NR552 Week 4 Discussion, Medicare – Medicaid Payment

Medicare/Medicaid payment NAME Chamberlain College of Nursing NR 552: Economics of Healthcare Policy Dr. Poirier DATE Depending on the location primary care providers practice in, they may have a larger-than-average patient population paying with Medicare and/or Medicaid. What could be the consequences of a large Medicare/Medicaid patient base to the provider and to the patient? Week 4: Medicare/Medicaid Payment Dartmouth Institute for Health Policy and Clinical Practice’s professionals have over the last thirty years recorded that Medicare spending significantly varies depending on the geographic location (Kibria et al., 2013). In their report, Kibria et al. noted that the trend is due to the fee-for-service reimbursement system that has been Medicare’s tradition of rewarding health care providers depending on the intensity and volume rather than the value of services (Kibria et al., 2013). Medicaid was introduced to provide medical coverage for low-income families and children. This was because these families lacked adequate financial resources or had developmental, intellectual, mental health, or severe physical disabilities, hence they could not seek health coverage from private insurance companies (Paradise, 2013). Medicaid was introduced to provide medical coverage to the elderly. Payments by Medicaid or Medicare to health care providers play a significant role in their operations. This can significantly affect access and quality of services provided to beneficiaries (Cunningham et al., 2016). With the conception of the Affordable Care Act, coverage for health insurance has greatly expanded (Cunningham et al., 2016). Hospitals that accept payment from Medicaid and Medicare have witnessed a rapid increase in their patient population. Larger than average Medicaid patient base poses a number of significant effects on the patients and healthcare providers. To begin, the expansion of Medicaid patients has resulted in an increase in Medicaid discharges (Cunningham et al., 2016). For instance, Ascension health, the United States’ largest non-profit hospital system recorded an increased Medicaid discharge (Cunningham et al., 2016). Patients from poor families who could not afford to pay for their hospital bills had their medical expenses paid through Medicaid. This ensured that patients were not detained at the hospitals. Consequently, increased discharge greatly improved access to health care because it reduced congestion at the hospitals especially for inpatient services. Secondly, a large Medicaid patient base significantly improved patient revenue thus boosting the healthcare provider’s income (Cunningham et al., 2016). Ascension health indicated an increase in their patient revenue and hospital income in the period between 2013 and 2014. The increase was linked to an increase in their Medicaid patient base (Cunningham et al., 2016). Improved hospital revenue ensures better healthcare services to the patient. For the hospitals, it ensures proper infrastructural development and proper staff remuneration for non-State hospitals A recent study released at the beginning of 2018 indicated that large Medicaid patient bases greatly boosted financial performance for hospitals (Antonisse et al., 2016). The improved financial performance may be associated with increased income from Medicaid payments. The study noted the improvement significantly reduced the chances of hospitals closing down more particularly in rural areas (Antonisse et al., 2016). Similarly, it also improved operating margins for healthcare providers. This is most evident in small hospitals, non-State hospitals, and for-profit hospitals. This is because Medicaid and Medicare reduced uncompensated care costs and improved revenue (Antonisse et al., 2016). To conclude, Medicare and Medicare spending varies from one region to another. This variation may result in some healthcare providers receiving more than the average number of beneficiaries. The number of beneficiaries a health provider receives has a significant impact on the provider and the patient. To the provider, it may improve patient revenue thus improve income and reduce operating margin. This can translate to better hospital infrastructure, avail drugs, boost staff morale and reduce hospital congestion, especially for inpatient services. This has the net benefit to the patient by improving access to quality healthcare. Reference Kibria, A., Mancher, M., McCoy, M. A., Graham, R. P., Garber, A. M., & Newhouse, J. P. (Eds.). (2013). Variation in health care spending: target decision making, not geography. National Academies Press. Paradise, J., & Garfield, R. (2013). What is Medicaid’s impact on access to care, health outcomes, and quality of care? Setting the record straight on the evidence. Kaiser Family Foundation, August. Cunningham, P., Rudowitz, R., Young, K., Garfield, R., & Foutz, J. (2016). Understanding Medicaid hospital payments and the impact of recent policy changes. Kaiser Family Foundation. Antonisse, L., Garfield, R., Rudowitz, R., & Artiga, S. (2017). The effects of Medicaid expansion under the ACA: Updated findings from a literature review. Retrieved from PROFESSOR RESPONSE TO POST: Thank you, Carole. I wonder how the states that have not expanded Medicaid are performing in terms of access and quality? RESPONSE TO PROFESSOR POST: Dr. Poirier, The Affordable Care Act (ACA) Medicaid expansion was designed to address the high uninsured rates among low-income adults, providing a coverage option for people with limited access to employer coverage and limited income to purchase coverage on their own. In states that expanded Medicaid, millions of people gained coverage, and the uninsured rate dropped significantly as a result of the expansion. While the Medicaid expansion was intended to be national, the June 2012 Supreme Court ruling on the Affordable Care Act (ACA) allowed states to opt out of the law's Medicaid expansion, leaving each state's decision to participate in the hands of state leaders (Advisory Board, 2018; Lyon, Douglas, & Cook, 2014). As of June 2018, 17 states have not expanded their Medicaid programs, with two states considering expansion (Advisory Board, 2018). Therefore, millions of uninsured adults and remain outside the reach of the ACA and continue to have limited options for affordable health coverage. In states that have not expanded Medicaid, many adults fall into a “coverage gap” of having incomes above Medicaid eligibility limits but below the lower limit for Marketplace premium tax credits (Lyon, Douglas, & Cook, 2014). Many people in the coverage gap are in poor working families. This means either they or a family member is employed but still living below the poverty line. Given the characteristics of their employment, it is likely that many will continue to lack access to coverage through their job even with ACA provisions for employer responsibility for coverage. Adults that fall into the coverage gap continue to face barriers to nonemergency care with associated poor health outcomes and serious financial hardships when they do seek care (Lyon, Douglas, & Cook, 2014). Finally, Safety-net hospitals play a vital role in our health care system, delivering significant care to Medicaid, uninsured, and other vulnerable patients. Safety-net hospitals include public hospitals that are often the last resort in their communities, providing services that other hospitals in the community do not, such as trauma care, burn care, neonatal intensive care, and inpatient behavioral health (Dobson, DaVanzo, & Haught, 2017). Safety-net hospitals are an important source of care for individuals who are ineligible for Medicaid or subsidized marketplace coverage. Safety-net health hospitals and providers in states that have not embraced Medicaid expansion also suffer from limitations in resources and reduced Disproportionate Share Hospital payments as they continue to shoulder the burden of uncompensated care costs (Dobson, DaVanzo, & Haught, 2017; Lyon, Douglas, & Cook, 2014). Reference Advisory Board. (2018, June 8). Where the states stand on Medicaid expansion. 33 states, D.C., have expanded Medicaid. Retrieved on August 1, 2018, from Dobson, A., DaVanzo, J. & Haught, R. (2017, June 28). The financial impact of the American Health Care Act’s Medicaid provisions on safety-net hospitals. Retrieved on August 1, 2018, from Lyon, S. M., Douglas, I. S., & Cooke, C. R. (2014). Medicaid Expansion under the Affordable Care Act. Implications for Insurance-related Disparities in Pulmonary, Critical Care, and Sleep. Annals of the American Thoracic Society, 11(4), 661–667. Wherry, L. R., & Miller, S. (2016). Early coverage, access, utilization, and health effects associated with the Affordable Care Act Medicaid expansions: a quasi-experimental study. Annals of internal medicine, 164(12), 795-803. PROFESSOR SUMMARY POST: How can we inform policy to address some of those challenges? SUMMARY POST FOR MEDICARE/MEDICAID: Dr. Poirier and classmates, Even though the Affordable Care Act has made a significant impact on healthcare in the United States, the health insurance exchanges, Medicaid expansion, accountable care organizations and further oversight of insurance companies and their pricing practices remain works in progress. The Medicaid program has become increasingly complex as policymakers use it to address various policy objectives, leading to structural tensions that surface with Medicaid managed care (MCO). Medicaid managed care has the potential to increase the focus through capitation on the Medicaid patient, but it also threatens existing systems and providers that have depended on Medicaid revenue and may use it to cover the costs of other services. Medicaid managed care has the potential to significantly improve access to health care and health outcomes for the Medicaid population. It may also have the potential to reduce program costs. However, these goals can be achieved only if payment rates are set at appropriate, actuarially sound, and sustainable levels. Policymakers are understandably concerned that high payment rates might result in above-market profits for health insurers who participate in Medicaid MCO programs. However, an excessive desire to cut rates and limit profit may be counterproductive, as it may reduce quality and access and drive health insurers out of the MCO business.