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November 13, 2018
Regardless of the age you
are Today, this is important information for you to know!
Medicare Retirees
Role in Reducing Cost to Pay for
Affordable Care Act
"Free" and "Reduced" Healthcare Cost
For those of you
participating in the recent Medicare Conference Calls with the Airline,
Auto and Steel Trusts, I promised to send you some important information
you need to know about what has happened to how Medicare payments are
determined, following the implementation of rules for the Affordable Care
Act, as well as all the cost associated with Medicare services today, since
the ACA was implemented and all the necessary tools used to lower Medicare
cost, offsetting the “free” healthcare now provided to people under the age
of 65 that do not report their income, or considered in the low income
levels, along with people that have entered the country illegally and/or
have family members receiving healthcare benefits through the ACA today, as
well as those receiving Emergency Room services across the country. A real
eyeopener for Medicare recipients and the impact it continues to have on
people with fixed income and participating in Medicare Insurance
programs.
While this is a large amount
of information below to read, YOU need to take the time to read it and
google for yourself DRG….and….Taxes associated with the Affordable Care
Act to see how the ACA is impacting your access to benefits and services as
well as the cost associated with your Medicare insurance plans going
forward.
When you enter a hospital,
or it is determined you may require hospitalization, it is important for
you to know what to expect on how you will be evaluated, following the
implementation of the Affordable Care Act (ACA). Important and
impactful changes on how hospitals and doctors are paid, along with the
requirements necessary to be admitted into the hospital and/or enter into a
Skilled Nursing Facility today. Unfortunately, most of this information you
will probably be seeing for the first time, and frankly, the people in
charge of promoting the ACA and those that support the ACA such as AARP,
and other insurance providers, don’t bother to tell you about as they
continue to make record profits.
While some may find these
changes positive, and fully support the ACA and helping the less fortunate,
a worthy cause as I do, I also find that reducing the payments to doctors
and hospitals of Medicare recipients and increasing the taxes for Medicare
plans and services an unacceptable method to save money, on the backs of
Seniors and/or Medicare eligible people.
In many cases, people under
65 are qualifying for the “FREE” or “Reduced cost” healthcare if/when they
report low income on their tax returns, choose not to work or qualify for
the free or reduced cost of their healthcare due to the illegal status of
themselves or their family members. Unfortunately, most Medicare eligible
people have no idea of the cost they are really paying for their healthcare
today. The ability to find doctors and hospitals that will take your
Medicare Insurance plan is only one of the challenges Medicare eligible
people face today as they continue to pay for the ACA benefits while their
Medicare cost of healthcare continues to rise. The cost for some, like my Daddy,
play a large role in inability to recover from an illness that for some is
minor and for others is much more difficult to overcome as they are pushed
out of the hospital before they are well enough to be released, in order to
meet a predetermined number of days per illness, as determined by
Medicare. Please continue to read the many ways you and your Medicare
benefits are being impacted today and will continue to be in the years to
come and what you can do to make your opinion count!
The information below is
taken from the internet and is presented By Elizabeth Davis, RN Updated October 24, 2018
This is a very important
term and you need to know ….
What does DRG stand for?
It is Diagnostic
Related Grouping (DRG)?
System sets fixed fee
schedule for hospital services
A DRG, or diagnostic
related grouping, is how Medicare and
some health insurance companies categorize hospitalization costs and
determine how much to pay for a patient's hospital stay. Rather than paying
the hospital for what it spent caring for a hospitalized patient, Medicare
pays the hospital a fixed amount based on the patient’s DRG or diagnosis.
If the hospital treats the
patient while spending less than the DRG payment, it makes a profit. If the
hospital spends more than the DRG payment treating the patient, it loses
money.
Background
Years ago, when you stayed
in the hospital, the hospital would send a bill to Medicare or your
insurance company that included charges for every Band-Aid, X-ray, alcohol
swab, bedpan, and aspirin, as well as a room charge for each day you were
in the hospital.
This encouraged hospitals to
keep you hospitalized for as long as possible and to do as much to you as
possible while you were in the hospital. After all, the longer you were in
the hospital, the more money the hospital made on room charges. The more
procedures you had done while hospitalized, the more Band-Aids, X-rays, and
alcohol swabs you used.
As health care costs went
up, the government sought a way to control costs while encouraging
hospitals to provide care more efficiently. What resulted was the DRG.
Starting in the 1980s, DRGs changed how Medicare pays hospitals.
Instead of paying for each
day you’re in the hospital and each Band-Aid you use, Medicare pays a
single amount for your hospitalization according to your DRG, which is
based on your age, gender, diagnosis, and the surgical procedures involved.
Medicare Challenges
The idea is that each DRG
encompasses patients who have clinically similar diagnoses, and whose care
requires a similar amount of resources to treat. The DRG system is intended
to standardize hospital reimbursement, taking into consideration where a
hospital is located, what type of patients are being treated, and other
regional factors.
The implementation of the
DRG system was not without its challenges. The reimbursement methodology
has affected the bottom line of many private hospitals, leading some to
channel their resources to higher-profit services.
To counter this, the
Affordable Care Act (ACA) introduced Medicare payment reforms, including
bundled payments and Accountable Care Organizations (ACOs). Still, DRGs remain the structural framework of the
Medicare hospital payment system.
How DRG Payments Are NOW
Calculated
Medicare starts by
calculating the average cost of the resources necessary to treat Medicare
patients in a particular DRG. That base rate is then adjusted based on a
variety of factors, including the wage index for a given area (a hospital
in NYC pays higher wages than a hospital in rural Kansas, for example, and
that's reflected in the payment rate that each hospital gets for the same
DRG).
For hospitals in Alaska and
Hawaii, even the nonlabor portion of the DRG base payment amount is
adjusted by a cost of living factor. There are also adjustments to the DRG
base payment if the hospital treats a large number of uninsured patients or
if it's a teaching hospital.
The baseline DRG costs
are recalculated annually and released to hospitals, insurers, and other
health providers through the Centers for Medicare and Medicaid Services
(CMS).
Example of How DRGs Work
A simplified version goes
like this: Mr. Koff and Mr. Flemm were both admitted to the same hospital
for treatment of pneumonia. Mr.
Koff was treated and released in two days. Mr. Flemm’s hospitalization
lasted 10 days.
Since Mr. Koff and Mr. Flemm
have the same diagnosis, they have the same DRG. Based on that DRG,
Medicare pays the hospital the same amount for Mr. Koff as it does for Mr.
Flemm even though the hospital spent more money providing 10 days of care
to Mr. Flemm than providing two days of care to Mr. Koff.
With a DRG, Medicare pays
for a hospitalization based on the diagnosis the patient was hospitalized
to treat, not based on how much the hospital did to treat the patient, how
long the patient was hospitalized, or how much the hospital spent caring
for the patient.
In the case of Mr. Koff, the
hospital may have made a small profit. The DRG-based payment was probably a
little bit larger than the actual cost of Mr. Koff's two-day stay.
In the case of Mr. Flemm,
the hospital probably lost money. It surely cost the hospital more to care
for Mr. Flemm for 10 days than the DRG-based payment it received.
Impact of DRGs on Health
Care
The DRG system of payment
encourages hospitals to become more efficient in treating patients and
takes away the incentive for hospitals to over-treat patients. However, this is a double-edged sword as hospitals
are now eager to discharge patients as soon as possible and are sometimes
accused of discharging patients home before they’re healthy enough to go
home safely.
Medicare has rules in place
that penalize a hospital if a patient is re-admitted with the same
diagnosis within 30 days. This is meant to discourage early discharge, a
practice often used to increase the bed occupancy turnover rate.
Additionally, in some DRGs,
the hospital has to share part of the DRG payment with the rehab facility
or home health care provider if it discharges a patient to an inpatient
rehab facility or with home health support.
Since a patient can be
discharged from the hospital sooner with the services of an inpatient rehab
facility or home health care, the hospital is eager to do so because it's
more likely to make a profit from the DRG payment. However, Medicare
requires the hospital to share part of the DRG payment with the rehab
facility or home health care provider to offset the additional costs
associated with those services.
My Opinion(Cathy Cone): While it sounds great to save money when we
can, this program seems more likely to keep people out of the hospital, or
push people out of the hospital early to save money rewarding the hospital,
insurance provider and doctors for their actions, instead of focusing primarily
on what is best for the Medicare patient! Naturally, the hospitals,
doctors and insurance providers would never admit to doing anything other
than what was best for the patient. I hardly call this a “Patient
Protection Act” for Medicare eligible Retirees!
Retirees need a voice in
Washington and they needed it YESTERDAY, as we continue to be left in the
dark while our healthcare cost continue to rise and our benefits continue
to be reduced! The least every
retiree can do is contact their Senators and Congressman and any other
Senator or Congressman in Washington to let them know what you think about
the changes in the way payments are made to providers and doctors, how
those payments are calculated and the ability to access benefits since the
roll-out of the ACA. You need to also tell them you want to see the HIF Tax
eliminated since it is set to be in place indefinitely to pay for the ACA!
Do these rules
apply to the PRE-65 people requiring hospitalization and other medical
services?
Pre-65 people are not
required to be admitted to the hospital for at least 3 days prior to having
access to Skilled Nursing or Rehab facilities however, it is a requirement
for Medicare paying for the Medicare eligible patient to go to a Skilled
Nursing Facility. WHY?
It is important to
note: Pre-65 people do not have to deal with Pre-Existing conditions
rules either, however, Medicare Eligible people DO!
The only time a Medicare
eligible person is not required to be subjected to the Pre-Existing
Conditions is when a person first becomes eligible for Medicare (the 7
month window of 3 months before you turn 65, your birthday month and 3
months following your first day of Medicare eligibility). For those
people out there demanding “Medicare for ALL!” AND “NO Pre-Existing Conditions”,
be careful of what you wish for, because Medicare recipients must deal with
Pre-existing conditions as all the other hoops described above in order to
receive the healthcare they need.
Besides the taxes that were
put on Medicare eligible people because of the ACA, along with the
reduction in payments and taxes on Durable Medical equipment, just to
mention a few, Medicare people, basically with no voice, and are paying a
big price for the free healthcare provided to thousands. I suggest that
you take the time to do a little research for yourself and in so doing, put
down all the improvements to Medicare with the implementation of the
Affordable Care Act (ACA). It is certainly not the closing of the
“donut hole” or “coverage gap” since less than 10% of the people on
Medicare ever get into the “Coverage Gap” and 100% of the people are paying
increased cost and taxes along with the implementation of the “HIF tax”
Health Insurers Fee to pay for the ACA benefits for those under the age of
65.
Another Tax you need
to know about!
What is the HIF
Tax: Section 9010 of the
Patient Protection and Affordable Care Act (ACA) imposes a fee on each
covered entity engaged in the business of providing health insurance for
United States health risks. The first filings were due from covered
entities by April 15, 2014 and the first fees were due September 30, 2014.
There was a moratorium on the fee for 2017.
You can copy and paste
this link into your browser to read more about all the taxes put in place
to provide the “free” healthcare for those under the age of 65, NOT for
Medicare Eligible Retirees on fixed incomes!
Moratorium on the HIF
TAX Providers Fee that was waived for 2017 and 2019, Not for 2018
The due date for Form 8963,
Report of Health Insurance Provider Information, for Fee Year 2018 was
April 17, 2018.
The Consolidated
Appropriations Act of 2016, Title II, § 201, Moratorium on Annual Fee on
Health Insurance Providers, suspended collection of the health insurance
provider fee for the 2017 calendar year only. Thus, health insurance
issuers were not required to pay the fee for 2017. This moratorium did not
affect the filing requirement and payment of the fee for 2016 or 2018.
Enacted on January 22, 2018, along with continuing resolution legislation,
H.R. 195, Division D – Suspension of Certain Health-Related Taxes, § 4003, suspends
collection of the HIF fee for the 2019 calendar year only. Again, this
does not affect the filing requirement and payment of the fee for
2018. For additional information on the 2017 and 2019 moratoriums, see
our questions and answers. The “applicable amount” for fee year 2018 needed
remains at $14.3 billion (see Treas. Reg. § 57.4(a)(3)).
Covered Entity
A covered entity is
generally any entity with net premiums written for health insurance for
United States health risks during the fee year that is (1) a health
insurance issuer within the meaning of section 9832(b)(2); (2) a health
maintenance organization (HMO) within the meaning of section 9832(b)(3);
(3) an insurance company that is subject to tax under subchapter L, Part I
or II, or that would be subject to tax under subchapter L, Part I or II,
but for the entity being exempt from tax under section 501(a); (4) an
insurer that provides health insurance under Medicare Advantage,
Medicare Part D, or Medicaid; or (5) a non-fully insured multiple employer
welfare arrangement (MEWA).
I hope you will take the
time to read the information provided above and Google additional
information regarding how your Medicare Insurance is being impacted by the
Affordable Care Act (ACA) and take the time to contact your elected
representatives and give them your thoughts on these programs, like them or
not!
Cathy Cone
Cone Retiree Healthcare
Group, LLC.
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