The “Patient Protection and Affordable Care Act” was signed into law on March 23, 2010. Originally it was known as H.R. 3590. Highlights of the law:
1. Beginning on September 23, 2010
A. Healthcare insurers cannot:
- Deny coverage to children with pre-existing conditions,
- Place lifetime limits on benefits,
- Cancel policies without first proving fraud, and
- Deny claims without an opportunity to appeal
B. Consumers can:
- Receive preventive services for “free,”
- Keep children on a parental healthcare policy until age 26,
- Choose a primary care physician, ob/gyn, and pediatrician,
- Use the nearest emergency room without penalty.
2. The law’s main features, benefits, costs, and other likely probabilities are:
- Starting in 2014, everyone in the United States will be required to have health insurance and must attach proof of insurance to their tax return,
- If a person fails to insure, they will be fined with the penalty rising to $695 ($2,085 per family) in 2016 or 2.5% of a person’s adjusted gross income, whichever is greater,
- If a person’s employer fails to offer health insurance, the employer can be fined as much as $2,000 per employee per year,
- The type of insurance a person must have, including co-pays, deductibles, and the person’s share of the premium, will be determined by Federal regulations,
- If a person does not have health insurance through his or her employer, Medicare, Medicaid, or other government plan, they will be required to purchase health insurance in a government regulated health insurance exchange, where competing health insurers will offer the government mandated health insurance benefit package,
- Medicare fees paid to physicians are required to drop 30% in the next three years.
- Persons may be able to buy health insurance that they can not now afford; e.g., a couple with an income of $29, 000 (twice the current Federal poverty level) will be able to buy health insurance for an annual premium no higher than 6.3% of their income; $1,827,
- Person’s with a pre-existing condition will be able to buy insurance for the same premium as paid by others persons in good health,
- Over the next 4 years, newly created risk pools will offer subsidized insurance to some people who have been turned down in the past by health insurers because of a pre-existing condition,
- 32 to 34 million otherwise uninsured persons will be able to obtain health insurance.
- $532 billion of the law’s first 10 year costs will be paid by cuts in spending on Medicare enrollees, and
- There will be new taxes on drugs and medical devices (wheelchairs, crutches, pacemakers, artificial joints).
D. Other likely probabilities:
- A new tax on health insurance that is likely to cost the families of employees of small businesses more than $500 per year in higher health insurance premiums,
- A 40% tax on extra coverage provided by expensive “Cadillac” plans will apply to about one-third of all private health insurance in 2019. Over time, the tax will apply to every health plan since provision is not indexed to medical cost inflation,
- Other items to be taxed include: tanning salons and the sale of a person’s home in some cases,
- Of the 15 million people expected to enroll in Medicare Advantage programs, 7 ½ million will lose their plan and the remainder will incur higher premiums and less benefits, and
- Approximately 6 million retirees will lose employer drug coverage.
3. Physician Effects
One positive effect is the addition of approximately 34 million people to the health insurance roles by 2014. About one-half of these persons will have private insurance. Some physicians may opt to treat more privately insured patients while reducing their Medicare and Medicaid patients, since private insurance will reimburse at a higher rate. Another plus for physicians treating Medicaid patients is that the Act provides for raising Medicaid fees to Medicare levels in 2013 and 2014 for primary care but not specialists.
Other provisions directly affecting physicians include:
- Elimination of Physician-Owned Hospitals. The Act essentially eliminates the Stark Law “Whole Hospital” exception that allows physician-owned hospitals. Grandfathered hospitals; those with provider agreements as of August 1, 2010, are permitted to remain operational; however, physician ownership cannot increase from that held on March 23, 2010. In addition, the Act increases disclosure requirements, expands requirements to ensure the physicians’ investments are bona fide, and places sets harsh restrictions on the hospitals’ abilities to increase procedure rooms and beds. The Reconciliation Act changes the date after which physician ownership of hospitals to which they self-refer is prohibited to December 31, 2010. It also provides a limited exception to growth restrictions on current physician-owned hospitals that render care to the highest percentage of Medicaid patients in their counties.
- Increased Medicaid Payments for Primary Care. Medicaid payments for primary care physicians; i.e., pediatricians, family physicians, and internists, will increase starting in 2013 and raise them to Medicare levels by 2014.
- Value-Based Payments for Physician Services. A relative value unit (RVU) modifier system will be implemented to increase physician payments based on their achievement of specific quality metrics.
- Ownership Disclosure of Imaging and Other Designated Health Services (DHS). Taking effect immediately, the Act amends in-office ancillary services exception to the Stark Law by requiring a referring physician to inform patients in writing at the time of a referral that the patient may obtain specified imaging services (MRI, CT, and PET scans) and other DHS as designated by the Secretary of Health and Human Services from a person or entity unrelated to the referring physician. Moreover, the referring physician must provide patients with a list of alternative suppliers in the area where the patient resides.
- Disclosure and Compliance. All long-term care providers will be required to disclose ownership information and to implement compliance and ethics plans.
The uncertainties affecting physicians are the following:
- If Medicare and Medicaid patients experience access problems to care, the Government may force physicians to accept an “all-payer” system, where the fees paid for all patients are the same. The fees paid may be substantially less than what private insurers are currently paying,
- Medicare reimbursement is undecided. The planned 21.5% fee decrease that was scheduled for 2010 has been delayed until November 2011 when Congress is scheduled to re-visit the issue,
- The new Medicare Independent Payment Advisory Board (IPAB) will have the authority to reduce the growth in Medicare spending. Future spending cuts in Medicare to curtail growth will likely target physicians. Targeting physicians is likely since the Act prohibits all other methods of cost control. Specifically, IPAB proposals may not:
i. Ration health care,
ii. Raise revenues or Medicare beneficiary premiums,
iii. Increase Medicare beneficiary cost sharing (including deductibles, coinsurance, and copayments) or restrict benefits or modify eligibility criteria.
These spending reductions will begin in 2015; reductions in hospital payments are scheduled for 2020. All IPAB decisions do not need Congressional approval. Congress can only block IPAB decisions by substituting a plan that saves more money than the IPAB proposal.
- Medicare may interfere with a physician’s practice of medicine. It is fairly certain that the Medicare payment system will be used to promote electronic medical records, coordinated care,, managed care, integrated care, and bundled care. Physicians may be nudged into an ACO (Accountable Care Organization), which is similar to an HMO but with conditional fees based on performance measures. Physicians are paid more for conformance and less if they do not conform. Private insurers are likely to follow Medicare’s lead, and
- A new moratorium on additional physician-owned hospitals is also being considered.
To date, there have been 47 amendments to the Act. For a complete list of those amendments, they can be accessed at: http://www.galen.org/newsletters/changes-to-obamacare-so-far/
The complete passed and signed Act can be accessed at:
Summaries of Key Elements of the Act: