The Patient Protection and Affordable Care Act

PPACA

The Patient Protection and Affordable Care Act (PPACA) is a federal U.S. statute dealing with health care. This act was passed by the Congress and signed into law by President Barack Obama on March 23, 2010. The law constitutes the principal health care reform legislative action of the 111th United States Congress ("Msnbc.msn.com"). Public Law 111-148 was the first installment of this body of legislation and signed into law by President Barack Obama on 3/23/2010

("Public law 111 -- 148," 2010) This was amended by Public Law 111-152 when it was signed by the President on 3/30/2010 ("Public law 111 -- 152," 2010).

This complicated new body of legislation leaves many questions unanswered in terms of its impact upon physicians and specialists. However, there is one commonality between the various portions of the law. Due to the new insurance provisions and financial compliance procedures, Health Information Technology (HIT) issues take center stage, requiring an overhaul of the technological infrastructure in an effort to bring about economy by achieving the paperless office.

Therefore, whether it be the business decisions of a family practice physician in private practice or of a specialist healthcare provider, everyone will be affected. However, the providers of long-term care (such as nursing home administrators) and hospital administrator will likely be affected the most due to the HIT issues, Medicaid and Medicare compliance issues and reduced reimbursement formulas are problems with family physicians and general internists as well.

PPACA Overview

First, we will examine the act itself in detail. Only then can we consider a break down of its affect by the division of the health care system it will effect.

It was intended that PPACA will reform the health care system by performing a fundamental transformation of the health insurance in the United States by sharing responsibility for paying for healthcare costs. PPACA is set to reform many aspects of the private health care and public health insurance programs. This includes the increasing insurance coverage of preexisting conditions as well as in expanding access to insurance for over 30 million people. The bill will also mandate an increase in the total national medical expenditure on healthcare. It is the intention of the bill's designers to achieve these reforms while at the same time not increasing health insurance premiums. In essence, this will mean that all Americans have to be a part of the system and have coverage. Individuals and family tax credits will ensure that the insurance is affordable for all. All of the above is necessary three elements are the essential links to achieve healthcare reform ("Patient Protection and Affordable Care Act Detailed Summary," 1) .

From the beginning, PPACA has had a cloud of constitutional controversy. Since then, the majority of the states as well as numerous private organizations as well as individuals have filed separate actions in U.S. federal court to challenge the constitutionality of the Act PPACA. As recently as September 2011, the federal appellate courts are just about divided about constitutional issues raised in the federal litigation at the district court level. Here, three federal judges upheld the PPACA's constitutionality of and three of them declared the act to be partially unconstitutional. There have been several other challenges that have been dismissed on technical grounds. The Supreme Court possible may review the matter by the end of 2011 ("Catholic.org").

The PPACA contains many provisions that will take effect only over several years beginning in 2010. There are many policies that were issued before the law was and that are grandfathered from other federal regulations. The total new tax revenue from the Act is expected to amount to $409.2 billion over the first 10 years. The federal government expects to realize $78 billion before the end of fiscal year 2014 ("Patient Protection and Affordable Care Act Detailed Summary" 1).

Much has been made of the economic impact of the Act, so it would do well to consider quickly the size of the health care market to help gauge the scale of the effects. The industry has been estimated to encompass some one-seventh of the U.S. economy. As one of the largest industries in 2008, healthcare provided 14.3 million jobs for wage and salary workers. The health care field is one of 10 of the 20 fastest growing occupations are healthcare related. The healthcare field will generate 3.2 million new wage and salary jobs between fiscal years 2008 and 2018. This is more than any other industry and is largely in response to the rapid growth in the elderly population. Whether one is for or against the PPACA, the economic impact upon a huge U.S. economic market is certain to be huge as well ("Bls.gov").

PPACA Stages

The Act is set to come into effect in stages. It is divided into 10 titles and contains provisions that became effective immediately, 90 days after enactment, and six months after enactment, as well as provisions that will become effective in 2014. Some of the key provisions of the Act. The amendments in the Health Care and Education Reconciliation Act of 2010 are integrated into this time line ("Patient Protection and Affordable Care Act Detailed Summary," 1).

PPACA Provisions

This will include health insurance market reforms. Some immediate reforms are to be implemented within six months which will include the treatment of temporary a high-risk pool with subsidized premiums for certain people with preexisting conditions . This is intended to end health insurance rescission abuse. The Act will ban the coverage exclusions of preexisting health conditions for all children. It will also require the public disclosure of overhead/benefit spending by health insurance companies. PPACA will provide coverage of certain preventive health services without the cost-sharing.

Lifetime limits on benefits and restrictions on the annual limits on benefits will be eliminated.

Insurers will be required to offer dependent coverage to allow all children to be covered on their parents' insurance policy up to the age 26 years old. There will be the uniform explanation of coverage documents for all enrollees. Coverage exclusions of preexisting conditions or rating or coverage restrictions based on health status for adults. This will provide standards for medical loss ratios that will ensure the premiums pay for necessary benefits (ibid).

PPACA will require that there be guaranteed issue and guaranteed renewability of insurance coverage. The Act allows individual states to form compacts to facilitate the interstate sale of insurance. The aim of this is to increase the transparency by mandating health insurers to provide a complete summary terms of coverage to all applicants and enrollees. It allows enrollee to select their primary care provider (or pediatrician children). There will be no prior authorization or increased cost-sharing for ER visits. There will be direct access to obstetrical and gynecological care (ibid).

PPACA creates by 2014 what will be know as state-based and state-administered health insurance exchanges. In other words, these will be marketplaces for the individual and small group markets. States may be granted waivers to opt out of this requirement if they provide can coverage at least as comprehensive as that required under PPACA. Under the Act, only qualified health benefit plans that meet very specific criteria will be sold in the exchanges. Insurers may opt to sell policies outside of the exchanges. Large employers will be phased into these exchanges in fiscal year 2017. Plans are not required to contract with just any willing provider that requires the health plans to implement a process for the appeal of coverage determinations and claims ("Patient Protection and Affordable Care Act Detailed Summary" 2).

PPACA allows qualified health plans to provide their coverage through a qualified direct primary care medical nursing home that meets federal requirements established by the secretary of the U.S. Department of Health and Human Services. The Act requires health plans to publicly disclose their information on claims payment policies. This is to include enrollments, denials, rating practices, out-of-network cost-sharing and enrollee rights as well (ibid 4).

PPACA requires that health care plans implement activities that will reduce health disparities to include the use of language services, community outreach as well as cultural competency trainings. This includes CO-OP and multi-state health plans and creates the Consumer Operated and Oriented Plan (CO-OP) program to foster the creation of non-profit, member-run health insurance companies in all 50 states. PPACA specifies that a CO-OP may not be an existing organization. All of its activities are required to consist of the issuing of qualified health benefit plans in each of the 50 states they are licensed in state in. The governance of the organization will be subject to a majority vote of the COOP members. COOP profits must be used to lower organizational premiums, improve benefits or improve quality of care that is delivered to its members. PPACA provides the initial grants to enable that CO-OP organizations meet state solvency requirements. It precludes insurer or insurance industry involvement in COOPS. The organizations cannot operate until a state has implemented the small group insurance and individual market reforms that are required the Patient Protection and Affordable Care Act (ibid, 3).

The Act authorizes the Office of Personnel Management (OPM) to contract out with private health insurers to offer at a minimum of two multi-state qualified health plans (to include at least one non-profit) to provide individual or small group coverage through state-based exchanges. In the area of long-term care, this creates a voluntary and national long-term care insurance program to help purchase services. In addition, this provides support for people who have functional limitations. This is done in order to help them maintain their personal and financial independence (CLASS program). PPACA requires that this be financed through voluntary payroll deductions (ibid 3-4).

In the area of Medicaid and CHIP, PPACA expands Medicaid to all individuals under the age of 65 years of age to include incomes up to 133% of the federal poverty level. We will examine how this affects individual providers below. This will provides 100% federal funding to the states for the costs of newly eligible individuals for fiscal years 2014-2016. The Bill will increase the payments for primary care services that are provided by primary care physicians up to 100% of the Medicare payment rates for fiscal years 2013 and 2014. States will receive 100% of federal funding for increased payment rates if they maintain the current structure of the CHIP program. This will increase by 23% in the match rate in fiscal years 2015 through 2019 (ibid).

PPACA will have individual mandates that require most individuals to have a minimum acceptable coverage or the will be required to pay a tax penalty to begin in fiscal year 2014. The Bill allows exemptions for those who cannot afford this coverage (ibid, 2-11).

Under PPACA Employer mandates that employers with more than 50 full-time employees provide health care coverage or pay a penalty. The Act requires that employers offer coverage and make a contribution or to provide free choice vouchers to qualified employees for the purchase of qualified health plans through the exchanges (ibid).

PPACA mandates that there be premium subsidies to individuals and that there be refundable, advanceable and that there be sliding-scale premium credits for individuals and families with modified gross incomes up to 400% of the federal poverty level. The Act provides for small employer tax credits for 25 or fewer full-time employees. The average annual wages of their employees can be no more than $50,000 (ibid).

As PPACA has unfolded over the last two years, the incentives have decreased and the penalties have increased. The interplay of quality and cost is a focus of PPACA. The projection is that the PPACA will eventually be a cost-saving measure is rooted largely in the belief that high quality care costs less. PPACA expanded the PQRI initiative and most notably, will transform the incentive structure from a positive to negative feedback. Bonus payments for quality reporting will be reduced to 1% in 2011, and 0.5% in 2012 through 2014. Beginning in 2015, providers who do not meet reporting requirements will see a 1.5% reduction in Medicare reimbursement. That penalty will increase to 2% in 2016 and beyond (Mathe, Hettrich & Nunley, 2011). PPACA is not the only legislation that will affect health care providers. The American Recovery and Reinvestment Act of 2009 included in its body the Health Information Technology for Economic and Clinical Health (HITECH) Act. This law provides for incentive payments to healthcare providers who employ the "meaningful use" of certified EHR technology. This could prove to be as much as $18,000 (ibid).

PPACA also aims to increase the use of EHRs and other HI technologies, not only to healthcare reduce costs over the long-term. However, the aim is also to make quality reporting easier. An incentive structure was instituted to provide encouragement for the adoption of EHRs by healthcare providers. The PPACA also explicitly requires that the Secretary of the Department of Health and Human Services integrate reporting mechanisms for the PQRI into a meaningful use criteria. Meaningful use criteria will provide structure to the use of EHRs by healthcare providers (ibid).

The PPACA extends the incentives for EHR adoption and for meaningful use criteria adherence. In 2011 and 2012, providers will be able to earn up to a 1.5% bonus. This will decrease to 1% through 2014. Starting in 2015, there will be a 1% reduction in payments that will be applied for healthcare non-adopters. This will increase to 2% in 2016 and 3% in 2017. The total reduction in payments under PQRI and EHR provisons are not allowed to exceed 5% (ibid).

Obviously, these measures are meant to provide an incentive for patients and healthcare providers to spend less money and to seek health care professionals that will get paid less. However, if the government is to be believed, then the system should ultimately provide more equity for both healthcare providers and patients. Certainly, an outside observer might have trouble proving that this is not the case. While the statistics quoted below are from a poll taken prior to the law's signing, prognostications about how things will unfold are necessary to gauge the present situation for healthcare professionals.

According to a Reuters/HCPlexus survey of 2958 doctors, 65% of them feel that the quality of U.S. healthcare will get worse over the next five years. Only 18% thought it would improve. According to their analysis, this translates into more work for already stressed out healthcare workers, less pay and logically However, according to More work, less pay and naturally worse care. That seems to be doctors' diagnosis of U.S. president Barack Obama's health care reform law, according to a new Thompson Reuters poll ("Mds fear healthcare," 2011) .

Doctors are were very pessimistic, to say the least about the PPACA's impact on their practices. In the poll, 78% of doctors said the PPACA has a negative impact on physician practices while only 8% said it has "positive" benefits. A mere 14% said that the PPACA would have a "neutral" effect on their practices. When it came to the patient care, 57% of physicians said that the PPACA would have a negative effect and only 27% believed the effect would be "positive." 15% believed the effect of the reform law would be "neutral" overall. The poll noted that the most optimistic groups were psychiatrists and pediatricians, with half in each believing in a positive outcome. Surgeons and ophthalmologists were the most pessimistic with both having the least positive responses and most negative responses. 74% believe the reforms of the ACA will make the reimbursement practices less fair with doctors and nurse practitioners getting closer levels of compensation in spite of differences in medical education levels between the jobs. Over 55% of physicians said that anyone newly insured would more likely be treated by nurse practitioners or physician assistants rather than by a primary care physician (ibid).