Remember the Affordable Care Act? Enacted in 2010, it expanded healthcare insurance to millions of uninsured Americans and increased access to care. But the ACA is much more than expanded coverage; it set in motion a variety of reforms in the healthcare delivery systems aimed at lowering costs and improving quality of care.
That fact was lost on presidential candidate Donald Trump, who told Fox News recently, “I don’t use much Obamacare, I must be honest with you, because it is so bad for the people and they can’t afford it.” Trump’s comments imply Obamacare is an insurance plan people can buy, which is not the case. As we wrap up year six since the ACA was enacted, here‘s what the law is really about and how it impacts providers.
Access to care
Clearly, the ACA’s biggest impact to date has been on expanding the availability of affordable health insurance and access to care. This was achieved by expanding Medicaid eligibility up to 138% of the federal policy level, establishing insurance exchanges with premium tax credits for people whose incomes are between 100% and 400% of poverty, requiring individuals to buy insurance or face a penalty, requiring businesses with more than 50 employees to provide health insurance to workers, and providing a small business tax credit.
For 2017, HHS expects up to 1.1 million individuals to newly sign up for health plans in the ACA exchanges, potentially bringing the total number of customers to 12.7 million. About 85% of those consumers are estimated to be eligible to receive tax credits.
Benefiting most from expanded coverage have been people with low incomes, minorities and young adults. And while HHS has said premiums for “benchmark” plans will rise on average 25% next year in the 39 states using HealthCare.gov, consumers could save up to $28 per month by switching to the lowest-premium plan in their area, the agency noted.
Cost-containment and ACOs
Beyond health insurance, the ACA signals a major change in how healthcare is delivered and paid for in this country. Among other things, it reduces payments to hospitals with high readmission rates and high rates of hospital-acquired conditions, awards higher payments to Medicare Advantage plans in areas with low fee-for-service rates and allows providers participating in accountable care organizations to share their Medicare cost savings.
In addition, providers can organize as Pioneer ACOs, sharing not only any cost savings but also the risk if Medicare expenditures exceeded expectations.
A major focus of the ACA is to support projects that enhance primary care. One example is the Comprehensive Primary Care Initiative where payers and providers in seven markets are evaluating a novel payment model's impact on costs and quality of care. Key measures are care coordination, increased access to primary care, better management of chronic diseases and simplifying administrative tasks.
The law also cut Medicare Disproportionate Share Hospital payments by 75%, effected in 2014, and tied future increases to the size of the uninsured population and how much uncompensated care was provided.
In yet another cost-saving move, the law cleared the way for U.S. approval of biosimilars — generic versions of biological drugs. Biologics makers are guaranteed 12 years of market exclusivity before a copycat biologic can be approved. To date, the Food and Drug Administration has approved four biosimilars (only one is currently being sold on the market).
To enhance health system performance, the ACA established the Patient-Centered Outcomes Research Institute (PCORI) to target and compare the effectiveness of different medical treatments. It also allows providers to bill for bundled amounts of acute, inpatient, physician, outpatient hospital and post-acute care services for care provided three days before hospitalization to 30 days post-discharge.
The ACA also creates Medicare payment incentives for providers to improve their performance on a range of cost and quality measures beyond readmissions and hospital-acquired conditions. For example, the hospital Value-Based Purchasing (VBP) program pays participating hospitals for inpatient acute care services based on the quality — rather than quantity — of services provided. A VBP model for home health was launched in January.
To create more transparency around providers’ financial relationships with drug, medical device and biologics manufacturers, the ACA created the Physician Payments Sunshine Act. Manufacturers are required to report annual payments exceeding $10 to hospitals, physicians and other health entities to the Centers for Medicare & Medicaid Services.