Module 2 Assignment 2: Outsourcing Federal Healthcare

Early in their existence, many businesses handle their activities internally. As businesses mature and grow, they often find competitive advantage in the specialization provided by outside firms. This trend is particularly frequent in industries such as information technology (IT) and healthcare.

The U.S. federal government delivers healthcare through its two main insurance programs: Medicare and Medicaid. In these programs, private healthcare providers are reimbursed by government insurers for health services delivered to insured citizens.

Visit the Web sites of Medicare and Medicaid programs for more information about them.
Review the article, “Outsourcing: Assessing the Risks and Benefits for Organizations, Sectors, and Nations” by Harland, Knight, Lamming, and Walker (2005). The conceptual framework in this article shows how corporate strategy is influenced by regulation under the decision node of policy issues (p. 844).

Based on your analysis of the article and the Web sites, address the following:

Identify the main stakeholders in the US federal healthcare system. In your view, what are their respective goals, wants, and needs with regard to public health?
Analyze the current status faced by the federal government in terms of the strategy being used in its healthcare system.

Identify strengths and weaknesses of the strategy as well as opportunities and threats (SWOT analysis) present in the external environment. Propose a new policy to be implemented for optimizing the use of outsourcing in healthcare services to private hospitals and healthcare practices in order to provide medical services to the bulk of the US population. This policy should include the following objectives: Lowering costs of the program to reduce federal spending Providing highest quality treatment for the insured Providing consumer-oriented choice Lowering treatment costs for consumers

Based on your proposal of a new policy, describe the benefits for at least one stakeholder group you identified in the first question. Discuss how your outsourcing strategy objectives satisfy the wants and needs of the specific stakeholder(s).
Explain the likely outcomes of the outsourcing policy you recommended. Which stakeholder group benefits the most and which benefits the least? What are the strategic tradeoffs implied by your outsourcing recommendation?

Write a 3–4-page paper in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M2_A2 ..

Harland, C., Knight, L., Lamming, R., & Walker, H. (2005). Outsourcing: Assessing the risks and benefits for organizations, sectors, and nations. International Journal of Operations & Production Management , 25 (9/10), 831–850. (ProQuest Document ID: 232337858) http://search.proquest.com.libproxy.edmc.edu/docview/232337858?accountid=34899

Assignment 2 Grading Criteria	Maximum Points
Identified the main stakeholders in the US federal healthcare system and described their respective goals, wants, and needs with regard to the public healthcare system according to a personal evaluation.
Analyzed the current status of the healthcare provided by the US government and proposed a new relevant policy to be implemented for optimizing the use of outsourcing in healthcare services to private hospitals and healthcare practices in order to provide medical services to the bulk of the US population.
In using the policy proposed, described the benefits for at least one stakeholder group identified in the first question.
Explained the likely outcomes of the outsourcing policy recommended, including the impact on different stakeholder groups as well as possible tradeoffs in implementing it.
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation.
Total:

For assistance with any problems you may have when completing this assignment—OR—to offer your assistance to classmates, please use the Problems and Solutions Discussion area located through the left side navigation link

Module 2 Assignment 2: Outsourcing Federal Healthcare

Early in their existence, many businesses handle their activities internally

As businesses mature and grow, they often find competitive advantage in the specialization provided by outside firms. This trend is particularly frequent in industries such as information technology (IT) and healthcare.

· Visit the Web sites of Medicare and Medicaid programs for more information about them.

· Review the article, “Outsourcing: Assessing the Risks and Benefits for Organizations, Sectors, and Nations” by Harland, Knight, Lamming, and Walker (

05). The conceptual framework in this article shows how corporate strategy is influenced by regulation under the decision node of policy issues (p.

44).

Based on your analysis of the article and the Web sites, address the following:

· Identify the main stakeholders in the US federal healthcare system. In your view, what are their respective goals, wants, and needs with regard to public health?

· Analyze the current status faced by the federal government in terms of the strategy being used in its healthcare system.

· Identify strengths and weaknesses of the strategy as well as opportunities and threats (SWOT analysis) present in the external environment.

· Propose a new policy to be implemented for optimizing the use of outsourcing in healthcare services to private hospitals and healthcare practices in order to provide medical services to the bulk of the US population. This policy should include the following objectives:

· Lowering costs of the program to reduce federal spending

· Providing highest quality treatment for the insured

· Providing consumer-oriented choice

· Lowering treatment costs for consumers

· Based on your proposal of a new policy, describe the benefits for at least one stakeholder group you identified in the first question. Discuss how your outsourcing strategy objectives satisfy the wants and needs of the specific stakeholder(s).

· Explain the likely outcomes of the outsourcing policy you recommended. Which stakeholder group benefits the most and which benefits the least? What are the strategic tradeoffs implied by your outsourcing recommendation?

Write a 3–4-page paper in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M2_A2 .

http://search.proquest.com.libproxy.edmc.edu/docview/
232337858?accountid=34899

Assignment 2 Grading Criteria	Maximum Points
Identified the main stakeholders in the US federal healthcare system and described their respective goals, wants, and needs with regard to the public healthcare system according to a personal evaluation.	20
Analyzed the current status of the healthcare provided by the US government and proposed a new relevant policy to be implemented for optimizing the use of outsourcing in healthcare services to private hospitals and healthcare practices in order to provide medical services to the bulk of the US population.	28
In using the policy proposed, described the benefits for at least one stakeholder group identified in the first question.		12
Explained the likely outcomes of the outsourcing policy recommended, including the impact on different stakeholder groups as well as possible tradeoffs in implementing it.
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation.	8
Total:	80

For assistance with any problems you may have when completing this assignment—OR—to offer your assistance to classmates, please use the Problems and Solutions Discussion area located through the left side navigation link

Affordable Care Act: State Resources FAQ

April 25, 2013

Enhanced Funding for Medicaid Eligibility Systems Operation and Maintenance

Reference Cite:

http://medicaid.gov/State-Resource-Center/FAQ-Medicaid-and-CHIP-Affordable-Care-Act-ACA-Implementation/Downloads/Affordable-Care-Act_-Newest-Version

Under the Medicaid program, CMS has provided 90 percent federal matching funds for the design and development of new or improved Medicaid eligibility determination systems that states are developing to accommodate the new Affordable Care Act modified adjusted gross income (MAGI) rules and to coordinate coverage with the Marketplaces. States may also receive 75 percent federal match for maintenance and operations. Receipt of these enhanced funds is conditioned on states meeting a series of standards and conditions to ensure investments are efficient and effective. CMS has examined our current practices under Medicaid Management Information Systems (MMIS) rules for approval of 75 percent federal match for maintenance and operations in the context of eligibility determinations and has confirmed that, as with other parts of MMIS operations, certain eligibility determination-related costs are eligible for 75 percent Federal Financial Participation (FFP). Eligibility for the enhanced FFP will be based on state systems being compliant with the Seven Conditions and Standards (see: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Data-and-Systems/Downloads/EFR-Seven-Conditions-and-Standards ), including meeting minimum critical success factors for accepting the new single streamlined application, making MAGI-based determinations and coordinating with Marketplaces starting October 1, 2013. The enhanced 75 percent funding will be available when the approved system becomes operational, with some exceptions outlined below.

This set of FAQs provides general guidelines about what costs are eligible for enhanced funding, and how CMS will work with each state to review and approve the costs that will be covered. As described in more detail in the following FAQs, CMS will use the advanced planning document (APD) process to confirm with states the specific implementation details, before states will be able to start claiming. CMS will also regularly monitor enhanced claims.

1. Can states claim 75 percent FFP for ongoing operational costs of their eligibility determination system? What costs are eligible for the enhanced FFP?

Yes, 75 percent FFP is available for on-going costs of operating approved eligibility determination systems that meet the Seven Conditions and Standards and critical success factors. (see: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Data-and-Systems/Downloads/EFR-Seven-Conditions-and-Standards )

Section 1903(a)(3)(B) of the Social Security Act provides 75 percent FFP for costs associated with operating an approved Medicaid management information system (MMIS). The Medicaid

Page 1 of 9

manual further clarifies at Section 11276.3 A. MMIS Operations, “FFP at 75 percent is available for direct costs directly attributable to the Medicaid program for ongoing automated processing of claims, payments, and reports. Included are forms, use of system hardware and supplies, maintenance of software and documentation, and personnel costs of operations control clerks, suspense and/or exception claims processing clerks, data entry operators, microfilm operators, terminal operators, peripheral equipment operators, computer operators, and claims coding clerks if the coded data is used in the MMIS, and all direct costs specifically identified to these cost objectives. Report users, such as staff who perform follow-up investigations, are not considered part of the MMIS.”

States may claim 75 percent FFP for the costs of certain personnel closely associated with operating claims processing and related systems under MMIS. As noted in our final rule, Medicaid Program; Federal Funding for Medicaid Eligibility Determination and Enrollment Activities (CMS–2346–F), in response to comments, “enhanced funding is available for staff time spent on mechanized eligibility determination systems in the same manner that they apply to all mechanized claims processing and information retrieval systems, since mechanized eligibility determination systems are now considered to be part of such systems, assuming the requirements of this section are met.” (See: https://www.federalregister.gov/articles/2011/04/19/2011-9340/medicaid-program-federal-funding-for-medicaid-eligibility-determination-and-enrollment-activities)

The table below delineates, consistent with traditional MMIS functions, how states should distinguish between costs that can be matched at 75 percent and 50 percent FFP. States should work closely with CMS during the APD process, as described below in more detail, to provide appropriate documentation concerning their cost allocation and claiming plans. In states where workers determine eligibility or provide customer service for multiple health and human service programs, costs should be allocated across programs, as discussed further in Question 6.

General Allocation Approach Eligible for 75/25 Application, On-going Case Maintenance and Renewal* Eligible for 50/50 Policy, Outreach and Post-eligibility • Intake – Application/data receipt (i) • Acceptance- Edits, verification and resolution of inconsistencies (ii) • Eligibility determination (iii) • Outputs- Issuance of eligibility notices to customer, file updates and transactions to partners (iv) • On-going case maintenance activities, including intake activities related to renewals (v) • Customer service, including call center • Outreach and Marketing – General public outreach, beneficiary education and outreach, including explanation of eligibility policies, program and benefits. • Policy development and research even if related to eligibility determination standards and methodologies • Staff development and training even if related to eligibility determination, except for Operational Readiness training as defined in the response to question 3

Health care

in the United States is provided by many distinct organizations. Health care facilities are largely owned and operated by

private sector

businesses.

Health insurance

for

public sector

employees is primarily provided by the government. 60-65% of healthcare provision and spending comes from programs such as

Medicare

Medicaid

TRICARE

, the

Children’s Health Insurance Program

, and the

Veterans Health Administration

. Most of the population under 65 is insured by their or a family member’s employer, some buy health insurance on their own, and the remainder are uninsured.

Of 17 high-income countries studied by the

National Institutes of Health

in 2013, the United States was at or near the bottom in

infant mortality

, heart and lung disease, sexually transmitted infections, adolescent pregnancies, injuries, homicides, and rates of disability. Together, such issues place the U.S. at the bottom of the list for life expectancy. On average, a U.S. male can be expected to live almost four fewer years than those in the top-ranked country.

[1]

According to the

World Health Organization

(WHO), the United States spent more on

health care per capita

($8,608), and more on health care as percentage of its

GDP

(17.9%), than any other nation in 2011. The

Commonwealth Fund

ranked the United States last in the quality of health care among similar countries, and notes U.S. care costs the most.

The

U.S. Census Bureau

reported that 49.9 million residents, 16.3% of the population, were uninsured in 2010 (up from 49.0 million residents, 16.1% of the population, in 2009). A 2004

Institute of Medicine

(IOM) report said: “The United States is among the few industrialized nations in the world that does not guarantee access to health care for its population.” A 2004

OECD

report said: “With the exception of Mexico, Turkey, and the United States, all

OECD countries

had achieved universal or near-universal (at least 98.4% insured) coverage of their populations by 1990.” A 2010 report observed that lack of health insurance causes roughly 48,000 unnecessary deaths every year in the United States.

[2]

In 2007, 62.1% of filers for bankruptcies claimed high medical expenses. A 2013 study found that about 25% of all senior citizens declare bankruptcy due to medical expenses, and 43% are forced to mortgage or sell their primary residence.

[3]

How the Health Care Law Benefits You

http://www.healthcare.gov/law/information-for-you/benefits.html

The Affordable Care Act forces insurance companies to play by the rules, prohibiting them from dropping your coverage if you get sick, billing you into bankruptcy because of an annual or lifetime limit, or, soon, discriminating against anyone with a pre-existing condition.

All Americans will have the security of knowing that they don’t have to worry about losing coverage if they’re laid off or change jobs. And insurance companies now have to cover your preventive care like mammograms and other cancer screenings.

When key parts of the health care law take effect in 2014, there’ll be a new way for individuals, families and small businesses to get health insurance. Whether you’re uninsured, or just want to explore new options,

the Marketplace

will give you more choice and control over your health insurance options.

Laying the Foundation for 2014

Increasing Access to Affordable Care

Millions of Americans have gained new access to more affordable health coverage and care.

· Coverage for young adults: 3.1 million young adults who were uninsured

have gained coverage

by being able to stay on their parent’s health plan, giving their families peace of mind.

· Access to free preventive services: 71 million additional Americans now receive coverage through their private health insurance plan for many

preventive services without cost sharing

such as copays or deductibles. That means that more Americans will receive wellness visits, cancer screenings and other services that will help them get and stay healthy. Women can now get coverage— without cost-sharing—of even

more preventive services

they need. Approximately 47 million women now have guaranteed access to additional preventive services without cost-sharing for policies renewing on or after August 1, 2012.

· Coverage for people with pre-existing conditions: Over 107,000 Americans with pre-existing conditions have gained coverage through the

Pre-Existing Condition Insurance Plan

. This temporary program makes health coverage available and more affordable for individuals who are uninsured and have been denied health insurance because of a pre-existing condition.

· Investing in primary care: The health care law invests in training and supporting thousands of new primary care doctors and nurses by providing bonus payments, scholarships and loan repayment, and new training opportunities.

· Community Health Centers: Community Health Centers improve the health of the nation and assure

access to quality primary health care services

at more than 8,900 service delivery sites around the country. Since the beginning of 2009, health centers have increased the total number of patients served on an annual basis by 3.1 million.

Making Care More Affordable

The health care law is bringing down health care costs and making sure health care dollars are spent wisely.

· 80/20 Rule: The health insurance companies of 76 million Americans now have to meet the

80/20 rule

, or Medical Loss Ratio, where they must spend at least 80 cents of your premium dollar on your health care or improvements to care. If they fail to meet this standard, they must provide a rebate to their customers. Already, the 80/20 rule is helping deliver rebates worth $1.1 billion to nearly 13 million consumers – an average rebate of $151 per household.

· Reviewing premium increases: For the first time ever in every State,

insurance companies must publicly justify any rate increase

of 10% or more. And the law gives States new resources to review and block these premium hikes. To date, rate review has helped save an estimated $1 billion for Americans and 42 States have used their rate review grant funds to make the rate review process stronger and more transparent. Since this rule was implemented, the number of requests for insurance premium increases of 10% or more has dropped dramatically, from 75% to 14%. The average premium increase for all rates in 2012 was 30% below what it was in 2010 this slowdown has continued into 2013.

· Small business tax credits: Small businesses have long paid a higher price for health insurance – often 18% more than larger employers.

Tax credits for small businesses

will benefit an estimated two million workers who get their insurance from an estimated 360,000 small employers who received the credit in 2011. In 2014, small business owners will get more relief with tax credits and affordable insurance choices in the

new competitive health insurance marketplace

in every State.

· Supporting early retiree coverage: The

Early Retiree Reinsurance Program (ERRP)

has provided $5 billion in reinsurance payments to employers so they can continue to provide benefits to their retired workers who are not yet eligible for Medicare. This program has reduced premiums or cost sharing for at least 19 million early retirees, workers, their spouses, surviving spouses and dependents.

How can I get Medicaid?

http://www.healthcare.gov/using-insurance/low-cost-care/medicaid/#howmed

You may be eligible for benefits through Medicaid. Medicaid programs vary by state, so you will need to check with your state Medicaid office for more information.

· Eligibility: People with disabilities are eligible in every state. In some states, people with disabilities qualify automatically if they get Supplemental Security Income (SSI) benefits. In other states you may qualify depending on your income and resources (financial assets).

· “Buy-Ins”: Some states also have “buy-in” programs that allow people with disabilities with incomes above regular Medicaid limits to enroll in the Medicaid program. Children with disabilities can qualify for Medicaid either under these disability-related rules, or based on family income.

· Expansion in 2014. Starting in 2014, the Affordable Care Act will expand the Medicaid program to cover people under age 65, including people with disabilities, with income of about $15,000 for a single individual (higher incomes for couples and families with children).

· Help for disabled people: This expansion helps low-income adults who have disabilities but don’t meet the disability requirements of the SSI program. The expansion also helps those whose income is above their state’s current eligibility levels.

To learn more about your state Medicaid program and other options available to

What does Medicaid cost?

Medicaid coverage is designed to be affordable for everyone who is eligible. Cost sharing for Medicaid varies by state but is extremely limited for most participants.

What does Medicaid cover?

The benefits covered for adults through Medicaid are different in each state, but certain benefits are covered in every Medicaid program.

Doctor’s services that are covered by Medicaid include:

· Laboratory and X-ray services

· Inpatient hospital services

· Outpatient hospital services

· Health screenings for children and treatment if medical problems are identified

· Comprehensive dental and vision services for children

· Family planning services and supplies

· Long-term care services and supports

· Medical and surgical dental services for adults

· Pediatric and family nurse practitioner services

· Services provided in health clinics

· Nurse-midwife services

· Nursing facility services for adults

· Home health care services for certain people

· Prescription drugs

Other benefits your state must cover for children and may cover for adults:

· Physical, occupational, or speech therapy

· Eye doctor visits, eyeglasses

· Audiology, hearing aids

· Prosthetic devices

· Mental health services

· Respite and other in-home long-term care

· Case management

· Personal care services

· Hospice services

The Affordable Care Act will expand options for community-based care. There will be more opportunities for people of all ages who have a disability to get help with daily activities while remaining in their homes. The Medicaid program continues to move toward providing more community-based care options as an alternative to nursing homes.

To learn more about your state Medicaid program and other options available to you,

use the insurance and coverage finder

visit Medicaid.gov

Find out how the health care law is making Medicaid work for you

What special Medicaid coverage is available to women?

Cancer Prevention and Treatment

Breast and Cervical Cancer Prevention and Treatment (BCCPT) Medicaid programs are available to eligible women who are diagnosed with either breast and/or cervical cancer through the state screening program. You may be eligible even if you have a higher income. States have flexibility to define what it means to have been diagnosed or screened under the program.

Medicaid Options for Pregnant Women

Pregnant women may have special eligibility for Medicaid coverage for themselves and their infants at little or no cost if they have limited income.

Medicaid eligibility for pregnant women varies by state, but all states must cover pregnant women with incomes up to about $20,000 as an individual. Most states cover pregnant women under Medicaid with higher incomes, and some states cover pregnant women under the

Children’s Health Insurance Program (CHIP)

How can I get Medicaid coverage for my children?

If you’re enrolled in Medicaid when your baby is born, your child is automatically eligible for Medicaid until your child’s first birthday. This means you don’t have to file a separate application for your new baby. He or she should be automatically enrolled after birth.

All states provide coverage for children through Medicaid and the

Children’s Health Insurance Program (CHIP). In fact, your children are likely to be eligible for coverage if your income is up to about $45,000 per year (for a family of four).

To learn more about coverage for children and other options available to you, use the insurance and coverage finder or

visit InsureKidsNow.gov

http://www.healthcare.gov/using-insurance/low-cost-care/medicaid/#howmed

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