Medicare provides millions of U.S. seniors and disabled citizens with health care coverage they could not afford on their own. The program, originally passed under President Lyndon Johnson in 1965, expanded over the decades, and now includes four separate parts that serve a vital purpose.
The large and complex nature of Medicare law puts the program at the center of health law discussions on a regular basis. Understanding the four parts of Medicare and the potential legal conflicts they attract is essential to understanding the U.S. health law system.
The core of the Medicare program is Part A, which supplies seniors with no-cost insurance coverage for major illnesses. Seniors may enroll in the program once they reach age 65, or have worked in certain jobs within the federal government for a predetermined length of time.
Part A coverage includes inpatient hospital stays of up to 90 days with very little payment out of pocket for the patient. The coverage extends to any food or tests that the hospital must perform as part of the patient’s approved care. For seniors who require long-term care as the result of a hospital stay, Part A also includes provisions for inpatient nursing services at an approved nursing facility for up to 100 days.
Medicare Part A is a hotbed of legal challenges, as the federal government fights to prevent fraudulent activities by hospitals and nursing homes. One of the biggest problems is the issue of hospital re-admissions. Hospitals release patients when they approach their Medicare cap, then re-admit the patient less than a month later. The government pursues penalties in these cases because they believe readmissions are indicative of poor post-hospital care and encourage patient turnover.
Part B coverage extends Medicare to seniors who need outpatient and daily medical insurance. Patients with Part B coverage can use the insurance to see their doctors for routine and preventive medical treatment, vaccinations, and hormonal treatments. Unlike Medicare Part A, Part B requires a monthly premium, with premiums determined on a graduated payment scale.
Under Medicare Part B, patients may apply for federal assistance for the purchase of durable medical equipment. The list of equipment includes any prosthetic or mobility device necessary for everyday activities.
Medicare Part B has come under fire for decades because of the potential for abuse. The most common form of abuse is overcharging from doctors. In just a single bust in June 2015, the federal government arrested more than 200 people for making $712 million in fraudulent Medicare claims. Doctors trying to defraud Medicare typically report services never rendered or charging one patient’s Medicare card for another patient’s services. As funding debates threaten the future of the program, the federal government will continue to crack down on Medicare fraud.
In an attempt to privatize portions of Medicare, President Bill Clinton created Medicare Part C in 1997. The program, also known as Medicare Advantage, allows Medicare beneficiaries to seek out coverage that meets their needs in the private insurance market. The plans have been very popular for people who want more coverage for routine doctor’s visits and medication, and are willing to accept less coverage for emergency hospital care.
Millions of Americans have chosen the Part C option, especially in areas where there is strong competition among insurance companies and a large choice of doctors. The program more than doubled from 2005 to 2013, with more than 25 percent of seniors enrolled in a Part C plan.
Unfortunately, the Part C program has several problems that affect health care law and policy. First, seniors in rural areas and inner cities have limited access to Part C options. Without strong competition among insurance companies, patients cannot receive the best price for their plan. Second, a flood of insurance companies left the Medicare Part C marketplace, lowering the number of competitors across the board. Finally, insurance companies failed to ensure their actual paid benefits were equal to or better than what patients could receive through traditional Medicare. Failure to meet the benefit threshold is extremely damaging for patients, because they must forgo traditional Medicare coverage to enroll in a Part C plan.
The newest Medicare program is Part D. Passed in 2006; Part D provides prescription drug coverage to anyone in a traditional Medicare program. The law passed in response to rising drug prices and the realization that the cost of drugs was higher than the cost of treatment for many seniors.
Where Medicare Parts A and B are administered through the federal government, Part D is run by private health insurers and pharmacies. As a result, the plans offer limited drug coverage for patients, and some patients must enroll in more than one plan to get access to all of the drugs that they need.
Much like the problems with Medicare Part B, Part D programs are highly susceptible to fraud. Doctors and pharmacies are incentivized to prescribe as many drugs as possible, because the federal government is paying the bill. More problematic for the federal government is that its inability to negotiate drug prices means the government cannot use its immense buying power to lower drug costs for seniors, so premiums must continue to rise.
As mentioned, medicare directly impacts health care facilities, such as hospitals or nursing homes, as well as health care professionals. Thus, it is essential that all of those within these industries have a solid understanding of Medicare so that they protect themselves and their peers from committing fraudulent activities. While many acts of fraud are intentional, they may also occur due to a misunderstanding – or a complete lack of knowledge – of updated regulations, so understanding the legal issues of Medicare are essential for those in the health field.
The Medicare program is an essential part of the social safety net for U.S. seniors, but for the program to remain healthy, the government must address some of the important legal issues.
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