Hospitals Brace for New Medicare Payment Rules

A bundled payment initiative related to hip & knee replacements takes effect today - and no - it's not an April Fool's joke!

This could be a huge change in the way that people in need of hip & knee replacements are evaluated & subsequently treated for the surgery.  It puts the onus on hospitals for the costs of the procedure for the first 90 days.  After that, if they've handled the surgery & post operative care "economically", the hospital may benefit.  If not, the providers could potentially OWE Medicare money.

This will most likely have a profound effect on who gets treated and how.  High risk patients, or patients who cannot go directly home after the surgery, would be most at risk for either being denied care or receiving limited care.

It is understood that Medicare spending overall needs to be evaluated and reigned in somehow, but we may find that the net effect of blanket policies, rather than case by case evaluation of long term impacts of care may come back to bite us.

Let's say someone is denied a knee replacement due to high risk, post operative complications.  Overall, short term, it may seem like an expensive procedure, but long term - may provide the patient with necessary mobility to stay in their home without care for a longer term.  Without the surgery - they could potentially become immobile, leading to all sorts of more expensive care & poor quality of life in the long run.

There should be a better way to get at the long term costs and benefits of a given treatment for a patient, rather than making a blanket "rule", for a particular thing that really shouldn't be evaluated in a vacuum.

What do you think?  Read the Wall Street Journal Article below:

Hospitals Brace for New Medicare Payment Rules

Why the Obamacare 2016 Open Enrollment Stalled: The Big Unwritten Story About Obamacare––How Unaffordable It Is For the Working and Middle Class

Now that the most recent Open Enrollment period for the "Affordable Care Act" has ended, Bob Laszewski has written another article about the law and its impact that is right on the money.  The big "untold" story is about how it has impacted premiums for the segment of the individual market that do not qualify for subsidies and now have to bear the weight of astronomical premium increases.

You can read Bob Laszewski's blog post here . . . .

HIPAA'S USE AS CODE OF SILENCE OFTEN MISINTERPRETS THE LAW

Many of us have had an experience, especially if caring for a family member or a friend, of not being able to get the most basic information when contacting a provider or a hospital on the status of a patient in our care.  Even very basic information is withheld sometimes, under the guise of "HIPAA rules won't allow us to share that". 

The New York Times published a recent article about the subject that I thought would interest you.

Here it is . . . .

I found some of the additional comments related to the article to be telling as well.  Many come from doctors and people working in the healthcare field about the reality of working with the law's requirements.

Enjoy!

When Turning 65 - People Who Have Marketplace Plans or Other Individual Insurance Need to Review Options

Now that the Affordable Care Act has been offering plans through the Marketplace for 2 full years, there is new confusion for those turning 65.  Normally, in the pre-Affordable Care Act (ACA) world, someone turning 65 in an individual plan would have coverage cease upon their eligibility date for Medicare.  They were not able to continue.

In this new Post-ACA world, especially when plans are purchased through the Marketplace - people turning 65 often are not notified that they should be looking at enrolling in Medicare.  Further, those getting subsidies are often unaware that if they are Medicare eligible, they are no longer able to collect subsidies through the Marketplace to help pay for insurance.

Know that there are penalties in the Medicare system if you do not enroll when eligible.  These penalties are imposed once Medicare is actually picked up and last a lifetime.  Financially, they can be large, and many people do not understand this unless someone is advising them.

My advice to someone turning 65?  Enroll in Medicare when eligible, unless you are an unusual case, such as a person who has immigrated here and would have to pay for Part A since they haven't paid enough Medicare taxes to warrant "premium free" Part A coverage.  (Part A - Hospitalization is automatic for most people at age 65 and costs nothing, if you've worked 40 quarters (10 years) or more in this country.  The fees to support this have already been paid for through payroll during a person's lifetime while working in the US.)

Part B - which covers outpatient services, carries a monthly premium.  If you do not sign up for that when first eligible, there are penalties associated with enrolling later.

Here's a good article from Kaiser Health News that discusses this in more detail.  Read more here . . .

FAQ: Congress Passes A Bill To Fix Medicare’s Doctor Payments. What’s In It?

Well, our Congress has finally reached a decision on SOMETHING . . . .this time it's about how to stop the madness around the decreases to physician's payment schedules under what was known as the SGR or "sustainable growth rate" formula.  That's good news for physicians.  Maybe not such good news for some Medicare beneficiaries.

They are always looking for ways to pay for their changes to the system, and that is valid - it's WHAT they look at sometimes that puzzles me.  It is known that Insurance companies were caught increasing their risk scores (meaning that they over-inflated their numbers of high risk beneficiaries in their Medicare Advantage programs), so that they could receive more money to support those programs. 

Instead of reigning in that type of fraud, they decided to take away things like first dollar coverage for Medicare supplement plans C and F.  In other words, they are taking away more consumer choices, that have no impact on Medicare expenditures.  In 2012, this very issue was looked at to see if having first dollar coverage led to "overutilization" of medical care.  The National Association of Insurance Commissioners (NAIC) conducted its own study, concluding that it did not.  And, logic says that it cannot, since Medicare supplement plans can only pay AFTER Medicare pays.  So, if there is overutilization - it occurs at the Medicare payment level - not because someone has a first dollar Medicare supplement plan.

It's too bad we can't take away some of the wonderful choices around insurance that we provide to our legislators, while we tell them that we think that by taking away their choices, it will somehow "change their bad behavior".

There are other elements to the legislation that fixes the payments to physicians under Medicare.  You can read more here

A Detailed Analysis of the Republican Alternative to Obamacare

Bob Laszewski has offered a detailed look at the Republican's alternative to "Obamacare".  I agree with Bob, that it may have been easier to accept "Obamacare" as the baseline, in need of major renovations - but it seems that it won't happen.

Some of the ideas in these proposals make perfect sense, but they will have different consequences for different consumers within the market.  The other big challenge here is that these solutions proposed are also very complicated for the average person to really understand.  What do you think?

Here's Bob's article . . . .Health Care Policy and Marketplace Review - Bob Laszewski

Congress Is Back And Looking At Limiting Your Health Insurance Choices - But Now It's About Medicare!

Yes, that's right!  They are busy at work to begin examining ways to limit a Medicare Eligible person's insurance options.  Like your Medicare supplement?  Want to buy one that offers full coverage, and pays for gaps that Medicare does not cover?  Well, you may not have that option anymore if certain members of Congress get their way.

This article explains some of the options that were discussed at the hearing to discuss ways to solve the physician pay "sustainable growth rate" (SGR) problem - or "doc fix" as some call it:

"Why Medigap Sellers' Ears are Burning"

I guess I am mystified as to how limiting the purchase of a private insurance plan that only pays after Medicare pays its share, or eliminating certain types of private coverage help reign in Medicare spending on the whole.  The argument is that if you give someone the option to buy "first dollar" coverage, they will over-utilize medical care. 

I know that based on the people I deal with regularly in my own client base, many of my people who purchase first dollar coverage for themselves do not over-utilize care.  If anything, many of them are healthy people.  They have the means to buy the best coverage that they can, and do so - for peace of mind.

That should be their option.  If you have the money, and want a good plan - you should be able to purchase it.

When the whole notion of limiting over-utilization in the under 65 health insurance market were done after the advent of "high deductible" health plans were introduced, studies showed that in some instances, medical expenditures actually rose due to the fact that people delayed seeking care when they really needed it. Some ended up spending more on reactive care that could have been prevented if they had sought care initially.

The Congressional representatives who always talk about this issue of "over-utilization" continually talk about the patient having more "skin in the game".  This always strikes me as ludicrous coming from a set of people who have no "skin in the game" at all. 

They have coverage provided to them via the Federal Government that we all pay for.  Maybe they should have their own "skin in the game" and have to purchase insurance on the open market like the rest of us.

If members of Congress had to go to Medicare at age 65, and then find ways to supplement their coverage - don't you think most of them would be purchasing first dollar coverage for themselves? They can certainly afford it. 

In addition, if they had to have Medicare as their primary means of insurance coverage, they would have to acquire Medicare Part B, which at their salary levels would also result in them having to pay the Income Related Monthly Adjustment Amount or IRMAA.

Forcing members of Congress - and all Federal employees and retirees for that matter - to go into full Medicare at 65 could be a better way to fund the SGR problem.  With the extra money from their part B premiums, and the IRMAA that would also be collected, we could probably bring enough money into the basic Medicare program to fund it without denying the rest of the American public choices on the private market that work for them.

But - don't worry, even though no patient advocacy groups were represented at the hearing, I'm sure Congress will consider the needs of the American public first!  Right? . . . .

Surprises Lurk for People Re-Enrolling on HealthCare.gov

This year, there may be surprises in store for those who do not do a subsidy "re-determination", and then shop for new plans and coverage.  If you were given subsidy money to purchase a policy under the new Affordable Care Act through Healthcare.gov last year, you may need to go back in and do a subsidy re-determination - especially if you believe your income for 2015 will be different than what you have projected for 2014.

Even if income stays the same, the plan choices and level of subsidy offered for the same income could differ considerably.

The Wall Street Article below spells it out pretty well. 

Surprises Lurk for People Re-Enrolling on Healthcare.gov 

I know that in the Kansas & Missouri markets there will be additional insurers entering the Federal Exchange/marketplace that were not present last year.  Insurers will also be offering some new plan designs that may impact what choices people make - even if they have been satisfied with their current coverage.

"Off-Exchange" policies will also offer more choice, for those who already know they will not qualify for subsidies.  If you do not qualify for a subsidy, there's really no good reason to shop through Healthcare.gov - unless you really want to go through the entire income verification process before you can purchase.

If you know you're going to purchase "off-exchange", you can go directly to the carrier to purchase, or work through an agent/broker (like me) who can run side-by-side quotes for you to choose from.

Open enrollment for individuals and families begins on 11/15/2014 and goes until 2/15/2015.  If you need to have coverage in place for a January 1 effective date, you'll need to be enrolled in a plan no later than 12/15/2014.

The Next Chapter of Obamacare

As we approach this next enrollment period (11/15/2014 - 02/15/2015) for individuals and families under the Affordable Care Act there are some things to be considered.

People who are receiving subsidies today, are being told that they can "do nothing" and automatically be re-enrolled in the plan they have today.  If that plan isn't going to be available for 2015, the insurance carrier will place you in a plan that's close.

But - even if you do want to keep the plan you have, you must keep in mind that if you do nothing, the subsidy amount you are currently receiving will stay the same and your share of the premium that you'll have to pay could increase.

So, most ACA subsidy recipients, should really go to the website (Healthcare.gov) when the enrollment period begins to re-apply and do a subsidy re-determination at that time for the year 2015.  If you don't, you may be surprised when the January 2015 bill comes.

In addition, you may want to re-visit things, simply because there will be some new plan offerings and, in some cases, some new carriers available on the exchange in your area.

Some of the Pre-ACA plans will only extend through the end of 2014 for some, so even if you are not receiving any subsidy money, you'll need to go shopping for a plan to begin on January 1.  If you don't qualify for the subsidy money, you can purchase "off-exchange" plans from a variety of sources - including your local agent or broker.

If you do qualify for subsidy money, then you can get assistance from a Navigator, Agent, or broker to review the process, help you access the local exchange in your area, and assist you with selecting plans.

People who had grandfathered plans (meaning, they were effective prior to 3/23/2010) can keep them as long as they desire.  Some others have received extensions of pre-ACA style plans that are not grandfathered beyond the year 2014.  Even though people can keep these plans - they must pay attention to note any rate activity on the plans that they currently have.  That may affect a decision on what to do in the coming year.

Each of you should be receiving some type of communication from your insurance carrier regarding your personal situation.

 - For policies to be effective on January 1, 2015 (i.e., for those who will absolutely lose coverage at the end of December 2014), you'll have to shop and be enrolled no later than December 15, 2014.

 - If you enroll by 1/15/2015, you'll have an effective date of 2/1/2015.  If you enroll by 2/15/2015, then your insurance will be effective on 3/1/2015.

 - If you do nothing, your insurance will continue and any price changes will be reflected in your first billing cycle in 2015.

Bob Laszewski's latest blog post outlines many things to be considered.  Read the blogpost here . . . .

Tax refunds may get hit due to health law credits

Get ready - here it comes!  Now that we're approaching the end of the year it's time to consider whether or not those of you who are benefitting from Advanced Tax Credits to pay for their health insurance underestimated their 2014 income.  If so, you may be subject to claw-backs at tax time.

This consideration also must be taken into account before the upcoming enrollment period, which is from 11/14/2014 through 2/15/2015.    During this next enrollment, you'll have to "estimate" your 2015 income.  If you've miscalculated for 2014, you'll want to be sure you don't build on that mistake.

Read the AP Article here . . . .

FAQ: Hospital Observation Care Can Be Costly For Medicare Patients

I have addressed this issue with many of my Medicare clients, so that they can ask the right questions regarding their status if they go to a hospital and are told to stay overnight.  A variety of difficulties can arise when your status is considered to be "outpatient". 

This becomes especially acute when someone is on a Medicare Advantage plan, as most of those plans in recent years have classified all "outpatient services" as requiring 20% coinsurance from the client.  If held in an "observation" mode in a hospital, that means the patient would be billed 20% of each charge incurred while in the hospital's care.  This can lead to thousands of dollars of coinsurance that the patient may not understand he or she owes.

Just because you're in a bed, and staying overnight in the hospital does not necessarily mean that you've been admitted.

Here's a good Frequently Asked Questions article from the Kaiser foundation that explains this phenomenon in more detail:

Medicare Observation Care FAQ

Home is where the money is for Medicare Advantage plans

Many of my Medicare clients have questioned the "home visits" offered by Medicare Advantage plans.  Some clients who have had the experience, thought it worked out well, and they appreciated the ability to talk with a nurse practitioner directly.  Other clients were hesitant to have someone come into their home, so they declined the visits.

All of the Medicare Advantage plans that I represent, currently offer the opportunity for a home visit to the members of the plan.  Whether you accept or decline, is up to you.

This article explains more about the home visits and how the data may be used.  It's worth a look.

Here's the full article . . . .

CMS Proposal Would Penalize More Than 2600 Hospitals

This article points out some of the problems with penalizing hospitals for readmission of patients. One thing I've seen my clients experience personally is the phenomenon of being "held for observation" as an outpatient resulting in the Medicare patient being stuck with 20% outpatient coinsurance for everything that happens - which can be thousands of dollars in billing.  In their zeal to cut back on "short stays" in hospitals and "readmissions" -hospitals are hesitant to admit anyone as an inpatient.  As the article points out, they aren't clear on what parameters they are being measured on in the first place - they find out when they get the penalty.

You can read the complete article here:

Researcher Says CMS Proposal Would Penalize More Than 2600 Hospitals

IRS and Department of the Treasury Release Guidance Related to Healthcare & Insurance

This week, the IRS and Department of Treasury released frequently asked questions to assist agents, brokers, and employers on provisions of the Affordable Care Act. The link below provides additional guidance on employer shared responsibility, seasonal worker coverage, minimum value, and small business healthcare tax credits. The new FAQs can be accessed, along with existing FAQs, from the IRS Q&A index page at the link below. The new questions are accessible in the employer shared responsibility, small business tax credit, and employer health care plans sections. http://www.irs.gov/uac/Newsroom/Affordable-Care-Act-Tax-Provisions-Questions-and-Answers If you'd like information regarding the Premium Tax Credits for Individuals and Families see the following link: http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-the-Premium-Tax-Credit   Centers for Medicare & Medicaid Services (CMS) has sent this Y1 AB MLN Curriculum Update. To contact Centers for Medicare & Medicaid Services (CMS) go to our contact us page.

Are ObamaCare's Tax Credits Harmless? The Little Understood Dark Side Of The Subsidies

Now that the first annual enrollment through the new Health Care Exchanges has ended, it's important to understand how the subsidies that many have received to assist with paying their insurance premiums will be handled by the IRS.  Forbes published a good article regarding how fluctuations in income and other life changes, could affect how the subsidy that you receive can change. 

If your income changes, or your life circumstances change that can affect household income levels, YOU are required to notify the health insurance marketplace (exchange), so that the subsidy can be adjusted accordingly.  If you do not do that, the government will make the adjustments at tax time.

Read more about the way the subsidies work here . . . .

Many have benefitted from the subsidy allocation, but with that benefit comes a responsibility to report any changes that could significantly impact your household income - otherwise there will be tax implications.

What Are The Penalties For Not Getting Insurance By The March 31st Deadline?

Here's a very good synopsis of how the penalty works under the new healthcare law.  As we enter the last phase of the enrollment, many who have not purchased insurance may still be contemplating whether or not to buy it, or whether they should just pay the penalty.  This may help clarify that decision.

Individual Insurance Mandate & Associated Penalty Calculation

There is still a full week left to obtain coverage.  I'm busy helping people this week, but you can also go directly to Healthcare.gov or to a local Navigator to obtain coverage.

Obamacare: To Buy Or Not To Buy–––An Entrepreneur Would Have Done It Differently

Bob Laszewski's blogpost today discusses how the plans under the new Affordable Care Act were built and whether or not people will actually purchase them.  I have had discussions about this with my clients, as to what they will decide to do at the end of 2014, when they will no longer be able to hang on to their 2013 style insurance plans any longer.

Many of these people are self-employed, and do not qualify for any type of subsidy.  Most of them are relatively healthy, and have always carried health insurance on their own.  And yes, it was "real" insurance - not sub-standard coverage.  When the time comes for them to choose an ACA style plan next year for coverage to take effect in the year 2015, they are going to find that their premiums without a subsidy will double in many cases.  The reason for that is that all of the current plans include all of the "essential health benefits" that the government built into every health plan, whether you deem it essential or not.

That is not to say that plans previously didn't have their problems - access to maternity coverage was a huge problem in the individual market.  Often, it was not even offered as an option.  But, maybe they could have found a solution like having every insurance company offer a maternity "option", that people who wanted the coverage could purchase - rather than build it into every plan.  Same for things like pediatric dental.  There were many other ways to have offered these benefits to people rather than baking them into every plan.

As an individual in the marketplace, I should have the right to purchase a catastrophic plan if I so choose, but that right was also taken from me, in the government's zeal to have everyone own a plan that looked very much like employer based plans look and feel.  Well, that's great, if you have an employer either paying for the plan, or kicking in 50% or more.  For those of us who are self employed, or work in places where no health insurance is offered, buying a Cadillac is just not a feasible proposition.

Keep in mind too, that the self employed also pay the maximum amount already on things like social security contributions and Medicare contributions in the form of self-employment tax, since they don't have an employer kicking in a portion of that.  Read Bob's Blogpost Here . . . .

THIS JUST IN: White House offers exemption from insurance mandate for consumers whose plans were canceled

The White House released new guidance that offers some leeway to people who had policies cancelled and found that their options under the new law were more expensive.  They will now be able to qualify for catastrophic coverage (previously only available to those under 30 or who could demonstrate financial hardship), and avoid the penalty.

You can read the full article, from Modern Healthcare, here.  Within the article, you can access the actual .pdf that is the document issued directly by CMS.

There are only 4 more days left to enroll for those who need coverage to be in force by January 1, 2014.  Premium payments (which originally were required to be received by the insurance company prior to January 1), must arrive no later than January 10. Blue Cross Blue Shield of Kansas City requires their first payment no later than January 7.  If you are unsure, check directly with the carrier for clarification.

Enrollments after the 23rd will be processed for a 2/1/2014 effective date.  Enrollments processed after 2/15/2014 will be for plans effective on March 1, and those processed after 3/15/2014 will be effective on 4/1/2014.

Anyone who hasn't enrolled in a policy during this initial enrollment period, will have to wait until next year's enrollment to sign up or to make changes to existing plans.

Obamacare Week 10––A Dearth of Enrollment In the States and Continuing Backroom Problems

Here's an update from Bob Laszewski regarding the current status of the enrollments through the Federal Marketplaces, and in the states that currently have a state run marketplace.  There is also data here about how various aspects of system corrections and development are going. 

The one point here that I found very troubling was the item that notes that the federal government hasn't built a payment system that would provide insurance companies with the premium subsidy payments.  They are expecting the insurance companies to bill them for these amounts.  It makes me wonder how long it will take them to get paid, and how that money will be tracked through the various private & government systems.

Also troubling was all of the confusion and inability to deal with Medicaid enrollments.

We'll see how the end of the year plays out.  I am hearing from people I deal with that they are actually able to get through the process now using Healthcare.gov, so at least they've made improvements there and some are getting approved for subsidies and enrolled.  Let's hope the improvements continue.

To read Bob's blog entry, please click here.

Correction to Previous post regarding Hospital Subsidies . .

The article referenced in the previous post was from the New York Times (not the Wall Street Journal) - I apologize for the error.