The policy known as the Deficit Reduction Act of 2005 (DRA) was created as a means of reducing the costs on the budget. The DRA is a legislative policy that should be implemented by the state governments. It is mandatory that the policy is implemented whereby the growth in federal spending in programs such as Medicaid and Medicare are slowed. This ensures the government save a considerable amount of money over the years of its implementation. This is made possible through cost saving strategies such as identifying fraud of medical institutions and practitioners ensuring effective distribution of provided funding (Moser, 2006). It is necessary to implement the policy to avoid steady rise in the expenses in the healthcare sector that may cause an upset to the country’s economy state (Antos, 2011).
Through the bill that was implemented into law in 2006, state governments are granted the flexibility to perform significant modifications to the Medicaid programs. The states will utilize this opportunity as a means of aligning the Medicaid program with the current state of health environment. On one hand, these modifications are seen to be positive aspects of the policy that could result in the expansion of the program as a means of providing more access to health care for the residents of the state (Regist, 2008; Rosenbaum, 2006). Alternatively, this may have negative consequences on the ability of families and children’s access to health care (Markus & Rosenbaum, 2006). The following paper will focus on the Deficit Reduction Act of 2005 and the numerous ways it affects Medicare and Medicaid. The paper will also provide a proposal on the most appropriate way of implementing it at the organization and community levels.
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Policy Statement/Requirement
The policy of the Deficit Reduction Act of 2005 is stated as an Act to provide for reconciliation pursuant to section 202(a) of the concurrent resolution on the budget for fiscal year 2006. The policy is in place as a means of ensuring stability of the national economy through active participation of the different states. The law has incorporated the different states as the distribution of authority has been seen as a key strategy for ensuring effective and efficient application of the respective budget allocation. The act contains provisions in agriculture, housing and deposit, digital television and public safety, transport, Medicare and Medicaid among other sectors of the economy. Residents in each state are required to produce documentation to prove that they are citizens of America so as to qualify for funding on health care costs.
Overview of Policy Content
The provisions that are included into the DRA are Eligibility, premiums, the benefit package, cost-sharing and the targeted case management. According to the eligibility provision, the issue of citizenship is key in receiving the care. In the past, patients would confirm their citizenship orally but after this law they were required to produce proof of legal status (Markus & Rosenbaum, 2006). The eligibility provision also requires SSI thresholds to be considered in provision of disabled children from families with low and moderate incomes. However, before the DRA was implemented, the policy was more flexible to cater to the needy families.
According to the premiums provision, the DRA has brought about charging of women particularly to families that have an income 150% above the Federal Poverty Level. The study by Moncrieff (2006) indicates the required need to cut on spending as a means of effectively balancing the utilization of allocated budget. The denying poorer families is seen as politically unattractive which may have prompted the need to incorporate cost sharing. Hereby, families between the 100% to 150% threshold above Federal Poverty Level may be allowed to practice cost sharing. The study by Dummit (2010) has identified the high expense of medical care in 2008 whereby a new schedule has been incorporated to suit numerous classifications of service provided. These include physician work, malpractice and practice expense as each is valued differently.
Consistency with Organization’s Mission, Vision, Policies and Related External Documents
The Deficit Reduction Act is seen as having double standards in that its main goal is ensuring slow growth of expenditure on health care despite inability to predict occurrence of diseases. The Medicare social insurance covers the senior citizens between above the age of 65 years old along with younger individuals with disabilities. This is a critical population that is prone to succumb to various illnesses. The DRA is seen to adhere to the mission of the organization where its main aim is to ensure the integrity of the members of the health sector. In this case, patients will not be overcharged for their health care services as the CMS institution will conduct a critical review of the same.
Medicaid is another social insurance program that is affected by the Deficit Reduction Act. Medicaid was created to increase the number of people who have medical insurance cover. The categorization of care services provided is seen as a positive effect to the Affordable Care Act. In this case, the categorization of the care services indicates the particular costs that a patient covered by the Medicaid social insurance has incurred. This will ensure that the fraudulent schemes that may be conducted by practitioners are avoided. The limitations of eligibility and premium standards are seen to be double standards of the Affordability Act. Premiums are seen to increase health care costs for non-exempt families that have a household income above 150% of the Federal Poverty Level.
Impact on Organization
The Deficit Reduction Act of 2005 has significant impact on the Center for Medicare and Medicaid Services in numerous ways. One of the major changes is the need to conduct audit services. The office of the Inspector General is responsible for conducting audits on health care providers that serve members who are insured by Medicaid and Medicare. An audit conducted by this office identified that 23 out of 25 drugs under review would cost the patient more than double the average pharmacy costs. The Federal upper limit amount for 13 of the same drugs was noted to be almost five times the average cost.
The Deficit Reduction Act of 2005 has the effect of reduced costs for the patients who are covered by Medicare and Medicaid. The reduced costs of drugs following the application of the DRA will be of significant advantage to the patients served. This has caused a row between the Department of Health and the practitioners in question. The loss that physicians could incur may lead to the practitioners focus on providing the high end services and the cheaper ones may be ignored. This may result in patients seeking cheaper and essential care lacking the qualified physicians to attend to them.
Resource Development and Evaluation Activities
The Deficit Reduction Act of 2005 has been identified as a significant policy that could leader to resource development. Some of the provisions within the law identify the need for medical practitioners and institutions to follow the rules and guidelines of the CMS. The care providers may lose significant sums of money in case of failing to follow the standards and regulations of the Act. These may include particular areas such as charges for the patients covered. As it has been identified that the Office of the Inspector General is responsible for conducting such audits, this may help in gathering financial recourses for covering more patients extensively.
The federal Department of Health and Human Services along with non-governmental organizations may be included in the evaluation activities and development of the health sector. The researchers may conduct studies on the various improvements that may be incorporated in the provision of health care and treatment. The research identifies better ways of improving physician and patient relationship that will lead to quality outcomes. The individuals may also identify the significant distribution of the patients covered by Medicare and Medicaid. This will be a better means of directing patients to the nearest institutions of receiving care. Evaluation of medical care institutions will identify the care services they offer and the ones where particular patients may join.
Stakeholders Involved in Implementing this Policy
There are numerous stakeholders involved that may be incorporated in the implementation process of this policy. The first stakeholder is the Medicare and Medicaid offices for the respective states. These offices will play a key role in identifying ways in which the allocated funds will be spread out to the various medical institutions. These offices will provide studies and their results on the best prices that favor both institutions along with the patients seeking treatment. According, to the report by Levinson (2007), the federal upper limit of selected high expenditure drugs will help in setting a market standard in the state.
The political leaders in the states will be other stakeholders who are consulted in passing significant laws that will help in molding the policy according to the current health environment in the region. The laws may include standardizations that may be charged to the non-exempt families with household income above the 150% Federal Poverty Level. The patients are stakeholders that will play a critical role in the development of the policy. In this case, the patients will be used in the evaluation of the medical practitioners that they will usually visit. In the process of cutting down on the health expenditure, it is expected that high quality standards of the care services are maintained. The patients will provide their evaluations of the practitioners as a practice of assessment.
System Changes Required
Before implementing this new policy, it is necessary that system of providing healthcare is significantly changed. The practitioners who have their own practices will be considered as part of the institutions that are available for referrals for the patients covered by Medicare and Medicaid. Studies have indicated the lower volumes of patients visiting the private offices for both magnetic resonance imaging (MRI) and computed tomographic (CT) imaging radiologists. This has resulted in lowered payments to the same offices. The offices of the nonradiologist physicians were noted to experience significant increase in payments alternatively (Moser, 2006).
This will require significant change in the cost of care that will ensure that the patients have increased options to choose between private and public medical institutions. The system of identifying patients viable to receive medical cover from the Medicare and Medicaid programs should also be evaluated. The patients who are above the FPL will be evaluated to identify those that are capable of paying the premiums that are set by the new policy. This will ensure significant finances are available to cover a wider range of patients who have qualified for these healthcare programs.
Communications and Training Activities to Build Awareness and Enable Implementation
For a successful implementation of the policy, it is important that communication is conveyed to the members of the public as well as the medical institutions. Medical institutions are easy to address as they are provided with adequate information on the changes made to the Medicare and Medicaid programs. Leaflets of the constitutional law will be conveyed to the administrative sectors of each of the public and private care providing institutions. The strategy that will be employed in making payments for the prospective inpatients will be conveyed. The announcement will be made prior to the beginning of the following fiscal year. The medical practitioners along will be essential in conveying the message to the members of the public. This is particularly to the patients who utilize the various health covers that are available. The public will be informed through leaflets on changes made in the health cover depending on the financial state of the families. The public may visit the various Medicare or Medicaid offices for further information on their status in their preferred health insurance cover.
Timing Requirements for this Policy
The policy will take approximately 6 months before the policy is implemented. The health institutions will be given this time to adjust their practices in such a way to incorporate the changes that have been made to the provision of care services to the various underprivileged members of the society. This period will be an opportunity for organizations to set their finances in order before the implementation of the policy. The institutions may also begin a pilot program of identifying the patients through serving patients as recommended by the new policy. The careful identification of the patients will be made to avoid significant losses by the institutions. The health centers will ensure they have improved their facilities and recourses such that they are capable of providing quality health care to the visiting patients.
Responsible Executives and/or Responsible Offices
There are multiple executives and responsible offices that are associated with the implementation. The elected leaders who are concerned with the health activities of the state will be usually seek response from the Medicare and Medicaid offices. The latter will be mainly responsible for assessing the public and the insurance cover that they qualify for. This will require close examination of the total household income. The office of the inspector general will be used to audit medical institutions and conduct cases where malpractices may have been identified. These offices working together will ensure that the allocation of health care fund is adequately and efficiently distributed throughout the state. The members of the public will report malpractice issues to the Medicare or Medicaid offices for follow-up.
References
Antos, J. R. (2011) Reforming Health Care Reform in 112 th Congress, New England Journal of Medicine , 364: 30-33.
Huberfeld, N. (2007). Clear Notice for Conditions on Spending, Unclear Implications for States in Federal Healthcare Programs. Unclear Implications for States in Federal Healthcare Programs (March 14, 2007) .
Leonard, E. W. (2007). Cooperative Federalism and Healthcare Reform: The Medicare Part D'Clawback'Example. Journal of Health Law & Policy , 1 , 79.
Markus, A. & Rosenbaum, S. (2006) “ The Deficit Reduction Act of 2005: An Overview of Key Medicaid Provisions and Their Implications for Early Childhood Development Services” , The Commonwealth Fund, Retrieved from http://www.commonwealthfund.org/publications/fund-reports/2006/oct/the-deficit-reduction-act-of-2005--an-overview-of-key-medicaid-provisions-and-their-implications-for
Moncrieff, A. R. (2006). Payments to Medicaid doctors: Interpreting the" equal access" provision. The University of Chicago Law Review , 673-704.
Moser, J. W. (2006). The Deficit Reduction Act of 2005: policy, politics, and impact on radiologists. Journal of the American College of Radiology , 3 (10), 744-750.
Regist, F. (2008). Medicare program: changes to the hospital inpatient prospective payment systems and fiscal year 2009 rates; payments for graduate medical education in certain emergency situations; changes to disclosure of physician ownership in hospitals and physician self-referral rules; updates to the long-term care prospective payment system; updates to certain IPPS-excluded hospitals; and collection of information regarding financial relationships between hospitals. Final rules. Federal register , 73 (161), 48433.
Rosenbaum, S. (2006). Medicaid at Forty: Revisiting Structure and Meaning in a Post-Deficit Reduction Act Era. J. Health Care L. & Pol'y , 9 , 5.
