Medicare and Medicaid: Chapter 5 Michelle Williams-Davis June 3, 2007

Outline:

 Medicare o Medicare Eligibility o Medicare Benefits o Medicare Financing o Medicare Reimbursement to Providers o Medicare Expenditures  Medicaid o Medicaid Eligibility o Medicaid Benefits o Medicaid Financing o Medicaid Reimbursements to Providers o Medicaid Costs o Legislative Attempts to Control Costs of Medicare and Medicaid  Health Insurance Portability and Accountability Act (HIPAA) of 1996  HIPAA Administrative Simplification Standards  Balanced Budget Act (BBA) of 1997  Balanced Budget Refined Act (BBRA) of 1999  Medicare, Medicaid and SCHIP Benefits Improvement and Protection (BIPA) Act of 2000  Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003  Medicare/Medicaid Fraud and Abuse  Federal Safe Harbors

MEDICARE:  Medicare is a federally funded program that provides health insurance to Americans over the age of 65. In 1972, the program expanded to include the disabled under age 65 who qualified for social security.  In 1966 Medicare covered 7 basic services o Part A of the program: Hospital Insurance (HI) . Inpatient hospital services . Outpatient diagnostic services . Home health agency services following hospitalization o Part B: Supplemental Medical Insurance (SMI) . Physical and other medical services . Outpatient therapeutic services . Home health agency services o Part C: Medicare + Choice . Expanded set of options for the delivery of healthcare  Medicare spending in 2002 was $267.1 billion  The program has survived by: o Increasing assessment to employers and employees o Increasing cost sharing o Increasing allocation from general revenues o Enacting legislation designed to slow the rate of growth  Sources of Payment for Medicare Beneficiaries (1999) o Medicare (53%) o Direct out of pocket (19%) o Medicaid (12%) o Private Insurance (12%) o Other (5%)

MEDICAID: Medicaid (1965) is a jointly funded program that provides health insurance to the medically indigent individuals who may be able to pay for normal living expenses and cannot afford healthcare expenses. Medicaid expanded to include low-income pregnant women, children, and infants

 Two categories of cost: o Costs for provider services o Costs for administrative services

HIPAA: designed to improve the availability of health insurance to working families and their children.

HHS intends the privacy rules to accomplish three broad objectives: (1) define the circumstances in which protected health information may be used and disclosed; (2) establish certain patient rights regarding protected health information; (3) required that organizations adopt administrative safeguards to ensure the privacy of protected health information.

Final rules on five standards 1. Transactions and Code Sets 2. National Provider Identifies 3. National Employer Identifies 4. Privacy 5. Security Fraud  Recent initiatives by the federal government to control healthcare costs has been the recent emphasis on enforcing fraud and abuse statues.  Fraud is estimated at $53 billion in 1994.

TERMS: 1. Omnibus Budget Reconciliation Act of 1989 (OBRA 1989)- established a physician fee schedule and limited the amount physicians’ charges could exceed the fee schedule 2. SCHIP (State Children’s Health Insurance Program) 1997- allows states to implement three options to expand coverage for children in families with incomes up to 200 percent of the poverty level , provide health insurance coverage to 50 percent of the nation’s 10 million uninsured children. a. Expanded Medicaid coverage b. Separate coverage c. Combination of coverage 3. UPL (upper payment limit)-For Medicaid reimbursement to the states, based on aggregate amount of payments make to states on behalf of the providers 4. HHS-Health and Human Services 5. Balanced Budget Act of 1997 (BBA)- Cut Medicare expenditure by $115 billion over five years, introduced SCHIP (definition above). 6. Health Insurance Portability and Accountability Act (HIPAA) of 1996- designed to improve the availability of health insurance to working families and their children. 7. HIPAA CMP Authority- civil monetary authority, 8. OIG- Office of Inspector General