1 - Medicare was created out of the Social Security Amendments of 1965 providing health care coverage to retired Americans sixty-five years of age and older. Medicare Part A provides for hospital coverage while Part B covers physician services. Medicare Part C was established in 1997 and in part expanded the types of private health care coverage plans available to beneficiaries (Blumenthal, Davis, Guterman, 2015). Part C was expanded further as a part of the Medicare Modernization Act of 2003 and evolved into what is now known as Medicare Advantage. The objective of the evolution of Medicare Advantage plans was to control costs through private competition among plan providers, introduction of prospective payment, and more efficiently addressing the health care needs of beneficiaries while emphasizing managed care functions. The Medicare Advantage movement essentially opened the doors for private insurance carriers to provide the same or similar health coverage services to Medicare beneficiaries as those available to the public. Medicare Advantage (MA) carriers must be licensed as a risk-bearing entity within the state in which they provide MA coverage. The respective state licensing authority must recognize the carrier as having the ability to assume the risk associated with the provisions of parts A, B, and D of Medicare. The Centers for Medicare & Medicaid Services (CMS) does not necessarily require state licensure by this risk-bearing entity. However, consent and certification from the state insurance licensing agency where the risk-bearer will provide services that the MA carrier has the legal and financial standing to manage the associated risk is required to manage a MA contract (Kongstvedt, 2007). Further, if a MA contractor covers one or more of the twenty-six MA coverage regions; state licensure can be temporarily waived as long as the contractor is licensed in one state within the respective region and application for licensure has been made in the remaining states in the region. Simply stated, it is the responsibility of the state to confirm that a MA contractor has the legal authority and financial ability to function as a risk-bearing entity relative to MA plan coverage. With the exception of licensure and plan solvency, all other federal laws pertaining to MA Plans supersede any state laws governing the provision of health insurance. In other words state-specific regulations governing the provision of health insurance and managed care plans do not necessarily apply to MA beyond state licensure (Medicare Managed Care Manual, 2011).
2- For an organization to become a Medicare Advantage Plan the organization must be licensed by the appropriate state authority as “a risk bearing entity under a scope of licensure that permits the organization to assume risk for the comprehensive benefits that make up Medicare A & B (Zarabozo & Lindenberg, 2007). An organization wanting to be a Medicare Advantage Plan must meet a minimum enrollment requirement of 5000 individuals. This requirement may be waived during the first three Medicare contract years. Since the advent of the Affordable Care Act, federal provisions were made regarding managed care organizations. Since 2014, that ACA requires that all managed health plans through insurance exchanges “must be accredited with respect to local performance on clinical quality measures such as the Healthcare Effectiveness Data and Information Set (HEDIS), patient experience rating on a standardized Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey, as well as consumer access, utilization management, quality assurance, provider credentialing, complaints and appeals, network adequacy, and patient information programs by any entity recognized by the the Secretary for the accreditation of health insurance issuers or plans” (www.ncsl, 2011). The ACA also require health plans to provided external review process. Although, these provisions are for managed health care organizations in general, any organization needs to be compliant to become a Medicare Advantage Plan. Organizations looking to become a MA plan must enter a contract with CMS, and a single MA contract can cover more than one MA plan offered by the organization. An organization must demonstrate certain administrative and managerial capabilities such as, a policy making body that oversees MA policy, personnel and systems sufficient enough to organization, plan and all aspects of the MA plan, a fidelity bond to cover all employees and officers handling the funds of the organization and commitment to compliance, integrity, and ethical values (www.cms.gov). Federal law supersedes any State law, regulation, contract requirements or other standards that would otherwise apply to Medicare Advantage plans, with the exception of licensing laws and regulations relating to solvency (www.cms.gov).
3- Strength of the military health system come from the fact they are the largest managed care provider care both in number of beneficiaries covered in dollars spent in healthcare. The military’s affordable low cost healthcare has been existence for over 235 years (Kongstvedt, 2007). The threats for the Military Health System (MHS) are that reimbursement is similar to Medicare as TRICARE faces the same healthcare cost increases as other managed-care entities particularly out-of-network referrals to civilian providers. Resources are strained in wartime so this along with the new strategic guidance for the Department of Defense (DoD) released in January 2012 that states that US Forces will no longer be sized to conduct large-scale, prolonged stability operations.(Licina, 2012) transformation of the military health support is required to assure that military health can bridge any healthcare gaps with civilian healthcare resources in times of resource strain particularly in wartime. Maintaining military health support readiness (at wartime needs ) at previous levels is no longer financially feasible (Licina, 2012). TRICARE’s program includes TRICARE prime, TRICARE standard, TRICARE extra and TRICARE for life (TFL). TRICARE prime is an HMO like program that is no cost for active duty enrollees. Each enrollee has a primary care manager and enrollees have additional benefits such as service standards for waiting times as well as wellness services. Non-network providers can be seen but at additional cost. TRICARE standard is a service model at no cost for active duty members. Though they can see any provider this is that were out of pocket expense. A deductible is required before cost-sharing begins in some beneficiaries may be responsible for their own claim filing. TRICARE extra the PPO model that allows civilian providers on a case-by-case basis this is not available to active duty and there is no primary care manager. TRICARE for life allows for civilian providers there are no enrollment fees or deductibles TRICARE’s greatest threat is the same as other healthcare providers, for TRICARE it is the annual cost increases particularly from contracted and out-of-network referrals to civilian providers as well as having to receive care at military training facilities (MTF). In addition, the military drawdown will have consequential effect’s on military health services in that the previous wartime readiness levels cannot be sustained yet systems and processes need to be in place to quickly provide health care services in wartime. Military healthcare readiness reengineering is in progress (Licina, 2012)). There have been base realignment and closure resulting in a 35% decrease in healthcare assets (Kongstvedt, 2007). Quality and access issues have been addressed by opening up access to defined civilian networks through a cost/benefit analysis (Kongstvedt, 2007). An analysis of the military’s healthcare costs is evident by major costs in the following areas; private providers, pharmacy, TRICARE for life (TFL) and the growing increase in beneficiaries(Kongstvedt, 2007). A focus on cost, access and quality through program efficiencies and effectiveness can be achieved through Military Health Services Transformation which is in process to include both Centers of Excellence and the ability to balance effectively military care versus out-of-network civilian resources. The centers of excellence address the growing morbidity post conflict which requires long-term care while the overall transformation of military health services addresses the cost, access and quality by addressing program efficiency and effectiveness. Military health system has identified new Military Health Services (MHS) leadership and utilizing Kotter’s eight steps for transformation framework is exploring ways to effectively transform the department of defense’s healthcare structure to be more efficient and cost-effective and of highest quality (Licina, 2012).
4- Tricare is medical insurance that is part of the United Sates Department of health System; it provides health care coverage for 9.5 billion beneficiaries worldwide (Anonymous, 2015). Tricare covers active duty, guard/reserve, retired military personnel and their families. Tricare benefits include covering all costs related to medial procedures, hospitalizations, outpatient procedures, emergency department visits, routine checkups, maternity care, preventive care, immunizations as well as mental/behavioral health care coverage. There are also special programs for dependents that require chiropractic care and cancer treatment care. Enrolling in Tricare and determining eligibility is easier than with traditional civilian insurance plans and benefits are easy to access. Active duty personnel are automatically eligible and they can get their families registered into the Defense Enrolment Eligibility Reporting System (DEERS) and once a family member military card is issued, Tricare may be used. There are four types of plans to accommodate to all members. Tricare covers all military personnel and their families over sees and covers all costs for any medial care for soldiers and their families. Tricare covers all types of surgery including cosmetic surgery as a result of disfigurement from burns, injuries while on active duty, etc. As with all health care plans, Tricare also has limitations; cosmetic surgery or drugs for cosmetic reason, non-surgical weight loss or obesity treatments, and alcohol, smoke or drug cessation products are not covered by Tricare. It also does not provide dental coverage. Contrary to some people’s beliefs, Tricare has certain charges in the form of premiums, additional charges and deductibles; these will vary according to each plan. For example Tricare Prime is the most cost effective plan but only if the member lives near a base or if they have access to a Military Treatment Facility. Retirees have a $460 enrolment fee. For any civilian outpatient visit, members will have a fee of 15% of the standard negotiated fee. Tricare Standard requires members to file their own claims, there is not a primary care provider and additional paperwork for civilian outpatient visits. The biggest threat to the Tricare insurance health care plan is the cost due to increased costs of health care. In July 2015 it was reported the military health system is running out of money for the fiscal year ending in September 30, 2015 and it may face a crisis if Congress didn’t authorize an additional $900 million (Tilgham, 2015). For the past several years, the Pentagon has requested that Congress increase the health care fees for retirees and military families as a way to absorb escalated costs. A large part of the increase in health care costs is from beneficiaries obtaining prescription drugs from retail pharmacies. Just as a reference, it has been reported the United States spends $52o billion annually on Medicare, $450 billion on Medicaid, $300 billion on the employer health insurance tax dedication and $100 billion in military spending (Mcarole, 2012).