Part A provides hospital coverage to individuals who are eligible and enrolled in Medicare, the federal government's health care insurance program. Medicare uses diagnostic related groups (DRGs) to determine payment levels for services provided for varying diagnoses.
Although anyone may pay a premium for Medicare hospital coverage, several groups are covered without a premium, including those over the age of 65, those who have received Social Security benefits or railroad retirement benefits for at least 24 months, and those with end-stage renal disease. Benefits are also available without a premium to several classes of individuals, typically those who worked long enough to receive Social Security benefits but do not, the spouses of those receiving Social Security or those eligible to receive Social Security, and the disabled spouses and children of those with Medicare coverage.
When someone receiving Social Security or railroad retirement benefits turns 65, he or she is enrolled automatically in Parts A and B. Others must enroll to receive Medicare coverage.
Until 1984, Medicare paid claims after services were provided. This sometimes led to inconsistency in coverage from person to person, as well as problems in Medicare's cost-accounting system. To remedy these issues, Medicare now assigns payment levels for different types of services before the services are provided, using groups of treatments and procedures called DRGs. Now, a medical service provider knows the payments it is likely to receive based on a patient's diagnosis. Likewise, Medicare knows the range of payments it is likely to make based on the patient's diagnosis.
Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.
