The Complex System of Payment Insurance

Introduction

Overview of Payment and Reimbursement in Healthcare

  • Focus on Medicare, Medicaid, and other systems

  • Presented by: Jane Baldwin, PT, DPT, NCS

Medicare

Eligibility

  • Persons aged 65 years or older

  • Individuals under 65 with a disability lasting over 24 months

Components of Medicare

  • Federal program categorized into three primary components:

    • Medicare A: Hospital insurance

    • Medicare B: Medical insurance

    • Medicare D: Prescription drug coverage

Medicare A

Coverage

  • Encompasses:

    • Hospital care: Includes acute care, Long-Term Acute Care (LTAC), and acute rehabilitation services.

    • Skilled nursing facility care: Rehabilitation and skilled nursing services after hospital discharge.

    • Nursing home care: For long-term care needs.

    • Hospice care: For terminally ill patients focusing on comfort rather than curative treatment.

    • Home health services: Skilled nursing and therapy services provided at home.

Premiums

  • No monthly premium if Medicare taxes were paid for more than 39 quarters.

  • If purchased:

    • $518/month for those who did not pay taxes for at least 30 quarters.

    • $285/month for those who paid for 30 to 39 quarters.

Deductible

  • Out-of-pocket cost per benefit period: $1,676.

    • Benefit period starts upon hospital or skilled nursing facility admission and ends after 60 consecutive days without covered service.

Medicare A Limits (Per Benefit Period)

Hospital Stays:

  • 1-60 days: $0 co-pay

  • 61-90 days: $419/day coinsurance

  • 91-150 days: $838/day

  • Beyond 150 days: All costs out-of-pocket.

Skilled Nursing Facility Stays:

  • 1-20 days: $0 co-pay

  • 21-100 days: $209.50/day

  • Beyond 100 days: All costs paid out-of-pocket.

Medicare B

Overview

  • Medical insurance available to anyone eligible for Medicare A.

Premium

  • Premium: $185/month (subject to income adjustments).

Coverage

  • Covers a range of outpatient services including:

    • Rehabilitation therapies, durable medical equipment (DME), lab work, and imaging services.

    • Provides 80% reimbursement after the yearly deductible of $257.

Medicare Supplements

  • Medicare Supplement Insurance (Medigap): Covers the remaining 20% not covered by Medicare B.

  • Offered by private insurance companies with costs ranging from $87.63 to $440/month, averaging around $155/month.

Medicare D

Overview

  • Prescription drug coverage available through various plans tailored to medications required.

Costs

  • Monthly premiums varied from $0 to $100 (average is $43/month).

  • Maximum deductible: $590/year.

Managed Care Alternatives

  • Participation in managed Medicare plans can lead to lower costs, but comes with a limited choice of services compared to traditional Medicare B.

Medicare Coverage Criteria

  • Coverage decisions are contingent upon:

    • Federal and state laws

    • National and local coverage decisions made by the Centers for Medicare & Medicaid Services (CMS)

Medicaid (MassHealth)

Eligibility

  • Designed for individuals who meet specific disability or financial requirements.

  • State-run program; coverage benefits can vary between states.

Financial Eligibility Standards for 2024

  • Income limits set at $6,264 for an individual; $7,800 for two persons, etc.

MassHealth Coverage Includes

  • Most medically necessary services with prior approval for certain treatments.

  • Therapy coverage:

    • Physical Therapy and Occupational Therapy: Up to 20 visits each per year.

    • Speech therapy: Up to 35 visits per year.

Individuals with Disabilities Education Act (IDEA)

  • Enacted in 1975 and revised in 2004, ensures that students with disabilities receive Free Appropriate Public Education (FAPE).

  • Provides services from birth to age 21, based on individual state regulations.

Children’s Health Insurance Program (CHIP)

  • Funded jointly by federal and state governments, aimed at uninsured children in families whose income exceeds Medicaid eligibility.

Legislative Wins for Physical Therapy

  • Introduced changes in certification requirements that enhance Medicare reimbursement

  • Advocacy has decreased supervision requirements for Physical Therapist Assistants (PTAs).

Value-Based Care

  • A significant shift towards payment models based on patient outcomes rather than traditional service volume.

  • Significant implications for reimbursement strategies across various healthcare settings including Skilled Nursing Facilities and Home Care.

Skilled Nursing Facilities (SNFs)

Patient Driven Payment Model (PDPM)

  • Enforced on October 1, 2019, where payment is determined based on individual patient characteristics rather than service quantity.

Home Care

Patient Driven Groupings Model (PDGM)

  • Introduced on January 1, 2020, following a similar framework to PDPM, emphasizing patient characteristics over volume of services.

Payment Calculation under PDPM and PDGM

PDPM Overview

  • Payment structures rely heavily on patient characteristics and classification into specific case mix categories.

  • Utilizes a complex formula to determine daily reimbursement rates.

Functional Status Assessment

  • Assessment metrics include bed mobility, transfers, eating, toileting, and walking abilities.

Payment Factors

  • Payment is calculated for each 30-day episode of care, explicitly indicating that more frequent services do not directly correlate to higher payment amounts.

Take Home Messages

  • Maintain awareness of evolving payment rules and regulations.

  • Proactively advocate for patient needs and open lines of communication with healthcare policy representatives.

  • Implement clinical judgment rooted in current best practices to enhance patient care decisions.