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					                                                   Medicare and Medicaid: Chapter 5
                                                           Michelle Williams-Davis
                                                                       June 3, 2007


      Medicare
           o Medicare Eligibility
           o Medicare Benefits
           o Medicare Financing
           o Medicare Reimbursement to Providers
           o Medicare Expenditures
      Medicaid
           o Medicaid Eligibility
           o Medicaid Benefits
           o Medicaid Financing
           o Medicaid Reimbursements to Providers
           o Medicaid Costs
           o Legislative Attempts to Control Costs of Medicare and Medicaid
      Health Insurance Portability and Accountability Act (HIPAA) of 1996
      HIPAA Administrative Simplification Standards
      Balanced Budget Act (BBA) of 1997
      Balanced Budget Refined Act (BBRA) of 1999
      Medicare, Medicaid and SCHIP Benefits Improvement and Protection (BIPA) Act
       of 2000
      Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of
      Medicare/Medicaid Fraud and Abuse
      Federal Safe Harbors

   Medicare is a federally funded program that provides health insurance to
    Americans over the age of 65. In 1972, the program expanded to include the
    disabled under age 65 who qualified for social security.
   In 1966 Medicare covered 7 basic services
        o Part A of the program: Hospital Insurance (HI)
                Inpatient hospital services
                Outpatient diagnostic services
                Home health agency services following hospitalization
        o Part B: Supplemental Medical Insurance (SMI)
                Physical and other medical services
                Outpatient therapeutic services
                Home health agency services
        o Part C: Medicare + Choice
                Expanded set of options for the delivery of healthcare
   Medicare spending in 2002 was $267.1 billion
      The program has survived by:
          o Increasing assessment to employers and employees
          o Increasing cost sharing
          o Increasing allocation from general revenues
          o Enacting legislation designed to slow the rate of growth
      Sources of Payment for Medicare Beneficiaries (1999)
          o Medicare (53%)
          o Direct out of pocket (19%)
          o Medicaid (12%)
          o Private Insurance (12%)
          o Other (5%)

MEDICAID: Medicaid (1965) is a jointly funded program that provides health insurance
to the medically indigent individuals who may be able to pay for normal living expenses
and cannot afford healthcare expenses. Medicaid expanded to include low-income
pregnant women, children, and infants

      Two categories of cost:
         o Costs for provider services
         o Costs for administrative services

HIPAA: designed to improve the availability of health insurance to working families and
their children.

HHS intends the privacy rules to accomplish three broad objectives:
(1) define the circumstances in which protected health information may be used and
(2) establish certain patient rights regarding protected health information;
(3) required that organizations adopt administrative safeguards to ensure the privacy of
protected health information.

Final rules on five standards
            1. Transactions and Code Sets
            2. National Provider Identifies
            3. National Employer Identifies
            4. Privacy
            5. Security
             Recent initiatives by the federal government to control healthcare costs
                has been the recent emphasis on enforcing fraud and abuse statues.
             Fraud is estimated at $53 billion in 1994.

  1. Omnibus Budget Reconciliation Act of 1989 (OBRA 1989)- established a
     physician fee schedule and limited the amount physicians’ charges could exceed
     the fee schedule
2. SCHIP (State Children’s Health Insurance Program) 1997- allows states to
   implement three options to expand coverage for children in families with incomes
   up to 200 percent of the poverty level , provide health insurance coverage to 50
   percent of the nation’s 10 million uninsured children.
       a. Expanded Medicaid coverage
       b. Separate coverage
       c. Combination of coverage
3. UPL (upper payment limit)-For Medicaid reimbursement to the states, based on
   aggregate amount of payments make to states on behalf of the providers
4. HHS-Health and Human Services
5. Balanced Budget Act of 1997 (BBA)- Cut Medicare expenditure by $115 billion
   over five years, introduced SCHIP (definition above).
6. Health Insurance Portability and Accountability Act (HIPAA) of 1996- designed
   to improve the availability of health insurance to working families and their
7. HIPAA CMP Authority- civil monetary authority,
8. OIG- Office of Inspector General

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