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Its Purpose, Patients, and Impact on Providers

Nancy CooperCoordinator, Health Policy Fellowship

May 13, 2014

Objectives

• Who does Medicare cover?• What services does it cover?• Who pays for services?• How does Medicare impact physicians?• How will the ACA impact Medicare?• How will the ACA impact you?

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Medicare e = elderly

Veterans AffairsIndian Health Service

Federal Employees Health Benefit Program (FEHBP)

http://www.ihs.gov/newsroom/factsheets/ihsyear2014profile

Medicaid d = destitute

Children’s Health Insurance Program (CHIP)

Federally Qualified Health Centers(FQHCs)

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Centers for Medicare and Medicaid Services (CMS) pays for health care for 110 million

elderly, disabled, and/or poor Americans

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Medicare is the largest payer of health care services in the US

Health and Human Services

$880 billion budget

Medicare $524 B Medicaid $243 B

Total CMS $ 767 B

www.hhs.govKaiser Family Foundation 3/17/11

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Medicare serves 50 million elderly and disabled

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Kaiser Family Foundation analysis of the CMS Medicare current beneficiary cost and use file 2006

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Beneficiary Profile65 and upHalf are poor1/3 live alone8 M non-elderly with disability2 M in long term care7 out of 10 die of heart disease, cancer, stroke

10Medicare at a Glance, Kaiser Family Foundation Nov 2012

Elderly and Poor

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Medicare 49 Million

Medicaid 60 Million9.2

M

AARP, Integrating Care for Dual Eligibles, 2012

Long term care, glasses, dental, pays some Medicare premiums and cost share

Hospital coverage, physician visits, drugs, some post hospital care

Dual Eligibles

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www.benefits.gov.ssa

Disabled: Medicare Social Security Disability Income (SSDI)

Determined by a Consultative Exam (CE)• Physician• Psychologist• Podiatrist• Optician• Speech/Lang. pathologist

Disabled and Poor: Medicaid Supplementary Security Income (SSI)

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http://medicareplansofamerica.com/wp/wp-content/uploads/2012/11/medicare-advantage-plans.jpg

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Medicare Part A: Hospital Insurance– inpatient hospital – skilled nursing facility – home health – hospice

No premium. $1,068 deductible 190 days in-patient psych covered No charge for hospice or home health

Medicare at a Glance, Kaiser Family Foundation – Medicare Policy. Nov 2012www.hhs.cms.gov

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Part A Out Of PocketCharged based on LOS in hospital• No co-pay for 1-60 days• $275 per day 60-90• $550 per day 91-150

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www.hhs.cms.gov

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After three midnights in a hospital . . .

Medicare Part BSupplemental Medical Insurance

• Covers physician visits, outpatient hospital care, ambulatory surgical services

• Labs, x-rays and durable equipment, • PT and speech therapy (limit of $1,740) • Out-patient mental health• Home health

www.hhs.cms.govKaiser Family Foundation 2012: Medicare Primer

Preventive services one wellness visit per year shots colorectal cancer screenings PSA, PAP, mammogram AAA bone mass screening diabetes monitoring glaucoma screening smoking cessation

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Part B Out Of Pocket

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Medicare and FQHC

Patient pays no Part B deductible but is responsible for co-pay . . .

UNLESS

• FQHC-supplied influenza and pneumococcal vaccines• FQHC-supplied Hepatitis B vaccine (HBV)• Personalized prevention plan services • Any covered preventive service that is recommended

with a grade of A or B by the U.S. Preventive Services Task Force

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Medicare Part C: Medicare Advantage

• HMO or preferred provider organization (PPO) cover A and B and sometimes dental, vision, hearing, wellness services and Rx

• Has out of pocket spending limits – no more than $6,700• Special Needs Plans: coordinated care for frail, poor elderly

– “frailty payment adjustment” if they provide long term care & Medicaid services

• Costs about 16% more than fee-for-service (“original”) Medicare

http://www.thenationalcouncil.org/galleries/policyfile/Dual%20Eligible%20Provisions%20of%20HC%20Reform%20Bill.pdf ; www.hhs.cms.gov

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Medicare Part D: RXCost $55 B in 2011

Voluntary Rx benefitCosts high as gov. can’t negotiate prices for brand name drugs

Kaiser Family Foundation 2012: Medicare PrimerCMS, 2010 Enrollment Information

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Part D: Prescription Drug Benefit

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Premium averages $38.40 per month

http://kff.org/medicare/issue-brief/medicare-part-d-prescription-drug-plans-the-marketplace-in-2013-and-key-trends-2006-2013/

Who Pays?Beneficiaries pay • Taxes • Deductibles, premiums and co-pays ($2,600 yr)

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Patient pays in

$150,000

Medicare pays out $300,000

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Trust Fund: Payroll tax of 2.9%

General revenue and premiums> $85,0000 pay higher premium

Not separately financed - capitated

General revenue, premiums, and state payments

Worker-Retiree Imbalance

In 1965: 6 workers per retiree

In 2012: 2 workers per retiree

25Institute for Health Metrics and Evaluation, University of Washington May 2012

“The US Government is an insurance company with a large army”

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High Cost of DyingCMS spends $140 Billion on the last year of life – about $59,000 per decedent

33% Medicare patients have in-patient surgery in the last year of life

Half of Medicare patients see ten or more physicians inthe last 6 months of life

Dartmouth Atlas of Health Care

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Physicians are not paid for end of life planning discussions

"The America I know and love is not one in which my parents or my baby with Down syndrome will have to stand in front of Obama's 'death panel' so his bureaucrats can decide, based on a subjective judgment of their 'level of productivity in society,' whether they are worthy of health care.” Sarah Palin 8/7/09

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75% of terminally ill people want to die at home – but only 35% do

“The hard question we face, then, is not how we can afford this system’s expense. It is how we can build a health-care system that will actually help dying patients achieve what’s most important to them at the end of their lives.”

Atul Gawande, M.D.

. . . Enrollment will increase from 47 million to approx 74 million – number of beneficiaries over age 80 will triple.

Congressional Budget Office 2/1/1230

The Silver Tsunami

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Physician ReimbursementReimburses at 80% of “customary and reasonable charge”

Fee for Service

Sustainable Growth Rate (SGR)

Physician Quality Reporting System

– Currently voluntary – earn 2% of Part B fees

– Mandatory in 2015: Part B payment will be ‘adjusted’ for not

submitting quality data

CMS.gov Affairshttp://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment Instruments/PQRS/index.html?redirect=/pqrs

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Patient Protection and Affordable Care Act (ACA): Impact on Medicare

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“Don’t Mess with Medicare”• Raise the age of eligibility• Raise out of pocket costs• Raise taxes• Defined benefits (“ration”)• Means test (rich pay more)• Lower reimbursement

Policy Options to Sustain Medicare for the Future, Kaiser Family Foundation January 2013

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Good News for Seniors

• Fill in donut hole in Medicare Rx• Reduce Hospital readmissions (1 out of 5)

• Reduce Medicare premiums• Increase Medicare preventive services• Increase access and

quality for dual eligibles

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Carrots and Sticks for Providers

• Responsible for quality and costs; can earn shared savings

• Primary Care team focuses on wellness and coordination of care

• Goal: Keep people healthy and out of the hospital

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Medicare Electronic Health Records (EHR) Incentive Program

$44,000 bonus for ‘meaningful use’ of HIT– The use of a certified EHR in a meaningful manner, re: e-

prescribing.– Electronic exchange of health information to improve quality of

health care– Submit clinical quality and other measures

-.5 to 5% penalty for no EHR after 2015

37http://www.acatoday.org/content_css.cfm?CID=4576

Bonus for Primary Care Providers10% bonus to primary care physicians and surgeons working in Health Profession Shortage Areas (HPSAs)Incentive payments for PC services if patient stays out of the hospital “Independence at Home”

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Medicare Value Based Payment Modifier

Value-based ‘purchasing’ based on physician performance and qualityNew physicians could be ‘dinged’ as their cost profiles are higher

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Increase Reimbursement to Medicare Advantage

Now will increase payment

by .5%

ACA would have cut

payment by ~ 2%

Medicare Prospective Payment System for FQHCs

From $117.67 (rural) and $129.02 (urban) to $158.85

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Carrots and Sticks for Hospitals

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No payment for preventable readmissionsReduce payment updates for hospitals, home health and SNFsBundled payment for an episode of care

43Source: HFMA, Healthcare Reform: The Dust Settles, April 13, 2010 http://www.beaconpartners.com/avoiding-aco-gotchas#sthash.c1C4CWV0.dpuf

Control Medicare Spending

Independent Payment Advisory Board to reduce rate of growth – depoliticize process

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Impact of PPACA on MedicareIncreases in spending

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(In Billions)

Kaiser Family Foundation. A Primer on Medicare. 2011

Impact of PPACA on MedicareDecreases in spending

Kaiser Family Foundation. A Primer on Medicare. 2011(In Billions)

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Stay Informed

Health Affairs: www.healthaffairs.org/

AOA Advocacy: www.osteopathic.org

AACOM Advocacy www.aacom.org

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Kaiser Health News: www.kaiserhealthnews.org/

Training in Policy Studies (TIPS)bcoppola@nyit.edu

Thank you

ncooper@ohio.edu

49CMS Office of the Actuary, Updated National Health Care Expenditure Projections 2009-2019; January 2011

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Enrollment Options(It’s Complicated)

• Original Medicare (Part A & B) & Prescription Drug Plan (Part D) for Rx• Original Medicare, Rx and Medigap to cover what original Medicare

does not cover• Medicare Health Plan

– Medicare Advantage (usually includes Part D Rx) Enroll between 10/15 – 12/7

– Medicare Medical Savings Account Plans – high deductible plan with Medicare health savings account

• Contribution less than the deductible: good for the “Healthy Wealthy”

• Part A & B automatic at 65 w/ Social Security• Can decline Part B if still covered under employer

http://www.medicare.gov/sign-up-change-plans/decide-how-to-get-medicare/decide-how-to-get-your-medicare.html

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