Healthcare: The Eagle Has Landed!

04.01.10

Any health law advisory would be remiss without mentioning the passage of the most comprehensive health reform legislation since the enactment of the Medicare and Medicaid program and perhaps even more significant than those programs. The Patient Protection Affordable Care Act was signed by the President on March 23, 2010. Then the Health Care and Education and Reconciliation Act of 2010 was signed into law on March 31, 2010. These sweeping reforms involve so many laws and areas of our healthcare system that it is impossible to discuss them in any one article, so this overview is only intended to give you some perspective on key areas. Subsequent articles in this advisory and future advisories will address specific issues. The reform legislation can be categorized into the following areas:

  • Insurance Reforms and Exchanges. This area has perhaps received the most publicity; it is the individual and employer mandates for health insurance beginning January 1, 2014 and the establishment of state-based American Health Benefit Exchanges from which individuals and small businesses may purchase coverage. These changes do not go as far as the hotly debated public option but provide significant new mandates placed on insurance companies, employers and health plans.
  • Public Coverage Programs. There are major changes to Medicare and Medicaid. One of the most public is the change to the Medicare Part D "donut hole". In addition, there is the development of a voluntary long term care insurance program that is referred to as "CLASS". Employers or employees will be able to contribute to this program through payroll deductions, similarly to the way they contribute to the Medicare program.
  • Delivery System Reforms. Perhaps the changes that will make the most substantive differences, which have had the least attention, are the changes that will modify the way healthcare is delivered. Expect to hear about medical homes, accountable care organizations, collaborative care organizations, value based payments which are payments based on outcomes, episode groupers which combine separate but clinically related items and services into an episode of care for an individual, and bundled payments. Many of these reforms will be initiated through pilot programs, will most likely lead to additional legislation, and hopefully innovation in the healthcare system to provide more seamless, better quality of care to patients.
  • Provider and Plan Payment Changes. Payment changes include an emphasis on primary care. Further notable is the prohibition against pre-existing coverage limitations. This prohibition starts for children as early as September 23, 2010. In addition, there are limitations on an insurance company's ability to terminate an insured once he or she is enrolled in the program for reasons other than fraud, non-payment, or termination of the plan.
  • Fraud and Abuse. There are 32 new provisions that impact the enforcement of fraud and abuse laws. The provisions include limitations on Stark law exceptions, making a person who violates the anti-kickback statute liable without knowledge of, or specific intent to violate the anti-kickback statute, enhance penalties for non-compliance, new investigative powers, and mandatory compliance program requirements. Further, there are increased transparency requirements for healthcare providers such as providing notice to patients of physician ownership and hospitals' charges for items and services.
  • Prevention and Wellness. The law will require all plans to offer an essential health benefits package. Exchange plans and Medicare plans must have certain preventive services. There is the establishment of a $15 billion Prevention and Public Health Fund to fund prevention, wellness and public health activities between FY 2010-2019. In particular, these funds will finance a newly established Community Transformation Grant Program to disseminate evidence based community preventive health activities.
  • Financing. Many provisions have been passed to fund the expansion of services discussed above. But perhaps the most public part of the financing package is the tax on tanning salons!

As you can see, it will take months for those of us working in the healthcare area to understand all the ramifications of this health reform legislation and years for many parts of it to be implemented. This is a regulators' employment security bill because there will be an extraordinary amount of regulation issued to expand on the items in the health reform legislation.

Hang onto your hat! Working in the healthcare system has never been crazier!

The author may be contacted at ebrennan@dsda.com

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Rebecca D. Bullard

Rebecca D. Bullard

Rebecca represents clients primarily in labor and employment litigation and counsels clients regarding everyday employment matters. 

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