UNIT 2 HEALTH INSURANCE BASICS CHAPTER 8 UNDERSTANDING MEDICAID Copyright © 2011, 2009, 2007 by Saunders, an imprint of Elsevier Inc.

What is Medicaid? Medicaid is a combination federal/state assistance program that provides medical care for qualifying, low income individuals, such as: children pregnant women the elderly the disabled parents with dependent children who have no other way to pay for health care What is Medicaid? A combination federal and state medical assistance program designed to provide comprehensive and quality medical care for low-income families with special emphasis on children, pregnant women, the elderly, the disabled, and parents with dependent children who have no other way to pay for health care. What group types typically are eligible for Medicaid benefits?

Medicaid What government entity established Medicaid? When was it established? By what act? How is Medicaid funded? Congress established the Medicaid program under Title XIX of the Social Security Act of 1965. Both federal and state governments contribute a specified percentage of total Medicaid health care expenditures.

Medicaid Facts All states have Medicaid programs. There are 56 different Medicaid programs, one for each state, territory, and the District of Columbia. Benefits federally mandated. Additional benefits vary from state to state. What are some of the main federal mandated Medicaid benefits?

Supplemental Security Income (SSI) SSI provides federally funded cash assistance to the elderly and disabled poor. SSI is a cash benefit program controlled by the Social Security Administration. It is not related to the Social Security Program. In 1972, federal law established the Supplemental Security Income (SSI) program, which provides federally funded cash assistance to the elderly and disabled poor.

SSI Eligibility Must be at least 65 years old or blind or disabled and have limited assets (financial resources). Income limits are determined by the federal poverty level (FPL) guidelines. To be eligible for SSI, an individual must be at least 65 years old or blind or disabled and have limited assets (financial resources). Income as determined by the standards set forth in the federal poverty level (FPL) guidelines.

Medicaid Expansion Expanded eligibility poor elderly people with disabilities pregnant women During the late 1980s and early 1990s, Congress expanded Medicaid eligibility to include more categories of people.

Who Administers Medicaid? The Centers for Medicare and Medicaid Services (CMS) administers Medicaid. It is under the general direction of the Department of Health and Human Services (HHS). The Medicaid program is administered by the Centers for Medicare and Medicaid Services (CMS) under the general direction of the Department of Health and Human Services (HHS).

Medicaid’s Two Major Groups Categorically Needy Medically Needy Individuals in the categorically needy group are eligible because their income falls within the poverty or Family Medical income guidelines or as a result of SSI eligibility. Coverage of this group is largely mandated by federal law with some limited options. The medically needy segment is made up of individuals who do not qualify for Medicaid benefits due to excess income or resources. They must pay of share of their medical costs through the spend down process, after which they qualify for limited Medicaid benefits. Refer to the text for a full explanation of these two Medicaid categories.

Federal Medicaid Mandates States must cover categorically needy: Low income families with children Individuals receiving SSI benefits Pregnant women, infants, and children with incomes less than a specified percent of the FPL Qualifying Medicare beneficiaries (QMBs) What are some of the categorically needy groups that fall under federal mandates?

Optional categories: Medically needy: aged, blind, or disabled; Qualifying families with dependent children; Aged/disabled persons with income below 100 percent of the FPL; and Certain qualifying institutionalized individuals States may cover optional categories. Not all states cover the same things. Medically needy aged, blind, or disabled individuals; Members of families with dependent children who have too much income and/or resources to be eligible for cash assistance but not enough for needed medical care; Aged and disabled persons with incomes less than 100 percent of the FPL; and Institutionalized persons with incomes no greater than 300 percent of the SSI federal benefit rate.

Federal Standards Mandate Inpatient hospital services; Outpatient hospital services; Physician services Rural health clinic services; Laboratory and x-ray services; Skilled nursing care; Home health care services (for individuals age 21 & up); Family planning services and supplies; EPSDT for individuals under age 21; Certified midwife/physician services; Certified pediatric/family nurse practitioner services; and Federally qualified ambulatory/ health center services. Federal Standards mandate that categorically needy individuals must be provided with the services shown on this slide.

Optional Coverage intermediate nursing care prescription drugs dental eyeglasses, hearing aids ambulance service other practitioners (e.g. podiatrists) psychologist services States can choose to provide certain optional coverage, such as listed on this slide. Since the government has begun the Medicare Part D prescription drug program, fewer categories of individuals have their prescription drugs paid under Medicaid.

Another Program In Which States Can Participate State Children's Health Insurance Program (SCHIP). SCHIP allows states to expand Medicaid eligibility guidelines to cover more categories of children States can also participate in Title XXI of the Social Security Act, which is the State Children's Health Insurance Program (SCHIP). The SCHIP program allows states to expand their Medicaid eligibility guidelines to cover more categories of children

States Can Also Adopt Medically Needy Standard Individuals qualifying for spend down. What is a “spend down” and when can it be utilized? Medically needy persons are those who could qualify for Medicaid categorically but are over the income limit. These individuals can spend down their assets to the Medicaid eligibility level by deducting incurred medical expenses. Who can tell me what the “spend down” process involves? (Answer: A spend down occurs when private or family finances are depleted to the point where the individual/family become eligible for Medicaid assistance. Almost any medical bills the applicant or the applicant’s family still owes or which were paid in the months for which Medicaid is sought (called the budget period) can be used to meet the spend down requirement.

Medicaid Fiscal Intermediary (FI) A Medicaid FI processes all health care claims on behalf of the Medicaid program. Some states have more than one FI, one for fee-for-service claims and a second one for managed care claims.

FI’s Responsibilities Process claims Provide information Generate guidelines Answer questions about benefits, claims processing, appeals, and explanation of benefits (SRA). A fiscal intermediary’s responsibilities include: Process claims Provide information for health care providers for the particular government program involved. Generate guidelines for providers in order to facilitate the claims process. Answer beneficiary questions about benefits, claims processing, appeals, and the explanation of benefits (SRA) document. How does an organization become a FI?

“Medically Necessary” For Medicaid to consider a service/ procedure to be medically necessary, it typically must be consistent with the diagnosis in accordance with the standards of good medical practice, performed at the proper level, and provided in the most appropriate setting. Why does Medicaid pay only services/procedures that are “medically necessary?”

Accepting Medicaid Patients Physicians’ choice. Patients with Medicaid only or Patients with any combination of Medicaid and OHI. Number of patients can be limited within certain limitations. Physicians have the choice of whether or not to accept Medicaid patients. This refers to patients with Medicaid only, or any combination of Medicaid and another insurance company, whether it is a primary or secondary payer. Physicians can limit the number of Medicaid patients they accept, as long as there is no discrimination by age, sex, race, or religious preference or national origin, in addition to the limits of their scope of practice. Why is it unethical for healthcare providers to pick and choose what Medicaid patients to accept?

Medicaid PAR Providers Can elect to accept or refuse Medicaid patients; Those who elect to treat one Medicaid patient must treat them all. Provider cannot single out which ones to treat. Most states do not make it mandatory for healthcare providers to accept Medicaid patients. Some state regulations say if a Medicaid PAR provider elects to treat one Medicaid patient, then all Medicaid patients must be accepted—the provider cannot single out which ones to treat. Some states allow healthcare providers to put a limit on how many Medicaid patients they will accept.

Verifying Medicaid Eligibility Several methods available Using the patient’s Medicaid identification (ID) card Using an automated voice response (AVR) system Using electronic data interchange (EDI) Using a Point-of-Sale device Using a computer software program There are several methods available in most states that the health insurance professional can use to verify eligibility

Medicaid Identification (ID) Cards Suggested steps when using ID card: Verify patient’s name and other identifying demographics (DOB, SS#, etc) Ask for a second form of identification Check eligibility period (“from” and “through” dates) How often should a health insurance professional verify a patient’s Medicaid eligibility? The following steps are suggested for eligibility verification when using the ID card Make sure that the patient’s name is on the ID card. (Typically, the patient’s birth date and sex are also listed.) Unless you know the patient personally, ask to see another form of identification to confirm his or her identity Check the eligibility period. There should be “from” and “through” dates that tell you the time period in which the patient is Medicaid-eligible. Medicaid pays only for dates of service during this eligibility period.

Look for insurance information. Ask the patient if there is any other insurance coverage. Photocopy the Medicaid ID card Enter any new information in the patient’s record. Look for insurance information. In the example shown in Figure 8-2 there is a “1” under the “Ins. No.” column. The “Insurance Data” block shows details of the patient’s insurance coverage. Ask the patient if there is any other insurance coverage. Photocopy the Medicaid ID card and enter any new information in the patient’s record.

Medicaid & Third Party Liability Examples of TPL which typically pay for services before Medicaid: employment-related health insurance, court-ordered health insurance by noncustodial parent, workers' compensation, long-term care insurance, and other state and Federal programs (unless specifically excluded by federal statute). If a patient is covered by both a group health plan and Medicaid, which plan is primary?

Common Medicaid Billing Errors Primary goals: Create and submit clean claims. Avoid making common billing errors. All claims submitted to Medicaid must pass screening criteria before they can be processed. Fig. 8-3 in the textbook lists some of the common billing errors on Medicaid Claims.

Medicaid Fraud & Abuse Fraud: Intentional misrepresentation or deception usually in the form of false statements resulting in unauthorized benefit(s) Abuse: Payment for services resulting from poor and inefficient claims submission practices. Usually no intent involved. How can a health insurance professional minimize Medicaid fraud/abuse? Medicaid fraud occurs when a healthcare provider deliberately engages in deceitful practices which result in excessive reimbursement from Medicaid. Abuse typically involves undeserved payment for items or services in which there was no deliberate intent to deceive or misrepresent but is the outcome of poor and inefficient methods that result in unnecessary costs to the Medicaid program.