LOSING MEDICARE AND MEDICAID – Part A: Medicare

Nationally voters rank health care as the top issue. [1] [2] If we break down the components of that concern, one of the issues is losing Medicare/Medicaid.

nationally voters rank health care as top issue

This discussion is brought to you in part by the official CMS website. Medicare and Medicaid are two of the health care pieces that are paid for by the government. The Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services.

MEDICARE

medicareHealth Spending by Major Sources of Funds:  Medicare spending (20 percent share of all health care funding in 2016) grew 3.6 percent. Altogether, Medicare cost the federal government $628 billion in 2015, $672 billion in 2016 and $684 billion in 2017.[3] For those of you worried about cuts to Medicare — which you should be — candidate Trump promised not to cut Medicare if he became president. HOWEVER, President Trump is doing exactly that in his proposed budget for 2019. Does $554 billion in cuts to Medicare sound like it might impact you, the 55 million Americans who are over age 65 or living with disabilities?

To better understand where your pocket book is at risk, let us first discuss the component parts of Medicare.  Medicare is essentially designed to cover 65 or older or disabled (SSDI- Social Security Disability Insurance).[4] or those with end-stage renal disease (ESRD). The has two parts[5]:

  • Part A (Hospital Insurance): includes medically necessary hospital, skilled nursing facility, home health, and hospice care; free if you paid Social Security.
    • Medicare Hospital Care spending (hospital care was 32 percent share of all National Health Expenditures in 2016 and grew 4.7 percent[6])
  • Part B (Medical Insurance): medically necessary doctor services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services; requires a monthly premium for this coverage.
    • Physician and Clinical Services (Physician and Clinical Services was 20 percent share of all National Health Expenditures in 2016 and grew 5.4 percent)

I will now take a minute to talk about how physicians code. Why? Because you need to understand the coding process in order to understand the next tectonic plate I will be describing below.

Physicians code their encounters with you based on intensity of service. Visit types are generally divided into NEW PATIENT VISIT and ESTABLISHED PATIENT VISIT. CPT (Current Procedural Terminology) coding is used to standardize medical communication across the board, which identifies the services provided, and are used by insurance companies to determine how much physicians will be paid for their services.[7]  They are considered EVALUATION AND MANAGEMENT (E&M) CODES.

NEW PATIENT VISIT CPT CODE 99201 is the least intensive of service and is straightforward and problem focused. Severity is usually considered self-limited or minor. Typical face to face time (your face to the physician’s face) is ten minutes. The CPT codes go up from there from 99202 through 99205. The history and examination go from expanded problem focused through detailed to comprehensive. The medical decision-making from straightforward to low/medium/ and then high complexity. The presenting problem severity is described in stages of low to moderate/moderate/and finally moderate to high.  Face times increase on a graduated scale from 20 minutes to an hour.

There is a similar intensity scale for ESTABLISHED PATIENT VISITS under CPT codes 99211 through 99215. They have the same graduated set of HISTORY AND EXAM, MEDICAL DECISION-MAKING COMPLEXITY and PROBLEM-SOLVING COMPLEXITY. FACE TO FACE TIME is shorter, ranging from five to forty minutes. [8]

There is plenty of advice on how physicians can maximize their coding. For example, the Journal of Family Practice featured an article entitled “10 billing & coding tips to boost your reimbursement.”[9] All specialties and their literature do it, so I am not just picking on Family Practitioners. But I will use this article as an example.

The article begins by indicating that virtually every family practice is missing opportunities to maximize reimbursement. And what is the standard reimbursement? For example, at the current Medicare reimbursement rate of $96.01 for a 99214 visit and $63.73 for a 99213 visit, if a physician does not code at least one level 99214 visit per day, the yearly income loss could be $8,393.

So where does the tectonic plate come in (other than the search for upcoding)? Here is where the first tectonic plate lurks.

PROPOSED CHANGES FOR PAYING PHYSICIANS UNDER MEDICARE[10]

  • Offering physicians basically the same amount, regardless of the patient’s condition or complexity of services provided
  • One rate for new patients
  • One rate for established patients

For established patients, the proposal calls for a payment rate of about $93 in place of the average ranges of $45 to $148 as you move up the ladder of office visit intensity. By removing the “paperwork” to document complexity for patient Level 2-Level 5 office visits, the Administration believes they will “save 51 hours of clinic time per doctor per year.”  Level 2 refers to 99202 and 99212 through Level 5 which means 99205 and 99215

The net impact on you? The critics are saying this could lead to short-changing doctors who care for the sickest, most complicated patients. What it might do is address the issue of “upcoding” (the intensity of service being provided during an office visit).   How? The proposal could increase the risk of “erroneous and fraudulent payments because doctors would submit less information to document the services provided.” [11]

There is also Medicare Part C, which is actually a euphemism for Medicare Advantage Plans, or private Medicare. Medicare Part D is for outpatient prescription drug insurance and provided only through private insurance companies that have contracts with the government, never through the government itself. As you would imagine, Part C and Part D vary by plan as far as premiums are concerned. The other tectonic plate is the changes to the program’s prescription drug coverage.   I will discuss the cost of prescription drugs, including Medicare prescription issues, later in another blog. For now, here is a sneak preview since we are talking about impacting Medicare. [12]

Prescription Drugs (10 percent share of all National Health Expenditures in 2016):[13]

Growth in National Health Expenditure retail prescription drug spending slowed in 2016, increasing 1.3 percent to $328.6 billion.

  • strong growth in 2014 and 2015, 12.4 percent and 8.9 percent, respectively.
  • growth reflected increased spending
    • new medicines
    • price growth for existing brand-name drug (especially drugs to treat hepatitis C.
  • Growth slowed in 2016
    • fewer new drug approvals
    • slower growth in brand-name drug spending (spending for hepatitis C drugs declined)
    • decline in spending for generic drugs as price growth slowed.

The Trump administration wants to make it easier for Medicare Part D prescription drug plans to negotiate prices with manufacturers. THIS DOES NOT ALLOW MEDICARE TO NEGOTIATE DRUG PRICES, only the Medicare Advantage Plans to which you might be enrolled.

  • According to the Kaiser Family Foundation: the top ten “stand-alone” drug plans, the average premium ranges from $20.21 to $83.68 per month. ($243 to $1,004 annually)
  • The average monthly premium is $43.48, a 9 percent increase from 2017 and a 68 percent increase since 2006 ($526.56 annually)[14]
  • The premium is higher, the higher your income

Officials also want to require plans to pass on a portion of any drug maker rebates they get to their enrollees. If this results in reduced revenue for the Plan, there might be cost shifting to you, the enrollee

  • higher premiums
  • higher deductibles
  • shifting drugs to higher cost tiers**

** Shifting drugs to a higher cost tier

Medicare Part D median out-of-pocket cost was $117 in 2015, an increase from $79 in 2011.  But that was not the whole cost risk for Medicare beneficiaries such as you with Part D coverage. There were 220 Part D drugs with annual 2015 out-of-pocket cost of $1000 or more, an 83 percent increase from the 118 such drugs in 2011. [15]

[1] https://www.huffingtonpost.com

[2] http://www.businessinsider.com

[3] https://www.cms.gov/ /research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/highlights.pdf

[4] Supplemental Security Income (SSI) and Social Security Disability Insurance (SSDI) are both federal programs that provide cash payments to people who meet the federal definition of “disabled.” But the similarities between the two programs end there. https://specialneedsanswers.com/three-big-differences-between-ssi-and-ssdi-14866

[5] https://www.medicare.gov/sign-up-change-plans/decide-how-to-get-medicare/whats-medicare/what-is-medicare.html

[6] https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/nationalhealthexpenddata/downloads/highlights.pdf

[7] https://www.quora.com/What-is-the-difference-between-ICD-and-CPT-coding

[8] https://www.myoptumhealthphysicalhealth.com/Documents/Reimbursement%20Policies/E_M%20QuickReferenceTable.pdf

[9] ttps://www.mdedge.com/jfponline/article/63368/practice-management/10-billing-coding-tips-boost-your-reimbursement

[10] https://www.marketwatch.com/story/seniors-will-pay-the-price-for-trumps-medicare-cuts-2018-02-14

[11] : www.nytimes.com/2018/07/22/us/politics/medicare-payments-trump.html

[12] https://www.cnbc.com/2018/05/11/trump-is-targeting-medicare-drug-prices-heres-what-part-d-coverage-costs.html

[13] IBID https://www.cms.gov

[14] https://www.kff.org/report-section/medicare-part-d-a-first-look-at-prescription-drug-plans-in-2018-findings/

[15] Wall Street Journal Business & Finance Surging Drug Costs Inflict Pain. Tuesday, May 30, 2017

By | 2018-09-18T14:52:04+00:00 August 15th, 2018|Categories: Healthcare|0 Comments

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