Medicare

Medicare is the federal insurance program, managed by the Centers for Medicare & Medicaid Services (CMS), that provides coverage for: 

• Persons 65 years or older
• Persons with disabilities
• Persons with End-Stage Renal Disease

Medicare started as a program to ensure inpatient care (e.g.Hospital Insurance, or Medicare Part A) was available to everyone. It has evolved to include outpatient care (Part B) and prescription drug costs (Part D). Until the passage of the Affordable Care Act, preventive services were limited and included cost-sharing. Now, preventive services are a key component to the Medicare program, including immunizations, testing and office visits.

“Original” Medicare is the federally managed health insurance program that includes a deductible and a 20% coinsurance. Medicare Advantage, or Part C Medicare, is administered by contracted private health insurers. Part C plans must cover the same benefits that original Medicare does, and may include additional benefits.

Medicaid is a state-federal program, meaning that states can determine qualifying income levels and can make various policy changes to their respective Medicaid program, so long as they comply with federal Medicaid statute. Visit CMS’ Resources for States to learn more about what your state Medicaid program covers and how your patients may qualify.

About 20% of all women are Medicare beneficiaries, and women make up 57% of the total number of Medicare beneficiaries.

Medicare sets the standards for health insurance, and often Medicare policies are adopted by Medicaid programs and private insurers.

Medicare Regulations

There are several regulations developed and updated annually. Three key annual updates include the Medicare Physician Fee Schedule, the Outpatient Prospective Payment System, and the Inpatient Prospective Payment System. ACOG analyzes, comments an advocates on these policies as well as many others as they are published.

Outpatient Prospective Payment System (OPPS)

Rules for hospital outpatient clinics and ambulatory surgical centers are typically finalized in November for implementation in January. The updated regulations include an economic analysis from prior years to determine the payment for the following. Payment rates are classified into Ambulatory Payment Classifications (APCs).

Outpatient services include services provided in the emergency department, services during patient observation, and outpatient tests and clinic visits.

The highlights of the 2022 OPPS rules include:

• Hospital Inpatient Quality Reporting requirements that includes reporting participation in a recognized Perinatal Quality Initiative Collaborative
• Price Transparency of Hospital Standard Charges
• Health Equity, Access to Emergency Care in Rural Areas, & Lessons from COVID-19

Inpatient Prospective Payment System (IPPS)

Inpatient services include those that are provided to a person who has been admitted to the hospital and spends at least one night. Payment is determined by the operating costs of acute care hospital inpatient stays, categorized into a diagnosis-related group (DRG). Each DRG has a payment weight assigned to it, based on the average resources used to treat Medicare patients in that DRG.

Payment to hospitals is also determined by the number of low-income patients that received services, if the hospital is a teaching hospital, and if there were significant outliers in cost.

The IPPS regulations are typically finalized in August for October implementation, and in addition to hospital rules, include hospital quality reporting requirements and updated International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM).

For questions or assistance with Medicare policies, visit ACOG’s Payment Advocacy and Policy Portal.