MOVE: MEDICAID ORIENTATION AND VIRTUAL EXERCISE A Module for Nurses

MOVE: MEDICAID ORIENTATION AND VIRTUAL EXERCISE

A Module for Nurses

Funded by Michigan Department of Community Health, The University of Michigan School of Nursing, and W. K. Kellogg Foundation

Prepared by Suzanne Begeny, RN, BSN, MS

Authors

• Suzanne Begeny, MS, BSN, RN, Doctoral Student in collaboration with

• Faculty/staff:• Trudy Esch • Barbara Guthrie • Phil Kalisch • Carol Loveland-Cherry• Patricia McCargar • Joanne Pohl • Rosemary Rowney

Medicaid: The Basics

• Medicaid is the cornerstone of the nation’s health care safety net. (Kaiser Family Foundation (KFF), 2002)

• Medicaid is health coverage that helps many people who cannot afford medical care pay for some or all of their medical bills.

• In the state of Michigan, 1.4 million residents are covered under Medicaid.

• Medicaid is available only to certain low-income individuals and families who fit into an eligibility group that is recognized by federal and state law. (Centers for Medicare and Medicaid Services (CMS), 2004)


• Begun in 1965 as a program primarily covering people who qualified for cash assistance, Medicaid now provides health and long-term care services to more than 50 million low-income families and elderly and disabled individuals.

• It insures more than one in seven Americans and accounts for more than 15 percent of our nation’s spending on health care.

• $199 billion has been appropriated for Medicaid from the federal government. This is approximately 7.7% of the federal budget and 28.7% of the state budget or 2/3 of the community health budget.

(KFF, 2002)

Medicaid Basics: In the State of Michigan

FY 2005 EXECUTIVE BUDGET

p. 44

http://www.michigan.gov/documents/FY05Document1_116216_7.pdf


• Medicaid is a STATE run program that grants assistance to those who need health coverage. It has a federal component that helps to set the guidelines for the states.

• Medicaid is the primary source of federal financial assistance to the

states, and represents a major shared state and federal commitment to improving the lives and the health of America’s low-income population. (KFF, 2002)

• To be eligible for Medicaid, every applicant must meet certain tests to assess whether the household has the “means” (income and resources/assets) to cover the cost of health care.• Applicants will be questioned regarding their income• Eligibility for benefits is based upon an individual’s lack of means, which is

measured by his or her income and/or resources. • The individual must disclose personal financial information as a condition of

eligibility.

(KFF, 2002)


• Medicaid is an entitlement program, in that a state cannot limit the number of persons it will cover under its program if they meet the established criteria for coverage.

• Medicaid is sometimes described as a joint state and federal “partnership.”

(CMS, 2004)

Medicaid: The Stats

As the largest health care program in America, in 2004 Medicaid will:

• Cover 26 million children – more than 1 child in 4 in the US.

• Offer coverage to certain children in America in a family with income below the federal poverty level, by federal law.• Coverage available for U.S citizens, certainpermanent residents, and emergency services for illegal immigrants

(KFF, 2002)

Medicaid: The Stats

• Pays for over 1.3 million births annually (37 percent of the US total)

• Pays for services for persons with disabilities

• Pays for over half of HIV/AIDS care

• Pays for nursing care for two-thirds of all nursing facility residents (primarily older adults) in America, accounting for almost half of all nursing facility (skilled nursing care) revenues

• Pays for chronically mentally ill(KFF, 2002)

Medicaid: Learning the Lingo

• Beneficiary - An individual who is eligible for and enrolled in the Medicaid program in the state in which he or she resides. Many individuals may qualify for Medicaid but have not applied and are therefore not program beneficiaries.

(KFF, 2002, p.165)


• Co-payment - A fixed dollar amount paid by a Medicaid beneficiary at the time of receiving a covered service from a participating provider.

• Co-payments may be imposed by state Medicaid programs: • only upon certain groups of beneficiaries, • under beneficiaries with respect to certain services,• and in nominal amounts as specified in federal

regulation. • Co-payment, or the amount that must be paid,

are set by the state and can vary from state to state.

(KFF, 2002, p. 166)


• Fee-For-Service – A traditional method of paying for medical services under which doctors and hospitals are paid for covered services they provide. The provider submits the bill for services to the patient’s insurance carrier for reimbursement. The provider bills the State Medicaid program for services. (KFF, 2002, p. 168)


• Managed Care – “A term used to describe health care systems that integrate the financing and delivery of appropriate health care services to covered individuals by: arrangements with selected providers to furnish a comprehensive set of health care services; explicit standards for selection of health care providers; formal programs for ongoing quality assurance and utilization review; and significant financial incentives for members to use providers and procedures associated with the plan.” (National Conference of State Legislators, 1997).


• Managed Care Organization (MCO)- “An MCO is an entity that has entered into a risk contract with a state Medicaid agency to provide a specified package of benefits to Medicaid enrollees in exchange for an actuarially sound monthly capitation payment on behalf of each enrollee.”

(KFF, 2002, p. 169)


• Mandatory – “State participation in the Medicaid program is voluntary. However, if a state elects to participate, as all do, the state must at a minimum offer coverage for certain services to certain populations. These eligibility groups and services are referred to as “mandatory” in order to distinguish them from the eligibility groups and services that a state may, at its option, cover with federal Medicaid matching funds.” (KFF, 2002, p. 169)


Means Testing – “The policy of basing eligibility for benefits upon an individual’s lack of means, as measured by his or her income or resources. Means testing by definition requires the disclosure of personal financial information by an applicant as a condition of eligibility.”

(KFF,

2002, 169)


• State Plan- No federal Medicaid funds can be awarded to the state unless its state Medicaid Plan has been submitted and approved by the Secretary of Health and Human Services. This was enacted under Title XIX of the Social Security Act. The state plan must also meet 64 federal statutory requirements. (KFF, 2002, p. 173).


• Medically Needy- Those individuals assigned the optional Medicaid eligibility group who qualify because of high medical expenses. These expenses are most commonly hospital or nursing home care. (KFF, 2002, p. 169)


• Financial Eligibility – “In order to qualify for Medicaid, an individual must meet both non-financial and financial eligibility requirements. Financial eligibility requirements vary from state to state and from category to category, but they generally include limits on the amount of income and the amount of resources an individual is allowed to have in order to qualify for coverage.” (KFF, 2002, p. 168)

Questioning the Basics

1) Medicaid pays for all of the medical services billed?

• True• False

Answer: False

• Some states do not cover the entire cost of the health care services. In many states such as Michigan a co-payment may be required of the beneficiary. This co-payment amount varies from state to state.

• Medicaid does not pay for all medical services.

Questioning the Lingo

• What is a beneficiary?

a.) An eligible individual b.) An eligible, low income and enrolled individualc.) The health care providerd.) All children

The Answer

• b.) An eligible, low income and enrolled individual.

Millions of individuals are eligible for Medicaid but not enrolled and are therefore not program beneficiaries. Not all children are covered under Medicaid as a beneficiary. The families of the infants or children must be in the low income category.

Questioning the Lingo

• Because Medicaid requires the disclosure of personal financial information by an applicant as a way to determine eligibility, Medicaid is considered what type of program?

a.) Deterministicb.) Means Testedc.) Evaluatived.) Fiscally Sound

The Answer

• b.) Means Tested Program

The policy of basing eligibility for benefits upon an individual’s lack of means, as measured by his or her income or resources. Means testing by definition requires the disclosure of personal financial information by an applicant as a condition of eligibility.

Medicaid: Eligibility

• Parents and Children - In 2001 Medicaid enrolled more than half of the poor children (55%) and one-third (34%) of near-poor children.

• Historically, most women and children eligible for Medicaid were also eligible for cash assistance through the Aid to Families with Dependent Children (AFDC) program. The repeal of the AFDC program by the 1996 welfare law broke the 30-year link between receipt of cash assistance and eligibility for Medicaid.

• 37 percent of the children enrolled in Medicaid receive cash assistance.

(CMS, 2005)(State of Michigan, 2005)



• Elderly- More than 4 million adults 65 and over were covered by Medicaid in 1998. About half were eligible because they were receiving cash assistance through the Supplemental Security Income (SSI) program.

• Others have too much income to qualify for SSI but may “spend down” to Medicaid eligibility by incurring high medical or long-term care expenses. In both cases, these elderly beneficiaries are covered for nursing home care and prescription drugs as well as other Medicaid services.

(KFF, 2002)


• Disabled- Nearly 7 million individuals with disabilities were covered by Medicaid in 1998.

• Almost 80 percent were eligible because they received cash assistance through the SSI program.

• The remainder generally qualified for Medicaid by incurring large hospital, prescription drug, nursing home, or other medical or long-term care expenses to meet their “spend down” obligation.

(KFF, 2002)

Medicaid Eligibility: State of Michigan

FY 2005 EXECUTIVE BUDGET

http://www.michigan.gov/documents/FY05Document1_116216_7.pdf Pg. 45

Medicaid: Mandatory Services• Inpatient hospital services

• Outpatient hospital services

• Physician services

• Medical and surgical dental services

• Nursing facility (NF) services for individuals aged 21 or older

• Home health care for persons eligible for nursing facility services

• Family planning services and supplies

• Rural health clinic services and any other ambulatory services offered by a rural health clinic that are otherwise covered under the State plan

(KFF, 2002)

Medicaid: Mandatory Services

• Laboratory and x-ray services

• Nurse practitioner (NP) services (NP services are state specific)

• Federally-qualified health center services and any other ambulatory services offered by a federally-qualified health center that is otherwise covered under the State plan

• Nurse-midwife services (to the extent authorized under State law)

• Early and periodic screening, diagnosis, and treatment (EPSDT) services for individuals under age 21

(KFF, 2002)

Nurse Practitioners (NP) Services in Michigan

• All Primary Care NPs can be directly reimbursed in Michigan, not just Family and Pediatric NPs.

• In Michigan NPs are reimbursed at 100% of the Medicaid rate; NPs need a collaborative agreement with a physician to be reimbursed directly.

• Medicare: 85% rate, physician

collaborative agreement needed

Medicaid: Mandatory Services for Optional Groups

If a State chooses to include the medically needy population, the State plan must provide, as a minimum, the following services:• Prenatal care and delivery services for pregnant women• Ambulatory services (hospital or other inpatient services beyond room and

board and other professional nursing or physician services, e.g. pharmacy, physical therapy) to individuals under age 18 and individuals entitled to institutional services

• Home health services to individuals entitled to nursing facility services• Mental health care services either in institutions for mental diseases or in

intermediate care facilities for the mentally retarded (ICF/MRs)

(KFF, 2002)

(Shi and Singh, 2004)

Medicaid: Optional Services

• States may also receive Federal funding if they elect to provide other optional services. The most commonly covered optional services under the Medicaid program include:• Clinic services• Nursing facility services for the under age 21• Intermediate care facility/mentally retarded services • Optometrist services and eyeglasses• Prescribed drugs • TB-related services for TB infected

persons • Prosthetic devices• Dental services

(KFF, 2002)

Medicaid: Managed Care

• States have the flexibility to contract with managed care plans to deliver Medicaid benefits, to use a traditional fee-for-service approach, or Primary Care Case Management (PCCM).

• The federal Medicaid program allows states substantial flexibility to design their own benefits packages subject to certain minimum requirements.

(KFF, 2002)



• Medicaid beneficiaries enrolled in Medicaid MCOs may receive more preventive and primary care services than they would in traditional fee-for-service Medicaid.

• Medicaid MCOs may also improve beneficiary access to services in general by providing care coordination through a clearly identifiable primary care provider.



• In most cases, the managed care plans are managed care organizations, or MCOs, that assume much of the financial risk of providing hospital, physician, and other covered Medicaid services to the beneficiaries who are enrolled in them.


(KFF, 2002)


• There is no federally-defined Medicaid managed care benefits package.

• Thus, states may determine which services to purchase through the MCO and which to “carve out,” either by continuing to pay for the service (e.g., prescription drugs) directly on a fee-for-service basis or by purchasing the services (e.g., mental health care).

(KFF, 2002)


Medicaid: Payment

• Medicaid operates as a vendor payment program, with payments made directly to the providers.

• Providers participating in Medicaid must accept the Medicaid reimbursement level as payment in full or the Medicaid’s capitation fee.

• Each State has relatively broad discretion in determining (within federally-imposed upper limits and specific restrictions) the reimbursement methodology and resulting rate for services, with three exceptions:

• 1) For institutional services, payment may not exceed amounts that would be paid under Medicare payment rates

• 2) For disproportionate share hospitals (DSHs), different limits apply. The DSH program provides payments to certain hospitals to defray a portion of the costs incurred by serving large numbers of uninsured patients.

• 3) For hospice care (KFF, 2002)

Medicaid: Payment

• States may impose nominal deductibles, coinsurance, or co-payments on some Medicaid recipients for certain services.

(KFF, 2002)

Medicaid: Payment

• The portion of the Medicaid program which is paid by the Federal government, known as the Federal Medical Assistance Percentage (FMAP), is determined annually for each State by a formula that compares the State's average per capita income level with the national average.

• Under this formula, a state’s federal Medicaid matching rate is based on the ratio of its per capita income, squared, to the U.S. per capita income, squared.

• By law, no state can have a matching rate lower than 50 percent or greater than 83 percent.

• As of 2001, Michigan’s FMAP was 56.2%(KFF, 2002)

SCHIP

• SCHIP: State Children's Health Insurance Program • Established through the Balanced Budget Act of

1997 to address the growing concern of children without health insurance.

• Designed as a Federal/State partnership, similar to Medicaid, with the goal of expanding health insurance to children whose families earn too much money to be eligible for Medicaid, but not enough money to purchase private insurance.

(CMS, 2005)

SCHIP

• Provides coverage to "targeted low-income children."

• A "targeted low-income child" is one who resides in a family with income below 200% of the Federal Poverty Level (FPL) or whose family has an income 50% higher than the state's Medicaid eligibility threshold.

• Some states have expanded SCHIP eligibility beyond the 200% FPL limit, and others are covering entire families and not just children.

(CMS, 2005)

SCHIP

• SCHIP offers states three options when designing a program. The state can either:

• Use SCHIP funds to expand Medicaid eligibility to children who previously did not qualify for the program

• Design a separate children's health insurance program entirely separate from Medicaid, or

• Combine both the Medicaid and separate program options.

(CMS, 2005)

Medicaid vs. Medicare

• Medicaid

• State run program

• Entitlement program that is needs based

• Medicare• Federally run program

• Entitlement program- Imposes a legal obligation on the federal government to any person, business, or unit of the government that meets the criteria set in the law. They are referred to as “direct” or “mandatory” spending. (KFF, 2002, p. 167)

Medicare

• Currently, Medicare provides coverage to approximately 40 million Americans. Medicare is the national health insurance program for: • People age 65 or older • Some people under age 65 with disabilities • People with End-Stage Renal Disease (ESRD),

which is permanent kidney failure requiring dialysis or a kidney transplant (CMS, 2005)

Medicare

• Medicare has four parts: Medicare Part A

• Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care).

• It also helps cover hospice care and some home health care. Certain conditions must be met to get these benefits.

(CMS, 2005)

Medicare

Medicare Part B• Medicare Part B (Medical Insurance) helps cover

doctors’ services and outpatient care. It also covers some other medical services that Part A does not cover, such as some of the services of physical and occupational therapists, and some home health care.

• Part B helps pay for these covered services and supplies when they are medically necessary.

(CMS, 2005)

Medicare Part C

Medicare Advantage (replaced Plus Choice) is a set of heath care options created by the Balanced Budget Act (BBA); it is a ‘managed care’ plan and includes:

• Health Maintenance Organization (HMO)• Point of Service (POS) • Provider Sponsored Organization (PSO)• Preferred Provider Organization (PPO)• Medical Savings Account (MSA)• Religious fraternal benefit society plan (RFP)

• Private fee for-service plan.” (CMS, 2005, p. H-11)

Medicare Part D

Pharmacy Benefit- “Provides beneficiaries with a Medicare drug benefit through private health plans. Anyone enrolled in Medicare Parts A or B are eligible to join Part D. Beneficiaries can elect to receive prescription drug coverage through either drug-only or a Medicare Advantage plan that provides comprehensive benefits.” (CMS, 2005, p. H-11)

A Virtual Exercise

• Please Choose a Case:

Case Study One: Henry Jamison

Henry Jamison is a 82 year old retired mechanic from Michigan with Parkinson’s Disease. His wife Jane, passed away four years earlier. Between his wife’s high medical bills and his small pension being used for the bills, Henry’s monthly income is below the poverty level. He receives $900 a month from his pension and his total savings amounts to $3500. Henry has been living at home. His two daughters and his grandchildren check in on him three times a week. Henry is your patient since he had a stroke. The family has decided that they can no longer care for him to the level that he needs. They have no choice but to place him in a nursing home. Henry and his family have questions for you.

Henry Jamison

Henry’s daughter asks you if he will be eligible to apply for Medicaid services. You answer…

a.) Yes, because of your father’s income he will be eligible.

b.) No, your father makes too much money.c.) I am sorry, I wish I could answer that

question, but there are many factors that are considered for eligibility. I would suggest you contact the Department of Health and Human Services or Michigan Department of Community Health. I will get you that number.

Answer

C.) In order to be eligible for Medicaid, Henry would have to go through a thorough screening process. Many factors have to be considered and the information provided would not allow you to make a determination of eligibility. It is best to refer the patient to the Department of Health and Human Services or the Michigan Department of Community Health.

Case Study Two: Linda and James

Linda a 18 year old single mother who just gave birth to James. She is part-time manager at a grocery store and makes $1,000 a month. She is also working to get her associate degree during the day. Because of child care expenses, school expenses, and the cost of daily living, Linda is struggling. She applied for Medicaid, but because of her income was not eligible. Linda is concerned that her son James will not have health insurance. She comes into your clinic to get vaccinations for her son, and has some questions for you about health care coverage.

Case Two: Linda and James

Linda has explained her situation to you and asks you what health care coverage options she has for her son. You answer…

a.) SCHIPb.) Medicarec.) Medicaid

Answer

A.) SCHIP

Under SCHIP the state can use SCHIP funds to expand Medicaid eligibility to children who previously did not qualify for the program

James is a "targeted low-income child" who resides in a family with income below 200% of the Federal Poverty Level (FPL) or whose family has an income 50% higher than the state's Medicaid eligibility threshold

Case Two: Linda and James

She then asks you if she will be covered. You respond that…

a.) Only she will be coveredb.) Only James will be coveredc.) She and James will be coveredd.) You refer her to the Department of Health and Human Services or the Michigan Department of Community Health.

Answer

D.) You refer to the Department of Health and Human Services or the Michigan Department of Community Health.

Since SCHIP is a state regulated program under Medicaid, Linda is not necessarily covered. In some states they will cover the parent if she is under 18 or pregnant. It is best to refer Linda to determine whether Michigan covers both her and James .

Case Three: Sarah RN

Sarah recently finished her FNP program. She accepted a position at a nurse run clinic sponsored by a university. Many of the patients she will see will be covered under Medicare and Medicaid. Sarah is confused about the difference between the programs and what type of reimbursement she will be receiving. Sarah comes to you for assistance and has these questions.

Sarah wonders…

Will I be reimbursed for my Medicaid patients and how much?

a.) You will be reimbursed 100% of the Medicaid rate.

b.) You will be reimbursed 100% of the Medicaid rate. However you will need a collaborative agreement with a physician to be reimbursed directly.

c.) You will be reimbursed 85% of the Medicaid rate. However you will need a collaborative agreement with a physician to be reimbursed directly.

d.) You will be reimbursed 85% of the Medicaid rate.

Answer

B.) You will be reimbursed 100% of the Medicaid rate. However you will need a collaborative agreement with a physician to be reimbursed directly.

Sarah wonders…

What optional services would she have to look into to see if it covers her Medicaid patients.

a.) Prenatal care and delivery services for pregnant women

b.) Ambulatory services to individuals under age 18 and individuals entitled to institutional services

c.) Home health services to individuals entitled to nursing facility services

d.) Mental health care services either in institutions for mental diseases or in intermediate care facilities for the mentally retarded

e.) All of the above

Answer

E.) All of the above

Sarah should contact the Department of Health and Human Services or the Michigan Department of Community Health to find out what services can be reimbursed in the state of Michigan.

She asks…

Which program is run by the state?

a.) Medicareb.) Medicaidc.) Both Medicaid and Medicarec.) Neither, they are both run by the federal government.

The Answer

B.) Medicaid

Medicare is a federally run program

The Future of Medicaid in Michigan

• In the state of Michigan, Medicaid alone accounts for $447 million of the unavoidable spending pressures. (pg. 10)

• The federal government is increasing mandates on the state, and significantly reducing its financial commitment to the Medicaid program, at a time when the state is least able to absorb the costs.

• In addition, the federal government is eliminating special financing arrangements, costing the state over $150 million next year and an additional $150 million in 2006.

(FY 2005 EXECUTIVE BUDGET, 2005)

Sustainability of Medicaid

• Every State is having to make difficult decisions

• Considering 15 % or more of state money is spent on Medicaid funding currently, the concern is raised that this spending is expected to grow by close to 10% by the year 2012. (KFF, 2004)

• Changes must be made

State of Michigan Changes for 2006

• Medicaid costs for fiscal year 2005 are expected to reach $6.1 billion.• Some of the changes that will occur for 2006 are:

• A freeze on Medicaid enrollment for 19 and 20 year old young adults. • Implementation of a limited benefit package for 19 and 20 year old young

adults, and low-income adults who are caring for their own, or related, children.

• Implementation of a Medicaid estate recovery program that recoups taxpayer funds spent on nursing home care from the patient’s estate.

• Closure of loopholes in Medicaid eligibility for long-term care to prohibit the sheltering of financial assets that can be used to pay for the patient’s care.

• Implementation of a physician provider assessment to increase physician reimbursement rates while saving $40 million in state funds.

• Elimination of the current 3-month retroactive Medicaid eligibility period prior to the date of application

• Implementation of a Medicaid Family Planning Waiver that will help reduce unintended pregnancies and infant mortality rates while saving $6.5 million on childbirth costs.” (State of Michigan, 2005, B-12).

References

Centers for Medicaid and Medicare Services (CMS) (2004). Retrieved September 15, 2004 from http://www.cms.hhs.gov/medicaid/

CMS (2005). Reference H: Glossary. Retrieved July 31st, 2005 from http://www.cms.hhs.gov/medlearn/billingguideB/referenceH.pdf.

Kaiser Family Foundation (KFF) (2002). The Medicaid Resource Book. Retrieved September 15th, 2004 from http://www.kff.org/medicaid/2236-index.cfm.

Kaiser Family Foundation (2004). States Respond to Fiscal Pressure: State Medicaid Spending Growth and Cost Containment in Fiscal Years 2003 and 2004 Results from a 50-State Survey. Retrieved July 31st, 2005 from http://www.kff.org/medicaid/upload/States-Respond-to-Fiscal-Pressure-State-Medicaid-Spending-Growth-and-Cost-Containment.pdf

National Conference of State Legislatures (1997). What Legislatures Need to Know about Managed Care. Retrieved July 31st, 2005 from http://www.ncsl.org/public/catalog/6642ex.htm.

Shi, L. & Singh, D.A. (2004). Delivering health care in America: A systems approach, 3rd ed. Jones and Bartlette Publishers: Boston.

State of Michigan (2004). Fiscal Year 2005 Executive Budget. Retrieved March 22nd, 2005 from http://www.michigan.gov/documents/FY05Document1_116216_7.pdf

State of Michigan (2005). Health and Human Services Fiscal Year 2006 Executive Budget Recommendation. Retrieved July 31st, 2005 from http://www.michigan.gov/documents/B15-22_115965_7.pdf

United States Department of Health and Human Services (2004). 2004 Federal Poverty Levels. Retrieved April 6th, 2005 from http://aspe.hhs.gov/poverty/04poverty.shtml.

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MOVE: MEDICAID ORIENTATION AND VIRTUAL EXERCISE A Module for Nurses

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