The Wall Street Journal reported on a story involving a 44-year old uninsured diabetic, Mark Baumann, and his mother Mary Baumann. According to the report Humana plans to reduce Mary’s Medicare Advantage plan to compensate for smaller government payments under the PP & AC Act, which stipulates that 15% of the new health care law will be funded by Medicare payment cuts beginning in 2012. The report cites the Congressional Budget Office in stating that Medicare Advantage enrollees will get $68 less a month in benefits by 2019.
The reduced Medicare Advantage plans for Mary and other seniors will result in either higher costs or less benefits. The report also states that dozens of private insurers that offer Medicare Advantage plans are now preparing to reduce dental, vision, and certain prescription-drug coverage beginning next year. Interestingly, the report states that by 2035, if both Medicare and Social Security see no changes, they will comprise 50% of all federal spending. The report goes on to discuss the larger issue of how this represents a shift of how the government applies our social safety net to cover younger people. What do you think of this? Let the PSM community know in the comments below (view the full article here).
Seniors Know Very Little About New Health Care Law
Several news outlets are reporting on a new poll that shows just how little seniors know about the new health law. Politicians, especially Democrats, are concerned since seniors represent a large voting bloc, especially in mid-term elections. The poll, conducted by the National Council on Aging, showed that only 17% of seniors knew the correct answers to more than half of the questions, and only 9% correctly answered two-thirds of the questions.
CMS Issues Final Rule Tying Renal Services to Performance
MordernHealthcare.com reports that the Centers for Medicare and Medicaid Services (CMS) proposed a new rule to tie Medicare payment for end-stage renal disease services with performance on quality measures. Two of these measures include anemia management and hemodialysis adequacy. Providers who don’t meet these standards will have their payments reduced up to 2% beginning January 2012. CMS also issued a final rule regarding a new ESRD payment system that includes adjustments for home dialysis training when clinically appropriate.
Happy Anniversary Medicare!
Yesterday marked 45 years of Medicare.
Medicare Blog | Medicare News | Medicare Information
On Thursday, President Obama signed a bill that mandates federal departments and agencies to reduce misspending. In fiscal year 2009, the federal government doled out nearly $110 billion in improper payments, mostly due to Medicare and Medicaid fraud. The Improper Payments Elimination and Recovery Act also stipulates agencies to invest at least $1 million in audits to identify likely overpayments, and to create processes to reduce such improper payments and establish penalties for government organizations that fail to comply with the new law.
Denials of Insurance Claims Easier to Fight
The Obama administration issued new rules regarding health care reform. The new rules guarantee the right for all Americans to appeal denials of insurance claims, first with their insurance company, and then to a third-party review board if required. Many states already have similar laws in place, however the rules differ greatly. Now the rules will be standard across the United States. The new rules aim to empower consumers when appealing insurance claims that are denied. America’s Health Insurance Plans (AHIP) spokesman Robert Zirkelbach said that his organization supports the standardization of the appeals process. The Obama administration is also providing $30 million in grants to improve state consumer assistance offices. States have until July 2011 to comply.
$251 Million Medicare Fraud Ring in 5 Cities Busted
Last Friday, Federal law enforcement officials announced the arrests of dozens of suspects in five states for defrauding Medicare of $251 million. The suspects, including several doctors and nurses, were apprehended in Miami, New York, Detroit, Houston, and Baton Rouge. 94 suspects were indicted, with 36 being arrested for billing Medicare for unnecessary equipment, and H.I.V and physical therapy treatments that were never conducted. The New York Times reported that violent criminals and mobster were getting into the action, as they viewed Medicare fraud as more lucrative and less risky than dealing drugs and fire arms.
Part D Increases Use of Heart Failure Medication
Reuters reported on a recent study of 7,000 older heart failure patients in one large insurance plan released by the American Heart Journal. The study found that the number of filled prescriptions for heart failure drugs soared after Part D took effect in 2006. Low-income seniors who never had previous drug coverage saw the biggest increase in filled prescriptions. Reuters states that the findings, among other cited in the article, substantiate arguments the goal of the law is being met.
| Bloomberg has a very interesting, in-depth article describing how Medicare’s auditing process is leading to much higher costs for many beneficiaries. The article opens by using Larry Barrows as an example. Larry spent eight days in a hospital to treat injuries from falling and was billed $36,000 that normally would be reimbursed. The problem was that Larry was classified as under observation during his stay and never admitted.
As many of you already know, beneficiaries classified as under observation incur 20% co-payments that aren’t required under admitted status. In addition to his eight day stay, Larry also needed three months of rehabilitation. Medicare didn’t cover this aftercare because the hospital didn’t classify him as inpatient.
The reason the hospital didn’t admit Larry is because it extended the use of the observation status to avoid being challenged by Medicare auditors on whether Larry should be classified as an inpatient or outpatient. Since inpatients are more costly to Medicare, auditors watch these cases very closely. If these cases are deemed inappropriate by the auditor, Medicare doesn’t pay the hospital. According to a representative for the Centers for Medicare and Medicaid Services, this extended use of the observation status should not be occurring, as it is meant for only the first 24-48 hours.
The article cites Nora Super, director of government relations for AARP, as saying “Certainly, hospitals will have an incentive not to admit people if they’re going to be penalized.” She also goes on to say the extended use of the observation classification may lead to higher costs, lower quality, and reduced access to aftercare for Medicare beneficiaries.
For the full article follow this link
On Wednesday, Dr. Donald Berwick was chosen by President Obama to head the Centers for Medicare and Medicaid Services (CMS). Dr. Donald Berwick is a Harvard Medical School professor and president of the Institute for Health Care Improvement (IHCI). The recess appointment by President Obama ends a four-year period without an official director for CMS. It also allows President Obama and Dr. Berwick to avoid the normal nomination process that would have entailed an onslaught of questions from Republicans.
According to the Boston Globe, “appointments made during official congressional breaks do not require a vote.” President Obama took further advantage of the break by appointing two other director positions for other government agencies. Of course, Republicans are expressing their outrage at what they believe is an exploitation of the political process. According to The Hill, Republicans are questioning Dr. Berwick’s industry ties, as his IHCI organization received millions in gifts from undisclosed donors in 2009.
Second Round of Doughnut Hole Checks Sent to Seniors
Over 300,000 seniors will get a $250 check from the government to help close the Medicare prescription drug coverage gap known as the “doughnut hole.” This second round of checks is going to seniors who entered the coverage gap between April and June and were not able to receive low-income subsidies. The first batch of 80,000 checks was sent in June and according to a Department of Health and Human Services press release, “About 70 percent of the checks were cashed within a week.” The checks are a result of the agreement between Congress and the pharmaceutical industry to close the “doughnut hole.”
Health Affairs Releases Brief on Medicare Doc Reimbursement Issue
Health Affairs released an excellent document analyzing the Medicare Doctor reimbursement issue. The document looks at the history of the issue, as well as the current situation. The most interesting parts however, are the forecasts it makes and the options it identifies. One statement made in the report is especially eye catching. The report states that if Medicare rates are frozen through 2014, it could add $89 billion to the federal deficit. We highly recommend reading the report if you are interested in learning more about the issue. You can view the document here.
Sources: KHN, Boston Globe, New York Times, The Hill
According to a study published in PLoS Medicine, the government’s plan to implement a pay-for-performance system for Medicare would lead to greater inequality among hospitals in rich and poor areas. The study analyzed 2,700 hospitals from 2004 to 2007. Each hospital was assigned a baseline score based on a number of factors in accordance to the system the government is planning to use. The report found that hospitals in richer areas received better baseline scores than those in more disadvantaged areas. The report concluded that in general, hospitals’ performance increased over time with a pay-for-performance system, but the benefits and level of performance increases were much smaller for hospitals in disadvantaged areas.
New National Health Insurance Website Goes Live
If you haven’t already heard, you may be interested in knowing that the Health and Human Services Department has launched HealthCare.gov that offers consumers a central place to learn about all their insurance coverage options. HHS Secretary Kathleen Sebelius announced yesterday that this site is the first central database of health coverage options, including Medicare, Medicaid, and the Children’s Health Insurance Program. It also includes information from plan information from private insurance carries for small businesses and individuals. According to HHS, the new website offers billions of health care choices through its finder function. Check it out here.
SEC Investigates Major Home-Health Companies for Medicare Fraud
Amedisys, Inc., the largest U.S. home-nursing provider, and Almost Family, Inc., the fourth-largest, both recently announced that they are under investigation by the SEC. In May, following a Wall Street Journal article that identified irregular reimbursement patterns, the U.S. Senate Finance Committee said it was analyzing whether the home-nursing industry manipulated the number of visits made to patients to inflate government reimbursement payments. According to Businessweek, the recent announcements signal that the analysis is expanding and may even include more companies. With the announcements, most publicly traded home-health companies are seeing the value of their stock significantly decline.
Sources: KHN, NPR, Businessweek, Wall Street Journal, PLoS Medicine