United States Healthcare Systems Presented by John Gallagher, Vice - - PowerPoint PPT Presentation

United States Healthcare Systems

Presented by John Gallagher, Vice President of VGM Government Relations

Discussion Topics

• Medicare – How it works and is funded in the U.S.
• Medicaid – How it works and is funded in the U.S.
• Third Party Payors

– Managed Care – Accountable Care Organizations (ACOs) – Bundled Payments

• Other Government Healthcare Programs

– TriCare – Veterans Affairs (VA) Coverage

• Medicare Competitive Bidding Program
• United States Advocacy Efforts Dealer involvement
• Lobby Work in USA – Current Grassroots Efforts; Dealer

involvement

• What are dealers and dealer organizations doing to lobby

effectively

• The Future of Healthcare in the United States

Medicare Overview – How does it work?

• Federally funded health insurance program for Seniors (65+)
• What does Medicare cover?

– Part A: Hospital visits, home health, skilled nursing facilities – Part B: Doctors visits, durable medical equipment, preventative care – Part C: Medicare Advantage – offered by private insurance – Part D: Medicare approved private plans to assist with A/B costs

• Providers that accept Medicare are reimbursed by the

government for services (Fee-for-Service)

• Covered 54 million people in 2014

• U.S. Department of Health and Human Services (HHS)

– The Centers for Medicare & Medicaid Services (CMS)

• Payroll taxes paid by employees and employers
• Funds also allocated by Congress
• Medicare Trust Funds

– Funds can only be applies to paying for Medicare by the government

Medicare Overview – How is it funded?

Medicare Overview – How is it funded?

Total Medicare Expenditures DME Expenditures

Medicaid Overview – How does it work?

• Federally funded insurance program for low-income Americans
• Program covers acute and long-term services for those with

disabilities

– Nursing facilities, home health aides, transportation, ect.

• Covers children, adults, and seniors – 65 million people

Medicaid Overview – How is it funded?

• Medicaid is funded jointly by states and the federal

government.

• Paid under FICA payroll taxes (same as Medicare)
• Federal government matches qualified states conrtibutions
• Affordable Care Act (ACA) incentives for states that expand

Medicaid.

Third Party Payers – Managed Care

• Health insurance plans where patients agree to visit only

certain doctors and hospitals.

• Costs of care are managed by a company at a reduced cost

– Health Maintenance Organizations (HMOs) – Preferred Provider Organizations (PPOs) – Point of Service (POS)

Third Party Payers - ACOs

• Accountable Care Organizations

– Groups of doctors, hospitals, and providers that voluntarily give coordinated care to their Medicare patients – Largely used for chronically ill patients. – Goal is to fix inefficient payment system and provide better care. – Hopes are that it relieves some financially stress on Medicare budget. – Health systems are rewarded with “bonuses” of expected savings.

• ACOs are paid by Fee-for-Service model with quality

benchmarks in prevention and efficiency.

Third Party Payers – Bundled Payment Model

• CMS effort called “Bundled Payments for

Care Improvement Initiative” (BPCI)

• Reimbursements for beneficiaries that

reward the quality of services vs. quantity

• Sets standards for each episode of care
• Participating providers are reimbursed at

expected costs for clinically defined episodes

Military Health Programs

TRICARE

• Healthcare program providing

benefits to U.S. Armed Forces, retirees, and their families.

• Managed by U.S. Department
• f Defense Military Health

System

• Additional government

programs, such as TRICARE,

• ften use rates set by Medicare

Medicare rates impacting TRICARE

TRICARE REDUCTIONS FROM DEC 15 TO JULY 16 HCPCS Code Description 15-Dec 16-Jan % reduction 16-Jul Total reduct E0601 Continuous positive $48.09 $34.72 27.80% $18.41 61.70% E0562 Humidifier, heated, u $172.80 $129.93 24.80% $80.89 53.20% A7037 Tubing used with po $23.54 $16.04 31.90% $7.17 69.50% A7034 Nasal interface (mas $67.52 $52.55 22.20% $33.29 50.70% A7035 Headgear used with $22.81 $17.24 24.40% $10.75 52.90% A7030 Full face mask used $108.28 $84.55 21.90% $52.52 51.50% E0470 Respiratory assist dev$93.90 $73.37 21.90% $47.79 49.10% E0471 Respiratory assist dev $276.46 $205.41 25.70% $115.42 58.30% E1390 Oxygen concentrato$108.55 $82.40 24.10% $47.25 56.50% E0431 Portable gaseous ox $18.25 $14.99 17.90% $10.48 42.60% E1392 Portable oxygen con $30.98 $28.04 9.50% $22.18 28.40% Avg reduction 52.20% MEDICARE REDUCTIONS FROM DEC 15 TO JULY 16 HCPCS Code Description 15-Dec 16-Jan % reduction 16-Jul Total reduct E0601 Continuous positive $106.87 $77.14 27.80% $40.92 61.70% E0562 Humidifier, heated, u $288.17 $216.55 24.90% $134.82 53.20% A7037 Tubing used with po $39.23 $26.74 31.80% $11.95 69.50% A7034 Nasal interface (mas$112.53 $87.59 22.20% $55.48 50.70% A7035 Headgear used with $38.01 $28.73 24.40% $17.92 52.90% A7030 Full face mask used $180.47 $140.92 21.90% $87.54 51.50% E0470 Respiratory assist dev $208.66 $163.05 21.90% $106.20 49.10% E0471 Respiratory assist dev $614.34 $456.46 25.70% $256.48 58.30% E1390 Oxygen concentrato$180.92 $137.33 24.10% $78.75 56.50% E0431 Portable gaseous ox $30.42 $24.98 17.90% $17.46 42.60% E1392 Portable oxygen con $51.63 $46.73 9.50% $36.96 28.40% Avg reduction 52.20%

Veterans Affairs Healthcare

• Comprehensive medical benefits for United States Military

Veterans

• Network of sites under the Department of Veterans Affairs,

more than 1,700 nationwide

• Types of care: illnesses, injuries, preventative care, improving

function, enhancing quality of life

• Covers over 8 million veterans
• Congress allocates dollars annually which changes eligibility.

VA Network of Medical Facilities

Medicare DMEPOS Competitive Bidding Program

• Introduction

– In October 2014, CMS released a rule which affects all durable medical equipment (DME) suppliers in the U.S. – Established new methods for a national price adjustment for DME Medicare reimbursements. – Reimbursements for competitively bid items were reduced based on various “regions” within the United States

Competitive Bidding Program Urban Areas

• Currently in 109 Competitive Bid Areas (CBAs) in 43 states
• Additionally, a national mail order program
• “Rounds” are contract periods which providers in a CBA have

rights to provide care at the price that was bid.

Nationwide Rollout of Competitive Bidding

• DME items within the competitive bidding program phased in

cuts over 6 month period.

• Beginning January 1, 2016, reimbursement rates were cut by

50%, with the phase-in concluding on July 1, 2016.

Nationwide Rollout of Competitive Bidding

• Industry stakeholders, including VGM Group, have adamantly
• pposed the nationwide rollout of competitive bidding into

rural areas of the country.

• We continue to argue that applying urban, competitively bid

rates into rural America is an extremely flawed model.

• Medicare beneficiaries’ access to DME items will be disrupted

as suppliers are unable to sustain the 50% cut in reimbursement

• In CBAs, suppliers accept contracts for DME items at a lower

rate because there is a reduced number of suppliers that can provide the competitively bid items.

Short Term:

Competitive Bidding/Expansion to Non-Bid Areas

S.2736 Patient Access to Durable Medical Equipment introduced by Sen. Thune (R-SD) and Sen. Heitkamp (D-ND) This bipartisan, non-controversial, and budget-neutral bill will:

• Delay the second cut for HME items in non-bid areas by 12 months. This would push back the second cut from July 1,

2016 until at least Oct. 1, 2017.

• Replace the bid ceiling for future rounds of bidding with the unadjusted fee service rates from January 1, 2015 instead
• f CMS’ current plans to limit future bid ceilings to the previous bid rates.
• Require CMS to solicit stakeholder input and take into account travel costs, volume, clearing price and information on

the numbers of providers serving bid areas as part of rate-setting activities for Jan. 2019 and beyond.

• Require CMS to monitor and report on access issues and health outcomes for Medicare beneficiaries utilizing HME, with

updates provided on the CMS website on a monthly basis.

• Advance the start date of the federal portion of Medicaid reimbursement mirroring Medicare rates by three months

from calendar year 2019 (Jan. 1) to fiscal year 2019 (Oct 1, 2018).

35 Co-sponsors

Short Term:

CompetitiveBidding/Expansion to Non-Bid Areas

H.R. 5210 Patient Access to Durable Medical Equipment Act of 2016 PADME introduced by Rep. Tom Price (R-G) and

• Rep. Dave Loebsack (D-IA)
• Extension of the phase-in rate of 50 percent of the previous fee schedule rate and 50 percent of the new

competitively bid rate until October 1, 2017. There would be no additional cuts to DME providers in rural areas until October 2017.

• Adjustment of the bid ceiling set by the Competitive Bidding Program by setting the bid ceiling at the FY

2015 fee schedule rate and adjusting it for inflation. This eliminates the artificial ceiling from the previous round of bidding, which has a continuous downward pressure on prices.

• Requirement of CMS to consider and account for the different business models of non-competitively bid

areas (CBAs) such as the travel distance, costs associated with furnishing DMEPOS items and services within a region, the highest amount bid by a supplier that was awarded a contract and the number of providers in CBAs compared to the number of providers in non-CBAs for future payment rates.

• Requirement of CMS to publish a monthly report of the results to allow Congress to monitor in order to

ensure that Medicare beneficiaries are not adversely impacted by CMS’ regulations.

121 Co-Sponsors

• In-State meetings
• Key members of Congress in your states
• SBA Hearing- scheduling new locations
• Senate Finance
• Action Center-What can you do?

How Advocates Can Help by Engaging:

• Legislators
• District Meetings
• SBA Hearings
• Customers, Family Caregivers, & Referral

Sources

• Other Stakeholders

Engaging Legislators:

• Holding Summer/Fall District Meetings
• Contacting Their Federal Office

Summer Blitz

• AAHomecare Legislative Conference, DME providers

and Industry Leaders hit the pavement having over 200 meetings in D.C. in 2 days!

SBA Field Hearings New 2016 Meetings

SBA hearings and roundtables in 2016

• Las Vegas, NV January 15th
• Charleston, West Virginia-

February 19th

• Salt Lake City, UT –March 9th
• Cheyenne, WY- March 10th
• Sioux Falls, SD-March 24th
• Bismarck, ND-March 23rd
• Portland, ME- May 16th
• Pittsburgh, PA- June 3rd
• Wisconsin- June 29th
• Birmingham, AL- August 2nd
• Minneapolis, MN- August 19th
• Portland, OR- August, 11th
• Honolulu, HI- August 23rd

Engaging Customers & Family Caregivers:

• Educating Customers About Changes
• Directing Customers to People for Quality

Care

• Complaint Hotline 800-404-8702
• Letters to Congress to Voice Concerns

We need the beneficiary voice now!

• Providers engaging with their

patients to promote awarenss.

• Direct them to reach out to

their member of Congress

• Call People for Quality Care
• 800-404-8702

We can help you by..

• Educating your patients about why accessing home medical equipment is so

difficult

• Connecting your patients with their members of Congress
• Sharing your patient’s story with health care leaders
• Providing your patients with information about area groups that can help

them with their medical conditions

People for Quality Care is a Resource for you!

Recently merged with AAHomecare’s Save My Medical Supplies! The opportunities are endless! Lets work together!

Contact Kelly Turner, 1-866-342-6643

Engaging Clinicians, Referral Sources, & Discharge Planners:

• Participating in Case Manager Survey
• Educating Referral Sources about Changes
• Directing to People for Quality Care for

more Info

Engaging Other Stakeholders:

• Local/State Senior Service Groups
• Patient Advocacy Groups
• NFIB

National Federation of Independent Business (NFIB)

Don Jones of Southern Medical Equipment in Alabama was recently elected to the Alabama NFIB (National Federation of Independent Business) Board. He was able to draw a meeting to the ADMEA conference with state director of the NFIB, Rosemary Elebash. This meeting was a great stepping stone to another meeting with the NFIB in Washington D.C. Networks and relationships continue to be built! We encourage state leaders and DME suppliers to reach out to your state’s NFIB to present the case for the HME industry-to keep small business alive!

The Future of Healthcare

VGM Group is working for you.

John Gallagher

VGM Group, Inc. john.gallagher@vgm.com

Thank you VGM Canada!!