Health Care Reform Poses Myriad of Challenges and Opportunities
Health reform is here. It not only affects how every American accesses, receives, and pays for care, but drastically changes the way providers and insurance companies conduct business.
Congress passed two monumental bills to overhaul the nation’s health care system, the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Affordability Reconciliation Act of 2010.
“Health care leaders should look to the future and start educating themselves, creating a plan, and implanting organizational change,” says Rob Schile, health care principal with LarsonAllen.
“A lack of preparation will negatively impact your ability to effectively care for the communities you serve,” he cautions.
Key provisions in the reform legislation
These new laws contain countless details and a variety of effective dates through 2020. “As employers and providers, health care organizations are understandably nervous about what health reform means. As the saying goes, ‘the best defense is offense.’ The good news is there’s time to prepare, but to remain competitive that preparation must start now,” says Nicole Fallon, health care manager with LarsonAllen.
To begin answering the many questions from our clients, we’ve compiled an evolving reference guide, which summarizes some of the specific provisions in the health care reform and reconciliation acts. Below are the highlights.
Individuals
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By 2014, all Americans will be required to obtain health insurance through their employer, a state insurance exchange, Medicaid, or the individual insurance market.
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Those who earn 400 percent or less of the federal poverty level will be eligible for subsidies to assist in paying for health insurance premiums and cost sharing.
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Employers
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Some businesses will be required to “play or pay,” meaning they will either have to provide a certain level of health coverage to each employee or pay a penalty fee if any full-time employees receive the federal premium assistance tax credit.
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Small employers, those with 50 employees or fewer and small nonprofits, will be eligible for tax credits to help provide coverage to their employees.
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Health Care Providers
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The provision of the act modifies annual market basket updates and adjusts for productivity under Medicare for inpatient hospital, home health, skilled nursing, hospice, and other Medicare providers.
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Payment reform will present opportunities to participate in a variety of demonstration projects and pilots for value-based purchasing, accountable care organizations, and payment bundling to produce shared savings.
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Various grants will be available for efforts like training people for jobs in the long-term care field.
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Primary care doctors, nurse practitioners, and physician assistants will be paid a 10 percent bonus on certain primary care services provided under Medicare beginning January 1, 2011.
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Decreased hospital readmissions, payment adjustments based on productivity, and disproportionate share payment reductions will result in Medicare reimbursement cuts.
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In fiscal years 2010 and 2011, there are no targeted reductions to the market basket for skilled nursing facilities (SNFs).
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There will be a new potential revenue stream through the Community Living Assistance Services and Supports Act (CLASS Act), which is a national, voluntary, self-funded program for long-term care insurance. The CLASS Act provides per diem cash benefits in the event an individual suffers a functional limitation.
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Helpful health care reform resources
Next steps and how we can help
“Together, let’s become well-informed and develop plans that are critical to sustaining the mission of providing health care, and do it in a financially savvy way during the transition,” encourages Schile.
As more details unfold and regulations are promulgated, LarsonAllen will be developing a series of tools to help your organization, as both a provider and employer, deal with the sweeping changes health care reform brings. They will provide insight on how to implement core strategies to make the best decisions for your organization, including:
- Achieving operational efficiencies to maximize reform opportunities, including grants, pilots, or demonstration projects
- Understanding the important role of service delivery data and health care information in implementing reform, including: measuring, tracking, sharing and reporting it
- Developing or enhancing strategic partnerships or affiliations among hospitals, physicians and post-acute providers
- Helping employers evaluate the options related to offering employee health insurance coverage
For more information on how health reform may impact your health care organization, contact Rob Schile at rschile@larsonallen.com or 612-376-4592, Nicole Fallon at nfallon@larsonallen.com or 612-376-4843, or a health care principal in your region.