TAX 9900 Lecture Notes - Lecture 70: Itemized Deduction, Medicare Advantage

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23 Apr 2020

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This helps you cover common hospital expenses: part b: for outpatient services that are deemed medically necessary (services like doctor office visits, lab testing, imaging, preventive care, surgeries, ambulance rides, etc. ) Part c: somewhat confusing - another name for private medicare insurance, referred to as medicare advantage. You would get your part a, part b, and sometimes also part d all from one insurance carrier. Advantage plans usually have a network of providers from whom you will seek your care. Part d: a federally created program to help lower the cost of prescription drugs. You will enroll in part d via private insurance carriers. Other tax-favored health plans: fsa: reimburses employees for qualified medical expenses. There are no employment or federal income taxes deducted from the contribution. Annual employee salary reductions for contributions are limited. Distributions from the plan for qualified medical expenses are income-tax deductible to the employer.

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PART I: Calculation of the Capitation rate per member per month (PMPM) â Chapter 7 Goldberg and Silverstein (GS) is a for-profit mid-level HMO company, providing health plans mostly in metro areas. GS is exploring to extend its health plan in a fast growing community called Newtown. There are three acute care hospitals in Newtown. GS bought Griffith HMO to provide services in Newtown. Griffith HMO is providing health care plans in Newtown area for past ten years using Miller Hospital, one of the three hospitals in Newtown. You have been assigned to prepare capitation rates to offer a new contract to the Miller Hospital. You have researched the documentation from Griffith HMO, and collected the following information: Griffith HMO has currently 19,000 enrollees. The number of enrollees is expected for next year is 20,000. Here is expected utilization from the previous year data (suppose that hospital only provide the following services): ï§ Inpatient days o 300 inpatient days per 1000 enrollees per year. o The cost of inpatient days: $1100 per day. ï§ Outpatient Surgery o 450 surgeries per 10,000 enrollees per year. o The cost of per outpatient surgery is $900. Emergency Room Visit
o 50 per 1000, enrollees per month.
o The average cost of each ER visit is $300.
2
ï§ Outpatient diagnostic (for CT Scan, MRI, Echocardiography, and Ultrasound)
o 100 visits per 1000 enrollees per year.
o The average cost is $500 per visit.
ï§ Outpatient diagnostic (Other than CT Scan, MRI, Echocardiography, and
Ultrasound)
o 300 visits per 1000 enrollees per year.
o The average cost is $150 per visit.
The plan has 10% copay for inpatient services per day, $350 copay for each outpatient surgery,
$300 copay for ER visit and $50 copay for each diagnostic service per visit.
You are expected to 15% of copay as bad debt for Miller Hospital.
Griffith hospital uses physician services on a contractual basis and does not employ any
medical doctor. Therefore, GS will have separate capitation contract for physician services.
The coordination of benefit is expected to cover 1.2% of the total cost.
You are expecting 11% administrative cost. The CFO of GS suggested you include some profit
margin for the shareholders.
******************************************************************************
Calculate the capitation rate per member per month that will be offered to Miller Hospital
with 2% and 3.5% profit margin for shareholders.
Please provide total capitation rates per member per month and also for PMPM for each
service mentioned above to Miller Hospital) using an Excel worksheet

erinbat785

If an insurer incorrectly estimates an insured person'spremium

, then the insurer will suffer a financial loss.

can appeal to the state insurance commissioner for asubsidy.

will drop people whose medical expenses exceed theirpremium.

None of the above

Medicare Part B (physician and outpatient services) is financedby

a premium that is 75 percent subsidized by the government and 25percent subsidized by the aged.

a payroll tax on both the employee and the employer.

a premium that is 100 percent subsidized by the government.

both a subsidized premium and a payroll tax

The diagnosis-related group hospital payment system changedhospital incentives by making it more profitable to

employ physicians.

admit sicker Medicare patients.

reduce a patient's length of stay.

charge more for lab tests.

Medicare is difficult to reform because

		pharmaceutical manufacturers benefit from drug sales under PartD.
		senior congressional leaders do not want their Medicare benefitschanged.
		the Medicare population is opposed and have highvoting-participation rates.
		Medicare reform would likely increase the federal deficit.

Medicare is not considered to be a fair redistributive systembecause

Medicare beneficiaries receive large subsidies regardless of howhigh their income is.

low-income Medicare beneficiaries with high out-of-pocketexpenses must enroll in Medicaid.

low-income employees subsidize high-income Medicarebeneficiaries.

All of the above

Substituting an income-related voucher for the current Medicaidsystem would not achieve the following:

		An income-related voucher would eliminate the large differencesbetween states in the percentage of their populations eligible forMedicaid.
		An income-related voucher would reinforce the movement towardMedicaid managed care, with its emphasis on coordinated care andincentives to provide care in less costly settings.
		An income-related voucher would provide employees with anincentive to forego higher pay so that they qualify for the vouchersubsidy.
		An income-related voucher would provide those on Medicaid withan incentive to take higher-paying jobs because they would onlylose part of their voucher subsidy.

Most states have shifted their Medicaid beneficiaries intoprivate Medicaid managed care/HMO plans. What is the advantage tothe state for doing so?

		Medicaid patients are more likely to receive coordinated careand preventive services.
		By paying HMOs a fixed fee per person per month, states are ableto shift their risk for higher expenditures to a managed careplan.
		Medicaid patients are more likely to have access to a physicianwithin the HMO.
		The HMOs have entered the Medicaid market because they believethey can provide the care less expensively and earn a profit.

What are some legitimate ways to spend down one's assets toqualify for Medicaid?

Fixing up one's house, purchasing a new car, or setting up aspecial burial account

Providing financial gifts to one's children

Transferring property to one's children

Setting up special retirement accounts that can be passed on tochildren or relatives after seven years

How is Medicaid administered?

		By each state, but policy is shared with the federalgovernment
		By the federal government and coordinated with the states
		By a joint commission composed of federal and stateappointees
		None of the above

Why were hospitals and physicians willing to participate in anHMO's provider network?

Hospitals and physicians developed excess capacity and werewilling to discount their prices for more patients.

Hospitals and physicians believed that they could reduce medicalcosts by joining together to better manage patient care.

Some states provided hospitals and their employed physicians anincentive to join or start HMOs to serve their Medicaidpatients.

b and c

How did early managed care firms achieve their largestsavings?

		By limiting access to very expensive specialty prescriptiondrugs
		By reducing hospital utilization of its enrollees
		By making enrollees wait long periods to see their primary carephysician
		By limiting enrollees' access to the HMO's specialists

Managed care plans differ according to the restrictiveness oftheir provider network and access to specialists. Which types ofplans are likely to have the lowest premiums?

		Plans that have the largest ratio of primary care physicians tospecialists
		Plans that have the most experience and have been in existencethe longest
		Plans that have the most restrictive/narrow provider network
		Plans that have received the highest quality and outcomemeasures

QUESTION 20

As part of the Affordable Care Act, health insurance exchangeswere established. What have been the most importantcost-containment approaches used by health plans competing forinsurance exchange enrollees?

		Health plans have used very narrow/limited providernetworks.
		Health plans have dramatically reduced access to new medicaltechnology.
		Health plans have included large deductibles and out-of-pocketpayments.
		a and c

blushtermite492

Managed care organizations

a) compete with each other on quality and low cost provision of services.

b) exclude health maintenance organizations.

c) exclude preferred provider organizations.

d) exclude closed-panel HMOs.

e) are often run by the federal government.

All of the following are examples of substituting cheaper forms of care for more expensive ones, except

a) prescribing a generic (vs. brand name) medication.

b) recommending chiropractic care instead of back surgery.

c) authorizing outpatient vs. inpatient surgery.

d) recommending nursing home care vs. hip replacement surgery.

e) using a physician assistant (vs. doctor) to see patients with uncomplicated health issues.

15) A physician graduates from medical school and must decide whether to take a job as a junior member of a large group practice or work for an HMO directly. For the physician, a positive aspect of working for the HMO is

a) lack of utilization controls.

b) very little peer review.

c) higher salary than with the group practice.

d) a steady stream of patients and income.

e) lower salary than with the group practice.

When it comes to attempts of managed care to control costs, cutting prices is one of the most popular methods. Which of the following is not among the valid explanations of the rationale behind this practice?

a) Price cuts would put money directly into the pocket of patients.

b) Compared to other methods, prices are easier to cut.

c) Large insurers have bargaining power to negotiate lower prices with providers.

d) When certain markets go through periods of excess supply, large insurers use it to negotiate lower prices.

e) Large insurers can threaten providers with taking the patients away unless discounts are provided.

You give birth to healthy twins. After two days in hospital, case control nurse reviews your records to determine if it is medically necessary for you to remain another day in hospital. This is an example of

a) pre-admission testing.

b) concurrent review.

c) retrospective review.

d) discharge planning.

e) database profiling.

An actuarial assistant at your HMO presents graphs and charts of the number of colonoscopies performed per 1,000 patients by each doctor in the plan. This is an example of

a) pre-admission testing.

b) concurrent review.

c) retrospective review.

d) discharge planning.

e) database profiling.

TAX 9900 Lecture Notes - Lecture 70: Itemized Deduction, Medicare Advantage

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