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The Rhode Island Model Can Save Medicaid

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The Ocean State cut spending on the program while delivering better outcomes for patients: A Model to Save Medicaid.

by GARY D. ALEXANDER March 14, 2017 4:00 AM

Read the Original Article at: http://www.nationalreview.com/article/445731/medicaid-reform-health-care-rhode-island-lower-costs-better-outcomes

As Congress attempts to reform our health-care system yet again, discussions about how to manage and pay for Medicaid are on the front burner. With one in four Americans enrolled in what’s now the largest “unearned” public-welfare program in history, curbing the program’s growth is a fiscal imperative.

But that doesn’t mean cutting back Medicaid has to hurt the poor as liberals claim; Medicaid spending can go down while patient care improves and the number of patients covered goes up. I know this is true because I helped my state achieve it.

In 2009, as secretary of health and human services for Governor Donald Carcieri of Rhode Island, I was charged with running a novel experiment. With exploding Medicaid costs in our state crowding out education, infrastructure, and other vital needs, we plainly saw what most current governors see today: an out-of-control entitlement growing 7 percent each year and eating 30 percent of our budget, yet frustrating patients with its complexities and subpar outcomes.

We set about revolutionizing the system with great success: Just two years later, an audit by the Lewin Group, a respected health-care-research firm, concluded that our bold reforms had been “highly effective in controlling costs and improving patients’ access to appropriate physician services.” The audit notes that our reforms led to “lower emergency room utilization,” as prevention of chronic conditions like asthma, heart disease, and diabetes became the norm. Home-health utilization, critical to avoiding needless expensive hospitalizations, actually increased by over 20 percent. The report praised Rhode Island for becoming a “smart purchaser” whose citizens received “the right services at the right time and in the right setting.”

So how did we do it? And could President Trump and Republicans replicate our success nationwide?

The answers are found in an incredibly misunderstood concept: “block grants,” which sadly have replaced “death panels” as the new political football standing in the way of a once-in-a-generation opportunity to completely overhaul Medicaid’s archaic, inefficient, and unaffordable design. Some hear the term block grants and think “kicking people off” and “limits to care.” They couldn’t be more mistaken.

First, like Medicare, Medicaid is headed for imposed limits anyway if we do nothing to reform it, because its rapidly rising costs are totally unsustainable. That’s a fact. And second, block grants are indeed a capped budget for states to spend, but in exchange, the federal government removes miles of onerous red tape, allowing governors huge freedom to innovate and apply modern solutions that have proven to deliver the results we all want: better health outcomes at lower prices.

In Rhode Island, we needed budgetary certainty about our Medicaid costs, but we didn’t want to compromise the health of our most vulnerable. So we asked the federal government for a one-of-a-kind “Global Medicaid Waiver,” which works like a block grant. We agreed to a fixed amount of funding from HHS for five years; in return, the Feds agreed to waive the burdensome restrictions that prevented us from instituting imaginative reforms such as shared living for seniors, delivery of specialty care to only the small patient cohort that needed and benefitted from it, and improved reimbursement incentives for home care and prevention. These reforms in turn gave patients greater independence and better outcomes, and their satisfaction soared.

Our single, spending-capped Medicaid system replaced dozens of independent programs that had operated with no spending limits and no coordination. The culture change within our state government was seismic: We were forced to embrace cost containment and disciplined management, and to eliminate the silos between programs. Many feared harm to our Medicaid population, but exactly the opposite happened: The imaginative remedies we implemented were so responsive and customized to our patients’ needs that their experiences and health improved even as we spent less.

In its first three years, our Global Waiver saved Rhode Island approximately $100 million. Our Medicaid spending remained an amazing $3 billion below the $12 billion cap we had agreed to. Even after a Democratic governor took over in 2011, the eye-popping savings continued, and physicians and hospitals continued to support our changes, offering proof that ingenuity knows no party label. The head of our state’s AARP chapter was ecstatic that the elderly could move out of nursing homes and back into their communities, saying that our blueprint offered “the right direction for seniors.” Most astonishingly, in 2013, the Providence Journal reported that Rhode Island’s program had delivered a $28 million surplus.

How many governors would love to have such a Medicaid surplus? How many states would jump at the chance to save more money that could be spent on helping more of their most vulnerable citizens? Our reforms could give them that chance if instituted nationwide. Congress and the Trump administration would be wise to give the Rhode Island model a look.

— Gary D. Alexander is a health-care and human-services adviser to governors, members of Congress, health systems, and private businesses. He served as Pennsylvania secretary of human services from 2011 to 2013 and as Rhode Island secretary of health and human services from 2006 to 2011. He can be reached at tgalexand@gmail.com.

Read more at:http://www.nationalreview.com/article/445731/medicaid-reform-health-care-rhode-island-lower-costs-better-outcomes

PLANNING FOR SOCIAL SECURITY BENEFITS

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Recent changes to the complex Social Security rules provide important planning opportunities for seniors.

Author: SIDNEY KESS, JAMES R. GRIMALDI, AND JAMES A. J. REVELS

SIDNEY KESS, JD, LLM, CPA, is of counsel to Kostelanetz & Fink and a senior consultant at Citrin Cooperman & Company, New York, N.Y. He is a member of the NYSSCPA Hall of Fame and was awarded the Society’s Outstanding CPA in Education Award in May 2015. He is also a member of The CPA Journal Editorial Board. JAMES R. GRIMALDI, JD, CPA, and JAMES A. J. REVELS, CPA, MST, are partners at Citrin Cooperman & Company.

After working for decades—while paying into the Social Security system—many people look forward to collecting benefits in retirement. Moreover, preretirement benefits may be available in case of disability. Social Security retirement payouts can be especially valuable because they are federally guaranteed for a lifetime, indexed to inflation, partially or fully tax-exempt, and may effectively include death benefits. Currently, a $25,000-per-year Social Security benefit provides more retirement cash flow than $1 million of ten-year Treasury bonds.

However, the Social Security system has complex rules for paying benefits. Disabled and retired clients naturally want to maximize their benefits, which can provide an opportunity for advisers to deliver tangible results. Considering recent changes in the rules, and the widespread press coverage, knowledgeable planning for Social Security may be especially welcomed by seniors.

Truncated tactics

The recent changes in the rules apply mainly to married couples, involving when each spouse should start Social Security and continue to receive retirement benefits. Some tactics have been terminated while others have effectively been grandfathered for certain seniors. For those strategies, and for those that still exist, planning begins around the date when an individual reaches “full retirement age” (FRA). For years, FRA has been 66, but that is now starting to change (see Exhibit 1).

As one can see, people who will be 62 to 73 in 2016 have an FRA of 66, but that age increases by two months for people who are 61 in 2016. Gradual increases in FRA will continue until it reaches age 67, for people 56 and younger in 2016.

FRA is important for three reasons. One, someone who waits until FRA to start Social Security retirement benefits will not incur an “earnings penalty.” Before FRA, certain amounts of earned income will cause a delay in receiving some benefits. By starting at FRA or later, a senior can have any amount of earned income and collect full retirement benefits. (There is no penalty at any age for any amount of unearned income, such as dividends and interest.)

The second reason to focus on FRA is that “full retirement age” means receiving full retirement benefits, according to the Social Security calculation, which is based on how much a worker has paid into the Social Security system. Starting earlier—retirement benefits generally can be collected as early as 62—means receiving a smaller monthly check. Ann Benson, born in 1954, with an FRA of 66, would get only $1,500 a month (75% of her FRA amount) if she started at 62, four years before she could collect $2,000 a month at her FRA. Craig Duncan, born in 1960, would get only $1,400 a month (70% of his FRA amount), if he started at 62, rather than starting at 67 with a $2,000 monthly benefit.

Finally, the FRA milepost marks the point at which waiting for benefits offers an 8% annual (but not compounded) increase in retirement benefits, all the way to age 70, the last starting date for Social Security. By waiting for benefits until age 70, Ann would get $2,640 a month (32% more than her FRA benefit of $2,000) while Craig would receive $2,480 a month (a 24% increase) by waiting for three years beyond his FRA for benefits. (All of these monthly amounts are before cost-of-living-adjustments.)

Patience can be prudent

Therefore, seniors have a choice when it comes to starting Social Security. Begin early, and start collecting, or wait and collect a higher benefit that will provide a plumper lifelong pension. The 8% annual delayed retirement credit, paid after FRA, as well as comparable increases before FRA, far exceed the return currently offered by federally guaranteed bonds and bank accounts.

The tradeoff, of course, is that waiting means forgoing substantial amounts of cash. Assume that Ann, in the above example, could start collecting benefits at age 62 without owing an earnings penalty. If she starts at $1,500 a month, that is $18,000 a year. She would forgo $72,000 in benefits by waiting until 66, and as much as $144,000 by waiting until 70.

The payoff is that Ann would get much larger payments at age 66, and especially at age 70, by waiting beyond age 62 to start Social Security. Depending on the assumptions used, the breakeven point for Ann—the time when she would gain more by waiting than she would lose upfront—is somewhere in her early to mid-80s.

Thus, if Ann can live comfortably without the early Social Security payments and has a reasonable expectancy of living for many years, deferring the start of benefits can pay off by addressing longevity risk. (Considering the rapidly increasing cost of health care at advanced age, longevity risk may become a key concern for many seniors.) After waiting to start benefits, Ann will collect ample payouts in her late 80s, 90s, and even longer.

Conversely, if Ann needs the money or if she has a relatively short life expectancy, she may do well to start Social Security benefits early. An early start also may be preferred by people who have doubts about the future solvency of the Social Security system.

Number crunching

As mentioned, the delayed retirement credit, for waiting to start Social Security until after FRA, is 8% a year: 16% for two years, 24% for three years, 32% for four years. Also, starting at FRA (now 66) rather than at age 62, the earliest possible date, raises Ann’s monthly benefit from $1,500 to $2,000: a 33.3% increase. This might appear to be a similar 8% increase, but the compound return, from $1,500 to $2,640 a month over eight years, is closer to 7%: still a good return today, for a government-guaranteed stream of income.

Upon closer inspection, the path from an age-62 benefit to an age-70 benefit is not a straight line. Above, Ann would get $1,500 a month from Social Security, starting at age 62, with an FRA of 66. If Ann starts instead at age 63, she would get 80% of her $2,000 FRA amount: $1,600 a month. That is an increase of 6.7% a month.

Now suppose that Ann waits to age 64, when she would get 86 2/3% of her FRA payout, about $1,733 a month. This one-year increase, from $1,600 to $1,733 a month, is over 8.3%. And so on, through Ann’s 60s, the true benefit of waiting will rise and fall. By waiting to start from 69 to 70, for example, Ann’s monthly Social Security check would increase from $2,480 to $2,640 a month, an increase of not quite 6.5%, rather than the posted 8%.

For some people, the difference between a 6.5% benefit increase and an 8.3% increase will not matter that much. The long-term advantage of a higher payout will still be appealing. In other cases, though, this pattern might lead seniors to start at, say, 68 or 69, rather than wait until 70, if immediate cash flow becomes important. Similarly, starting at age 64 rather than age 63 might be desirable, due to the 8.3% increase in benefits then.

Breaking even

People deciding when to start Social Security may want to see how long the makeup period would be. Not counting the time value of money, how long will it take to break even? If Ann waits from 62 to 70, she will not collect eight years of benefits at $1,500 a month, or $144,000. Starting at 70, she would collect $2,640 a month, an extra $1,140, so she would catch up in 127 months: more than ten years. By the time Ann reaches age 81, she would be ahead in total dollars collected, and the gap would grow throughout Ann’s lifetime.

Alternatively, suppose that Ann still has ample earned income, so starting before her FRA (66) does not make sense. As mentioned, Ann could get a Social Security benefit of $2,640 a month by waiting until age 70.

However, Ann could start Social Security at 69 and receive $2,480 a month. In the first year, she would collect $29,760 in benefits. By waiting until 70, she would get an extra $160 a month, so it would take her 186 months ($29,760 divided by $160) to recoup those forgone paychecks. Ann would not be ahead in total Social Security payments until she is 85 1/2 years old.

The actuarial formula used by Social Security has been designed so that people receive the same aggregate amount of money, regardless of when they begin claiming, assuming they all live to their life expectancy. In terms of total dollars, waiting is advantageous if recipients ultimately live longer than expected.

Spousal strategies

Deciding when to start Social Security may not be an easy decision, as explained. Moreover, the decision will be more complicated for married couples because one or both spouses typically have two choices: taking benefits on one’s own work record or on the other spouse’s work record. Previously, there were more opportunities to expand income by switching between one’s own record and a spouse’s record (often involving starting and stopping one spouse’s benefits, thus executing a “file-and-suspend” plan) but those methods generally expired in 2016.

The exception: “restricted applications for spousal benefits” are still allowed, but only for people who reached age 62 on or before 1/1/16. A restricted application can be approved at full retirement age of 66. With this tactic, someone applies for Social Security but restricts the

claim to a spousal benefit, on the other spouse’s work record.

To see how this might work, suppose Ed Franklin worked steadily for decades and his wife Gloria’s working career was interrupted while she stayed home with their young children. Thus, Ed contributed more to the Social Security system than Gloria, and he will receive a larger benefit.

If Gloria is now 63, she can file a restricted application to get a spousal benefit at her FRA. Her spousal benefit could equal 50% of Ed’s benefit. This approach would allow Gloria’s benefit to grow larger until she starts to take it, perhaps as late as age 70. Alternatively, if Ed meets the age requirement, he could use a restricted application to start his spousal benefit at FRA, allowing his regular benefit to grow larger, at 8% a year until age 70. (A restricted application by one spouse requires the other spouse to be receiving benefits.)

Some strategies are still viable

As explained, restricted applications are available to only some people 62 and older in 2016. Nevertheless, there are opportunities for all married couples to use in their planning. For example, one spouse might claim benefits early, to start cash flowing, while the other spouse waits to start Social Security, in order to receive a higher payout.

Take a hypothetical married couple, Heidi and Ivan King. They are both 60, so they cannot use a restricted application or the now banned file-and-suspend plan. Suppose both spouses have made substantial contributions to the Social Security system over the years, so they will both receive ample benefits, but Ivan would get a higher payout. One approach would be for Heidi to begin her own benefits at age 62, the earliest date possible, while Ivan waits until age 70.

Assuming no earnings penalty, Heidi’s checks would provide eight years of cash flow in their 60s, making it easier for the Kings to wait for Ivan’s large payout. If Ivan is the first spouse to die, Heidi would receive the amount Ivan had been getting, as a surviving spouse; if Heidi dies first, Ivan would continue to receive his high benefit.

What if Ivan had contributed much more to Social Security than Heidi, so that Ivan is entitled to a $2,500 monthly benefit at FRA but Heidi’s FRA benefit is only $750 a month? One approach would be for Ivan (born in 1956) to claim benefits at 66 and four months, his FRA, and start getting $2,500 a month. Heidi, about the same age, would also claim at her FRA. Then Heidi would get a spousal benefit, so she would receive 50% of Ivan’s benefit—$1,250 a month—which is larger than her own. Again, Heidi would get a large bump in benefits if she is the surviving spouse.

Things could be different if Heidi (with a low benefit on her own work record) is now 55 years old, instead of 60. Then, Ivan could wait until he is age 70, to get the maximum monthly benefit. Heidi could start at age 62, the earliest date, claiming her own benefit. Heidi would get a reduced benefit, because she started early, but she would still get monthly checks. At age 65, when Ed is 70 and claims his maximum benefit, Heidi could get a spousal benefit, increasing her Social Security checks. (If Ed is older than Heidi, that increases the likelihood he will be the first spouse to die, so waiting for his benefit also increases the widow’s benefit Heidi could receive.)

In real life, the decision to start Social Security will go beyond spreadsheets to health and the need for cash flow. Still, it will pay to know the rules, so seniors can figure out how much they will collect and how much they will forgo, at various points in time.

Fine points

Despite the changes in Social Security rules, some people are still able to use the banned strategies. Anyone who initiated a file-and-suspend strategy before 4/30/16, is grandfathered, and thus remains eligible to maintain that method of claiming benefits.

As mentioned, restricted applications for spousal benefits are still allowed for people who were 62 or older at the start of 2016. Moreover, the same opportunity applies to divorced spouses who were 62 or older by that deadline. If they were married at least ten years, have been divorced at least two years, and are unmarried, divorced spouses can file a restricted application at FRA to get a 50% spousal benefit, then switch to their own higher retirement benefit as late as age 70.

How benefits are taxed

The starting date for Social Security benefits might also affect how those benefits are taxed. The reasoning behind this opportunity is complex, to put it mildly.

The key is the formula that determines how benefits are taxed. That starts with a calculation of “combined income” (CI), also known as provisional income. To find someone’s CI, add one-half of annual Social Security benefits received to all other income, including tax-exempt income, and other exclusions from income. Once CI is found, it is compared to certain base amounts. If CI is under $25,000 (for single filers) or under $32,000 (for couples filing joint tax returns), no federal income tax will be imposed on Social Security benefits.

As CI climbs over those thresholds, a gradually increasing portion of Social Security benefits will be taxed, up to 50%. Eventually, CI may reach a second set of thresholds: $34,000 for singles and $44,000 for joint filers. With CI in excess of those amounts, the tax rate keeps climbing, and up to 85% of Social Security benefits can be taxed.

Note that Social Security benefits are never fully taxed under current law. If Jim and Lynn Martin, high income seniors, collect a total of $60,000 in benefits, it is likely that $51,000 (85% of $60,000) will be included in their income, subject to income tax. If the Martins are in the top 39.6% tax bracket, they would owe $20,196 in tax on their Social Security benefits—39.6% of $51,000, for an effective tax rate of 33.7% on their $60,000 from Social Security.

Tax planning possibilities

Thus, taxpayers with CI below $25,000 (single) or $32,000 (joint) will owe no tax on their Social Security benefits, without any planning. Taxpayers far above $34,000 or $44,000 in CI probably will owe tax on 85% of their Social Security benefits. In the middle ground, though, some steps may be effective.

Investing in municipal bonds will not help because tax-exempt interest is fully included in CI. Conversely, taking capital losses to offset taxable gains might pay off; so might investing in no-dividend stocks or growth funds. If it is possible to convert a traditional IRA to a Roth IRA at a low tax rate, in part or in full, this might cut future taxable withdrawals and thus reduce future CI—Roth IRA owners never have required minimum distributions (RMDs), so fewer RMDs can mean lower CI in the coming years.

Patience may be prudent

What does the starting date of Social Security benefits have to do with taxes on those benefits? As mentioned, the formula counts Social Security benefits at only 50 cents on the dollar, when computing CI. Other income, including withdrawals from traditional IRAs, is fully included in CI, dollar for dollar.

Thus, people who are in the middle ground for the taxation of Social Security benefits (CI not too low to be fully exempt and not too high to certainly face maximum taxation) might do well to delay Social Security until age 70, to get the maximum benefit, even if that means withdrawing money from a traditional IRA to provide needed cash flow. Those IRA withdrawals, which might be lightly taxed in retirement, will reduce future RMDs, while more post-age-70 cash flow will come from Social Security, only partially included in CI.

The advantages of delaying Social Security will vary, from one individual to another, and number crunching will be necessary to determine the probable best result. However, withdrawals from traditional IRAs will always be taxable, at any age, and the tax rate on those withdrawals may be higher if 85% of Social Security benefits are also included in income, moving taxpayers into a higher bracket. On the other hand, Social Security benefits may not be included in income for some taxpayers, or at least not included up to the 85% maximum. Taking taxable IRA withdrawals in lieu of early Social Security benefits may be a long-term tax savings strategy, in the right circumstances.

Sidebar

Savvy Social Security Strategies

Even after the recent changes to the rules for claiming Social Security benefits, there are still some moves that work. Examples:

  • It is never too late to increase Social Security benefits. Retirement benefits, as well as other individuals’ Social Security benefits tied to those retirement payouts, are based on a worker’s 35 highest-earning years. At any age, a top-35 earnings year can be replaced by a year with greater earnings, boosting the amount of the checks from Social Security.
  • Do not dally for spousal benefits. Waiting past FRA will not increase spousal benefits. FRA, now 66, is scheduled to gradually increase to 67 in the coming years.
  • Social Security planning can be family planning. People with a spouse and perhaps children who can collect on the breadwinner’s record might want to start Social Security retirement benefits at age 62, the earliest age possible. Then other qualified family members may be able to accelerate their benefits from Social Security.
  • Family benefits may be as high as 80% of the breadwinner’s Social Security retirement benefit. The maximum amount might be reached if the retiree has children under age 18, or slightly older and still in high school. Older children may get a disability benefit, also based on the breadwinner’s earnings record.
  • Widows and widowers can still double-dip. Someone who qualifies for a widow(er)’s benefit can claim their own retirement benefit first, then claim a widow(er)’s benefit; or file first as a widow(er), if that works better. However, filing for retirement benefits before a spouse or ex-spouse dies will limit the widow(er)’s benefit. The earnings penalty described previously also applies to widows and spouses, however.
  • Widowed divorcees can start early. The starting age for collecting Social Security on a deceased ex-spouse’s work record is as early as 60 for people who were divorced and then widowed by an ex-spouse’s death (age 50 for people who are disabled). That is the case if the marriage lasted at least ten years and the divorced individual does not have a work record that would provide a higher benefit.

Determining disability

Social Security benefits also may be available to people who cannot work because of a medical condition. To qualify, the condition must be expected to last at least one year or result in death. Moreover, a disabled worker usually must meet: (1) a recent work test, based on age at the time of becoming disabled; and (2) a duration of work test to show how long payments were made to the Social Security program.

Certain blind workers must meet only the duration of work test. In addition, family members of disabled workers may also receive disability benefits from Social Security.

Under the recent work test, someone who became disabled in or before the quarter of turning age 24 must have worked 1.5 years under Social Security during the three-year period ending with the quarter the disability began.

If the disability occurred in the quarter after turning age 24 but before the quarter of turning age 31, the requirement is work for at least half the time of the period beginning with the quarter after turning 21 to the quarter of becoming disabled. For example, someone who becomes disabled in the quarter of turning 27 would need three years of work out of the six-year period ending with the quarter of becoming disabled.

If the disability occurred in the quarter after turning 31 or later, the requirement is work for at least five years out of the ten-year period ending with the quarter the disability began.

The test for duration of work generally requires a total of 1.5 years of work that was covered by Social Security for a disability before age 28. That requirement gradually increases, to a total of 9.5 years of covered work for a disability at 60 or older.

Even after passing both tests, applicants for Social Security disability benefits must undergo an extensive review process before collecting. In 2017, the average disability benefit for a disabled worker, spouse, and one or more children is about $2,000 a month.

Exhibit 1. Full retirement age

Full retirement age

Exhibit 2. Checklist for Social Security Planning

Checklist for Social Security Planning

 

Raimondo places blame for UHIP fiasco; Roberts resigns, contractor targeted

By Uncategorized

Rhode Island’s failed Medicaid (UHIP) computer system at center of issue

PROVIDENCE – The resignation of Health and Human Services Secretary Elizabeth Roberts Tuesday was just the beginning of Governor Gina Raimondo’s newest attempt to fix the state’s problem-ridden public benefits computer system.

The governor announced Wednesday morning that she will continue to withhold payment from the primary vendor and builder of the Unified Healthcare Infrastructure Project: Deloitte Consulting.

 She also plans to redo Deloitte’s contract so future payments are tied to completing specific tasks, and demand it pay for any extra money the state has to dish out to fix UHIP. It launched last September, and caused immediate headaches – such as three- to four hour waits at field offices, delayed food assistance, providers not being paid and many residents incorrectly denied benefits.

Of the $364 million project, which is paid to multiple vendors, Deloitte has already received about $200 million. In a recent media briefing, Eric Beane, acting director of the state Department of Human Services, said about $68 million is left to give Deloitte.

Beane replaced former Director Melba Depena Affigne, who with Chief Digital Officer Thom Guertin, gave their forced resignations last month. Raimondo gave Beane 30 days to review UHIP and come back with recommendations.

Roberts departure, changing Deloitte’s contract, more training for staff, hiring additional technicians and asking some staff who were laid off prematurely last fall – which Beane described as valuable because of their institutional knowledge – are a result of his findings, which was also released Wednesday.

His assessment concludes it was a mistake to go live in September, a collective decision made by Raimondo and state leaders after receiving what he described as “incomplete and sometimes inaccurate information” and “too rosy” of a picture.

A draft of his Powerpoint presentation for the House Oversight committee hearing scheduled for late Wednesday afternoon included a graphic Deloitte gave a couple of weeks before UHIP was turned on with all green lights.

“Nothing would surprise me,” Serpa said. “It seems we’ve had a huge management problem since before this thing launched in September.”

With reports from staff writers Patrick Anderson and Jennifer Bogdan of the Providence Journal

READ THE FULL STORY HERE.

 

Does Medicare Cover Therapy Services?

By Uncategorized

Medicare’s Coverage Of Therapy Services Again Is In Center Of Court Dispute

Four years after Medicare officials agreed in a landmark court settlement that seniors cannot be denied coverage for physical therapy and other skilled care simply because their condition is not improving, patients are still being turned away.

So federal officials and Medicare advocates have renewed their court battle, acknowledging that they cannot agree on a way to fix the problem. Earlier this month, each submitted ideas to the judge, who will decide — possibly within the next few months — what measures should be taken.

Several organizations report that the government’s initial education campaign following the settlement has failed. Many seniors have only been able to get coverage once their condition worsened. But once it improved, treatment would stop — until they got worse and were eligible again for coverage.

Every year thousands of Medicare patients receive physical therapy and other treatment to recover from a fall or medical procedure, as well as to help cope with disabilities or chronic conditions including multiple sclerosis, Alzheimer’s or Parkinson’s diseases, stroke, and spinal cord or brain injuries.  Although it removes the necessity to show an improving health condition, the settlement does not affect other criteria and limitations on Medicare coverage.

“We still regularly get calls from people who are told they are being denied coverage,” said Peter Schmidt at the National Parkinson Foundation, based in Miami. Denials sometimes occur because physical therapy providers use a billing code that still requires the patient to show improvement. Although Parkinson’s is a degenerative brain disease, Schmidt said physical therapy and exercise can help slow its progress.

The agreement, approved in 2013, settled a class action lawsuit against the Centers for Medicare & Medicaid Services filed by the Center for Medicare Advocacy and Vermont Legal Aid on behalf of five Medicare beneficiaries, including the late Glenda Jimmo, and  six nationwide patient organizations. Coverage, the Jimmo settlement said, does not depend on the “potential for improvement from the therapy but rather on the beneficiary’s need for skilled care.”

In August, U.S. District Court Chief Judge Christina Reiss in Vermont ordered the government to work with the beneficiaries’ attorneys to strengthen its education campaign about the policy aimed at bill-processing contractors, claims reviewers, providers, appeals judges, people who staff the 800-MEDICARE help line and others. (Beneficiaries, however, were not included.) After working during the fall, both sides acknowledged this month they could not reach a compromise on the best way to make revisions to the education campaign.

There was a long-standing kind of mythical policy that Medicare contractors put into place that said Medicare only pays for services if the patient could progress,” said Roshunda Drummond-Dye, director of regulatory affairs for the American Physical Therapy Association. “It takes extensive effort to erase that.”

Medicare’s proposals include educational efforts such as a special webpage with “frequently asked questions” spelling out the proper procedures for handling claims. The government would also issue a clear statement confirming that Medicare covers physical, speech and occupational therapy along with skilled care at home, and in other settings, even if the patient has “reached a plateau” — a term seniors still hear — and is not improving.

Attorneys for the seniors want to monitor how Medicare officials implement these new measures and have offered to write the policy statement disavowing what’s known as the “improvement standard.” They also want the government to repeat its 2013 conference call with providers, contractors and others involved in the process in order to correct mistakes, according to papers filed with the court Jan. 13.

“The major problem for us is that they do not want the plaintiff’s counsel to have any say or involvement in what they do,” said Gill DeFord, litigation director at the Center for Medicare Advocacy in Connecticut. “We think that’s exactly the reason the educational campaign was so riddled with inaccuracies in the first place.”

But in its filing, the government said, “The Plaintiffs’ plan seeks to address perceived deficiencies that were specifically not guaranteed under the [settlement] Agreement.” It added accepting the advocates’ plan “would also grant their counsel undue control in developing CMS educational materials and an outsize role in CMS’ corrective action efforts.”

The settlement affects care provided by a trained professional in a patient’s home, nursing home or the provider’s private office that is medically necessary to maintain the patient’s condition and prevent deterioration.

A Medicare spokesman declined to comment under agency protocol because the case is still pending.

KHN’s coverage of aging and long-term care issues is supported by The SCAN Foundation.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Early Diagnosis Beneficial for People with Dementia

By Medicaid Planning and Gifting, Uncategorized

The devastating impact of Alzheimer’s disease and Dementia

A TPT documentary aims the national spotlight on looming Alzheimer’s “epidemic” and its financial and emotional toll on families. The devastating impact of Alzheimer’s disease and Dementia on his own mother — and on his father, who struggled to care for her — first prompted Gerry Richman to take a hard look at the disease. As vice president of national productions at Twin Cities Public Television, he was the mastermind behind a 2004 Emmy-winning documentary called “The Forgetting: A Portrait of Alzheimer’s.” Now, Richman is back with another eye-opening film on the subject. “Alzheimer’s: Every Minute Counts” — airing across the country Wednesday — chronicles the struggles of people living with Alzheimer’s and the emotional and financial challenges it poses for their families. It also forecasts, through interviews with doctors and researchers, a looming crisis for the country as baby boomers enter their senior years and their risk of developing Alzheimer’s increases.brain_slices

The current numbers are scary enough. More than 5 million Americans have Alzheimer’s — with one new case identified every minute. In addition to the emotional toll, it can cost tens of thousands of dollars to take care of someone with Alzheimer’s, making it one of the most expensive diseases and provoking some health experts to predict that it will collapse both Medicare and Medicaid — and the finances of millions of people. Although Alzheimer’s can strike people younger than 65, it generally occurs in those much older. The risk of developing the disease doubles every five years after 65, according to the National Institute on Aging. It becomes much more common among people in their 80s and 90s. With longer life spans come greater numbers of people at risk of Alzheimer’s. “There hasn’t been a large population of 85-year-olds until this generation,” Arledge said.
The full article can be found HERE.

When you or your loved one is diagnosed with a cognitive issue, planning for how to handle the soon to be increased needs of your loved ones is critical. Discussions as to immediate and long term needs must be had with your medical advisers and with your financial advisers. Financial advisers are as important as medical as there must be a plan in place as to how to pay for the additional services needed.

When you need to develop a plan about how to handle the cognitive issues of a loved one, contact our office for a no-cost consultation to discuss your facts and options.

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$9.2B spending plan includes Medicaid figures

By Uncategorized

MEDICAID BUDGET UNDER THE HEALTH & HUMAN SERVICES SECTOR IS 42.1% OF BUDGET

PROVIDENCE, R.I. — Gov. Gina Raimondo counts on Rhode Islanders paying sales tax when they shop online to finance a series of big initiatives, including tuition-free years at state colleges, in a $9.25-billion state budget proposed Thursday. The tax and spending plan for the fiscal year starting July 1 would raise total expenditures by $309 million, or 3.5 percent, over the budget passed by lawmakers for this year. Online giant Amazon has told state officials it will begin collecting

Source: $9.2B spending plan includes revenue from new Internet sales taxes

Many Rhode Island Nursing Homes Awaiting Payment from State

By Uncategorized

Troubled launch of the State’s new UHIP computer system at center of issue

Since the launch of the Rhode Island’s trouble social services system, UHIP, many nursing homes have gone without payment for Medicaid patients. Owed for months of care, many administrators are concerned they won’t be able to go without payment for much longer.

Debra Griffin is the administrator at Hattie Ide Chaffee Nursing Home and Rehabilitation in East Providence. She also chairs the state nursing home association. Griffin says the system for getting paid for these patients was inefficient before but it’s worse now.

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RI DHS Executives

“We haven’t received an approval since September. And that was for someone back to last April,” says Griffin.

Griffin says firing Department of Human Services workers who understood long- term care Medicaid applications before the launch of the new system was a mistake.

“Long- term applications are not run of the mill,” said Griffin. “You have to have a level of knowledge and expertise in the approval process.”

Governor Gina Raimondo acknowledges letting workers go before the launch of the system that was a mistake. The Governor has just accepted the resignations of two top officials involved in the launch. But Griffin says that the governor’s latest actions to fix the problem may not be enough to solve nursing homes’ financial woes.

Griffin says the state owes her home more than $200,000, and most nursing homes in the state are still awaiting payment.

The original Article was written by Kristen Gourlay for RINPR and can be found HERE.

Matt Leonard