Medicare, Medicaid & the Delivery System

Medicare, Medicaid & the Delivery System

Introduction

United States of America is the only state in the world that has been spending the most enormous sum of money on its health care system. The U.S health care system works on the motto that health care services should be provided to every individual, regardless of their age, sex, ethnicity and racial background. In order to achieve this goal, the health care system has launched several programs. Amongst these programs, Medicare and Medicaid hold key importance.

This document defines the Medicare and Medicaid programs, hospitals and physicians are reimbursed under the current Medicare payment mechanism, the reimbursement of Accountable Care Organizations and elements that would contributes to overhauling of the delivery system concerning the success of proposed ACO's.

Discussion

Medicare and Medicaid are the health care programs that are working in United States of America to ensure health care in the population. Both of the organizations differ in the eligibility criteria for the individuals following under their care plan and the type of services they deliver. Medicare is the health insurance program that provides insurance and health care services to the individuals who are above 65 years of age, disabled or suffering from end stage renal disease. While on the other hand, Medicaid covers the individuals and their families that are not earning well and are poor and deprived (CMS, 2011).

The organization and working of these programs are structured accordingly, and there are slight changes in the organizations as well as eligibility criteria and payment procedures in state to state. This document has answered some of the principal concerns regarding these health care agencies.

Reimbursement of Hospitals and Physicians under Medicare Payment Mechanism

Medicare has been divided into two significant parts in terms of its coverage (Frakes, Evans, 2006).

Part A: it covers the hospice, hospital admission, nursing facility, and various health services.

Part B: it covers the services provided by physicians, medical equipment, laboratory services and outpatient hospital service

Medicare reimburses the hospitals for 95% of its cost. In the past, private payment system was highly appreciated. Initially the reimbursement of hospitals and the physicians was done by private payers for a percentage of their spending in the provision of health care services. However, the method was proved to be really expensive for Medicare. This led to the development of Prospective payment systems.

Hospital outpatient prospective payment system that has been recently implemented is able to provide a fixed perspective that is determined for the reimbursement of any non physician or technical services that are being given to the beneficiaries being occurred within the hospital outpatient settings. The system that is adopted by Medicare in order to reimburse the physicians and hospitals is called the Prospective Payment System. This system involves the payment based on the categorization of the disease. The Prospective Payment System (PPS) further depends on the type of patient, like the in-patient PPS or the outpatient PPS, psychiatric facilities for inpatient, long term facilities, rehabilitation facilities, and vice versa (Abbey, Duane, ...