Its Purpose , Patients, and Impact on Providers

1. Its Purpose, Patients, and Impact on Providers Nancy Cooper Coordinator, Health Policy Fellowship May 13, 2014

2. 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?

4. Medicare e = elderly Veterans Affairs Indian 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)

5. Centers for Medicare and Medicaid Services (CMS) pays for health care for 110 million elderly, disabled, and/or poor Americans

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

7. Health and Human Services $880 billion budget Medicare $524 B Medicaid $243 B Total CMS $ 767 B www.hhs.gov Kaiser Family Foundation 3/17/11

8. Medicare serves 50 million elderly and disabled Kaiser Family Foundation analysis of the CMS Medicare current beneficiary cost and use file 2006

10. Beneficiary Profile 65 and up Half are poor 1/3 live alone 8 M non-elderly with disability 2 M in long term care 7 out of 10 die of heart disease, cancer, stroke Medicare at a Glance, Kaiser Family Foundation Nov 2012

11. Elderly and Poor Dual Eligibles 9.2 M Hospital coverage, physician visits, drugs, some post hospital care Long term care, glasses, dental, pays some Medicare premiums and cost share AARP, Integrating Care for Dual Eligibles, 2012

12. 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) www.benefits.gov.ssa

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

14. 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 2012 www.hhs.cms.gov

15. Part A Out Of Pocket Charged based on LOS in hospital • No co-pay for 1-60 days • $275 per day 60-90 • $550 per day 91-150 www.hhs.cms.gov

16. After three midnights in a hospital . . .

17. 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.gov Kaiser 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

18. Part B Out Of Pocket

19. 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

20. 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

21. Medicare Part D: RXCost $55 B in 2011 Voluntary Rx benefit Costs high as gov. can’t negotiate prices for brand name drugs Kaiser Family Foundation 2012: Medicare Primer CMS, 2010 Enrollment Information

22. Part D: Prescription Drug Benefit 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/

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

24. Trust Fund: Payroll tax of 2.9% General revenue, premiums, and state payments General revenue and premiums > $85,0000 pay higher premium Not separately financed - capitated

25. Worker-Retiree Imbalance In 1965: 6 workers per retiree In 2012: 2 workers per retiree Institute for Health Metrics and Evaluation, University of Washington May 2012

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

27. High Cost of Dying CMS 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 in the last 6 months of life Dartmouth Atlas of Health Care

28. 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 Downsyndrome 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

29. 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.” AtulGawande, M.D.

30. The Silver Tsunami . . . Enrollment will increase from 47 million to approx 74 million – number of beneficiaries over age 80 will triple. Congressional Budget Office 2/1/12

32. Physician Reimbursement Reimburses 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

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

34. “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

35. 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

36. 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

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

38. Bonus for Primary Care Providers 10% 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”

39. Medicare Value Based Payment Modifier Value-based ‘purchasing’ based on physician performance and quality New physicians could be ‘dinged’ as their cost profiles are higher

40. Increase Reimbursement to Medicare Advantage

41. Medicare Prospective Payment System for FQHCs From $117.67 (rural) and $129.02 (urban) to $158.85

42. Carrots and Sticks for Hospitals No payment for preventable readmissions Reduce payment updates for hospitals, home health and SNFs Bundled payment for an episode of care

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

44. Control Medicare Spending Independent Payment Advisory Board to reduce rate of growth – depoliticize process

45. Impact of PPACA on MedicareIncreases in spending (In Billions) Kaiser Family Foundation. A Primer on Medicare. 2011

46. Impact of PPACA on MedicareDecreases in spending (In Billions) Kaiser Family Foundation. A Primer on Medicare. 2011

47. Stay Informed Kaiser Health News: www.kaiserhealthnews.org/ Health Affairs: www.healthaffairs.org/ AOA Advocacy: www.osteopathic.org AACOM Advocacy www.aacom.org Training in Policy Studies (TIPS) bcoppola@nyit.edu

48. Thank you ncooper@ohio.edu

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