Becker's Hospital Review

8 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 Health Reform in 2013: What's Happened, What's Left & What it Means for Providers (continued from page 1) The Obama administration has embarked on a comprehensive overhaul of the way Americans deliver and pay for healthcare, aiming to make care more affordable through eliminating waste, incentivizing efficiency and requiring more recipients to pay in. It plans to achieve those goals at the cost of the traditional funding mechanisms and levels that providers have come to rely on, which could spell disaster for the unprepared. Being prepared requires providers to not only know and adapt to what's coming, but also to be able to explain what has changed to their patients and business partners. The Patient Protection and Affordable Care Act represents enormous upheaval to the healthcare industry's status quo, so here is a recap of what's happened, what's to come, and what hospitals should be doing to ready themselves for the PPACA. Reform so far President Barack Obama signed the PPACA into law March 23, 2010, but the lead-up to its passing was a hard-fought battle. There were rumors of "death panels" enabling government-sponsored euthanasia resulting from rationed funding for healthcare. A public health insurance option intended to compete with private insurers was rejected twice. And although the Supreme Court upheld the constitutionality of the law's contentious individual health insurance mandate in June 2012, it struck down the requirement for all states to expand their Medicaid programs, relegating that part of the law as optional for each state. Much of the law so far has begun to turn the wheels of the health industry in the direction of growing primary care, promoting and protecting consumers' access to coverage and introducing funding models that share payors' risk and gains with providers. 2010 — Expanding access to more people, the 2010 law immediately began to disburse tax credits for small businesses' health plans and rebates to seniors for prescription drugs. Children could no longer be denied coverage due to pre-existing conditions, and some state and federal insurance plans were created for adults with pre-existing conditions who had been uninsured for six months or more. Young adults under 26 not offered insurance from their employer were permitted to stay on their parent's plan. Anticipating the boost in demand, education assistance was established to attract more primary care nurses and physicians into underserved areas. Within the health plans themselves, types of preventive care became covered without charging a copay or deductible, and no lifetime limits on hospital stays or other essential benefits can be imposed. More assistance was given to seniors buying Medicare Part D-covered drugs and receiving preventive services, and at the same time the Obama administration added defenses against corruption and unreasonable business practices. Extra funding was pumped into fraud-busting programs to cut unlawful billing of Medicare, Medicaid and CHIP, and into state groups with authority to review or regulate insurance premium increases. 2011 — In 2011, a major limit on insurance companies was imposed that required them to spend at least 80 to 85 percent of premium dollars on healthcare or quality improvement, rather than administrative costs or profits, or else send rebates to customers. Gradual reductions to insurance companies in the Medicare Advantage program began, slowly shrinking the $1,000 bonus paid per beneficiary on average compared with traditional Medicare. Elderly and disabled beneficiaries gained a wealth of new services designed to decrease the amount of time they spent hospitalized, free preventive care for certain services, assistance designing care plans and coordinating support services when they were discharged from a hospital visit, and freedom for states to use Medicaid funding to pay for cheaper at-home care versus nursing home admittance. Medicare beneficiaries also began to receive a 50 percent discount on Part D-covered brand-name prescription drugs. Money was granted to public health programs and services to help Americans purchase sensible private insurance. Efforts to build and renovate community health centers gained new financial support, and payments for rural providers went up. 2012 — Last year saw a swath of changes, including the advent of accountable care organizations established in order to design cost-effective approaches to care delivery in exchange for sharing in CMS' savings. In October 2012, hospitals meeting certain benchmarks for electronic health records became eligible for incentive payments as part of provisions included in the American Reinvestment and Recovery Act. That same month, CMS began its Value-Based Purchasing program, which alters how much it pays hospitals through Medicare depending on its performance on various quality measures including patient satisfaction and hospital readmission rates. 2013 — Beginning this year, funding changes to Medicaid will reimburse primary physicians at Medicare rates through 2014. The federal government will also increase funding to states that craft Medicaid programs with better benefits for preventive care. And a national pilot program to promote bundled payment models has gone into effect, which would allow providers to take on risks and profit potential from efficient use of Medicare funds. Coming soon There's more to come from the law, especially next year in 2014. That's when nearly all adults and children must obtain health insurance or pay a fine, which will be the greater of 1 percent of income or $95 per adult ($285 for a family) next year but will balloon to the greater of 2.5 percent of income or $695 ($2,085 per family) by 2016. Penalties for much wealthier families can grow as high as the average basic-level governmentapproved health plan's annual premiums. Employers of more than 50 fulltime workers will need to offer minimum essential coverage or pay a fine for each eligible worker above a threshold who is not offered coverage. Each state will have an online health insurance marketplace, referred to as an exchange, that will offer qualified private plans for individuals and small businesses, and screen customers to see if they are eligible for subsidies, tax credits or Medicaid. Enrollment for these begins in October this year, with coverage going live Jan. 1, 2014. All but a few Republican states have shunned the idea of running their own exchanges, opting instead for the federal government to take on the job. Supporters say the marketplaces increase competition and will benefit consumers, thus creating less need for government insurance programs. One of the most hotly contested features of the PPACA, even today, began to receive funding in 2011. The Independent Payment Advisory Board, an appointed panel of healthcare experts, will be charged with making binding cost-cutting plans for Medicare payments beginning in 2015 that Congress can override only through new legislation that achieves the same level of savings. Republicans have vowed to eliminate the IPAB, and even some Democrats have raised an eyebrow at the concept. Originally, the law intended for all states to be required to expand Medicaid to more poor and childless adults at 133 percent of federal poverty line. But when the Supreme Court nixed that mandate, the Obama administration fell back on incentivizing states to volunteer to expand Medicaid with a guaranteed three years during which the increased cost of the expansion will be covered entirely by the federal government. After that, states will only contribute 10 percent of the extra cost. Medicare disproportionate share hospital payments, the lifeblood of some critical access and safety-net hospitals, will plummet 75 percent in October, but they'll be offset by larger payments based on a hospital's proportion of uninsured served and uncompensated care provided.

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