Medicare and Medicaid - Background

1000 - Medicare and Medicaid - Background (Rev. 1, 05-21-04) The Social Security Act (the Act) mandates the establishment of minimum health and safety and CLIA standards that must be met by providers and suppliers participating in the Medicare and Medicaid programs. The Secretary of the Department of Health and Human Services (DHHS) has designated CMS to administer the standards compliance aspects of these programs. 1000A - Medicare Provisions (Rev. 1, 05-21-04) Medicare is a Federal insurance program providing a wide range of benefits for specific periods of time through providers and suppliers participating in the program. Providers, in Medicare terminology, include patient care institutions such as hospitals, critical access hospitals (CAHs), hospices, nursing homes, and home health agencies (HHAs). Suppliers are agencies for diagnosis and therapy rather than sustained patient care, such as laboratories, clinics, and ambulatory surgery centers (ASCs). The Act designates those providers and suppliers that are subject to Federal health care quality standards. Benefits are payable for most people over age 65, Social Security beneficiaries under age 65 entitled to disability benefits, and individuals needing renal dialysis or renal transplantation. The Federal Government makes payment for services through designated fiscal intermediaries (FIs) and carriers to the providers and suppliers. Section 1802 of the Act provides that any individual entitled to Medicare may obtain health services from any institution, agency, or person qualified to participate in Medicare if that institution, agency, or person undertakes to provide that individual such services. 1000B - Medicaid Provisions (Rev. 123, Issued: 10-03-14, Effective: 10-03-14, Implementation: 10-03-14) Medicaid and the Children’s Health Insurance Program (CHIP) are Federal-State partnerships which provide health coverage to millions of Americans, including children, pregnant women, parents, seniors and individuals with disabilities. In order to participate in Medicaid, Federal law requires States to cover certain population groups (mandatory eligibility groups) and gives them the flexibility to cover other population groups (optional eligibility groups). States establish and administer their own Medicaid and CHIP programs, and determine the type, amount, duration, and scope of services within broad federal guidelines. States are required to cover certain “mandatory benefits,” and can choose to provide other “optional benefits”. States receive federal matching funds to provide these benefits. Section 1902 (a)(23) of the Act provides Medicaid beneficiaries a free choice of qualified providers willing to furnish covered services. Such freedom of choice may be restricted when the beneficiary receives services through managed care arrangements that are authorized under a number of statutory provisions or through waiver authority (except that freedom of choice of qualified family planning providers and access to federally qualified health centers has special protection). In general, many types of health care facilities that participate in the Medicaid and CHIP programs also participate in Medicare, but they are not required to do so. There are, however, some types of facilities that participate only in Medicaid: these include nursing facilities (NFs) that are not also dually certified as Medicare skilled nursing facilities (SNFs), Psychiatric Residential Treatment Facilities (PRTFs), and Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IIDs). Under Medicaid regulations, NFs are required to meet virtually the same requirements that SNFs participating in Medicare must meet. PRTFs and ICF/IIDs must comply with special Medicaid standards. There are also cases where Medicaid regulations require that certain healthcare providers that only participate in Medicaid must, among other things, comply with Medicare participation requirements. For example, under 42 CFR 440.10, Medicaid-only hospitals must meet requirements at Section 42 CFR 489.10 and 42 CFR Part 482, and Medicaid-only Home Health Agencies (HHAs) are required under 42 CFR 440.70(d) to meet the requirements at 42 CFR 489.28 and 42 CFR Part 484, in addition to those at 42 CFR 441.16(c). 1000C - Clinical Laboratory Improvement Amendments (CLIA) (Rev. 123, Issued: 10-03-14, Effective: 10-03-14, Implementation: 10-03-14) Congress passed the Clinical Laboratory Improvement Amendments (CLIA) in 1988 establishing quality standards for all laboratories testing to ensure the accuracy, reliability, and timeliness of patient test results, regardless of where the test was performed. A laboratory is defined as any facility that performs laboratory testing on specimens derived from humans for the purpose of providing information for the diagnosis, prevention, treatment of disease, or the impairment of, or assessment of health. CLIA is user-fee funded; therefore, all costs of administering the program must be covered by the regulated facilities, including certificate and survey costs. The final CLIA regulations are based on the complexity of the test method; thus, the more complicated the test, the more stringent the requirements. Three categories of tests have been established: waived complexity, moderate complexity, including the subcategory of provider-performed microscopy, and high complexity. CLIA specifies quality standards for laboratories performing moderate and/or high complexity tests. Waived laboratories must enroll in CLIA, pay the applicable fee and follow manufacturers’ instructions. CMS is charged with the implementation of CLIA, including laboratory registration, fee collection, surveys, surveyor guidelines and training, enforcement, approvals of proficiency testing providers, accrediting organizations and exempt States. (For further details on CLIA, refer to Chapter 6—Special Procedures for Laboratories and Chapter 5—Complaint Procedures which has a CLIA section.)