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

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

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? . . . .

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 . . . .

There Will Be Fewer Medicare Advantage Plan Offerings for 2014

As we head into the Annual Enrollment period for Medicare eligible people, they will ultimately find that in some areas, some Medicare Advantage plans have withdrawn some plans they previously offered.  This article is a good synopsis of what's happening in this marketplace:

View the article here . . .

October will be a very busy month!

Medicare Seeks To Limit Number Of Seniors Placed In Hospital Observation Care

The "observation care" designation is a thorny one - for the providers, as well as, the Medicare beneficiary.  The patient often doesn't realize that they haven't been admitted, and end up with increased financial obligations because of it.  If a person has a Medicare Advantage plan, this can be especially troubling, since in many of the plans on the market, the patient would be responsible for 20% of all outpatient services received, rather than a straight 'hospital inpatient' daily co-pay.

The difference between the two can be enormous, especially if expensive tests are done while the person is considered to be an "outpatient".  There are other implications as well, related to requirements to be admitted into a nursing home after a hospital stay.  The requirement to have coverage in that instance is that the patient has been an "inpatient" for 3 consecutive days.  Outpatient status doesn't count.  Read more in the Kaiser Foundation & Washington Post article here . . .

Repealing Obamacare - What are the consequences?

Bob Laszewski's review of what might happen if Romney were to win the presidency and make good on his promise to repeal or defund the Health Care Reform law (PPACA), is a concise analysis of some of the difficulties with either scenario and the unintended consequences.

Usually the Congress attempts to fix troublesome aspects of larger pieces of legislation, rather than this "all or nothing" stance that seems to prevail now.  "All or Nothing" is usually not a realistic scenario.

A lot of money has already been spent implementing this law, and more is on the table in both the public and private sectors.  Will all of that be for nothing?  Bob raises many issues and questions that need to be considered.  I could only hope that Mr. Romney might read Bob's blog post . . . .

Read Bob's Article here . . . .

Critics say hospitals cherry pick best-paying patients

This is an interesting article about how hospitals are using private medical records on patients to target direct marketing efforts that will ultimately yield increased profits for the hospital.  This raises more questions about privacy and sharing of personal medical data with non-medical people involved in the marketing efforts. 

I'm sure that over time, this practice (unless it's somehow either disallowed through regulation, or at least limited) is going to grow in popularity.  It also points out in the article that they specifically target patients with insurance - another way to insure that the facility receives payment, while potentially driving up insurance claims activity, which we all will ultimately end up paying for in the form of higher premiums.

Read more here . . . .

More Congressional Efforts to Redesign Medicare are Underway

http://capsules.kaiserhealthnews.org/index.php/2011/12/wyden-joins-forces-with-ryan-on-medicare/comment-page-1/#comment-23070

Take a look at the latest efforts regarding revamping of Medicare.  Looks like efforts to privatize - just masked behind a new "compromise".  May very well be a wolf in sheeps clothing if we're not paying attention . . . . .

Health Care & the Super Committee - the Cost of Failure

This article by Joe Paduda lays out some dire implications if the Super Committee doesn't come to an agreement in the time allotted.  Very realistic and pretty awful predictions of what could happen here . . . .

http://careandcost.com/2011/11/18/health-care-and-the-super-committee-the-cost-of-failure/

I still constantly wonder, who on the Hill is actually working for the people anymore? . . . .

States Continue to Cut Medicaid - Hospital Stays Reduced Due to Cost

Once again, Medicaid is the target of cuts that will most likely result in the rest of us bearing the cost of hospitals "eating" the costs they incur that are not reimbursable.  They cannot turn those that are already sick or in need of treatment away, as they can't just flip people already in the hospital out of their beds when an arbitrary date comes around.  If they have to absorb those costs, the rest of us will end up paying for it in higher insurance rates & in other ways - maybe even through other cuts to programs we may want sustained over time, like Medicare.

Maybe one big cost we could cut here in the US would be the cost of healthcare benefits for our members of Congress . . . .I'm tired of paying for them . . . . .

Read more here:  http://www.zanebenefits.com/blog/2011/10/425/States+Continue+to+Cut+Medicaid+-+Hospital+Stays+Reduced+Due+to+Cost

Big Name Drugs to go Generic

Big-name drugs go generic

Some of the most popular prescription drugs are about to get a lot cheaper.  According to the mail-order pharmacy Medco, at least 22 prescribed medications may be available as generics in the next year.

When drug companies develop a drug the FDA usually grants them exclusive rights to market that drug for a set period of time.  When those rights expire, other companies can make the exact same drug.  Since there is competition, the generics are cheaper.  The FDA says the regulations are “designed to promote a balance between new drug innovation and generic drug competition.” 

Click the link to read the entire article from CNN -
http://thechart.blogs.cnn.com/2011/07/26/big-name-drugs-go-generic/