By the year 2030, when most of the baby-boomer generation will have retired, 19% of the U.S. population will be older than age 65, compared with less than 12% today (Kiplinger, 2007). As a result of this, many individuals will have a need to seek out health care plans such as Medicare in order to sustain their life.
One major policy affecting the health care industry came on December 8, 2003, when President Bush signed into law the Medicare Prescription Drug Improvement and Modernization Act of 2003 (Pub. L. 108-173). This legislation allowed seniors and individuals with disabilities with a prescription drug benefit, more choices, and better benefits under Medicare.
In response to the legislation, President Bush stated,
With the Medicare Act of 2003, our government is finally bringing prescription drug coverage to the seniors of America. With this law, we’re giving older Americans better choices and more control over their health care, so they can receive the modern medical care they deserve…Our nation has the best health care system in the world. And we want our seniors to share in the benefits of that system.
Our nation has made a promise, a solemn promise to America’s seniors. We have pledged to help our citizens find affordable medical care in the later years of life. Lyndon Johnson established that commitment by signing the Medicare Act of 1965. And today, by reforming and modernizing this vital program, we are honoring the commitments of Medicare to all our seniors (Centers for Medicaid and Medicare Services, 2007).
Medicare benefits are extended to cover cases involving acute medical care, when a patient is expected to recover. However, eligibility for Medicare is not extended to treatment plans provided with in the home, to include the costs associated with assisted living facilities or in nursing homes.
Additionally, Medicare coverage is not available for people with chronic disabilities and lengthy illnesses. Additionally, Medicare does not cover all types of prescription medications (Today’s Seniors, 2007).
Medicare benefits are subdivided into three categories: A, B and D. Part A helps a patient recover costs for inpatient hospital care, some skilled nursing facilities, hospice care, and some (but not all) home health care. Part A coverage is offered premium-free for most beneficiaries (Today’s Seniors, 2007).
Medicare coverage under Part B requires the beneficiary recipients to pay an out of pocket monthly premium in order to receive coverage. This premium goes towards payment for doctors, outpatient hospital care, as well as physical therapy and outpatient therapy.
Medicare’s coverage under Part D provides payment for prescription drugs benefits. Beneficiaries under Part D will also have to pay a monthly premium as well as co-payments in order to receive prescription drugs (Today’s Seniors, 2007).
The Centers for Medicare and Medicaid Services have been established to regulate claims and serves as the central liaison and point of contact for patients receiving services. The Centers have also been at the core of recent changes in the field of medical billing and coding. Resulting from the increase in access to Medicare has been the rise in Medicare claims.
The Center for Medicare Services was established and reconfigured following the 2003 policy change in order to regulate claims and serves as the central liaison and point of contact for patients receiving services. Resulting from the increase in access to Medicare has been the rise in Medicare claims.
Consider, now, the case of pharmaceutical reimbursement. The rules that govern pharmaceutical reimbursement are regulated by the bureaucracy, and require a lengthy list of required information that must be included in order for the reimbursement to be processed.
The rules include the use of certain claim forms that include information on patient location, drug, the Health Care Common Procedure Coding System (HCPCS), billing unit revenue unit, and International Classification of Diseases. Additionally, ICD-9 codes are required in order to obtain the reimbursement from governmental Medicare and Medicaid Services (Jarrett, 2006).
Adding to the complication is that the billing and coding requirements for hospital inpatients and outpatients differ. At the same time, claims for patients treated at physician-owned clinics require different claims processing procedures than those treated in hospital outpatient clinics. However, the set of complications involved does not stop there, as the rules keep changing.
Changes resulting from the new Medicare policy have not been limited to pharmaceutical reimbursement.
Stemming from changes in Medicare coverage policies in recent decades as a result of the Baby Boomers requiring access to medications and other therapies, updates in the medical billing and coding processes have also been made in the billing steps required for physical therapist services in skilled nursing facilities, comprehensive outpatient rehabilitation facilities, rehabilitation agencies and home health agencies (PT, 2005).
The Centers for Medicare and Medicaid Services passes a Correct Coding Initiative (CCI), which edited the codes for these services with the intention of addressing concerns about the rising utilization of the services and in response to the problem of billing requirements for Medicare physician schedules.
In response to the rising needs of medical billers and coders as well as the rising accessibility of health care resulting from the increase in the Baby Boomer generation, companies have begun to institute billing and coding software programs to ensure accurate billing as well as expedite the billing and coding process.
For example, Jonathan Bush and Todd Park, healthcare consultants, conducted research on Athena health care services, and found that there is a 72-day lag from the time that the “medical practice submits a claim to when it actually gets paid” (Iyer, P., Sheen, B., ; Levin, M., 2006).
As of July 2005, Athena had more than 5,000 customers, and, as a result of the institution of the billing and coding software, has reduced the average days in accounts receivable to 47. Central to the software program is a component that tracks and updates every coding change or shift in the industry.