Health reform is and has been a hot-button issue for both politicians and healthcare leaders for the last few years, though talk of significant, government-led reform has been discussed for decades. In the wake of the Patient Protection and Affordable Care Act, healthcare reform is a highly contested and very politically polarizing issue. It is therefore very important to know what is going on and where. The following are 60 things to know about healthcare reform in the United States.
1. The Senate passed the PPACA on Dec. 24, 2009 with a 60 to 39 vote after months of heated partisan debate. It then passed in the House on March 21, 2010 with a vote of 219 to 212 to approve the measure, and on March 23, 2010, President Obama signed the original PPACA into law.
Individual mandate
2. The PPACA includes a provision, often referred to as the "individual mandate," that requires Americans to obtain health insurance or pay a penalty. However, the law does include some exceptions that began in 2014, which include:
• Individuals with religious opposition to the acceptance of benefits from a health insurance policy,
• Undocumented immigrants,
• Incarcerated individuals,
• Native Americans,
• Individuals with a family income lower than the threshold for filing a tax return,
• An individual having to pay more than 8 percent of your income for health insurance — after taking into account any employer contributions or tax credits.
3. In 2014, the penalty for not obtaining health coverage is $95 per adult and $47.50 per child (up to $285 for a family) or 1 percent of family income, whichever is greater. In 2015, the penalty is $325 per adult and $162.50 per child up to ($975 per family) or 2 percent of family income, whichever is greater. In 2016 (and beyond) the penalty jumps to $695 per adult and $347.50 per child (up to $2,085 for a family) or 2.5 percent of family income, whichever is greater.
4. In August 2011, an 11th Circuit Appellate decision from Atlanta declared the individual mandate unconstitutional. The court ruling was one of the most closely watched cases regarding healthcare law, with its plaintiffs including Republican governors and attorneys general from 26 states. President Obama's administration appealed this ruling to the U.S. Supreme Court.
5. In March 2012, the U.S Supreme Court reviewed two provisions of the PPACA that had been the source of much activity in the Appellate courts: the individual mandate and the obligatory Medicaid expansion for all states.
6. The Supreme Court's decision, in National Federation of Independent Business v. Sebelius, was announced June 28, 2012. The constitutionality of the individual mandate was supported by a majority 5-4 decision. Additionally, the Court found the Medicaid expansion unconstitutionally coercive of the states, because states did not have adequate notice to voice voluntarily consent. However, a majority of the Justices found that the issue was adequately remedied by leaving Medicaid expansion intact in the PPACA, while making it optional for states to expand and limiting the Department of Health and Human Services Secretary's power to withhold the funds.
Employer mandate
7. Under the original PPACA employer mandate, which was slated to begin in 2014, businesses and companies with 50 or more employees were required to offer health insurance to those employees or pay a penalty. Those that didn't were forced to make a shared responsibility payment to help offset the costs to taxpayers that result from employees getting premium subsidies to buy coverage through the health insurance exchanges.
8. In February, the Internal Revenue Service released final regulations concerning the employer shared responsibility provisions that take effect next year under the PPACA. According to the final regulations, the employer mandate or responsibility provision will apply to firms with 100 or more full-time employees starting in 2015 and to businesses with 50 or more full-time workers beginning in 2016.
9. The two-year delay for employers with 50-99 employees stems from a widespread aversion to the employer mandate and the difficulty in its implementation. Furthermore, the larger companies caught a break when the coverage requirement was changed to 70 percent of their full-time workers for 2015, rather than 95 percent, which applies to 2016 and beyond.
10. For those that don't provide coverage, the annual employer mandate fee — or the Employer Shared Responsibility Payment — is an annual, per employee fee of $2,000 for employers with over 50 full-time equivalent employees. If at least one full-time employee receives a premium tax credit because coverage is either unaffordable or does not cover 60 percent of total costs, the employer must pay the lesser of $3,000 for each of those employees receiving a credit or $750 for each of their full-time employees total.
11. According to a report by the American Health Policy Institute, the PPACA directly and indirectly increases the cost of employer-based health insurance through various provisions. These provisions include the Patient Centered Outcomes Research Institute fee, temporary reinsurance fee, excise tax on high-cost health plans and the mandate to cover adult children as dependents until age 26, among others.
12. Overall, during the next decade, the PPACA is expected to cost large U.S. employers (those with 10,000 or more workers) an estimated $4,800 to $5,900 per employee, according to the American Health Policy Institute report. The total cost of the PPACA to all large employers during the next 10 years is projected to be $151 billion to $186 billion.
Insurance reform
13. The PPACA requires ten essential health benefits to be included in the individual and small group markets, both inside and outside of the health insurance marketplace. They are:
• Outpatient care
• Trips to the emergency room
• Treatment in the hospital for inpatient care
• Care before and after a baby is born
• Mental health and substance abuse services
• Prescription drugs
• Services and devices to help recovery for the injured, or those who have a disability or chronic conditions
• Lab tests
• Preventive services including counseling, screenings and vaccines; and care for managing chronic disease
• Pediatric services including dental care and vision care for kids.
14. Although President Obama promised consumers that, "If you like your healthcare plan, you can keep it," while pushing for the passage of the PPACA, many policies are being cancelled by health insurance companies and/or do not comply with the PPACA. Due to the ubiquitous aversion to the cancellation of current plans, as of December 2013, individuals can keep their current plan — if insurance companies continue to offer them — even if it does not comply with the PPACA until 2015. After 2015, if a plan is not considered to have "grandfathered status" — those that were in existence on the date the PPACA was enacted or March 23, 2010, an individual must purchase a new plan that complies with the PPACA requirements. Further delaying the impending plan changes, as of March 2014, HHS announced that in some states you can renew your plan up to October 2016.
15. Since 2011, the PPACA has required health insurers to maintain a minimum medical loss ratio of 80 percent in the individual and small group markets and 85 percent in the large group market to cut the cost of insurance to consumers and the government, while simultaneously monitoring how much insurers profit from recent healthcare reform. The medical loss ratio shows the percentage of premium dollars an insurer spends on medical care and quality improvement expenses, minus what the company spends on overhead (profits, administrative costs and sales expenses). Health insurers that spend less than those percentages on quality improvement and medical care must pay the difference in the form of rebates to their members.
16. The MLR requirement has led to a new era of price negotiating and managed care reimbursement talks between hospitals and health insurers. According to HHS, American consumers have saved a total of $9 billion on health insurance premiums since 2011 under the medical loss ratio provision included in the PPACA.
17. On Jan. 1, the PPACA also put in place guaranteed issue regulations that require health insurance companies issue a health plan to any applicant regardless of the applicant's health status — including pre-existing conditions or other factors. The PPACA's guaranteed issue provision applies to all group plans and new plans on the individual market, but does not apply to grandfathered plans — those that were in existence of the date the PPACA was enacted or March 23, 2010.
18. On Jan. 1, insurance companies were forced to meet the PPACA's minimum premium rating rules for health plans for individual and small businesses. Under the PPACA, health plans for individuals and small businesses are allowed to adjust premiums based on the following factors only:
• individual vs. family enrollment
• geographic areas
• age
• tobacco use.
19. The risk adjustment provision of the PPACA redistributes funds from individual and small group plans with lower-risk enrollees to plans with higher-risk enrollees, spreading financial risk across the markets in states that do not operate their own marketplace. HHS estimates risk using enrollee demographics and medical diagnoses. To assess which plans will be charged and which will be issued payments, HHS then compares plans in each geographic area and market segment based on the average risk of their enrollees. The risk adjustment program is a permanent program.
20. The reinsurance provision of the PPACA is a temporary program that is meant to stabilize premiums by reducing the incentive for insurers to charge higher premiums due to uncertainty about the health status of enrollees. The reinsurance provision requires all individual, small group, and large group market providers of fully-insured major medical products, as well as self-funded plans to make contributions under this program to support payments to individual market issuers that cover high-cost individuals. By putting more money into the individual market, the reinsurance payments subsidize premiums in that market for a period of time. Reinsurance payments are issued to plans with high cost enrollees based on need. State high risk pools are excluded from the program. Any state may contract with one or more private contractors to operate a reinsurance program. No state is required to operate a reinsurance program, but if a state chooses not to operate such a program, then the federal government will operate the program in that state.
21. The risk corridors provision in the PPACA is another temporary program for 2014 and 2016 protecting against higher premium setting during the reform years. The risk corridors provision helps moderate insurers' gains and losses in selling exchange coverage. Each year, each health plan qualified to participate in the exchanges are assigned a target amount for allowable costs. If an insurer’s actual claims fall within plus or minus three percent of the target amount, it makes no payments into the risk corridor program and receives no payments from the program. As a result plans take full responsibility for small gains or losses, while the federal government shares in larger gains and losses.
Insurance exchanges
22. There are four categories of marketplace insurance plans in addition to a separate catastrophic plan offered to individuals under 30 years-old. The four categories are:
• Bronze – health plan pays an average of 60 percent, 40 percent is out-of-pocket
• Silver – health plan pays an average of 70 percent, 30 percent is out-of-pocket
• Gold – health plan pays an average of 80 percent, 20 percent is out-of-of pocket
• Platinum – health plan pays an average of 90 percent, 10 percent is out-of-pocket.
Note: Catastrophic plans pay less than 60 percent on the total average cost of care and are available only to people less than 30 years-old who have a hardship exemption, which is qualified by certain circumstances such as homelessness, domestic violence victims, a recent death in the immediate family, bankruptcy, recently ill family member and more.
23. The PPACA provides premium tax credits and cost sharing subsidies for those who qualify. The premium subsidies target low- and moderate-income Americans or those with incomes between 100 and 400 percent of the federal poverty level. Additional cost-sharing subsidies are available to those with incomes below 250 percent of the federal poverty level helping with deductibles, co-pays and co-insurance.
24. The PPACA requires that all health plans provide a summary of benefits and coverage for all enrollees and applicants, in addition to providing consumers with a uniform glossary of terms used in health insurance coverage. The provision went into effect in 2012.
25. The PPACA provides states with the option to create a state-based marketplace — a state's price comparison website for subsidized health insurance administered by a governmental agency or nonprofit organization, through which individuals and small businesses with up to 100 employees can purchase qualified coverage. States may also form regional marketplaces or allow more than one marketplace to operate in a state as long as each marketplace serves a distinct geographical area. If the state opts out of operating its marketplace, the PPACA gives it the option to participate in a federally facilitated marketplace or a partially federally facilitated marketplace. Formerly called "exchanges," the term "marketplace" came from a suggestion by Medicare officials to ensure better consumer understanding.
26. The initial open enrollment period for 2014 Marketplace coverage began Oct. 1, 2013. Less than two weeks after the end of the enrollment period in March, Kathleen Sebelius, the HHS secretary, stepped down. The resignation came in the wake of a glitch-ridden rollout for the federal health insurance marketplace website, HealthCare.gov. Following the launch in October, the site experienced numerous technical issues frustrating consumers and drawing wide criticism from the healthcare reform law's opponents.
27. In the U.S., there are 17 state-based marketplaces, seven Partnership Marketplaces and 27 federally facilitated marketplaces. They break out by state as follows:
Alabama – Federally facilitated marketplace
Alaska – Federally facilitated marketplace
Arizona – Federally facilitated marketplace
Arkansas – Partnership market place
California – State-based marketplace
Colorado – State-based marketplace
Connecticut – State-based marketplace
Delaware – Partnership marketplace
D.C. – State-based marketplace
Florida – Federally facilitated marketplace
Georgia – Federally facilitated marketplace
Hawaii – State-based marketplace
Idaho – State-based marketplace
(Idaho received conditional approval from HHS to run a state-based marketplace. However, due to time constraints in implementing an IT system, the Idaho Health Insurance Exchange Board voted to work with the federal government in running the individual and Small Business Health Options Program Marketplace until their IT platform is fully developed. The state will maintain plan management and consumer assistance functions, while the federal government will operate the IT system.)
Illinois – Partnership marketplace
Indiana – Federally facilitated marketplace
Iowa – Partnership marketplace
Kansas – Federally facilitated marketplace
Kentucky – State-based marketplace
Louisiana – Federally facilitated marketplace
Maine – Federally facilitated marketplace
Maryland – State-based marketplace
Massachusetts – State-based marketplace
Michigan – Partnership marketplace
Minnesota – State-based marketplace
Mississippi – Federally facilitated marketplace
(On October 1, 2013, HHS granted conditional approval to the Mississippi Insurance Department to operate the SHOP Marketplace. The federal government will continue to run Mississippi's Individual Marketplace.)
Missouri – Federally facilitated marketplace
Montana – Federally facilitated marketplace
Nebraska – Federally facilitated marketplace
Nevada – State-based marketplace
New Hampshire – Partnership marketplace
New Jersey – Federally facilitated marketplace
New Mexico – State-based marketplace
(New Mexico received conditional approval from HHS to run a state-based Marketplace. However, due to time constraints in implementing an IT system, the New Mexico Health Insurance Exchange Board voted to work with the federal government in running the individual Marketplace until October 2014. The state will maintain plan management and consumer assistance functions, while the federal government will operate the IT system. The state will run the SHOP Marketplace.)
New York – State-based marketplace
North Carolina – Federally facilitated marketplace
North Dakota – Federally facilitated marketplace
Ohio – Federally facilitated marketplace
Oklahoma – Federally facilitated marketplace
Oregon – State-based marketplace
Pennsylvania – Federally facilitated marketplace
Rhode Island – State-based marketplace
South Carolina – Federally facilitated marketplace
South Dakota – Federally facilitated marketplace
Tennessee – Federally facilitated marketplace
Texas – Federally facilitated marketplace
Utah – Federally facilitated marketplace
(On May 10, 2013, HHS announced that it will operate the individual Marketplace in Utah and the state will operate the small business, or SHOP, Marketplace.)
Vermont – State-based marketplace
Virginia – Federally facilitated marketplace
Washington – State-based marketplace
West Virginia – Partnership marketplace
Wisconsin – Federally facilitated marketplace
Wyoming – Federally facilitated marketplace
28. At the start of July, HHS's Office of the Inspector General released the results of an audit that found the health insurance marketplaces run by the federal government and some states failed to ensure individuals who enrolled in health plans provided accurate information. A month after the July audit by the OIG, warning notices were issued affecting about 310,000 people who purchased health plans through the PPACA exchanges and qualified for federal subsidies. Those individuals could reportedly lose their coverage, unless they provide documentation by Sept. 5, proving their eligibility, according to the notices.
29. According to a report by the Wall Street Journal the Sept. 5 deadline poses many problems for some who have already made an effort to submit requested documentation such as passports, driver's licenses and birth certificates. According to the report, HHS is struggling to process documents that have been submitted.
Medicaid expansion
30. The original goal of the PPACA expanded Medicaid's mandatory coverage groups by requiring that participating states cover nearly all people under age 65 with household incomes at or below 133 percent federal poverty level. The aforementioned Supreme Court ruling on the constitutionality of the PPACA upheld Medicaid expansion, but limited the ability of HHS to enforce it, thereby making the decision to expand Medicaid optional for states.
31. To finance the coverage for the newly eligible, states will receive federal funding for 100 percent of costs for new enrollees in 2014 through 2016, 95 percent federal financing in 2017, 94 percent federal financing in 2018, 93 percent federal financing in 2019 and 90 percent federal financing for 2020 and subsequent years.
32. States that have already expanded eligibility to adults with incomes up to 100 percent of the federal poverty level will receive an increase in the federal medical assistance percentage for non-pregnant childless adults so that by 2019 they receive the same federal financing as other states — 93 percent in 2019 and 90 percent in 2020 and later. States' option to expand Medicaid eligibility to childless adults began on April 1, 2010, receiving their regular federal medical assistance percentage until 2014.
33. The PPACA also extends Children's Health Insurance Program funding through 2015. About 5.7 million children of lower income families are enrolled in CHIP. CHIP is funded jointly by the federal government and the states. As an incentive for states to expand the coverage programs for children, the federal matching rate for CHIP is currently 15 percent higher than the Medicaid rate, averaging 71 percent nationally. Beginning Oct. 1, 2015, the CHIP federal matching rate will increase by 23 percent brining the national average to 93 percent.
34. As of June 10, 27 states — including D.C. — are implementing Medicaid expansion in 2014, 3 states are in open debate, and 21 states are not moving forward at this time. They break out by state as follows:
Alabama – Not moving forward at this time
Alaska – Not moving forward at this time
Arizona – Implementing expansion in 2014
Arkansas – Implementing expansion in 2014 (Ark. has approved Section 1115 waivers for Medicaid expansion)
California – Implementing expansion in 2014
Colorado – Implementing expansion in 2014
Connecticut – Implementing expansion in 2014
Delaware – Implementing expansion in 2014
D.C. – Implementing expansion in 2014
Florida – Not moving forward at this time
Georgia – Not moving forward at this time
Hawaii – Implementing expansion in 2014
Idaho – Not moving forward at this time
Illinois – Implementing expansion in 2014
Indiana – Open debate (Ind. has pending waivers for alternative Medicaid expansion plans.)
Iowa – Implementing expansion in 2014 (Iowa has approved Section 1115 waivers for Medicaid expansion)
Kansas – Not moving forward at this time
Kentucky – Implementing expansion in 2014
Louisiana – Not moving forward at this time
Maine – Not moving forward at this time
Maryland – Implementing expansion in 2014
Massachusetts – Implementing expansion in 2014
Michigan – Implementing expansion in 2014
Minnesota – Implementing expansion in 2014
Mississippi – Not moving forward at this time
Missouri – Not moving forward at this time
Montana – Not moving forward at this time
Nebraska – Not moving forward at this time
Nevada – Implementing expansion in 2014
New Hampshire – Implementing expansion in 2014
New Jersey – Implementing Expansion in 2014
New Mexico – Implementing expansion in 2014
New York – Implementing expansion in 2014
North Carolina – Not moving forward at this time
North Dakota – Implementing expansion in 2014
Ohio – Implementing expansion in 2014
Oklahoma – Not moving forward at this time
Oregon – Implementing expansion in 2014
Pennsylvania – Open debate (Pa. has pending waivers for alternative Medicaid expansion plans.)
Rhode Island – Implementing expansion in 2014
South Carolina – Not moving forward at this time
South Dakota – Not moving forward at this time
Tennessee – Not moving forward at this time
Texas – Not moving forward at this time
Utah – Open debate
Vermont – Implementing expansion in 2014
Virginia – Not moving forward at this time
Washington – Implementing expansion in 2014
West Virginia – Implementing expansion in 2014
Wisconsin – Not moving forward at this time (Wisc. amended its Medicaid state plan and existing Section 1115 waiver to cover adults up to 100 percent federal poverty level in Medicaid, but did not adopt the expansion.)
Wyoming – Not moving forward at this time
Disproportionate Share Hospital Payments
35. The PPACA calls for annual aggregate reductions in federal Disproportionate Share Hospital funding from fiscal year 2014 to 2020. Medicare DSH payments will be reduced 75 percent by 2019, or $49.9 billion. As part of the inpatient prospective payments systems final rule, CMS will cut overall Medicare DSH payments by 1.3 percent in FY 2015, compared with FY 2014. Medicare DSH payments will continue to be distributed under the new policy, which is based on hospitals' uncompensated care amounts.
Center for Medicare and Medicaid Innovation
36. CMS covers 100 million people through Medicare, Medicaid, CHIP and the Health Insurance Marketplace. The Center for Medicare and Medicaid Innovation was created by section 1115A of the Social Security Act, as added by section 3021 of the PPACA. As a part of CMS, the CMMI tests innovative payment and service delivery models, such as ACOs, that aim to reduce costs while maintaining or improving care quality. The PPACA allocated $10 billion every ten years for the CMMI.
Bundled Payments
37. The CMMI helped enact the Bundled Payments for Care Improvement Initiative. Under the initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care in effort to ensure higher quality and more coordinated care at a lower cost to Medicare. The initiative aims to reimburse healthcare providers a lump sum on the expected costs for the spectrum of a patient's care. The BPCI initiative involves four different payment models, depending on the type of healthcare providers involved and the nature and time frame for services included in the bundle.
38. At the end of July, CMS announced 4,122 providers will be added to phase 1 — the exploratory, non-risk bearing stage — of the Medicare Bundled Payments for Care Improvement initiative, joining the 2,412 providers already participating. In phase 2, healthcare organizations are held accountable for financial and quality performance for episodes of care. For phase 2, CMS already has bundled payment contracts with 243 providers across all models.
Pioneer ACO Model
39. The Pioneer ACO Model is a CMMI initiative designed to support organizations with experience operating as accountable care organizations or in other similar arrangements. Pioneers have a higher level of risk than MSSP ACOs and can achieve shared savings in the first two years under CMS' shared savings and losses model, In this model, the ACOs will share the savings or losses experienced by Medicare for an assigned set of patients and there is no option for a shared savings-only arrangement in the Pioneer program.
40. CMS announced the original 32 Pioneer ACOs in December 2011. The first performance period for the Pioneers began Jan. 1, 2012. In their first performance year, all of the Pioneer ACOs improved quality, but just 13 achieved enough savings to share in them with Medicare. Overall, the Pioneers achieved a net savings of $33 million for Medicare Trust Funds.
41. In July 2013, nine Pioneer ACOs left the ACO model after CMS released preliminary results from the first performance year. There are currently 23 ACO's participating in the Pioneer ACO Model.
Primary care transformation
42. The Comprehensive Primary Care initiative is a multi-payer initiative to strengthen primary care by developing collaboration between public and private healthcare payers. The four-year initiative tests practice redesign models and a multi-payer payment model. Medicare works with commercial and state health plans offering bonus payments to primary care physicians who better coordinate care for their patients. Currently there are 481 participants representing 2,347 providers serving approximately 2.6 million patients. Of those patients, 385,016 are Medicare or Medicaid beneficiaries.
Medicare Shared Savings Program
43. The Medicare Shared Savings Program final rule took effect Jan. 1, 2012. The MSSP is an effort to facilitate coordination and cooperation among providers to improve the quality of care for Medicare fee-for-service beneficiaries and reduce cost. The MSSP rewards ACOs that lower their costs while meeting performance standards and increasing quality care. Under the MSSP, providers must make a three-year commitment to care for a group of at least 5,000 Medicare beneficiaries.
44. There are currently 338 MSSP ACOs covering about 5.6 million assigned beneficiaries across 47 states including Puerto Rico and Washington D.C.
Value-Based Purchasing
45. Established in section 3001 in the PPACA, the hospital Value-Based Purchasing program for Medicare started Oct. 1, 2012 (FY 2013). The VBP Program distributes an estimated $850 million in incentives to hospitals based on their overall performance on a set of quality measures, such as clinical processes of care and patient satisfaction from the Hospital Consumer Assessment of Healthcare Providers and Systems survey. The VBP program adjusts payments to hospitals under the Inpatient Prospective Payment System based on the quality of care they provide to patients. Examples include how quickly heart attack patients receive potentially life-saving surgery on their arteries and how often patients with heart failure get proper discharge instructions. Hospitals are scored based on their performance on each measure compared with other hospitals, and higher scores lead to incentive payments.
46. As a result of the VBP program, CMS took back 1.25 percent of Medicare reimbursement at hospitals paid under the IPPS in FY 2014. The resulting $1.1 billion was dispersed to hospitals based on how well they performed on healthcare quality measures. In FY 2014, 778 hospitals lost more than 0.2 percent of their Medicare pay, while 630 hospitals received a bonus of more than 0.2 percent.
47. For 2015, CMS is increasing the applicable percent reduction, the portion of Medicare payments available to fund the value-based incentive payments under the program, to 1.5 percent of Medicare reimbursements, resulting in about $1.4 billion in value-based incentives. Next year, providers will need to meet 26 measures for VBP or face Medicare reimbursement penalties. The measures include 12 process-of-care measures, eight patient-experience measures, five outcome measures and one measure on spending per beneficiary.
Hospital-acquired conditions
48. The PPACA requires Medicare to reduce payments to a hospital by 1 percent if it is in the top 25 percent with certain high cost and common hospital-acquired conditions, such as bedsores, complications from extended use of catheters and injuries, quality performance metrics. Starting in FY 2015, hospitals scoring in the top national quartile for the rate of HACs will see reduced Medicare payments. The HAC reduction is made after adjustments are made for the VBP and the hospital readmissions program.
Hospital Readmission Reduction Program
49. The Hospital Readmission Reduction Program penalizes hospitals for heart attack, heart failure, pneumonia and hip or knee surgery 30-day readmission rates for Medicare patients that are greater than predicted, after adjusting for patients' illness severity. Under the final rule released in August, CMS has increased the maximum penalty from 2 percent to 3 percent.
Device tax
50. The medical device tax — a 2.3 percent excise tax — was implemented Jan. 1, 2013 as a part of the PPACA. It is estimated to collect more than $30 billion in taxes. The tax applies to manufacturers, producers and importers of taxable medical devices. Device companies invest nearly $10 billion in research and development annually, but the new tax is expected to shrink this amount significantly, and some fear it will also stifle innovation. Large device companies such as Stryker have announced huge layoffs attributable to the excise tax.
Physician training, reporting, reimbursement
Physician Training
51. The PPACA provides nearly $230 million to increase the number of medical residents and nurse practitioners and physician assistants in primary care. The FY 2014 budget is expected to add an addition 2,800 additional primary care providers over five years.
Physician Quality Reporting System
52. The PPACA also made changes to the Physician Quality Reporting System. The program provides an incentive payment to practices with eligible professionals identified on claims by their individual National Provider Identifier and Tax Identification Number. Furthermore, beginning in 2015, the program will apply payment adjustments to eligible professionals who do not satisfactorily report data on quality measures for covered professional services.
Payment Sunshine Act
53. The Physician Payment Sunshine Act was included in the final version of PPACA. The act requires that any "payment or other transfer of value" of $10 or more to physicians and teaching hospitals must be reported to HHS. Supporters consider the act to elucidate potential conflicts of interest and lower health costs; however, physicians are not only threatened by the new enforced transparency, but are also struggling to find a balance between that transparency and what some consider cumbersome paperwork under the Act.
54. Recently CMS announced the delay of the deadline for physicians and teaching hospitals to register, review and dispute the information posed on Open Payments — the online portal listing payments from drug and device makers to physicians. The delay comes after CMS took the database offline in order to investigate a report of incorrect data. Although the website is back online, the agency has extended the deadline until Sept. 8. The website will be available to the public starting Sept. 30.
Pharmaceutical provisions
55. According to the PPACA website, the PPACA helps close the Medicare part D "donut hole" for seniors. The "donut hole" is the coverage gap in 2014 between which a Medicare beneficiary is required to pay all drug costs out of pocket starting at $2,850 and ending at $6,455. The PPACA aims to help seniors to pay smaller portions of prescription costs by discounting Part D-covered brand-name prescription drugs at 47.5 percent.
56. The PPACA also contains a provision expanding the 340B drug discount program to include a greater number of healthcare providers, such as critical access hospitals, freestanding non-prospective payment system cancer hospitals, sole community hospitals, certain non-PPS children's hospitals and rural referral centers with disproportionate share adjustments equal to or greater than 8 percent. The program has faced criticism from various groups and healthcare industry stakeholders who claim it opens the door for abuse by hospitals.
57. In late May, U.S. District Judge Rudolph Contreras ruled against HHS in a suit challenging a final rule from the agency expanding the 340B drug discount program to rural and cancer hospitals as outlined in the PPACA. The Pharmaceutical Research and Manufacturers of America filed the suit, seeking to exclude all drugs with an "orphan" designation — a drug that has been developed specifically to treat a rare condition and often carries a hefty price tag — from the final rule. Judge Contreras ruled in favor of PhRMA, finding that HHS does not have the authority to put regulations in practice implementing PPACA 340B provisions.
58. However, in July, the Health Resources and Services Administration stated on its website that "the Court did not invalidate HRSA's interpretation of the statute. HHS/HRSA continues to stand by the interpretation described in its published final rule, which allows the 340B covered entities affected by the orphan drug exclusion to purchase orphan drugs at 340B prices when orphan drugs are used for any indication other than treating the rare disease or condition for which the drug received an orphan designation." The interpretive rule will continue allowing rural and cancer hospitals to access 340B drug program discounts on orphan drugs when the drugs are not used for the rare conditions that resulted in orphan designation.
Physician-owned hospitals
59. Under the PPACA, new physician-owned hospitals cannot be constructed, and current physician-owned hospitals cannot expand, assuming both accept both Medicare and Medicaid patients. The expansion prohibition prevents a physician-owned hospital from increasing the aggregate number of operating rooms, procedure rooms and beds above the number for which the hospital was licensed as of March 23, 2010.
False Claims Act
60. The PPACA expanded False Claims Act liability, making it possible for a fraud and abuse, Anti-Kickback or Stark violation to serve as the basis for a false claims case. It used to be unclear that an anti-kickback claim, for example, could give rise to a false claims case, but now, under PPACA, such actions can be direct paths to such claims.
Additionally, there is an increased frequency in which the government is joining qui tam relators — the people pursuing the litigation — in their cases. In teaming up with the government, the chances of collection and the amount of collections by the relator go up significantly.