Medicare reimbursement cuts have skyrocketed since Medicare’s beginning in 1965, despite many different measures to control growth. Short-term legislative fixes have been buying time in order to develop long-term solutions while numerous stakeholders stand to win and lose as they deal with reimbursement cuts. Among these stakeholders are politicians, the federal government, Medicare recipients, healthcare providers, and third-party payers. There are anticipated problems in implementing reimbursement cuts, including obstacles to patient care and the financial capability of healthcare providers who rely on Medicare revenue. Continual questions over short-term Medicare cuts will be eclipsed by policy modifications related to the program’s ability to sustain long-term healthcare funding and delivery systems.

Introduction

Currently health care spending accounts for 16% of the gross domestic product of the United States (Getzen, 2007). Overall health care spending and high health care costs are due to new technology and higher incomes. This raises the question, how are health care expenses going to be controlled within government programs like Medicare? The development of Medicare and Medicaid by the Social Security Acts of 1965 recognized the government as a major financier in health care. Hospitals and other institutions were allowed to grow in size, capacity, and capital due to regular reimbursement through government funding.

Background and Significance

Medicare has progressed in numerous ways since its beginning in 1965. Initially, physicians were compensated by the program for services covered and were able to bill their patients for costs that were not covered. Hospital compensation plans also followed similar patterns until a modification was made in 1983 from “reasonable cost” to the prospective payment system based on groups that were diagnostically-related. In 1992 the charge-based system was replaced by the physician fee schedule. To control spending even further, the Sustainable Growth Rate (SGR) of 1998 was created. With this, the annual goals for spending are established and physician payments are reduced if spending goes over these limits.

The majority of today’s Medicare costs are unlike those of the past. A large percentage of the expenses are attributable to outpatient services covered by Medicare Part B. This percentage has consistently exceeded the established formula that is specified in the SGR. Imminent adjustments that come in the form of reimbursement cuts mean major problems for any physician that receives reimbursements for services provided to their Medicare patients. These cuts will have a major impact on hospitals and physicians, and they may worsen access barriers to healthcare for Medicare recipients. New reimbursement cuts are especially troubling in light of evidence that the expansion of Medicare reimbursements to new areas of care can benefit patient health (Gross et al., 2006). Legislation and actions on Capitol Hill generally determine the types and amounts of cuts to be made.

Legislation

Legislative action related to Medicare cuts is unending. A recent (February 14th, 2008) amendment was proposed in the House of Representatives to amend conversion factors in Part B of title XVIII of the Social Security Act, which increased Medicare payments for physicians’ services through December 31, 2009. These modifications are temporary fixes in the challenge to produce long-term solutions, and legislative fixes are subjective to the various groups that are involved with these cuts. Congress is endlessly tweaking legislation related to reimbursement in order to slow down uncontrolled growth while acknowledging the constituencies and interest groups.

The executive branch also plays a major role in Medicare cuts. Recently, the Bush Administration proposed a measure to control the elevated growth in the program. This change was initiated by a condition of the 2003 Medicare law. When a financial alert is released by Medicare trustees, the administration is mandated to present legislation that reduces program spending or increases revenue.

Stakeholders

The major stakeholders in this Medicare issue are the federal government, politicians, Medicare recipients, physicians, hospitals, and third-party payers. The federal government is in position to win by moderating the uncontrolled growth in the Medicare program. In recent years, the total expenses and federal reimbursement has exceeded the goals that have been set. The growing size of Medicare threatens to infringe upon other fund sources and programs. To reform Medicare and keep expenses within manageable boundaries, it is in the best interest of the federal government to take charge. Regardless of the benefits involved in implementing cuts, the types of cuts made have potential repercussions. Cuts to reimbursements are controversial within the healthcare community, so the federal government must implement responsible controls to ease harm and allow reform.

Politicians are another group that is affected by reimbursement cut policies. Their role is fairly involved as their responsibilities and functions are reflective of the interests of different groups and political parties. Reduction of expenses and reimbursement cuts affect constituents in many ways. In political decision-making, the role of Medicare reimbursement cuts depends on how these groups are affected, and the amount of healthcare lobbying that happens on Capitol Hill shows the magnitude of the interests involved.

Additionally, third-party payers are heavily influenced by Medicare reimbursement tactics. Medicare reimbursement cuts may mean reimbursement cuts by other third-party payers, thus adding to many of the problems that healthcare providers experience.

Understandably, Medicare recipients are another leading group affected by cuts because that means the reduction of programs and benefits to these recipients. Patients have been provided with a vast array of services, procedures, and pharmaceuticals due to technological advancement. If benefit and program cuts occur, these technological features will be greatly reduced. Reimbursement cuts may also play a part in preventing easy access to care. New Medicare patients may be less likely to be accepted by providers due to lower reimbursements from Medicare. In the short-term seniors will always suffer from reimbursement cuts but they may benefit in the long-run from a more efficient delivery system resulting from Medicare reform.

Physicians and hospitals will always lose in the short-term. The healthcare community does not agree with current reimbursement models and believes that any additional cuts will significantly wear down revenues. Many physician practices and hospitals will be greatly affected but they may benefit in the long-run from programs that are moderated in growth.

Implementation issues

There are many groups engaged in searching for answers to this problem, including the Medicare Payment Advisory Commission (MedPAC), the Government Accountability Office, physician and hospital organizations, economists, and other interest groups. The U.S. Senate and House of Representatives are working separately on ways to reduce the irregularities in expenses and reimbursements while trying to set up long-term solutions to these issues. One of the most significant challenges to implementation is the financial domino effect to providers relying on reimbursements (hospitals, physicians, providers). Medicare medical insurance accounts for a large part of revenues to health facilities and healthcare providers. Any lessening of reimbursements for services will generate a major financial impact and the healthcare community has been very resistant to any additional cuts. Some of the noisiest groups have been health providers and interest groups affiliated with them.

Future direction

Reduction of Medicare reimbursement is a major policy issue that affects a large section of interests. Within the government it is acknowledged that more time is required to generate sustainable strategies. The ability to balance long-term objectives with the immediate effects of cuts is a sensitive matter. Policymakers must make calculated decisions when it comes to reducing healthcare spending. Some proponents believe that a greater concentration on preventive care can potentially alleviate expense trends. A large portion of current expenses in Medicare and other programs comes from long-term maintenance of chronic conditions. This tendency accounts for a large part of growth that is not controlled. These reimbursement cuts are only temporary strategies in a losing battle, but a greater concentration on preventive care can potentially extend the viability of U.S. healthcare systems.

Do you believe your healthcare information is always kept private? Unfortunately, it is not necessarily so.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) introduced some very significant privacy protections for your personal and healthcare information, which, in HIPAA vernacular, is called Protected Health Information, or PHI.

Among the protections that HIPAA covers is a set of requirements that allow your healthcare providers to share your PHI without authorization from you. They consist of all of the following situations:

1.) Uses and disclosures that are mandatory by law2.) Uses and disclosures that are for public health activities3.) Disclosures that are related to victims of abuse, neglect, or domestic violence4.) Uses and disclosures that are for health supervision activities5.) Disclosures that are for law enforcement purposes6.) Uses and disclosures that are for medical examiners and coroners 7.) Uses and disclosures that are for tissue, organ, or eye donation purposes8.) Uses and disclosures that are for research that involves minimal risk9.) Uses and disclosures that are made to prevent a serious threat to health or safety10.) Disclosures related to Workers Compensation

If your healthcare provider chooses to disclose your PHI for one of the above reasons, by law, they must document and account for the disclosure. Also, you have the right to receive that documentation so you will know to whom your healthcare provider has disclosed your PHI. By simply asking your healthcare provider for documentation of the disclosures, you can exercise that right any time you want. This information is very personal so you should take great care to know that your information is kept as confidential as possible.

However, compliance with proper documentation of disclosures can be spotty, at best. Oftentimes, healthcare staff and providers do not really understand how or why they should not disclose your PHI. So, some of them just do not properly account for such disclosures.

You may not necessarily know if your PHI has been disclosed as your authorization is not required for these disclosures, and health provider offices may not comply with the disclosure accounting rules.

You must also know that once your provider discloses your PHI, whether they account for the disclosure or not, whoever receives your PHI may or may not be required to comply with all HIPAA privacy rules.

For instance, Jackie Smith (named changed to protect the individual’s privacy) suffered a death in her family. Due to those circumstances, her deceased family member’s PHI was disclosed to law enforcement. Fortunately, the healthcare provider followed the HIPAA privacy rules and accounted for the disclosures. But then her family member’s PHI was released to the press, including the Social Security Number, date of birth, and diagnoses.

The way the information was leaked to the press is a subject for the courts. The point is that the confidential information was not protected once it was disclosed through the healthcare provider.

And you too should know that your healthcare information may not be safe once disclosed by your provider.

What steps can you follow to help ensure that you and your family’s protected healthcare information will really be protected and remain confidential?

First: if you or your family members are ever involved in any circumstance mentioned above, and your healthcare provider discloses your PHI, you must exercise your right for an account of the disclosure by your healthcare provider.

Next, if you do not receive any account in writing within 30 days, then file a complaint with your healthcare provider’s HIPAA Privacy Officer (all healthcare providers are required to have one). If necessary, file a complaint through the Health and Human Services’ Office of Civil Rights.

After that, check that you follow the chain of custody: who received the confidential information and what did they do with it. Ensure that each of your requests for this information are in writing and then follow-up with phone calls.

Finally, always remember to keep a log of your requests; one day you may need it.

The HIPAA privacy rules were created to maintain confidentiality of your protected health information whenever it is in your healthcare provider’s custody. Once the information is disclosed to other organizations that are not healthcare-related, it is no longer protected by HIPAA regulation. It is your job to keep track of your PHI and to ensure that the information is kept as confidential as possible.

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According to Humana’s website, Humana health insurance is providing the highly anticipated H1N1 flu vaccine for its members.

They announced that they will be covering the administration costs for all fully insured members, including those who have plans which exclude immunizations. All co-pays and deductibles will be waived when the vaccine is received regardless of the preventative services benefit which is offered in these members’ plans.

Lisa Weaver, MD, Humana segment vice president of clinical strategies stated that the safety and well being of members and the country is of the utmost concern for Humana health insurance. Their initial focus is to encourage the CDC-identified priority groups to receive the H1N1 vaccine as quickly as possible.

Humana is working hard to get members the ability to receive the vaccination. They are monitoring and responding to guidance from the Centers for Disease Control and Prevention who are closely tracking the spread of the virus. For the most current H1N1 information visit the CDC’s website. To become a Humana member and receive a Humana quote.

Profits, it seems, is the eye of the beholder. What to one person seems meager appears to the folks next door immorally exorbitant. When it comes to health care reform there are many who perceive the profit margins of health insurance companies are obscene. The politicians and pundits sharing this belief can be viewed with frequency stating their case. It almost seems that they consider the main goal of health care reform as a means of punishing greedy health insurance companies. (That’s not the case, they care about access and affordability, too, but it sometimes does look that way). These are many of the same folks who forget that health insurance premiums are driven by the underlying cost of medical care. It is, after all, so much easier to just attack villains raking in obscene profits than to discuss complex issues like restraining overall health care spending in the country.

A number of sources are beginning to question the math of these carrier critics. The Associated Press, for example, ran a story Sunday noting that health insurance profit margins “typically run about 6 percent, give or take a point or two. That’s anemic compared with other forms of insurance a broad array of industries ….” Among the statistic the Associated Press brings to light:  ”Health insurers posted a 2.2 percent profit margin last year, placing them 35th on the Fortune 500 list of top industries. As is typical, other health sectors did much better — drugs and medical products and services were both in the top 10.”

Of course, last year was a bad year for a lot of industries profits, but some did quite well. Tupperware brands had a profit margin of 7.5 percent, Hershey 6.1 percent, and the folks who own KFC, Pizza Hut, and Taco Bell earned profits of 8.5 percent.

Another reality check raising doubts on how critics evaluate health insurance profits was published recently by PolitiFact.com. Senator Jay Rockefeller in September claimed “Insurance companies have seen their profits soar by more than 400 percent since 2001,” but the award-winning site, sponsored by the St. Petersburg Times, labels Senator Rockefeller’s charge a half-truth — an in my mind, that’s being kind. The problem with Senator Rockefeller’s statistics is the data is flawed. Senator Rockefeller’s statistics are based on an analysis conducted by Health Care for America Now. They examined profits between 2000 and 2008 of just 10 companies. (Interestingly, Senator Rockefeller cites just the change in profits from 2001-to-2007; if he had used 2008 the rise would have been 249 percent, not the 400 percent he claims).

In analyzing the profits of the big 10 carriers, however, the study ignored increases in profits resulting from carrier consolidation. “When big companies absorb smaller ones, the net effect may be to enlarge the profits of the biggest companies … even as the total size of the health insurance industry — the broader entity that Rockefeller seemed to be referring to — stays roughly the same.” This is more than a little problem as not all those smaller companies are truly “small”  (consider WellPoint’s merger with Anthem). This flaw alone makes any conclusions based on this study open to question.

Some will argue that, when it comes to health care, any profits is immoral. Yet profit exists throughout the system: doctors, nurses, hospitals, pharmaceutical companies, device manufacturers, and others all make a profit (or at least earn a living) from the medical services and products they provide. There’s nothing special or unique about carrier profits. Except that people like doctors and nurses and don’t like health insurance companies.

Instead of focusing on insurance carrier profits, industry critics would make a more significant contribution to the debate by broadening their inquiry to carriers’ administrative costs. This would lead to a more nuanced discussion on the value of expenses such as disease management, marketing, customer service, technology investments, taxes, regulatory compliance costs and, yes, profits, among other expenses. And it would require a discussion of what is an appropriate level for these non-claim costs. Here, I would suggest, the true measure of excessive costs is a carrier’s ability to bring health plans to the market that consumers buy. Carriers unable to control their administrative costs are unlikely to be able to compete long-term — another, more efficient carrier is likely to emerge and capture market share. (Yes, I know that in some states there simply isn’t enough competition among health insurance carriers for competition to work its magic, but in many states there are — and solutions can be found for where it is inadequate).

My point is not that anyone should feel sorry for the relatively low profit margins earned by health plans. Nor am I suggesting that it is unfair to question how insurance companies operate as part of the health care reform debate.

What I’m asking for is a broader examination into all contributors to the cost of health care in America, including looking at how the dominant fee-for-service method of reimbursing doctors and other medical providers, the  near monopolies enjoyed by some hospital chains in many regions of the country, the disparity between prices drug companies charge in the United States versus oversees, and the how medical malpractice and government regulations add to the cost of health care.

Because at the end of the day health care reform will be judged not by its impact on health insurance company profits, but on whether Americans can afford their health insurance coverage.

Just came back from dropping off my broken HP laptop at the computer store. Apparently they repair man at the computer said the HP laptops are one of the most repaired laptop brands in his store (about 20 each month), next to Toshiba and then Acer. I asked him which laptop he thinks gets the least repaired and he said the Acer Laptops are the least repaired.

I brought this HP laptop as refurbished directly from HP on eBay back in 2007. Once I had it mailed to my house I turned it on and in about 10 minutes I smell something burning and then the computer shut itself off. Luckily for me there was a 1 year warranty with HP refurbished systems. I called the support and they gave me their repaired shop closest to my house where I can send it back at no charge to have it fix.

I got my new fixed HP laptop back about 2 weeks later and when I talked to the repaired guy what caused it to go down. He told me the motherboard got burned and they had to replace the motherboard along with the 2x 2BG memory ram and the video card.

Because my HP laptop needed repaired only 10 minutes after I turned it on and I had to wait 2 weeks for it to get fix. I decided to buy the 2 years extended warranty, but when I called to pay for the extended warranty, the HP support person said my laptop was no longer under any warranty, so I can’t get the extended warranty. However, I just had the laptop only for about 1 month. I told the support person about how I sent my laptop to HP to have it repaired only a few weeks earlier still with warranty, but apparently they said it was no longer under warranty.

I never brought a laptop before and only been using desktop PC for many years. I had about 3 or 4 PC before and never had any problem with anyone of them. So I was not concern about searching about with laptop has the most problem and repairs, my only concern at the time prior to buy this HP laptop was the hardware of the laptop.

Now my HP laptop is broken down again for the second time with no warranty. I am not going to buy any more HP laptops. I am now leading towards Acer and maybe Toshiba laptops.

I would guess that Apple would be the best laptop but I’m a PC guy and I do some 3D work and gaming is important to me. So Apple is unfortunately out of the list.