The health care reform legislation, the Patient Protection and Affordable Care Act (PPACA), and other recent amendments impact hospitals and other medical providers in a variety of ways. A few of the key items in the legislation are as follows:
Medicare
Medicare Advantage payments are held to current levels for 2011. Beginning in 2012, benchmarks will vary from 115 percent of spending in low cost areas to 95 percent of spending in high cost areas.
Medicare Advantage plans will be required to spend at least 85 percent of revenue on medical costs. To the extent expenditures on profit and overhead exceed 15 percent of revenue, a rebate will be required to be remitted to Health and Human Services.
Effective for fiscal year 2014, the legislation reduces disproportionate share hospital payments.
The Market Basket reduction has been revised. These revisions impact inpatient hospitals, long-term care hospitals, inpatient rehabilitation facilities, psychiatric hospitals and outpatient hospitals.
Self-referral by physicians to hospitals they own is prohibited after December 31, 2010. Certain exceptions exist for physician owned hospitals that treat the highest percentage of Medicaid patients in their county.
Medicaid
Provides federal Medicaid matching payments for the costs of services to newly eligible individuals.
Payment rates to primary care physicians providing primary care services will be no less than the Medicaid payment rates in fiscal years 2013 and 2014.
HHS is required to develop a methodology for reducing Disproportionate Share Hospital allotments to achieve the mandated reductions.
Other provisions, benefits, and costs
Makes key investments in training doctors, nurses and other health care providers.
Invests in the National Health Services Corps’ scholarship and loan repayment programs to expand the health care workforce.
Provides funds to build new and expand existing community health centers, and expands funding for scholarships and loan repayments for primary care practitioners working underserved areas.
A two-year temporary credit subject to an overall cap of $1 billion to encourage investments in new therapies to prevent, diagnose, and treat acute and chronic diseases. The credit would be available for qualifying investments made in 2009 and 2010.
Establishes a non-profit entity to identify priorities in patient-centered outcomes research and oversee analytics regarding effectiveness of treatments to assist doctors in treating patients.
Tax-Exempt -501(c)(3) hospitals would be required to: conduct a community health needs assessment every three years; implement a financial assistance policy; limit charges to certain patients to amounts generally billed to insured patients; and follow certain debt collection practices.
Establishes requirements for community mental health centers that provide Medicare partial hospitalization services.
Applies an excise tax of 2.3 percent on the sale of medical devices by a manufacturer or importer.
What should providers be doing now?
Continue to monitor available information. Documents exceed 2000 pages and additional information will continue to be forthcoming. Understand elements and timelines.
Evaluate reduction in reimbursements. This is important due to model changes in reimbursements.
Discuss with executive teams and Boards of Directors the Acts’ timelines and anticipated changes in payment mechanisms and reimbursements.
Health care timeline Over the next four years, PPACA will expand Medicaid significantly, subsidize insurance premiums, and provide incentives for businesses to provide health care insurance. Learn more >
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