Hardly a day goes by without news reports about repealing, changing, or modifying the Patient Protection and Affordable Care Act (ACA). It seems that no matter which way the political winds may blow, healthcare providers, including orthopaedic surgeons, will see significant changes in the way care is delivered to patients.
The ACA made numerous changes to the healthcare delivery system, including expanding Medicaid, increasing enrollment in healthcare plans through exchanges, and placing excise taxes on devices, drugs, and health plans. Despite these attempts to hold down costs, the Centers for Medicare & Medicaid Services (CMS) expects healthcare costs to increase 6 percent a year for the next decade.
Now 5 years old, the ACA represents the most significant overhaul of the U. S. healthcare system since the passage of Medicare and Medicaid in 1965. But where does it stand and how is it affecting orthopaedic surgeons?
Delivering its promise?
The overall promise of the ACA was to increase the quality and decrease the cost of healthcare insurance in the United States and to provide coverage for many uninsured by lowering the cost and increasing value through the expansion of public and private insurance programs. It introduced a new mechanism with mandates, subsidies and insurance exchanges. It also established minimum standards and new measures in preventive care.
As of May 2014, an additional 20 million Americans gained health insurance coverage under the ACA. The percentage of uninsured Americans has dropped from 18 percent in 2013 to 13.4 percent today, the largest drop in the percentage of uninsured since 1965.
The second enrollment period, which ended on Feb. 2, 2015, for most Americans, went far more smoothly than the first, which was marred by technical difficulties with the healthcare.gov website. Nearly 11.7 million people signed up for health insurance for 2015 through the exchanges. Most of these individuals (8.8 million) used healthcare.gov, the federal exchange that handles enrollment for 27 states; the remaining 2.8 million used state-based exchanges.
The overall demographics for those obtaining coverage in 2015 are similar to those in 2014: 28 percent were between ages 18 and 34 years, 11 percent were Latinos and 14 percent were African-Americans.
Additional enrollees, as well as many more insurers, have joined the exchanges this year, changing the pricing of most plans. Nearly nine out of ten (87 percent) of those who signed up on the federal exchange received federal subsidies. Generally, subsidies average around $260 a month; consumers must pay an average of $101 per month.
The battle over subsidies
The subsidies are really at the heart of the next battle for the administration. The Supreme Court is currently deciding whether those who signed up on the federal exchange are eligible for subsidies. The case of King v. Burwell challenges whether not the federal government can provide subsidies to citizens who did not purchase health insurance through state-run exchanges.
A decision is expected to be announced this month. If the court declares that subsidies are not available to those who purchased health insurance through the federal exchange, nearly 5 million Americans could potentially lose subsidy dollars.
In 2012, the Supreme Court upheld the ACA’s individual mandate provision by ruling that the penalty for not buying health insurance would be a tax. However, it also overturned a provision that required all states to expand Medicaid to cover individuals with incomes of up to 138 percent of the federal poverty level, or $32,913 for a family of four. Although 28 states and the District of Columbia expanded Medicaid programs—taking advantage of the federal government’s offer to pay 100 percent of the costs of coverage for those newly eligible—22 states have not expanded Medicaid.
The gradual implementation of the ACA means that changes are ongoing. The initial changes, for example, were focused on consumer protections, such as prohibiting discrimination due to preexisting conditions or gender, eliminating annual limits on insurance coverage, and ensuring coverage for individuals participating in clinical trials. The ACA also sought to improve quality and lower costs by making care more affordable, establishing the health insurance marketplace, and increasing the small business tax credit.
This year, however, the changes may have a greater impact on providers, as the government begins to implement a value-based, rather than a volume-based, payment system. These provisions will tie physician payments to the quality of care they provide as well as to the cost of providing that care.
This value-based modifier (VBM) approach will affect both Medicare patients and physicians’ compensation. As a zero-sum game, some physicians (those who deliver high quality at lower costs) will receive more compensation, while others (those who deliver high-cost, lower-quality care) will receive less. No additional money is allocated to reward success.
The VBM is based on data from 2 years prior (2013 data will be used in 2015; 2014 data in 2016). Groups of 100 or more physicians will receive their first reports this fall. Groups of 10 or fewer physicians will receive reports in 2016, based on data from 2014. This represents a fundamental change to have payment based more on value (outcome/cost) than simple volume.
Quality will be based on numerous parameters, as determined by Medicare data. A severity rating will be applied to determine the cost of delivering care to individual patients. The VBM system has already been tested in some states.
The effect on the delivery of orthopaedic care remains to be seen. As it becomes more difficult to maintain a solo medical practice, consolidation into regional health systems will increase. With the expansion of Medicaid in some states and the drop in the numbers of uninsured individuals, more people will have access to primary and specialty orthopaedic care. However, this increase in access might be offset significantly by a narrowing of health insurance networks. Many private orthopaedic groups currently do not accept Medicaid coverage for elective visits and procedures, a situation that may be accelerated depending on reimbursement.
Large healthcare systems are starting to narrow the types of health insurance they will accept. This may result in shifting patients who have plans with lower reimbursements (such as managed care Medicaid programs) to tertiary care institutions and county hospitals, thus effectively limiting access instead of broadening it.
Another potential unforeseen circumstance that may hinder patient care will be the limited access to certain resources (some prescription medications, injections, and access to ancillary services such as physical or occupational therapy, home health services, and skilled nursing facilities). This may be particularly challenging as providers attempt to deliver optimal postoperative care. It not only may shift the burden of cost onto the healthcare system but, more importantly, have an adverse effect patient outcomes.
Lalit Puri, MD, and Daniel Adair, MD, have both served on the AAOS Health Care Systems Committee.