Medicare vs Medicaid- What’s the Difference?
Interchangeable?
It seems that often EMS people like to interchange the words Medicare and Medicaid. While similar in scope, the reality is these programs are two uniquely different government offerings.
We thought it would be helpful to define the two programs and call attention to their similarities and differences.
This week we’ll dig into Medicare. Next week, we’ll explain Medicaid complete with the effects on ambulance payments by both programs.
But first…
But first, let’s retrace the history of the programs.
President Harry Truman first floated the idea of a comprehensive government health insurance program in 1945, however he was unable to convince Congress to take his vision anywhere.
Two decades later, President Johnson mapped out his “Great Society” vision for America and was able to push through a new program to cover older Americans using Medicare and Americans of low income under Medicaid.
The programs have been expanded and re-written a time or two over the years, but the same basic concepts and structure exists at the bedrock of the initiatives now 53 years later.
Medicare Defined
Medicare is a program designed to benefit persons who have reached retirement age. It also covers those with long-term disabilities that keep them from working and thus affording health insurance.
It should be noted that when a patient has Medicare, there are a number of options and we will explain that briefly below. Additionally, a person may fit into what’s called Dual Enrollment status where the patient is eligible for both Medicare and Medicaid coverage.
The Medicare Alphabet
Medicare has four parts and all parts are identified alphabetically using the letter A through D.
- Medicare Part A- This is hospital insurance. This part of the program covers medically necessary hospital inpatient stays, skilled nursing facility stays, home health and hospice. Some hospital EMS systems have been granted permission to bill Medicare Part A for their transports, as well.
- Medicare Part B- Part B is the medical insurance portion and pays using what we call Fee-for-Service Medicare covering doctors services, preventive care, durable medical supplies, hospital outpatient services, laboratory test, x-ray service, mental health and, of course, medically necessary ambulance transportation. Medicare Part B is primarily where the payment for ambulance services resides.
- Medicare Part C- This is the private health insurance leg of the program. Private health insurance plans- HMOs and PPOs also called Medicare Advantage Plans are rolled into this part. These private plans must cover what original Medicare covers but can impose different payment rules, costs, coverage restrictions, etc. Many times, Medicare Part C also incorporates Part D into their offerings for a one-stop shopping solution.
- Medicare Part D- Part D is the outpatient prescription drug coverage program. These benefits are never direct from the government and are always administered and paid by private contractors. This part has no connection to EMS in any way.
Private Contractors
Speaking of private contractors, Medicare and Medicaid is administered under the United States Department of Health and Human Services (HHS) within the regulatory arm of the Centers for Medicare and Medicaid Services (CMS). Companies called Medicare Administrative Contractors (MACs) contract with CMS to cover geographically connected Jurisdictions which are groups of States, typically contiguous States, forming a physical jurisdiction. The MACs process incoming claims and reimburse on those claims.
Fee Schedule
For ambulance, a national Medicare Ambulance Fee Schedule incepted in 2002 is adjusted each year by a formula called the Ambulance Inflation Factor (AIF) which controls the reimbursement levels. The fee schedules are calculated at the base by geography using Geographical Practice Cost Indices (GPCIs) which factor in account area economic trends. Because it was determined the Fee Schedule underfunds EMS, the reimbursement levels have been bolstered by what are called the Bonus Payments of 2% in urban areas, 3% in rural areas and 22.6% in small geographic pockets called super rural areas. Rural and super rural areas also receive a 50% increase in the mileage payment per loaded mile for the first 17 miles of each and every transport. The bonus payments expired on December 31, 2017 but will hopefully be renewed later this month when Congress re-convenes after their holiday recess.
Transport Benefit
It is important to note that Medicare benefits are only paid when a patient is transported in the ambulance. Ambulance suppliers and providers must accept the fee schedule payment, as payment in full and can only balance bill the patient for either the 20% amount that Fee-for-Service Medicare does not pay direct, citing a cost-sharing requirement, or either a deductible or co-pay amount assessed by a Medicare Part C insurer.
