Component 1: Introduction to Health Care and Public Health in the U.S. Unit 4: Financing Health Care Lecture 4 This material was developed by Oregon Health & Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number IU24OC

Health IT Workforce Curriculum Version 2.0/Spring Topics in This Lecture Insurance that is managed by the Centers for Medicare and Medicaid Services (CMS) –Medicare –Medicaid –Children’s Health Insurance Program Medicaid/Medicare fraud and abuse Workers’ Compensation Component 1/Unit 4-4

Medicare Created by Social Security Act of 1965 –Social Security Administration determines Medicare eligibility, processes premium payments Partially financed by payroll taxes (Federal Insurance Contributions Act [FICA]) –2.9% (1.45% from employee, 1.45% from employer) –FICA pays for Medicare Part A (hospital insurance) Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicare Part A Hospital insurance Helps cover: –Inpatient care (including psychiatric hospital) –Hospital outpatient care –Skilled nursing facility or rehabilitation facility –Long-term-care facility –Hospice (end-of-life care) Patient pays deductible Most Americans pay no premium—others can buy Part A coverage Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Prospective Payment System (PPS) Medicare’s system for reimbursing Part A charges Controls costs by paying the provider a predetermined, fixed dollar rate for most patients, regardless of services provided The rate is based on the patient’s diagnosis-related group (DRG), which reflects information in the patient’s chart at time of discharge Each type of facility has its own PPS Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicare Part B Medical insurance Helps cover: –Doctors’ services –Outpatient care –Home health services –Some preventive services –Other medical services Patient pays premium and deductible Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicare Part C Medicare Advantage plans –Offered by private companies that are approved by Medicare Companies provide all Part A and Part B; most also include Part D May offer extra coverage (such as for vision, hearing, and dental services) Patient pays premium and deductible Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicare Part C (cont’d) Part C options include: –Health maintenance organization (HMO) –Preferred provider organization (PPO) –Private fee-for-service plan –Special needs plan Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicare Part D Prescription drug coverage Created in 2003 Voluntary enrollment Provided by insurance company or other private company approved by Medicare Patients pay premium and deductible –After a certain point, may pay up to 50% of drug costs themselves (“doughnut hole”) Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicaid Helps pay medical costs of people with limited income and resources –Joint federal and state program –Some people on Medicare qualify for Medicaid too –Funded by taxpayers’ income tax payments Administered through CMS at state level –States formulate and administer a plan that is subject to federal regulations and guidelines –The plan outlines the nature and scope of services to be provided Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicaid (cont’d) Each state has different eligibility requirements and co-payments –Must provide payments for hospital and physician services –May provide payments for pharmacy, dental, and eye care –Must not provide payments for abortions Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicaid (cont’d) Medicaid programs have different names in different states Federal government reimburses states for expenditures under Medicaid States accepting funding for Medicaid must provide coverage to families and individuals who receive: –Temporary Assistance to Needy Families –Supplemental Security Income (SSI) Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Children’s Health Insurance Program (CHIP) Provides low-cost health insurance coverage For children in families that earn too much to qualify for Medicaid but can’t afford private health insurance –Each state has its own program and eligibility criteria –Eligibility is based on child’s status (for example, a child who is a U.S. citizen can qualify even if the parent is not a citizen) Also for low-income pregnant women Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicaid and CHIP May Work Together Typically cover a range of benefits, including: –Doctor visits, emergency care, hospital care –Prescription drugs, vision, hearing, dental –Free preventive care, including vaccinations Low premiums and cost-sharing may be available for other services Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicare/Medicaid Fraud and Abuse Fraud is intentional falsification of information or deception of Medicare or Medicaid Abuse occurs when doctors or suppliers don’t follow good medical practices –Unnecessary costs –Improper payment –Services that aren’t medically necessary Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Medicare/Medicaid Fraud and Abuse (cont’d) Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring Examples of possible fraud/abuse: –Health care provider bills for services or equipment that the patient never received –Someone uses another person’s Medicare or Medicaid card to get medical care or equipment –A provider bills for home medical equipment after it is returned

Medicare/Medicaid Fraud and Abuse (cont’d) It is not abuse to complain about quality of care from a physician, hospital, or other provider or facility The Medicare Web site offers options to file: –Inquiries –Complaints –Grievances –Appeals Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Methods of Fighting Medicare/Medicaid Fraud SMPs (formerly called Senior Medicare Patrols) –Educate older adults receiving Medicare and Medicaid benefits to prevent, detect, and report health care fraud Online brochure (stopmedicarefraud.gov) –Helps older adults spot, stop, and report fraud HEAT law enforcement activities Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Workers’ Compensation Form of insurance that provides fixed monetary awards to employees who are injured or become sick during the course of employment –Regardless of who was at fault –In exchange for monetary award, employee gives up the right to sue his or her employer for negligence Workers’ Compensation is not: –Disability insurance –Unemployment income Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Benefits of Workers’ Compensation Plans Wage replacement (form of disability insurance) Compensation for economic loss (past and future) Medical benefits (form of health insurance) Benefits to survivors of employees killed in work- related accidents (form of life insurance) Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Workers’ Compensation: Federal and State Federal government –Provides Workers’ Compensation for non-military federal employees –Administered by Office of Workers’ Compensation Programs State governments –Since 1949, all states have required some form of Workers’ Compensation –Most employers are required to offer this insurance –States investigate fraud and abuse Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Workers’ Compensation at State Level Administration differs by state –Some states operate state fund –In most states, Workers’ Compensation is provided by private insurance companies Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring

Summary Government health insurance programs operate on the federal level, state level, or both Programs sometimes work together –Medicaid and CHIP, Medicare and Medicaid All programs are subject to legislative change over time Component 1/Unit 4-4 Health IT Workforce Curriculum Version 2.0/Spring