Medicare pilot program meant to revise policy that leaves seniors with costly bill

from the Washington Post

By Susan Jaffe, Published: August 9

Medicare has launched a pilot project to test whether it can relax hospital-payment rules to help the growing number of seniors who are shelling out thousands of dollars for follow-up nursing-home care.

The issue involves what should be an easy question: Is the Medicare beneficiary an inpatient or an observation patient?

The answer can mean the difference between Medicare-covered follow-up nursing-home care or a senior facing an unexpected whopper of a bill.

Though many seniors stay in the hospital for several days and are in a regular hospital room while being treated, they don’t always know that the hospital has classified them as an observation patient, which is considered outpatient care.

Under Medicare rules, patients must have at least three days in the hospital as an inpatient — not just for observation — to qualify for follow-up care in a nursing home. In addition to generally higher hospital co-payments, hospital observation patients can be billed any amount by their hospital for the routine maintenance drugs they need. Some have reported charges of $18 for one baby aspirin and $71 for one blood pressure pill that costs 16 cents at a local pharmacy.

This may all come as a surprise because hospitals don’t have to tell Medicare beneficiaries they are in observation care.

Currently, if Medicare decides that a hospital has billed it for inpatient treatment of a patient who should have received observation services, the facility can lose its entire payment.

That may prompt hospitals to put too many people in observation care, Medicare said in the rule announcing the pilot program.

Under the pilot program, the 380 hospitals participating will be able to rebill Medicare for observation services if claims for inpatient care are rejected. Medicare officials want to see if that takes some of the pressure off hospitals.

Advocates for seniors say the pilot project won’t help observation patients.

Toby Edelman, a lawyer at the Center for Medicare Advocacy, said the classification should be scrapped.

“It’s pretty arbitrary,” she said. “People get the same care whether they are inpatient or observation, especially when they are co-mingled in the hospital.”

The center has filed a lawsuit against the government to eliminate observation care.

A Medicare spokeswoman declined to respond to questions about the project or provide a list of the participating hospitals because of the litigation.

Medicare officials are also asking for feedback on whether to tighten the rules for observation care, including setting a time limit or specifying which diagnoses require a full hospital admission.

Medicare recommends that patients be in observation care for no more than 24 to 48 hours. The number of patients in observation care beyond 48 hours more than doubled, to 7.5 percent, between 2006 and 2010, Medicare said.

During the three-year pilot program, if Medicare determines that an inpatient level of care was inappropriate, the participating hospitals will be able to resubmit bills to Medicare for each treatment or procedure the patient received, as if that patient were an observation patient. The hospitals will receive 90 percent of the allowable Medicare payment for these services. In return, the hospitals give up the right to appeal to Medicare for the full inpatient payment.

The pilot program doesn’t go far enough for the American Hospital Association.

“It is limited to a small fraction of hospitals affected by the policy, underpays hospitals for care provided and requires hospitals to waive all appeal rights for these claims,” spokeswoman Alicia Mitchell said.

Kaiser Health Newsis an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Largest health insurer to keep key parts of law regardless of court ruling

Washington Post

By N.C. Aizenman, Updated: Monday, June 11, 12:01 AM

The nation’s largest health insurer will keep in place several key consumer provisions mandated by the 2010 health-care law regardless of whether the statute survives Supreme Court review.

Officials at UnitedHealthcare will announce Monday that whatever the outcome of the court decision — expected this month — the company will continue to provide customers preventive health-care services without co-payments or other out-of-pocket charges, allow parents to keep adult children up to age 26 on their plans, and maintain the more streamlined appeals process required by the law.

UnitedHealthcare would also continue to observe the law’s prohibitions on putting lifetime limits on insurance payouts and rescinding coverage after a member becomes ill, except in cases where a member intentionally lied on an insurance application.

The provisions are part of a larger package in the law often referred to by supporters as “the Patients Bill of Rights” that took effect as plans renewed after Sept. 23, 2010. They are popular with consumers and relatively uncontroversial among insurers. And there had already been signals from industry insiders that some insurers were likely to leave them in place. UnitedHealthcare, a UnitedHealth Group company, is the first to publicly commit to the idea.

“The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs,” Stephen J. Hemsley, president and chief executive of UnitedHealth Group, said in a statement. “These provisions are compatible with our mission and continue our operating practices.”

The court’s options include upholding the law, overturning part or all of it, and delaying action until after the law takes full effect.

A spokesman at UnitedHealthcare said officials chose to announce their intentions now because “people in this uncertain time are worried about what might happen to their coverage and we think the time is right to let people know that these provisions will continue and they can count on us.”

The announcement applies to the roughly 9 million consumers in plans that they or their employer have purchased from UnitedHealthcare. An additional 27 million people are covered by plans that are administered by UnitedHealthcare but for which their employer has assumed the financial risk, meaning that in effect their employer is their insurer. In these cases it would be up to the employer to decide which provisions to continue offering voluntarily.

While UnitedHealthcare would include birth control and sterilization among the preventive services it would continue to offer without co-payments, officials said they would honor requests from employers or individual customers wishing to remove such services from the list because of religious or other objections. By contrast, in implementing the health-care law’s preventive-services requirements, the Obama administration has issued controversial restrictions on the types of employers that can refuse to offer birth control coverage on conscience grounds.

Officials at UnitedHealthcare said they did not have statistics on what, if any, impact the decision could have on premiums.

The Obama administration has estimated that on average the law’s early consumer mandates would increase premiums by less than 2 percent. However, that figure has probably varied depending on whether a particular plan already included the new requirements — often the case with plans bought by large employers — or whether insurers had to incorporate the new rules — often the case with plans sold to individuals and small businesses.

Further complicating the picture, other forces, such as a drop in use of health care, have exerted a countervailing downward pressure on premiums in recent years.

The “Patients Bill of Rights” also includes several mandates that UnitedHealthcare did not pledge to continue complying with in the event the Supreme Court invalidates the law. These include the elimination of annual limits on insurance payouts, which are being phased out under the law, and that statute’s ban on denying coverage to children with preexisting conditions.

The latter would be impossible to do unilaterally, said UnitedHealthcare officials, because the company’s risk pool could be quickly skewed toward sick children. But in a statement they said the company is “committed to working with all other participants in the health care system to sustain that coverage.”

Ronald Pollack, executive director of the consumer advocacy group Families USA and a supporter of the law, welcomed UnitedHealthcare’s announcement.

“It would make a huge difference for a great number of people who would otherwise be left out in the cold in terms of getting coverage,” he said. “And hopefully, given UnitedHealthcare’s market share, this would have tremendous influence on other companies.”

But even if the entire insurance industry followed suit, Pollack said, it would hardly make up for the loss of other provisions in the law that are set to take effect in 2014 — including the extension of Medicaid to cover a larger share of the poor, subsidies to help low-income Americans buy insurance and bans against insurers discriminating against adults with preexisting conditions.

This would be a “one-third of a loaf” substitute, Pollack said. “A very good step, but in no way altering the necessity of implementing the much larger protections included in the new law.”

 

IRS Gets Half of Implementation Dollars

Why the IRS gets half of health reform’s implementation dollars

From Wonkblog – Washington Post

By , Monday, April 9, 9:47 AM

Daniel Acker Bloomberg Among its many provisions, the Affordable Care Act included a $1 billion fund to cover various implementation costs. The law didn’t commit that fund to any particular activity, but rather allowed the administration to use it wherever needed to lay the health care overhaul’s foundation.

Monday morning, The Hill’s Sam Baker reported that the White House has found a home for half that fund — $500 million — at the Internal Revenue Service.

“HHS plans to drain the entire fund by September, before the presidential election and more than a year before most of the health law takes effect,” Baker reports. “HHS has transferred almost $200 million to the IRS over the past two years and plans to transfer more than $300 million this year.”

Sending a big chunk of money to one of America’s least liked federal agencies is unlikely to score many political points. That might be especially true with the health reform law, where the IRS is responsible for administering half the much-maligned mandated purchase of insurance.

But, policy wise, it probably makes a lot of sense. Even though it’s a health insurance expansion, Treasury is probably on equal footing with Health and Human Services in making the Affordable Care Act work. It will be the agency that administers one of the most important parts of the health care overhaul: The requirement to purchase health insurance.

It will not, as some have suggested, hire an army of gun-toting IRS agents, who will show up at your door and demand proof of insurance. The agency’s role will be much less dramatic. The agency has already started administering tax credits for small businesses, as an incentive to provide health insurance to their workers.

It’s role will expand significantly when the coverage expansion starts in 2014. It will, for example, add new lines to annual tax filing forms where individuals will write down their source of health insurance coverage. Those who do not include coverage will face a tax penalty, as part of the individual mandate.

The IRS will also administer subsidies to low and middle-income Americans, to assist with the purchase of health insurance. Since those subsidies are tethered to income — the lowest-income Americans get the most assistance purchasing coverage — the IRS will play a crucial role figuring out who gets what.

Treasury isn’t usually the most public agency when it comes to the health reform law. Much of the rollout has happened at Health and Human Services, which has helped states lay the groundwork for setting up health insurance exchanges and regulating their insurance markets. But as the health reform law’s bigger provision kicks in, the department will play a key role in achieving one of the law’s biggest goals: Expanding access to affordable health coverage.

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