The Medicare Advantage Program

Medicare Advantage Program/ Medicare+Choice: Part C

The Balanced Budget Act of 1997 created Part C to allow individuals to choose private plans as alternatives to Parts A and B. Private plans must include at least all services offered in Parts A and B, and may include reduced cost sharing or premiums. Part C is paid for by the HI trust fund and the Part B SMI trust fund, and is proportional to the amount of benefits paid by Parts A and B. Administrative costs for Part C totaled 1.4% in 2008. Beneficiary payments vary by plan, and are based on capitation; beneficiaries pay a fixed monthly amount regardless of the actual services used (Klees et al., 2009).

Fraud

Medicare is susceptible to fraud due to its size and complicated structure. Fraud ranges from accidental errors in the accuracy of claims to intentional billing abuse. Providers are expected to submit truthful claims, which are then checked by contracted intermediaries that oversee payment. Quality Improvement Organizations (QIOs), Medicare Integrity Programs (MIPs), and the Department of Justice (DOJ) are some of the numerous groups tasked with the prevention and recovery of fraudulent payments.

QIOs are “groups of practicing health care professionals who are paid by the Federal government to improve the effectiveness, efficiency, economy, and quality of services delivered to Medicare beneficiaries” (Klees et al., 2009, p. 16). Among the responsibilities of QIOs is to verify “that Medicare pays only for services and goods that are reasonable and necessary and that are provided in the most appropriate setting” (Klees, 2009, p. 14).

MIPs were created in 1996 under the Health Insurance Portability and Accountability Act (HIPAA). MIPs provide monies for the CMS or contrac...

... middle of paper ...

...ve no other health insurance. CHIP was allocated $40 billion of federal funding through 2007. An additional $10 billion was spent in 2008, and in 2009, federal funding was extended to 2013. States were also given the option of providing coverage through the expansion of their Medicaid programs. The federal government pays an “enhanced” FMAP, averaging 71.36% in 2009, for CHIP (Klees et al., 2009).

PACE is a state option created by the Balanced Budget Act to provide nursing facility level care to individuals 55 and older as an alternative to institutionalization. Participating providers are paid solely through PACE, and are required to provide all services included in Medicare and Medicaid coverage regardless of the actual duration or extent of services. Providers cannot charge additional deductibles, copayments, or other fees on beneficiaries (Klees et al., 2009).