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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.

Sources: Wall Street Journal, NPR, Modernhealthcare.com

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.

Sources: Washington Post, Reuters, New York Times, KHN

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.

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