Medicare

Introduction

Health insurance for people >= 65 years of age, disabled persons, & patients with end-stage renal disease.

47 million beneficiaries (2013)

$492 billion (2013), 14% of the federal budget

Classification

• Medicare Part A
• Medicare Part B
• Medicare Part C (Medicare Advantage)
• Medicare Part D

Notes

Reimbursement

• fee for service reimbursement system
• reimbursement based on volume & intensity of services performed & billed
• by the end of 2018, 50% of Medicare payments to physicians & hospitals should be based on the value, rather than volume
  • in 2014, value-based payment account for just 20% of Medicare payments
  • sources of value-based payments include
    • Accountable Care Organizations
    • primary care medical homes
• doctors do not have to redocument medical student entries for parts of Medicare claims

Coverage:

• covers acute & post-acute care
• does NOT cover
  • long-term care (custodial care in nursing home)
  • vision assessment, eyeglasses not covered by traditional Medicare
    • Medicare Advantage programs may cover vision
  • hearing aids
  • health maintenance examinations
  • dental care
  • foot care, orthopedic shoes
  • cosmetic surgery
  • care in foreign countries
• drugs (see prescription drug plan)

Benefits are, in principle, uniform across USA

Copayments are generally 20% in addition to deductable

Exceptions are

• hospitalization 100% (part A)
• postacute care in skilled nursing facility 100% (part A)
• home care (medically necessary) 100% (parts A & B)
• ouupatient mental health care 50% (part B)

Expenditures:

• hospitals 69%
• physician services 25%
• nursing homes 1%
• other 5%

In 1999, Medicare beneficiaries still pay $2430/year or 19% of income out of pocket for health care (average cost/income)

All financial operations for Medicare are handled through 2 trust funds in the US Treasury. One for hospital insurance (Part A) & one for supplementary medical insurance (Part B). Financing is primarly through a mandatory payroll deduction (Federal Insurance Contributions Act, FICA). Employers & employees pay 1.45% of wage earnings. Self employed persons pay 2.90%.

Regional insurance companies (intermdediaries) are used to pay hospitals, nursing homes, home care agencies, & hospice programs (part A)

Separate regional insurance companies (carriers) are used to pay physicians & other health care workers, ambulances, outpatient facilities, laboratories, imaging facilities, & suppliers of durable medical equipment (part B)

Includes:

• review of medical necessity
• incentives to use certain providers
• case management

Medicare supports:

• point of service options (POS)
• preferred provider organizations (PPO)
• provider sponsored organizations (PSO)
• individual practice associations (IPA)

Changes to pharmaceutical benefits (2004)

• Medicare formularies to allow at least 2 drugs in each class

Other

• physician house calls may be billed up to $150, CPT: 99350 (2008)
• payment for physician home visits may be augmented by billing for prolonged services if the visit the visit extends beyond the typical face to face time for the selected CPT code
• physician home visits on the same day as home health agency visits are reimbursed by Medicare
• begining Jan 2015, monthly fees of $40/month for coordinating care of Medicare patients >= 2 chronic conditions, including:
  • medical, psychological, & social health
  • comprehensive care plan
  • monitoring any treatment provided by specialists
  • checking medication compliance
  • managing transition from hospital to home or a nursing home
  • accessibility 24 hours per day, 7 days per week
• 2 drugs (Revlimid & Copaxone) account for 26% of total Medicare drug spending but just 1% of claims
• among 60 million fee-for-service beneficiaries from 1999-2013:
  • hospitalization rates diminished, from 35,000 to 27,000 per 100,000 person-years
  • in-hospital, 30-day, & 1-year mortality fell
  • adjusted mean annual Medicare inpatient expenditure diminished from $3290 to $2801 per beneficiary
  • median hospital stay diminished from 5 to 4 days
• Medicare does not provide incentive to practice geriatrics well
  • as much if not more time can be spent on non-billable activities
    • examples include:
    • coordinating care
    • reviewing medications
    • reviewing records
    • making calls & referrals for services
    • counseling families

More specific terms

• Medicare Advantage Plan (Medicare Part C)
• Medicare Part A
• Medicare Part B
• Medicare part D Prescription Drug Plan (PDP)

Additional terms

• Medicaid
• Medicare & subacute healthcare
• Medicare personal plan finder
• Medigap
• prospective payment system (PPS)