FINANCE NEWS - MEDICARE Connect here to view Medicare-specific Finance News prepared by OHA's Health Economics & Policy team.
MEDICARE AND OHIO HOSPITALS Medicare was the payer in 35% of the more than 36 million patient encounters at Ohio hospitals in 2021 — but reimburses about 87 cents for every dollar of care provided to Ohio’s elderly and disabled patients. Payment rates are set annually by the federal government. Hospitals have little ability to negotiate reimbursement rates. Ohioans pay into Medicare through payroll and self-employment taxes.
VARIOUS ELEMENTS OF MEDICARE Most hospital services are fully covered or partially covered by Medicare. Beneficiaries often choose to obtain supplemental insurance plans for services and items not covered by Medicare. These plans include: Hospital Insurance (Part A): Covers inpatient hospital services, nursing home care, home health care, and hospice. Part A coverage is automatic for beneficiaries and is financed by a payroll tax on both employers and employees. Supplemental Medical Insurance (Part B): Covers any outpatient services, laboratory tests, physician services and medical supplies. Part B is optional coverage and is generally paid through beneficiaries’ monthly premium. Medicare Advantage (Part C): Optional and paid through premiums, this includes private plans, such as managed care plans, that offer Parts A, B, & D benefits, often in conjunction with additional benefits. Prescription Drug Coverage (Part D): This optional program provides coverage to help seniors pay for prescription drugs.
MEDICARE DSH PAYMENTS Medicare Disproportionate Share Hospital Program, or DSH, payment adjustments compensate hospitals for the higher operating costs they incur treating a large share of vulnerable low-income patients. DSH funds preserve access to care for Medicare and low-income populations by financially assisting the hospitals they use. Low-income Medicare patients tend to be sicker and more costly to treat than other Medicare patients with the same diagnosis. Higher costs also result from the need for additional staffing and services, such as translators and social workers, to care for low-income patients. Ohio hospitals earned $350 million in DSH payments in 2020, yet still posted a loss of $1.7 billion on services provided to Medicare beneficiaries based on the federal reimbursement rates.
QUICK LINKS MedPAC Medicare Payment Basics for all provider types CMS Manuals CGS Medicare Home Page CMS RAC for Regions 1 and 5, Performant Recovery Inc. Home Page