Medicare Design
•
Part A: Inpatient care, hospice, and
some home health care
•
Part B: Physician services + outpatient
care
•
Part C (“Medicare Advantage”): Private
plan alternative to Parts A and B
Medicare Eligibility and Premiums – Parts A and B
•
Part A
:
– Entitled if:
• Age 65 + US citizen or permanent legal resident +
you/spouse makes payroll contributions at least 10 years • SSDI recipient for at least 24 months
• ESRD or Lou Gehrig’s disease – Eligible if:
• Not automatically entitled, but age 65 + US citizen or permanent legal resident
– Premium:
• No premium if entitled
• Premium if eligible but not entitled
•
Part B:
– Eligible if entitled or eligible for Part A – Means-based premium
Medicare Part C
•
Defined: Private plans that contract with government
to offer Medicare Advantage Plans
•
Eligibility: Eligible for Part C if eligible for Parts A and B
•
Coverage:
–
Plans must cover all services covered under Parts A and B
–
May cover prescription drugs (Part D benefit)
–
May cover additional services not covered under Parts A
and B
•
Premium/cost-sharing:
–
Premium based on statutory formula; varies by plan
–
Cost-sharing may vary from Parts A and B cost-sharing
Medicare Part D
•
Coverage: Covers outpatient prescription drugs. Covered
through private plans (Prescription Drug Plans or Medicare
Advantage (MA) Plans)
•
Eligibility and Enrollment:
–
Eligible for Part D if entitled to Part A, enrolled in Part B, or
enrolled in a MA Plan
–
Must affirmatively enroll
• Exception: “dual eligibles” automatically enrolled
• Those enrolled in a MA Plan must get their drug coverage through their
MA plan
–
May enroll at any time
•
Premiums:
–
Varies across plans
–
Means-tested
PAYMENT RATE =
HOSPITAL SPECIFIC AMOUNT x DRG
(+ ANY ADD-ON PAYMENTS)
STANDARDIZED AMOUNT
/
\
EXAMPLE
National Standardized Amount = $5438
/ \
Labor Share = $3000 Non-Labor Share = $2438
Hospital ABC’s Wage Index = 1.5
EXAMPLE
Joe Smith is admitted to Hospital ABC. Assigned
to a DRG with a weight of 2.0.
Payment Amount
= Hospital Specific Standardized Amount x DRG (+ any
add-on payments)
PAYMENT RATE =
HOSPITAL SPECIFIC RATE x DRG
(+ ANY ADD-ON PAYMENTS
)
PAYMENT RATE =
RVU x Conversion Factor
RVU Physician Work (Geographically Adjusted) Practice Expense (Geographically Adjusted) Malpractice Expense (Geographically Adjusted)
Medicare’s Hospital
Value-Based Purchasing Program
•
Quality Measures
– Clinical process of care – Patient experience of care – Patient outcomes
•
Efficiency Measure:
Medical Spending per Beneficiary (MSBP)•
Scoring
– Composite quality score: based on higher of achievement and improvement score for each measure
– Combined score: 80% quality + 20% efficiency
•
Payment
– Specified percentage of standard payment rates withheld
Payment Year HVBP* FY 2013 1% FY 2014 1.25% FY 2015 1.50% FY 2016 1.75% FY 2017 2.0%
Medicare Hospital
VBP Program: Payment
*% reduction in payment rates to fund VBP payments
Pre-Value Based Purchasing
National Standardized Amount = $5438
/ \
Labor Share = $3000 Non-Labor Share = $2438 Hospital ABC’s Wage Index = 1.5
Hospital Specific Rate = (Labor Share x Wage Index) + Non-Labor Share = ($3000 x 1.5) + $2438, or $6938
______________________________________________________________________ Post-Value Based Purchasing: High Performing Hospital
Adjusted National Standardized Amount = $5500
/ \
Labor Share = $3055 Non-Labor Share = $2445 Hospital ABC’s Wage Index = 1.5
PAYMENT RATE =
RVU x
Conversion Factor
Medicare’s Hospital Readmission
Reduction Program
•
Penalty
–
% reduction in payments if excessive readmissions
–
Based on hospital-specific benchmark
Medicare: Hospital
Acquired Conditions (HACs)
•
No increased payment for certain HACs
Bundled Payments
•
Who: Organizations that voluntarily
participate.
•
Payment: Single payment to multiple
providers for an episode of care.
Shared Savings Program
•
Who? Accountable Care Organizations (ACOs)
that voluntarily participate
•
Payment:
–
Shared savings model: ACOs providers paid fee
schedule rate (e.g., IPPS, physician fee schedule).
ACOs that meet target cost savings + quality metrics
awarded percentage of Medicare’s savings.
–
Shared savings + risk model: Same as shared savings
model, except ACOs that do not meet target cost
Giving Providers Tools to Address
Quality & Cost Concerns
Regulatory Initiatives: HIT/EHR
•
HIPAA
•
Office of the National Coordinator (ONC)
–
Establish standards
–
State health information exchanges (HIEs)
–
Technical assistance
•
Medicare and Medicaid EHR Incentive
Payments
–
Subsidies if “meaningful user” of EHRs
$12,376 $14,913 $11,167 $12,478 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 2014 2019
Medicare is on track to spend $1,200 less per person in 2014
than was projected in 2010, and $2,400 less in 2019
FOR 2019
-$2,436
SOURCE: Kaiser Family Foundation analysis of mandatory Medicare outlays and Medicare enrollment data from CBO Medicare baseline projections, 2010-2014; 2014 estimates based on August 2014 baseline.
FOR 2014
2.9%
3.1%
3.4%
3.9%
4.4%
4.8%
0% 1% 2% 3% 4% 5% 6% 2015 2020 2025 2030 2035 2040Medicare spending is projected to grow as a
share of the economy
NOTE: Estimates are net Medicare spending as percentages of gross domestic product (GDP), based on the extended alternative fiscal scenario, under which Medicare’s physician payment rates would be maintained at current levels, rather than reduced.
Medicaid Eligibility
•
Mandatory categories (“categorically needy”/”deserving poor”)
– Aged, blind, and disabled receiving SSI – Low income children and their caregivers – Pregnant women below 133% FPL
– Former foster care children under age 26
•
Optional categories
– Pregnant women, children and their caregivers with incomes exceeding limits for categorically needy
– Medically needy
– Other adults with incomes below 133% FPL (ACA)