The Affordable Health Care Act, known as Obamacare, impacts private practices in multiple ways, but nowhere is that more evident than a pilot program of Accountable Care Organizations (ACOs).
An ACO is a group of healthcare providers that work as a team to deliver and manage patient care. Primarily aimed at Medicare patients, the goal is to prevent hospital admissions and readmissions.
It’s one of many initiatives that Obamacare is utilizing as a means of lowering healthcare costs. The outcome of the program could affect the entire way that care is delivered to seniors.
If the new method becomes the standard, it will affect any private practice that isn’t part of an ACO.
Composition And Rewards Of An ACO
The ACO is multi-disciplinary team composed of hospitals, clinicians and home care providers that are charged with providing primary and ongoing care. Services are bundled and a flat fee is paid to the team.
Bonuses will be paid when teams provide quality care that falls below a to-be-determined dollar amount.
ACOs attempt to limit costs through the reduction of “unnecessary” tests and procedures, and less usage of expensive technologies. ACOs that reach target wellness goals can keep any savings for themselves.
Home monitoring and the services of nurse practitioners, physician assistants, dietitians and care coordinators are encouraged.
At the end of three years, the information will be used to evaluate the program and discover areas where the greatest savings were found. The data will be examined by the Patient Outcomes Research Institute created by Obamacare.
The Independent Payment Advisory Board will be free to enact laws based on the Institute’s final results.
Private Practice Concerns
The financial rewards can be great for ACO participants, but if the pilot program becomes the standard, it will significantly reduce revenues for clinicians in private practice. Medicare patients will be initiated into an ACO that will handle their care from the beginning of a medical episode and for up to 30 days following discharge.
Practices that rely heavily on technology will be most affected.
It’s conceivable that private practitioners will be required to participate in an ACO or lose a significant number of patients and corresponding revenues. Some clinicians are facing pressure to sell their practices to local hospitals to become cogs in an ACO.
Practitioners will need to find alternative revenue streams that could include the sale of supplements, medical products or becoming a concierge practice.
Patient Fears For The Future
Obamacare functions on the assumption that ACOs will replace the current treatment and reimbursement model.
Many patients are concerned that the quality of their healthcare will suffer and access to technology will be limited as ACO teams prescribe treatment with an eye to a financial bonus at the end of the encounter.
The Possible End Of Employer-Based Insurance
ACOs have the potential to replace employer-based insurance. Instead of contracting with insurance carriers, employers could choose to join an ACO network to provide care for employees.
Private practices derive a significant portion of their patient base through contracts with employer-provided insurance plans.
The ACO model is an inclusive group that disperses work throughout its members. Clinicians could find their access to patients limited if they’re not ACO participants.
ACOs will affect patients and practitioners in various ways.
The driving force behind Obamacare is finding ways to save money, particularly in the Medicare arena. ACOs are touted as a means to rein in costs while providing quality care. To accomplish that goal, clinicians may have to be prepared to become an ACO participant, and patients may have to be content with less access to technology if it’s deemed too expensive.
Denials disrupt a medical insurance biller’s (MIB) cash flow to their clients, but incurring exclusions from one of the government operated healthcare programs can cost thousands of dollars. Exclusions severely limit employment opportunities and in this revealing article, Nitin Chhoda examines exclusionary factors and what it means for billers.
Any individual or entity that works with government healthcare plans can be excluded from the network, from hospitals and clinicians to billers.
There’s an extensive number of ways that billers can garner exclusions. The good news is that there are preventative measures that billers can take to protect themselves and their clients.
Keeping current on coding is essential for obtaining reimbursements and it helps MIBs avoid claim denials. CPT codes are updated annually and those using old, obsolete or defunct codes run the risk of having a claim reimbursed at a lower level.
At the payer’s discretion, the carrier may refuse to recognize the claim at all. When billers obtain a new client, it’s a good idea to take a look at their coding and forms to ensure they’re using the most current codes.
ICD-10 codes will soon replace the old system and updating to the new codes is critical for claims to be accepted. Healthcare practice management insurance carriers will reject and deny any claim that doesn’t employ the new coding system.
Current coding allows practitioners to be reimbursed at the highest level and provides proof to carriers that the charges are justified.
Attending seminars and conferences is a good way to stay up-to- date on the latest trends, laws and practices that relate to the billing industry. Many carriers provide free seminars and professional billing associations offer online webinars and resources. Subscribing to newsletters and bulletins from professional organizations is also a good source of knowledge.
Exclusions and Causes
There are two types of exclusions – permissive and mandatory – and they’re governed by the U.S. Office of the Inspector General (OIG). Depending upon the offense, those who have incurred exclusions will find their employment opportunities curtailed and they can even lose their license. Penalties are typically in effect for a minimum of five years. Mandatory offenses that require exclusions are:
Conviction of patient abuse or neglect;
Conviction of a program-related crime;
Felony conviction relating to healthcare fraud;
Felony conviction of a controlled substance.
Penalties for permissive exclusions vary from case to case, but are in effect for a specified amount of time set by the OIG. Permissive offenses that are at the OIG’s discretion include:
Failure to provide quality care;
Failure to repay college education loans;
Some misdemeanor convictions;
Lying on an enrollment application;
Loss of state license to practice.
Billing with the latest codes facilitates claims that aren’t denied, while ensuring prompt payments and uninterrupted cash flow for clients.
MIBs that garner exclusions will be unable to work or contract with facilities or clinicians that participate in government healthcare programs, and will lose income should one of their clients incur exclusions.
The Affordable Health Care Act, known as Obamacare, will affect people in different ways, Coverage is guaranteed either through the Healthcare depending upon their situation. Marketplace or expanded Medicaid programs.
Obamacare promises affordable healthcare, but the term affordable is based on a government formula and it doesn’t necessarily mean cheap.
The Department of Health and Human Services estimates the average cost of a Marketplace plan will be $328 per month for mid-level coverage.
Four plans are offered in the Marketplace – bronze, silver, gold and platinum – each with different levels of out-of-pocket expenses.
The lowest average catastrophic plan premium is estimated at $129 per month.
Essential Medical Coverage
Everyone covered with an insurance plan, whether it’s a purchased policy, Medicare or Medicaid, are entitled to a core group of services ranging from hospitalization and prescriptions to lab tests.
Many preventative tests, wellness screenings and counseling services can be obtained at no cost to the patient.
Employees with coverage through their employer don’t have to apply through the Marketplace. If the cost of an employer policy is more than 9.5 percent of the worker’s wages, then they can apply for insurance through the Marketplace.
Pre-existing Conditions And Breaks For Children
Patients with any type of pre-existing medical condition can’t be turned down for coverage or charged more than other policyholder.
Children can now remain on parental insurance policies until the age of 26.
Spouses May Not Qualify As Dependents
Spouses may not be eligible for family coverage under Marketplace policies. Obamacare provides the means for the primary policyholder to cover dependents (children) but spouses are not necessarily considered dependents any longer.
In plans that don’t count spouses as dependents, individuals will be responsible for obtaining coverage through their own employer or buying a plan through the Marketplace.
Medicare And Seniors
There will be no change in how Medicare recipients choose their physicians and Obamacare will completely close the gap in what they pay for prescriptions by 2020, once a deductible of $4,750 is met. After that, seniors pay 5 percent of the cost for the remainder of the year.
Seniors with high medical needs will be able to receive basic care in their home to reduce and prevent hospital stays.
Couples with yearly earnings of $200,000 or more will see a tax rate increase of .9 percent for Medicare Part A coverage and a new income-related premium will be established for Medicare Part D.
Many consumers will qualify for federal subsidies to help them purchase coverage on the Marketplace. Financial assistance is dependent upon household income.
The cost of the policy will depend on the coverage selected, the person’s income and the geographic area in which the policyholder lives.
The Individual Mandate Tax (IMT)
Anyone who chooses not to obtain insurance will be assessed a penalty on their income tax returns. Fines begin at $95 for adults and $47.50 for children in 2014, escalating to $695 for adults and $347.50 for children in 2016.
Interest accrues on unpaid amounts and fines can be deducted from any refund that’s due.
Exemptions from the IMT are available for certain religious groups, members of Native American tribes, and those who are incarcerated.
Also exempt are people with incomes of $9,500 or less who aren’t required to file a tax return, along with those whose premiums would exceed 8 percent of their income after employer contributions and federal subsidies.
Obamacare will affect everyone in different ways. For some, it will mean access to healthcare services for the first time. Others will see an increase or decrease in their coverage costs, depending on the type of policy they currently have.
Most consumers will have to wait to see exactly how Obamacare will impact them now and in the future.
With so much controversy surrounding the Affordable Health Care Act, many are confused about the overwhelming support the insurance industry afforded Obamacare.
There are three major reasons insurance companies supported the Act.
It gave them an estimated 30 million new customers, placed no caps on the cost of polices, and gave them more control over all aspects of the health insurance market.
Despite assertions to the contrary, insurance companies found much to like in Obamacare. It opened the doors for 30 to 50 million new patients, all of which are required by law to purchase insurance or pay a fine.
Individual Mandate Tax
Obamacare penalizes those who don’t purchase insurance with the Individual Mandate Tax (IMT). Insurance industry officials believe the IMT is beneficial and ensures most will purchase a policy rather than pay the fine. It’s a win-win situation for insurance companies.
If consumers purchase a policy, it’s more money in the coffers of insurers.
Revenues from those who choose to pay the fine goes toward subsidies from the federal government to help people pay for Marketplace policies, which still goes to insurers.
No Price Controls
Obamacare places no limits on how much insurance carriers can charge for policies and there’s no accountability.
Insurers claim the cost of plans under Obamacare will rely largely on the number of young people that participate in the Marketplace, yet insurance companies have already increased co-pays, deductibles and premiums on many employer-provided policies for individuals that won’t even be purchasing through the Marketplace.
Industry officials indicate that if people choose to pay the IMT rather than purchase health insurance, costs will increase.
The industry can charge as much it wants and blame rising costs on provisions in Obamacare, primary of which is the ability to keep children on their parent’s policies until they’re 26 and the inability to refuse coverage to those with pre-existing conditions.
The Healthcare Marketplace was established to provide consumers with “affordable” insurance options, but affordable doesn’t mean cheap. It’s a relative term for consumers and is based on a government formula.
If Marketplace plans prove to be too expensive, Obamacare provides individuals with government subsidies to help them pay for their policies.
No insurance company will be required to participate in the Marketplace and many have indicated they won’t. The refusal to participate in the Marketplace will effectively create monopolies in some areas in which patients have only one or two providers from which to choose.
Non-participation by insurers will limit consumer choices and the amount of their subsidy, while effectively creating monopolies.
According to the Kaiser Family Foundation, the cost of Marketplace policies will vary widely, some by as much as $200 or more.
The cost of Marketplace policies is tied to geographical area and the cost of healthcare within that location.
The size of the subsidy offered to patients by the federal government is dependent upon income and the two don’t necessarily equal out.
Obamacare provides insurance companies with an enormous financial windfall through more policyholders, subsidies from the federal government and no explicit price controls. Many fear Obamacare will eventually lead to price fixing, with no effective recourse to address such a problem.
Consumers are left with mandatory insurance policies requiring more out-of-pocket expenses that make the coverage too expensive to use, while insurance carriers continue to profit either way.
It’s been six days and the partial government shutdown is in effect. Hundreds of thousands of federal employees are affected, with some possibly receiving backpay.
October 1, 2013 marks the opening of the healthcare exchanges that are going to change the way the middle class purchases health insurance in America, and your patient’s attitude towards the skilled care that you offer.
More about that later in this article.
President Obama said:
“An important part of the Affordable Care Act takes effect tomorrow, no matter what Congress decides today.”
“Tomorrow, tens of millions of Americans will be able to visit HealthCare.gov to shop for affordable health coverage.”
So what’s Obamacare all about?
The Affordable Health Care Act, also known as Obamacare, is an ambitious attempt to establish a one-size-fits-all healthcare system. It’s packed with the right intentions, and it has tremendous potential to do good for the uninsured in America. It also has the potential to overwhelm a medical system that’s already strained to the limit.
The objective is that at least half the nation’s nearly 50 million uninsured people should get some form of insurance coverage through the Affordable Care Act.
This is achieved with the introduction of the new healthcare exchanges (which includes subsidized private healthcare plans), slated to be available online starting today, October 1, 2013. In some states, a version of Medicaid for low-income adults is also going to be an option (more about that shortly).
The Impact for Middle Class America
People who get insurance coverage through their employers will also see changes. Starting Jan. 1, it is going to be the legal responsibility of almost all Americans to carry health insurance or face fines. These fines will become larger as time goes by. Passing up the company medical plan in exchange for a bigger paycheck may no longer be an option. On the other hand, employees who lose their jobs, entrepreneurs starting their own businesses and people in between school and work could have an easier time getting coverage.
Also as of Jan. 1, a pre-existing medical condition will no longer be a barrier to getting health insurance. Yes, this sounds good, but when you take a closer look at the numbers (copays and deductibles) and benefits, there are a lot of things for a patient to consider.
How is Obamacare going to be implemented across the nation? For starters, the provisions of this act suggest the appointment of a panel of individuals who will establish guidelines and make decisions about which treatments are necessary, with an eye on savings that has the potential to lower costs and benefit patients.
Will this work out the way we all want – lower costs and improved quality of care? That remains to be seen.
The Act penalizes those with no insurance, and attempts to increase access to care for millions of Americans.
Deductibles, Co-Pays and Premiums
Some of the likely effects of Obamacare include higher premiums, co-pays and deductibles.
In some instances, co-pays have doubles while the policy offers fewer services. It’s up to the individual patient to shop around, compare benefits and make the right decision, based on available choices. With some plans, imited physician, specialist and pharmacy options are designed solely to cut costs for insurance companies, with a negative impact on patient convenience and quality of care.
The Act mandates all types of “free” preventative services and no one can be denied coverage due to a pre-existing condition. It allows parents to keep children on their policies until they turn 26.
This is excellent for the uninsured in America. It also has a flip side. This has the potential to overwhelm the current healthcare system in the United States.
In a thought provoking article on Obamacare on Foxnews.com, John Goodman from the National Policy Analysis in Dallas said it would take 7.5 hours of each doctor’s day to provide the free services mandated in Obamacare, leaving no time for paying patients. To make things even more challenging, Medicare reimbursements are already below the cost of care and continue to shrink.
Many practitioners are refusing to treat Medicare patients, opting for early retirement, or selling their practices, further reducing patient access to care. This is not what Obamacare intended, but it is the reality that patients (and clinicians) are facing in the Obamacare economy.
Taxes, Penalties and Limitations
The Act imposes a 40 percent tax on healthcare plans beginning in 2018, based on the value of the policy. The tax will be collected through income tax returns. The tax applies to those with a “Cadillac” plan worth $10,200 for individuals and $27,500 for families. Those without insurance face penalties of up to $695 per person for a family of three, or $2,085 per household.
Obamacare virtually guarantees that patients will choose the minimum amount of coverage as a means to avoid penalties and stay covered.
Having said that, the financial impact of a catastrophic medical event cannot be avoided, especially with a restricted healthcare plan. A major increase in bankruptcies is a very real possibility.
Hospital payroll taxes will increase to 2.35 percent, taking an extra bite out of employees’ take home pay. Obamacare restricts the amount people can contribute to a flexible spending account (FSA) to pay for medical expenses at $2,500. New limitations are now placed on the medical products that can be purchased with FSA funds and increases penalties for buying those items to 20 percent.
Employers with 50 or more workers must provide healthcare plans that provide specific services, but there’s no limit on what insurance companies can charge for those policies. Employers are now looking at a potential increase in healthcare costs.
Employers insist they can no longer afford to offer insurance. Delta Airlines estimates that one clause alone will cost the company $8 million dollars a year.
Currently, it’s less expensive for employers to pay the government-enforced penalties than offer insurance. Their employees have no choice but to purchase federally approved policies from state healthcare exchanges, or they risk paying fines as individuals.
The exchanges offer three levels of healthcare plans offered by multiple providers. If you enjoy insurance from your employer, exchange plans can be a double edged sword. They may or may not be more affordable than the healthcare plan you have right now. Even for those who qualify for an exchange plan, there’s no guarantee that they will qualify for a subsidy promised by the government to help pay premiums. Many Medicaid patients will be removed from state rolls and forced to purchase plans from health exchanges.
In states not expanding Medicaid, millions of uninsured people below the federal poverty level will likely be shut out of coverage. That’s the case in Texas and Florida — both of which have large uninsured populations — and in many, but not all, Republican-led states.
It’s because under the law, people below the poverty line — an individual making $11,490, a family of four $23,550 — can only get the new coverage through expanded Medicaid. And the Supreme Court gave states the right to opt out.
The other arm of “Obamacare’s” coverage expansion — subsidized private insurance through the new markets — is mainly geared to uninsured people in the middle class. The administration is hoping to sign up 7 million the first year. Young, healthy adults are prime customers, since they’ll help offset the cost of caring for sicker people sure to sign up once insurers can no longer reject them.
Kevin Maass of Fairfax, Va., has been uninsured for more than a year, since he turned 26 and could no longer stay on his parents’ insurance. He’s got a background in statistics that he hopes to apply to criminology, but he’s been working temporary jobs while looking for permanent employment in law enforcement.
“Not having health insurance has made me a little bit more cautious,” said Maass. “I like to snowboard, but it’s given me second thoughts. Heaven forbid I should break my wrist or my arm.”
Maass thinks he might be able to afford $100 to $200 a month for insurance. Early indications are that he’ll find plenty of options. However, plans with the lowest premiums will have high deductibles and copayments, which means sizable out-of-pocket costs if he gets sick or has an accident.
Nonetheless, Maass says he’s definitely planning to check out the health insurance market. “My parents have been pushing for me to get health insurance,” he said. “I might as well at least get something rather than pay (a fine) to not have anything.”
The Bottom Line for Patients
Nothing is free – there’s always a cost to someone.
With Obamacare, it’s consumers and high income earners who will ultimately pay for healthcare.
A likely outcome is higher costs, less access to practitioners, and increased wait times for appointments and in the office.
The premise of Obamacare always has been to provide affordable healthcare to all while reducing costs, but it’s too early to tell the real impact.
Patients are paying more, practitioners are receiving less and easy access to services is a thing of the past.
It’s unlikely that’s going to change anytime soon.
In fact, with the increased personal responsibility (and financial burden) on most Americans, there is a very real possibility that the future of healthcare will see an unprecedented return to the use of home remedies by patients. Patients will have more important bills to pay (gas, electric and now health insurance) and penalties to avoid.
Does that mean that patients will choose to ‘stay home’ and try and heal themselves on their own, instead of paying a $40 copay and $1000 deductible towards physical therapy? It’s hard to tell, hopefully that won’t be the case.
The real outcome remains to be seen.
Special Announcement – BONUS Presentation at the 2013 Private Practice Retreat
I’m going to be doing a presentation on “Obamacare and how you can prepare your practice to deal with it” in the upcoming Private Practice Retreat from October 11-13 in Las Vegas. Only a handful of tickets remain. If you want to attend, register here for the 2013 Private Practice Retreat in Las Vegas.
Beginning Jan. 1, 2014, everyone in the U.S. will be required to have some type of medical coverage as part of the Affordable Health Care Act, otherwise known as Obamacare. Coverage can be in the form of Medicare, Medicaid or a typical health insurance policy.
Consumers can purchase coverage through the Health Insurance Marketplace beginning Oct. 1, 2013.
The Marketplace is the backbone of Obamacare, designed to provide four levels of coverage at levels the federal government deems as affordable.
As part of the Act, individuals buying insurance through the Marketplace may be eligible for federal subsidies to help them pay for coverage.
Federal dollars are allotted based on income.
Who Should Enroll?
Open enrollment through the Health Insurance Marketplace runs from Oct. 1, 2013 to March 31, 2014. Patients who don’t qualify for Medicaid, Medicare and CHIP, or who don’t have an employer-based insurance plan, qualify for enrollment.
Individuals who haven’t enrolled in a plan by Jan. 1, 2014 or have received an exemption, will be assessed a fee when they file their income tax return.
Employees who have insurance through the workplace can’t use the Marketplace unless the cost of their insurance exceeds 9.5 percent of their income, or if the plan doesn’t offer the minimum services mandated by Obamacare.
Individuals can choose not to buy insurance and pay the Individual Mandate Tax (IMT) instead.
In 2014, the IMT is $95 per adult and $47.50 per child, or 1 percent of income, whichever is greater. The penalty increases to $325 or 2 percent of the family income in 2015. In 2016, the penalty will be $695 per adult and $347.50 per child or 2.5 percent of the total income.
Fines are based on a cost-of-living formula after 2016.
Preparation And Documentation
To create an account and sign up, consumers will need to provide some basic information including:
Social Security number or document number for legal immigrants;
Employer and income information for each household member;
Policy numbers for any current plan(s) covering household members;
A completed Employer Coverage Tool, available on the site, that lists all job-based plans for which household members are eligible.
Plans And Options
Patients can purchase four types of policies through the Marketplace – Bronze, Silver, Gold and Platinum. The plans pay 60 percent, 70 percent, 80 percent and 90 percent, respectively, of healthcare costs.
Bronze and Silver plan costs are capped at 9.5 percent of income. Gold and Platinum plans are capped at 12 percent of income. High-end plans may be subject to an excise tax of 40 percent of the total cost.
Visitors to the Marketplace can compare policies, deductibles, co-pays and costs. The online calculator allows consumers to find the plan that best fits their needs. They’ll be able to determine if they qualify for a federal subsidy to help them pay for Marketplace insurance and how to apply.
The Marketplace also offers “catastrophic” plans for people age 30 and low-income consumers, but different terms and rules apply and individuals won’t be eligible for subsidies and credits.
Affordable Versus Cheaper
It’s important to remember that affordable doesn’t necessarily mean cheaper. There are no restrictions on how much insurance carriers can charge for coverage and other options may be more cost effective.
Families with incomes less than 15,302 will qualify for Medicaid.
Some may qualify for assistance with out-of-pocket expenses for government programs including Medicaid, Medicare and the Children’s Health Insurance Plan.
Obamacare dictates that each person must have insurance and the Health Insurance Marketplace offers plans to accommodate the law. Patients should evaluate each plan carefully and examine all their available options so they can make an informed decision that’s best for everyone in the family.