11. HC Coverage In Retirement Flashcards
At implementation (1966) Medicare covered most people age 65+.
Now, other groups are eligible, too (list 5):
- Persons entitled to SS or RR disability cash benefits for 24+ months
- Persons with ESRD
- Certain otherwise non covered, aged persons, who elect to pay a premium for Medicare
- Persons w Lou Gehrig’s disease, who are allowed to waive the 24mo waiting period
- Persons diagnosed w a medical cond’n caused by exposure to a public health hazard, per Public Law 96-510.
Originally, Medicare was HI + SMI, A+B.
List the 4 categories of hc services covered under Part A:
- Inpatient hospital
- SNF (skilled nursing)
- HHA (home health)
- Hospice
Summarize the inpatient hospital care benefit of Medicare Part A
Covers costs of:
- Semiprivate room
- Meals
- Regular nursing
- OR, recovery rooms
- ICU
- Inpatient Rx
- Labs, x-rays
- Psych hospitals
- Inpatient rehab
- Long-term hospitalization when medically necessary
- Other medically nec services/supplies provide by a hospital
An initial deductible payment is required of beneficiaries who are admitted to a hospital, plus copayments for all hospital days following day 60, within a Ben period.
Summarize the SNF benefit in Medicare Part A
of SNF days provided under Medicare: limited to 100 days per Ben period. A copay applies for days 21-100.
Coverage for SNF is provided by Part A only if the care follows within (generally) 30d of a hospitalization that lasted 3+ days, and is certified as medically nec.
Covered services similar to inpatient hospital care, including rehab & appliances.
Part A doesn’t cover nursing facility care, if the patient does not require skilled nursing or skilled rehab.
Explain the HHA care provided by Medicare Part A
HHA is covered by parts A & B. The Balanced Budget Act transferred from Part A -> B HH services furnished from 1/1/98+ that are in associated with a hospital or SNF stay.
- Part A continues to cover the first 100 visits following a 3+d hospital/SNF stay
- Part B covers any visits thereafter.
HH care under A & B has no copay, no deductible.
HHA care, including care provided by an aide, can be furnished part-time by an HHA in the residence of a homebound beneficiary, if intermittent/PT skilled-nursing and/or certain other therapy/rehab is needed.
Certain supplies/DME may also be provided @ 20% coinsurance. A treatment plan w periodic physician review req’d.
FULL TIME nursing care, food, blood, drugs - are NOT provided as HHA services.
Describe the hospice care benefits provided by Medicare Part A
Coverage is provided for services to terminally ill persons w/ life expectancies of 6 months or less who elect to forgo their standard Medicare bens for tx of their illness, and to receive only hospice for it.
Such care includes: pain relief, supportive med/social svcs, PT, nursing, symptom mgmt. If a hospice patient reqs tx for a cond’n that isn’t related to the terminal illness, Medicare will pay for all covered services related to that condition.
For hospice, no deductible, but yes small copay for drugs and inpatient respite.
What is the benefit period concept in Medicare Part A? How does it work?
Starts: when beneficiary first enters a hospital
Ends: When there’s been a break of 60+ consecutive days since inpatient hospital or SNF care provided.
No limit to # of benefit periods covered by Part A during a lifetime, but inpatient care limited to 90d per period, and copays apply for days 61-90.
If a Ben exhausts the 90d inpatient care in a period, they can use days from their non renewable “lifetime reserve” of up to 60 total additional inpatient days. Copays apply to those days.
Describe Medicare Part B benefits
- All citizens & certain legal aliens age 65+, and all disabled persons entitled to coverage under part A, are eligible to enroll in part B on a voluntary basis by payment of monthly premium.
- Almost all persons entitled to A, choose to enroll in B.
- Examples of Part B benefits:
—physicians & surgeons services, incl chiro, podiatry, dentist, optometrist
—non-physician services by Medicare approved: RN anesthetists, clinical psychology, clinical social workers ex-hospital/SNF, PA, NP, CNS with physician collab
—ER, outpatient clinic, ambulatory surgical, including same-day surg
—HHS excluded by part A
—labs, x-rays, other diagnostic radiology
—certain prev.care/screenings
—physical & occ therapy, speech path
—outpatient rehab
—radiation therapy, dialysis, transplants (!)
—approved DME
—non-self-admin drugs & biologics
—certain diabetic svcs
—ambulance when other transit is contraindicated
All services must be med nec (or prev.care)
Generally, are subject to deductible & coins; some have special payment rules like max approved amounts or higher coins.
What’s the purpose of Medicare Part C?
Aka Medicare Advantage, it expands bens’ options for participation in private-sector hc plans.
A+B constitute the original FFS Medicare. Although this is still available, most folks using A+B could choose C instead.
They’re offered by private cos/orgs, and are req’d to provide services AT LEAST as good as A+B (minus hospice). They may (/must, in some cases) provide EXTRA bens (e.g., vision, hearing) OR reduce cost-sharing/premiums.
Describe the 4 types of Medicare Advantage (C) plans:
- LCCP: Local coordinated care plans. Includes HMOs, provider-sponsored orgs, local PPOs, other certified coordinated care plans/entities that meet legal standards. Has a network of participating providers you must use (or pay $$$ to go OON).
- Regional PPO in one of 26 defined regions. Like a local PPO, has a network that you must use (or pay $$$ to go OON). Are req’d to provide Ben financial protections - limited OOP cost-sharing, and has provisions designed to encourage regional PPO to participate in Medicare
- PFFS: private fee-for-service. Not required to have networks historically, but since 2011 that’s only true for regions with <2 network-based LCCPs. Members may go to any Medicare provider willing to take the plan.
- Special needs plans: restricted to bens who are dually eligible for Medicare & Medicaid, live in LTC institutions, or have certain severe, disabling conditions
Describe Medicare Part D
Provides subsidized access to Rx drug insurance. Voluntary. Premium. For individuals entitled to part A, or enrolled in part B.
There are premium and cost-share subsidies for low income enrollees.
Bens can choose a standalone PDP or an integrated Advantage+D plan.
Covers most FDA-approved Rx and biologics. Plans can have formularies, subject to statutory rules.
Can be standard, or an alt design that meets AVs. For an additional premium, plans can offer supplemental coverage exceeding basic coverage’s value.
Is SMI synonymous with Part B?
No.
SMI consists of Parts B & D. Part D activities are handled within the SMI trust fund, but in an account separate from Part B. The purpose of the 2 sep accounts within the SMI trust fund is to ensure that funds from one part are not used to finance the other.
List some (5) of the hc services NOT covered by Medicare
-Long-term nursing
-Custodial care
-Dentures and dental care
-Eyeglasses
-Hearing aids
They could be part of a private health plan under Advantage, though.
How is Medicare Part A financed by payroll taxes?
The financial ops of A are handled through the HI trust fund. It’s financed primarily thru mandatory payroll tax.
Almost all EEs & self-emp workers in the US pay taxes to support the cost: 1.45% of earnings, to be paid by each EE + matching amount paid by ER for each EE, and 2.90% for self-emp. Paid on all covered wages & self-emp income without limit.
Additional A payroll tax of 0.9% collected on earned income >$200k (singly)/ >$250k (jointly - not indexed!).
Part A tax rate specified by SS Act and cannot be changed w/o legislation.
Part A is generally provided automatically ,and free of premiums, to those age 65+ and SS/RR Ben eligible, whether they enroll in the cash benefit or not.
How else is part A financed, in addition to payroll tax? (5)
- A portion of the income tax levied on SS bens paid to high-income bens
- Premiums from persons not otherwise eligible who enroll voluntarily
- Reimb from general fund of US Treasury
- Interest earnings on invested assets
- Other, small, misc income
How does the SMI trust fund fundamentally differ from the HI trust fund, wrt the nature of its financing?
SMI = parts B & D. Each has its own separate account within the SMI trust fund. It’s similar in that both parts are primarily financed by contribs from the general fund of the US treasury, and to a small degree, Ben premiums.
B: Contribs from Treasury are largest source of income bc Ben prems are set at a level covering 25% of the avg expenditures for aged bens. Provisions can alter the prem rate for some enrollees.
D: Contribs from Treasury are largest source of income bc Ben premiums represent 25.5% of cost of standard coverage. Provisions can modify. D also receives pmts from the states. With the availability of rx drug coverage & low-income subsidies under D, Medicaid is no longer the primary payer for rx drugs for Medicaid bens who also have Medicare, and states are req’d t defray a portion of D expenditures for those folks.
SMI trust fund also gets income from interest earnings on invested assets, and a bit of misc income.
Ben premiums and general fund pmts for B & D are redetermined annually and separately.
FFS bens are responsible for charges not covered by the Medicare program and various cost-sharing aspects of A+B. How are these paid? (3 ways
- By the beneficiary
- By a 3rd party, eg ER-sponsored retiree plan, private Medigap
- Medicaid ,if eligible
What are Medigap policies?
Private health insurance that pays, within limits, most of the hc service charges excluded by A+B. Must meet federally imposed standards. Offered by commercial insurers eg. BCBS.
How is a ben’s FFS payment share determined for (a) hospital care under Medicare Part A and (b) SN care under Medicare Part A ?
A) First, one-time deductible at beginning of each Ben period. Covers the first 60d of inpatient care. If care continues past 60d, additional coinsurance required, thru day 90. Each Part A Ben has a “lifetime reserve” of 60d that can be used, only once, and coins applies.
B) Medicare fully covers the first 20d of SNF care in a Ben period. For days 21-100, copay req’d. After 100d, Medicare doesn’t pay for SNF.
Are premiums req’d for Medicare Part A? Details
No.
Eligibility is earned thru work experience of Ben or their spouse.
Most aged people who are otherwise ineligible for premium-free part A can enroll voluntarily by paying a monthly premium, if they also enroll in Part B.
What is the ben’s FFS payment share for Medicare Part B services?
- Annual deductible
- Monthly premiums
- Coinsurance for Part B services
- Deductible for blood
- Certain charges above Medicare-allowed charge, for claims not on assignment
- Payment for non-covered services
For services reimbursed under the outpt hospital prospective pmt system, coins varies by service, generally 20-50%.
No deductible/coins for certain services, like lab tests, HHA, and some prev.care.
What is the ben’s FFS payment for Medicare Part D bens?
- Initial deductible
- then, Ben pays 25% of remaining cost up to coverage limit.
A coverage gap starts after an individual’s drug cost reaches the initial coverage limit, and stops when the Ben incurs a certain threshold of OOP costs.
For costs incurred after reaching the OOP threshold, catastrophic coverage is provided. This reqs the enrollee to pay the greater of 5% coins, or a small defined copay.
Many Part D plans offer alt coverage that differs from the above standard - and the majority of bens choose the alt., which are more likely to have low/no deductible, flat payments for covered drugs, and some partial coverage in “the gap.”
Describe the pmts made to providers for:
1. Medicare Part A inpatient hospital services
2. Non physician Medicare Part B services
3. Physician services
- Use a reimbursement mechanism called PPS, prospective pmt system. For acute inpatient hospital, each stay categorized into a diagnosis-related group (DRG), which has a predetermined amount associated that serves as basis. Then, adjustments apply to calculate the payment. Sometimes the pmt the hospital gets is < actual hospital cost of providing covered services, but sometimes it’s more. Hospital absorbs loss or takes profit. Certain adjustments exist for extraordinary stays/situations. Pmts for SNF, home health, inpatient rehab, LTC, inpatient psych, and hospice are made under separate PPS.
- Same PPS as A. Outpatient hospital, a separate PPS. Clinical lab and ambulance are fee schedule - a comprehensive listing of max fees. DME - fee schedule, but also paid based on a competitive bidding process
- The lesser of submitted charges OR fee schedule based on relative value scale. IRL, the fee schedule, which is supposed to update by a SGR (sustainable growth rate) system prescribed by law, but since that would’ve resulted in fee reductions for physicians, Congress has overridden this in past years.
If a Dr/supplier agrees to accept the Medicare rate in full (“takes assignment”), then pmts provided must be considered pmt in full and provider can’t request more, besides ded/coins, from the Ben/insurer.
If the provider doesn’t take assignment, beneficiary can be charged excess (which they can submit to Medigap ins if they have it). Limits now exist on the excess providers can charge.
Physicians are participating physicians if they agree before 1/1 to accept assignment for all Medicare services they furnish during the year. Since Bens in the original Medicare FFS may select their doctors, they can choose participating physicians.
How were MACs (Medicare administrative contractors) developed? What do they do?
From the beginning of Medicare, FFS claims were processed by NGOs/agencies under contract to serve as the fiscal agent bt providers & the fed gov’t. They apply the Medicare coverage rules to determine appropriate reimb amnts, and make pmts to provider/suppliers. They were responsible to maintain records, establish patrols, safeguard against fraud/abuse, assist providers & bens. They processed most Medicare claims.
Legislation mandated the replacement of the older system with a new one of entities known as MACs. Each MAC processes and pays FFS claims for A+B services within its geo jurisdiction. They’re selected via competitive procedure. System is intended to improve Medicare services to bens, provider, suppliers, who now have a single POC for all claims-related biz. System enables Medicare FFS program to benefit from economy of scale/competitive performance pricing.
