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Assignment Content

Question 1 

In Chapter 11 (pp. 312) , we read that there are several changes taking place in long-term care reimbursement that will continue to have an impact on providers and consumers alike.

In at least 300 words, identify at least 3 of these changes and share your thoughts on the impact of these.

 Be sure to include your APA citations/references  

Course Materials (Available in the Content area of the course): Pratt. J. Long-Term Care- Managing Across the Continuum. 4th edition. Jones and Bartlett ISBN: 978-1-284-05459-0.

Long-Term Care: Managing Across the Continuum, Fourth Edition

John R. Pratt




· The long-term care system in the United States is reimbursement driven, meaning that the way care is provided is highly dependent on the way it is financed.

· Services are not universally and uniformly available.

· Each of the provider segments along the continuum of care has its own unique mix of payment sources

Origins and Development

· Began as charity-based care for all except the very wealthy.

· State and federal governments began to get involved in protecting the welfare of the poor and needy.

· Social Security Act of 1935

· Medicare and Medicaid in 1965

Current Reimbursement Options

· Can be broken into three categories for easier study: public sources, private sources, and public-private partnerships.

Public Reimbursement Sources

· Medicare and Medicaid are by far the most prominent sources of public funding of long-term care and other types of health care.

· Medicare

· Title XVIII of the Social Security Act.

· Its primary purpose was to provide health care coverage for the elderly.

· Four parts:

· Part A – provides hospital insurance, including some sections of long-term care (skilled care, home health care, hospice),

· Part B – provides supplementary medical insurance that covers physician care,

· Part C – deals with managed care organizations,

· Part D – covers medications.

· Medicare: What’s Covered?  

· Skilled nursing services – in nursing facilities or units in hospitals.

· Subacute care – covered under the category “post-acute care,” it is generally provided in Medicare-certified SNFs or units and is reimbursed through the SNF mechanism.

· Home health care – is the primary provider of reimbursement for home health care services.

· Hospice – for people who are certified to be terminally ill, with 6 months or less to live. The care must be palliative rather than curative, and as with other types of Medicare coverage, must be delivered by a provider organization that is certified by that program.

· Other – coverage may be included in settings such as assisted living or adult day care under some Medicaid waiver programs.

· Medicaid

· Title XIX of the Social Security Act

· Covers only those who are “medically indigent” and who cannot pay for their own health care or have insurance

· Has no age limitations

· Is jointly funded by the federal and state governments and is run by the states under federal guidelines

· Medicaid: What’s Covered?  

· Nursing care facilities – covers just about all services.

· Assisted living – called “residential care facilities” in some states, coverage is far from universal, varying from state to state, but it is growing. Much of the Medicaid coverage of assisted living has resulted from waiver programs.

· Home health care – Medicaid is the largest source of funding for home health care agencies and is often used to supplement Medicare coverage for low-income seniors.

Other – Other forms of long-term care, such as subacute care, hospice, and adult day care, are generally not covered by Medicaid, but may be covered as a supplement to Medicare or under some of the waiver innovations.

· State Efforts to Reduce Medicaid Expenses  

· Medicaid is one of the top two or three most expensive items in many state’s budgets.

· Increased efforts to reduce Medicaid costs.

· By reducing the amount of care received by Medicaid recipients in nursing facilities.

· By raising the eligibility requirements for institutional care

· Through increased use of managed care.

· Medicaid “Spend Down” Requirements – Consumers must use up all other resources before they can become eligible for Medicaid.

· Payment Bundling

· Other Public Funding Sources

· Includes the Supplemental Security Income (SSI) program, the Veterans Administration, and the Older Americans Act.

· Serve limited populations.

Private Reimbursement Sources – account for about one-third of all long-term care coverage.

· Out-of-Pocket Payments

· Less than one quarter of the total costs.

· Private Long-Term Care Insurance

· A small, but growing portion of long-term care financing.

· Little is covered under employer-sponsored policies.

· Public-Private Partnerships

· Programs that seek ways to provide incentives for individuals to purchase long-term care insurance.

· The primary incentive is asset protection in return for meeting some of the cost of long-term care.

· In 2006 Congress approved legislation clearing the way for expanded, nationwide public–private long-term care (LTC) insurance partnerships.

· Managed Care – a system of health care delivery that tries to manage the cost of health care, the quality of that health care, and access to that care.

· Managed Care: How it Works – organizations that delivered health care to a specified group of members on a fixed-rate basis, regardless of how much service they required.

· Managed Care and Long-Term Care

· For long-term care, it has taken hold much more in some parts of the country than in others.

· It has grown in public payments, particularly Medicaid.

· Types of Managed Care: Provider Arrangements – (1) per diem, (2) discount from charges, (3) case rates and (4) capitation.

· Medicaid and Medicare Managed Care.

· Medicaid – In the past 15 years, states have increasingly relied on managed care for Medicaid benefits.

· Medicare managed care is found in the form of Medicare Advantage plans.

· Managed Care: Making the Transition – Long-term care providers must look carefully before partnering with a managed care organization, but it usually makes sense.

· Managed Care: A Tarnished Image – has suffered from a perception that MCOs put cost control ahead of quality of care or the interests of consumers.

Significant Trends and Their Impact

· Private Managed Care – is becoming increasingly attractive.

· Public Managed Care – is growing as a way to save costs.

· Prospective Payment – has replaced retrospective reimbursement for most of long-term care.

· Emphasis on Community-Based Care – is the result of both cost-cutting and increased demand for consumer choice.

· Incentives for Purchase of Private Long-Term Care Insurance – few incentives today, but more needed if it is to be an important reimbursement source.

· Liability Costs and Tort Reform – expensive lawsuits have drive up insurance costs, but there has been little in the way of reforming the tort system.

· Financing Reform – There has also been much talk about reforming the overall U.S. healthcare system, which really means reforming the healthcare financing system. The debate, which culminated in the Affordable Care Act of 2010 (ACA), centers on providing coverage for people needing acute and preventive care.



© 2015 Jones and Bartlett Publishers, LLC

Chapter 11

Long-Term Care


Learning Objectives

Understand how long-term care services are reimbursed

Identify and define public sources of reimbursement

Identify and define private sources of reimbursement

Learning Objectives (continued)

4. Understand how managed care works and its impact on long-term care

5. Understand the trends affecting
long-term care reimbursement

Long-Term Care
System Development

Little government involvement until welfare (Social Security) in 1935

Major involvement with Medicare and Medicaid in 1965

Has evolved since then

Current Reimbursement Options

Government (public) sources:




Private sources:

Out-of-pocket payments

Private long-term care insurance

Managed care organizations

Public/private partnerships


Title XVIII of the Social Security Act

Covers elderly and some disabled

No means test

Covers (with some limitations):

Skilled nursing in nursing facilities and subacute care

Home health care


© 2010 Jones nd Bartlett Publishers, LLC


Title XIX of the Social Security Act

Covers “medically indigent”

Funded partly by federal and partly by state governments

Run by the states under federal guidelines

Covers (depending on the state’s program):

Nursing care facilities

Assisted living

Home health care

Medicaid (continued)

State efforts to reduce costs:

Divert funds to less expensive forms
of care (community-based)

“Spend-down” requirements

May be greatly expanded by the
Affordable Care Act

Other Public Funding Sources

Supplemental Security Income program

Department of Veterans Affairs

Older Americans Act


Private Reimbursement Sources

Out-of-pocket payments

Private long-term care insurance

Public/private partnership programs

Managed care

Public/Private Partnerships

Robert Wood Johnson Foundation demonstration projects

Provide incentives for consumers to provide some long-term care coverage in return for asset protection

2006 legislation to create nationwide program

Managed Care

Impact on long-term care

Types of MCO/provider arrangements

Making the transition to managed care

Managed care’s tarnished image

Trends in Reimbursement

Growth of private managed care

Growth of public managed care

Prospective payment

Emphasis on community-based care

Incentives for purchase of private

LTC insurance

Liability costs and tort reform

Financing Reform

Much talk, not much action until 2010

Passing of the ACA

Long-term care is not a high priority

Hard to define

Would be very expensive


Long-term care provider organizations are reimbursed by a combination of public and private organizations and agencies. Reimbursement is fragmented and varies by type of provider.

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