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THE PATIENT PROTECTION AND AFFORDABLE CARE ACT MEDICARE & MEDICAID.

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Presentation on theme: "THE PATIENT PROTECTION AND AFFORDABLE CARE ACT MEDICARE & MEDICAID."— Presentation transcript:

1 THE PATIENT PROTECTION AND AFFORDABLE CARE ACT MEDICARE & MEDICAID

2 THE HEADLINES: Health Care Economics -Total Health Care Spending vs. Medicare and Medicaid ACA and Medicare -Efficiencies -Cuts -Spending and Taxes ACA and Medicaid -Access -Funding -Supreme Court decision, uncertainty

3 HEALTH CARE ECONOMICS NATIONAL HEALTH CARE SPENDING AS IT COMPARES TO MEDICARE AND MEDICAID FINANCES

4 $2.7 TRILLION AND GROWING : -The growth rate was 3.9%, the same rate observed in Federal spending outside of health care was $2.61 trillion Future: -Health care spending will grow 4.2% in 2012, 3.8% in 2013, and 7.4% in Health Care Spending in 2011

5 $557.8 BILLION SPENT ON 47.6 MILLION : -The growth rate was 6.3% an increase from 5.0% in Medicare accounted for 16% of federal spending 3 Future: -In 2012 Medicare spending is expected to grow 5.9% 1 -In ‬2013 spending could slow to 1.3% or grow at 5.0% 1 -It is projected that from Medicare spending growth will average 6.7% per year 1 Medicare Spending in 2011

6 $428.7 BILLION SPENT ON 55.4 MILLION : -Medicaid spending is estimated to have grown by 6.8% in 2011, down from 7.2% growth in Medicaid accounted for 8% of total federal spending 3 Future: -Medicaid spending is projected to accelerate to 7.0% by 2012 and Medicaid spending is projected to grow by 18% by Medicaid Spending in 2011

7 THE ACA, MEDICARE AND MEDICAID REFORMS UNDER THE NEW HEALTH CARE LAW

8 EFFICIENCY AND CUTS Efficiency -Preventive health care, drug benefits -Accountable Care Organizations -New government entities Cuts -Payment cuts to hospitals and insurers Spending and Taxes -Medicare spending -Taxes ACA and Medicare

9 CONTROVERSIAL EXPANSION Medicaid Expansion -Access -Funding -Supreme Court decision, uncertainty ACA and Medicaid

10 PREVENTATIVE SERVICES Free screenings for breast cancer, cervical cancer, prostate cancer and diabetes 4 From January 1 to July 1, 2011, 51.5% of beneficiaries with Original Medicare received one or more free preventive services 5 ACA and Medicare

11 PRESCRIPTION DRUG PLANS (PART D) Rebate Check -When beneficiaries reached the coverage gap, or “donut hole,” they received a $250 rebate check. 6 50% Discount on brand-name drugs - Requires manufacturers to provide 50% discounts on brand- name drugs for people in the donut hole. 6 Savings -As of March 19, 2012, 5.1 million beneficiaries had received a rebate check 6 -The average savings for an individual was $635 6 ACA and Medicare

12 HOSPITAL SPENDING ‪ The Affordable Care Act includes up to $716 billion in Medicare spending cuts between 2013 and 2022.‬‪ Of that, 34.8% comes from reductions in hospital reimbursement rates 8‬ ACA and Medicare

13 MEDICARE ADVANTAGE Cuts to Medicare Advantage reimbursements to private insurers account for 30.2% of the $716 billion in Medicare spending reductions 8 ACA and Medicare

14 CLOSING THE PAYMENT GAP Of the 47 million Medicare beneficiaries, about 25% are in Medicare Advantage Plans (Part C) 9 -Part C plans receive more money per participant from the federal government than is spent on the average beneficiary under Traditional Medicare. 9 -The ACA aims to close this gap by reducing the extra payments over the next several years, starting in ACA and Medicare

15 PAYMENT REDUCTION IMPACT The 2012 Medicare Trustees Report predicts that enrollment in Part C plans will peak at 27 percent in 2012 and then, as new ACA-mandated payment rates are phased in, will decline to about 17 percent by According to the report, more seniors will opt for Traditional Medicare because Part C plans will offer less attractive benefit packages. 10 Some of the extra benefits that Part C provides may be eliminated, or insurers may stop doing business in certain counties. 10 ACA and Medicare

16 CARE COORDINATION An Accountable Care Organization is a network of doctors and hospitals that share responsibility for providing care to patients‬ The ranks of the 259 ACOs covering 4 million patients include: ACOs: participate in the Medicare Shared Savings Program ACOs: participate in the Pioneer Model ACOs: participate in the Advanced Payment Model 14 ACA and Medicare

17 32 Pioneer Model ACOs 16 STATES INCLUDE: ArizonaCaliforniaColorado Florida Illinois IowaIndianaMaineMassachusetts Minnesota Michigan New Hampshire New YorkNevadaNew Mexico PennsylvaniaSan DiegoVermontWisconsinTexas

18 35 Advanced Payment Model ACOs 17 ACA and Medicare STATES INCLUDE: CaliforniaFlorida KentuckyMississippi Massachusetts TexasMarylandArkansas New Hampshire Rhode Island Connecticut Tennessee Missouri Ohio NebraskaNorth Carolina

19 ACA LINKS QUALITY AND PAYMENT 18 - New Center for Medicare and Medicaid Innovations (2011) - Shared Savings/Accountable Care Organizations (2012) - Reduces payments for preventable hospitalizations (2012) - Independence at Home demonstration project with shared savings (2012) - Value-based purchasing for hospitals (2012) - National pilot to bundle payments for hospital and post-acute care (2013) - Reduce payments for hospital-acquired conditions (2015) - Mandatory physician quality reporting (2015) ACA and Medicare

20 ENTITIES CREATED BY THE ACA Independent Payment Advisory Board (IPAB) Patient-Centered Outcomes Research Institute (PCORI) Center for Medicare & Medicaid Innovation Federal Coordinated Healthcare Office ACA and Medicare

21 CHECKS ON GROWTH Independent Payment Advisory Board 19 -The mission is to recommend ways to reduce the growth in Medicare spending, if Medicare spending growth exceeds target rates. 19 -IPAB is comprised of 15 members, appointed by the president and confirmed by the Senate, and its savings recommendations will be sent to Congress for approval. 19 -IPAB is not subject to judicial or administrative review. 19 -Funding was $15 million for FY2012 from the Medicare Trust Funds. 19 ACA and Medicare

22 WITH CHECKS ON POWER Limitations to Recommendations: 19 -Cannot reduce beneficiary benefits. 19 -Cannot modify Medicare beneficiary premiums, cost- sharing or eligibility requirements, or other changes that would result in health care rationing 19 -Cannot recommend any increase in taxes 19 -Cannot make changes that would reduce payments to certain providers before ACA and Medicare

23 PATIENTS FIRST Patient-Centered Outcomes Research Institute - -The PCORI is authorized by Congress to give out grants to conduct evidence-based research to help patients and their health care providers make more informed decisions about care. 20 -Funding for PCORI’s research derives from taxes in the ACA. Its budget through 2012 totals $210 million, and is expected to reach $500 million by ACA and Medicare

24 INNOVATIVE SOLUTIONS Center for Medicare & Medicaid Innovation identifies, develops, supports and evaluates: 21 -Innovative payment and service delivery models -Programs that reduce expenditures -Programs that preserve or enhance the quality of care for those who receive Medicare, Medicaid or CHIP benefits Under the ACA, the Innovation Center may be allocated $10 billion every decade 21 ACA and Medicare

25 DUALS COORDINATION The Federal Coordinated Health Care Office, which is under the auspices of the CMS, is charged with: 22 -Integrating benefits between Medicare and Medicaid -Improving coordination between state and federal governments -Addressing cost shifting between the two programs -Developing new strategies to improve care coordination and cost effectiveness -Eliminating regulatory conflicts between rules under the Medicare and Medicaid programs ACA and Medicare

26 TRIMMING SPENDING The Medicare provisions of the health care reform law are estimated to experience a net reduction of $428 billion in spending between 2010 and 2019, taking into account $533 billion in Medicare savings and $105 billion in new Medicare spending. 23 ACA and Medicare

27 MEDICARE TAX CHANGES 9 Increases to the Medicare Hospital Insurance (Part A) tax rate on wages from 1.4% to 2.3% on earnings over $200,000 for individual taxpayers and $250,000 for couples filing jointly 24 A 3.8% Medicare contribution tax on net investment income for higher-income taxpayers 25 Elimination of the Medicare Prescription Drug Plans (Part D) subsidy tax deduction for employers that provide retiree prescription drug coverage. 26 ACA and Medicare

28 PROJECTED REVENUE Revenue collected through $87 billion through a higher Medicare payroll tax -$27 billion by imposing an annual fee on brand-name prescription drugs by pharmaceutical manufacturers and importers -$5 billion by eliminating the tax deduction for employers who receive Medicare Prescription Drug Plans (Part D) retiree drug subsidy payments, beginning in 2013 ACA and Medicare

29 ACA AND MEDICAID EXPANSION TURMOIL AND UNCERTAINTY

30 COVERAGE FOR THE POOR Intent of the Law: 9 -Expand health care for the poor -Would have added 24 million beneficiaries to Medicaid -Program now covers 60 million recipients (30 million children, 15 million adults, 8 million people with disabilities) -Expansion would have covered 16 million uninsured people ACA and Medicaid

31 EVERYONE PLAYS NOW Funding for Medicaid comes from both federal and state governments. State participation in Medicaid is optional, but all 50 states have opted to join. 9 The Medicaid expansion would see: State spending increase by $76 billion over (an increase of less than 3%) Federal spending would increase by $952 billion (a 26% increase). 28 ACA and Medicaid

32 EXPANSION TIMEFRAME Starting in 2014: States that opt into this provision will make their residents under age 65 Medicaid-eligible if they have incomes at or below 133% of the federal poverty level ($14,484 for an individual, or $29,726 for a family of four) : For the first three years of the policy, the federal government will pay 100% of the costs of the expansion, and in subsequent years, it will gradually lower its share to 90% of costs. 28 ACA and Medicaid

33 MEDICAID VS. SCHOOLS 31 ACA and Medicaid

34 CONTROVERSY STRIKES Supreme Court Case: National Federation of Independent Business v. Sebelius 35 Result: On June 28, 2012, the Supreme Court upheld the ACA, but set limits on the Medicaid expansion provision. 35 Eligibility goes into effect on January 1, 2014, but states can choose whether they want to participate in the expansion of coverage. 35 ACA and Medicaid

35 14 STATES AND THE DISTRICT OF COLUMBIA ARE PARTICIPATING: Arkansas, California, Connecticut, Delaware, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Missouri, Nevada, Rhode Island, Vermont, Washington WHICH STATES ARE PARTICIPATING? 30

36 5 STATES LEANING TOWARDS PARTICIPATION: Colorado, Kentucky, New Hampshire, New York, Oregon WHICH STATES ARE LEANING TOWARD PARTICIPATING? 30

37 9 STATES ARE NOT PARTICIPATING: Alabama, Georgia, Louisiana, Maine, Mississippi, South Carolina, South Dakota, Oklahoma, Texas WHICH STATES ARE NOT PARTICIPATING? 30

38 5 STATES ARE LEANING TOWARDS NOT PARTICIPATING: Iowa, Nebraska, New Jersey, Virginia, Wyoming WHICH STATES ARE LEANING TOWARD NOT PARTICIPATING? 30

39 17 STATES ARE UNDECIDED: Alaska, Arizona, Florida, Idaho, Indiana, Kansas, Michigan, Montana, Ohio, New Mexico, North Carolina, North Dakota, Pennsylvania, Tennessee, Utah, West Virginia, Wisconsin WHICH STATES ARE UNDECIDED? 30

40 ALL THE STATES TOGETHER 30

41 STORYLINES: IT’S ALL ABOUT THE MONEY -Medicare has a revenue problem -So does Medicaid, from some states’ perspective -At some point there will not be enough money to sustain the Medicare program -State officials are leery that more and more of their budgets will fund health care at the expense of other programs Summarizing ACA

42 STORYLINES: REFORM IS ABOUT THE MONEY There are currently two schools of thought: -Refocus the health care delivery system around value over volume (pay for performance) -Restructure the program in more basic and fundamental ways (eligibility age increase, premium support, means testing) Summarizing ACA

43 STORYLINES: FOLLOW THE MONEY Look at the reform proposals from the view of each stakeholder operating in the Medicare space: -How much have they already given in the name of reform? -Who profits and who loses? -Who will be squeezed? -Where and how can money be made? -Where can saving be found? Summarizing ACA

44 STORYLINES: COMPARE, CONSTRAST BOTTOM LINES The financial bottom line versus the quality health bottom line: -Can you have both, without either suffering terribly? -Who has to give in order to get? -Who might get hurt? -And is that hurt real or perceived? Summarizing ACA

45 REFERENCE LIST 1.http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/Downloads/Proj2011PDF.pdf 2.https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/downloads/tables.pdf 3.http://facts.kff.org/chart.aspx?cb=58&sctn=169&ch= http://www.uspreventiveservicestaskforce.org/uspstf/uspsabrecs.htm 5.http://www.hhs.gov/news/press/2011pres/08/ a.html 6.http://healthreform.kff.org/Document-Finder/HHS/HHS-Report-on-the-Medicare-Prescription- Drug-Rebate-Program.aspx 7.http://www.healthcare.gov/compare/partnership-for-patients/about/index.html 8.http://www.washingtonpost.com/blogs/wonkblog/wp/2012/08/14/romneys-right-obamacare- cuts-medicare-by-716-billion-heres-how/ 9.http://www.kff.org/healthreform/upload/ pdf 10.http://www.cbo.gov/sites/default/files/cbofiles/attachments/43471-hr6079.pdf 11.http://innovations.cms.gov/Files/x/Pioneer-ACO-Model-Press-Release pdf 12.https://www.cms.gov/Medicare/Medicare-Fee-for-Service- Payment/sharedsavingsprogram/index.html?redirect=/sharedsavingsprogram/ 13.http://innovations.cms.gov/initiatives/ACO/Pioneer/index.html 14.http://innovations.cms.gov/initiatives/aco/advance-payment/index.html 15.http://www.hhs.gov/news/press/2013pres/01/ a.html

46 REFERENCE LIST 16.http://innovations.cms.gov/initiatives/ACO/Pioneer/index.html 17.http://innovations.cms.gov/initiatives/aco/advance-payment/index.html 18.‪http://healthreform.kff.org/timeline.aspx‪ 19.http://www.kff.org/medicare/upload/8150.pdf 20.http://www.pcori.org/about/ 21.http://www.innovations.cms.gov/About/index.html 22.http://www.healthcare.gov/law/full/ 23.http://www.kff.org/healthreform/upload/ pdf 24.http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Questions-and-Answers- for-the-Additional-Medicare-Tax 25.https://www.fidelity.com/viewpoints/personal-finance/new-medicare-taxes 26.http://www.deloitte.com/view/en_US/us/Services/audit-enterprise-risk-services/Financial- Statement-Internal-Control-Audit/Accounting-Standards- Communications/b9500b1044c97210VgnVCM100000ba42f00aRCRD.htm 27.http://www.cms.gov/Research-Statistics-Data-and- Systems/Research/ActuarialStudies/downloads/PPACA_ pdf 28.http://www.kff.org/healthreform/upload/8288.pdf 29.http://www.kff.org/healthreform/upload/8348.pdf 30.http://www.advisory.com/Daily-Briefing/2012/11/09/MedicaidMap#lightbox/1/ 31.http://www.nasbo.org/sites/default/files/Summary%20- %20State%20Expenditure%20Report_0.pdf


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