal prosecution </li></ul><ul><li>Fines </li></ul><ul><li>Jail sentences </li></ul><ul><li>Expulsion from Medicare and Medicaid programs </li></ul>
  21. 21. Prohibitions Under the False Claims Act <ul><li>Providing and billing for services that are medically unnecessary </li></ul><ul><li>Providing and billing for noncovered services </li></ul><ul><li>Claiming payments for services that are covered in a bundled rate </li></ul><ul><li>Delivering inadequate care </li></ul>
  22. 22. Qui Tam <ul><li>Whistleblower provision </li></ul><ul><li>A private party can sue a violator on behalf of the government </li></ul><ul><li>Monetary recoveries are shared </li></ul>