8 Dec 2022

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Financial Models of Reimbursement

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A brief history of Medicare and Medicaid 

Medicare started in 1966 under the Social Security Administration. It is currently overseen by the Center for Medicare and Medicaid Services. It was enacted by Congress in 1965 under President Lyndon Johnson. Medicare has undergone several changes since then. The association of health maintenance organizations was made formal and broadened during the Clinton administration and later in 2003, the program covering most self-administered prescription medicine was ratified and became operational in 2006. The initial Medicare program had Part A and Part B. The other parts (Part C and Part D) were formalized in 1997. They previously existed as demonstration projects. All benefits in the program are subject to medical necessity. 

Medicaid is funded jointly by the federal and states governments. It covers for medical expenses for many Americans including eligible low-income earners. Although states are not required to participate, the program is the main source of health insurance for low-income people. Medicaid is overseen by the states. It was created by the Social Security Amendments of 1965. Notable additions over the years include the creation of the Omnibus Budget Reconciliation Act of 1990 and 1993. 

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Populations served by Medicare and Medicaid 

Medicare is the national health program designed to cater to people who are aged 65 years or older, younger people with disability status and people with End-stage Renal Disease (ESRD). Currently, there are more than 58.5 million beneficiaries enrolled in Medicare. The program covers about 50% of healthcare expenses for the beneficiaries. The beneficiaries cover the remaining expenses mostly through additional private insurance or by joining Part C or Part D of the Medicare plan (CMS, 2018 pg. 1). There are at least 6,100 hospitals, 15,000 skilled nursing facilities, and 1.2 million physicians, service providers, and other health care practitioners enrolled in the program. 

Medicaid is joint federal and state coverage for eligible low-income adults, pregnant women, and children. There are more than seventy-two million beneficiaries enrolled in the program including twenty-eight million children. Eligibility to Medicaid varies from state to state. It covers 40% of all births in the country. The program provides the largest coverage for long-term care services, mental health services, and births (Smith & Medalia, 2014). Populations covered through Medicaid include parents, a caretaker relative of minors, children and adolescents, pregnant women, seniors, certain people with blindness, and certain people with disabilities. 

Expanded Medicaid 

The Supreme Court ruled that the Patient Protection and Affordable Care Act was coercive. States are as a result of this ruling free to decide whether to expand Medicaid or not. Thirty-seven states have expanded Medicaid while fourteen have not. Some have adopted and implemented while others have adopted but not implemented. The partisan orientation of states is the most significant for either adoption or rejection of Medicaid expansion. States that are governed by Democrats tend to expand the program while those that are led by Republicans tend not to favor Medicaid expansion. Other factors include people’s attitudes in a given state, healthcare providers’ spending on elections, and the generosity of the program before 2010 in a state. My current state has expanded Medicaid. 

Reasons why some states choose not to participate in Medicaid expansion 

Individual states indicate they are opposed to Medicaid expansion for several reasons. In an effort to balance their budgets, they are confronted with tough fiscal choices every year. The cost of Medicaid grows faster than revenue and it usually takes the largest share of their budgets. The program is said to be one of the main causes of the increase in health care spending ( Kimberly, 2015). The states that declined to expand Medicaid have also cited their concerns about their ability to afford or predict their ten percent share of costs. 

States not expanding Medicaid argue that the program will consume a lot of their budgets but only provide limited access to quality care. Medicaid expansion means increased enrollment for the program. More than half of those newly enrolled are likely to drop private coverage. Previously privately-funded health care will, therefore, be funded by taxpayers. This will strain federal and state budgets and potentially spell the end for the poor’s safety net as they are forced to compete with millions of others to get care from the limited number of providers who see Medicaid patients ( Turner & Roy, 2013). There are also calls to modernize the 1965 legislation as it has not fundamentally changed since its creation. 

My role when interfacing with Medicare and/or Medicaid recipients 

The overall aim is to improve quality health care, improve outcomes, and reduce expenses for all parties. Cost reduction can be done through avoidance of unnecessary hospitalization, recurrent diagnostic tests, multiple prescriptions, and repetitive medical histories. Nurses are positioned to contribute to interfacing Medicare and Medicaid recipients by being team-based and providing patient-centered quality health care that is seamless and affordable. This calls for an enhanced set of knowledge for all reimbursement models, work skills, and the right attitudes for population care. 

Several factors have led to the ongoing discussions on the current models of reimbursement including a sustained sharp climb of healthcare costs, less than the impressive health status of the people, safety issues, quality issues, and millions of uninsured or underinsured ( Kominski, 2017). There is a need to provide quality that is measured through patient experience, payments that are determined by outcomes, and increased efficiency by avoiding duplicative care. Nurses’ roles should advance health, increase value and improve general healthcare. 

References 

CMS (2018). Medicare and Medicaid basics. Centers for Medicare and Medicaid Services. 

Retrieved from https://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNProducts/Downloads/ProgramBasics.pdf 

Kimberly, L. (2015). Opposing Medicaid Expansion. US News. Retrieved from 

https://www.usnews.com/news/the-report/articles/2015/12/04/opposing-medicaid-expansion 

Kominski, G. (2017). The Affordable Care Act’s Impacts on Access to Insurance and Health 

Care for Low-Income Populations. University of California, Los Angeles, California. Retrieved from https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5886019/#__ffn_sectitle 

Smith, J. & Medalia, C. (2014). Health Insurance in the United States. U.S. Department of 

Commerce. Retrieved from https://data.nber.org/cps/hi/2014redesign/p60-250.pdf 

Turner, G & Roy, A. (2013). Why States Should Not Expand Medicaid. Galen Institute. 

Retrieved from https://galen.org/2013/why-states-should-not-expand-medicaid/ 

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StudyBounty. (2023, September 15). Financial Models of Reimbursement.
https://studybounty.com/financial-models-of-reimbursement-essay

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