Assignment: Severity of Illness Systems

One of the major criticisms of the CMS Diagnosis Related Groups (DRG) reimbursement methodology was that it did not include an adequate Severity of Illness (S/I) adjustment. In response to these criticisms, CMS revised the old DRG system in FY 2008 to include a Severity of Illness adjustment (MS-DRG).

In a 1.5 page paper, analyze, compare and contrast the old DRG system with the new MS-DRG system. Based on your analysis, identify and evaluate the overall benefits and/or disadvantages that the new MS-DRG severity adjusted system would be for a healthcare facility.

Requirements

Your paper should use APA format, including in-text citations and a References page.

Comparison of the old DRG system with the new MS-DRG system that includes at a minimum two distinct characteristics.

Identification and evaluation of the benefits and disadvantages of the new MS-DRG system

Provides appropriate citations for at least 2 research sources.

Module- Voluntary and Government Sponsored Healthcare Plans

Medicare

Medicare was originally constructed in the 1960s to mimic Blue Cross /Blue Shield's mainstream approach to medicine, but in order to sustain it, it must be changed. Medicare payments are not intended to cover all the medical needs of enrollees. Only about one in ten individuals over sixty-five relies solely on Medicare; others have Medicaid, supplementary health insurance, or some other coverage in addition to Medicare.

Structural Reform of Medicare

Little attention is being given to the funds needed to make Medicare whole. The nation is more focused on the revenue side of the equation than on addressing the rampant growth of benefit obligations that would require cuts for beneficiaries. Payroll taxes finance the majority of Part A, while general revenues fund three-quarters of Parts B and D.

Medicare is a tougher problem politically because it does not involve a simple cash benefit - Medicare puts a price tag on beneficiaries' health and maybe even their lives. Individuals contribute payroll taxes to Medicare throughout their working lives and become eligible for coverage when they reach sixty-five, regardless of their income.

Overhauling Medicare

Medicare can be considered inadequate in the sense that it does not protect individuals against long hospital stays or catastrophic expenses. Enrolled individuals pay the first $800 of hospital care and the first $100 of outpatient physician visits. If hospitalized for more than sixty or ninety days, they could end up paying another $250 per day for hospital care. This is not optimal health insurance. Medicare does not protect people from financial ruin, and insurance should do that. Low-income people cannot afford to purchase supplemental insurance that would take care of those expenses not covered by Medicare. Medicare should protect people against catastrophic loss.

Medicaid

Medicaid is the nation's public health insurance for Americans of limited means and the severely disabled. More than sixty million people are covered by Medicaid. Medicaid is funded by both the federal and state governments. It is the second largest line item in state budgets behind education.

Who is eligible for Medicaid?

To qualify, the Medicaid-insured has to meet financial criteria and belong to one of the eligible groups. It is a safety net for:

• Low-wage working families with children
• Medicare-eligible beneficiaries with limited resources, who need assistance with filing gaps in their Medicare coverage
• Blind or severely disabled children and adults
• Uninsured pregnant women

Medicaid does not provide coverage for everyone at the bottom of the economic pyramid.

What is required?

The following health services must be covered by Medicaid:

• Dental services
• EPSDT (Early and Periodic Screening, Diagnosis, and Treatment) services for children under twenty-one years of age
• Family planning and pregnancy services
• Home health services
• Hospital services, both inpatient and outpatient
• Laboratory and radiological services
• Licensed physician, nurse practitioner, and midwife services
• Nursing facility services for those over twenty-one years of age

Payments are paid directly to hospitals and other health care providers. Low income is only one test for Medicaid eligibility; assets and resources are also tested against established thresholds. Emergency services must be life-threatening to be covered.

Why?

Public health insurance is economically necessary. In the health industry, utility is a measure of the relative satisfaction from consumption of health care. In a democratic society like the U.S., there is an economic need for the federal government to:

• Support the nation's health care system and safety net
• Help generate economic activity in the states
• Maximize economic impacts on the nation's health care system
• Enhance state capacities for health insurance coverage.