A whole new world awaits
Industry braces for big changes if bill becomes law
Hospital industry leaders in witnessing the historic passage of the Senate’s healthcare overhaul bill know that the way they do business in the healthcare marketplace may be about to rapidly change.
As the House and Senate move to confer on the respective differences on their healthcare reform packages early this year (See story below), providers are gearing up for the likelihood that the government plans a major revamp in how it pays and evaluates hospitals for care under federal programs.
Any health reform bill is bound to generate a great deal of regulatory activity. Many changes in payment policy are likely to take place—and will be implemented quickly, said Don May, vice president for policy with the American Hospital Association. Some of these changes could be discussed, proposed and implemented as soon as 2011, he said.
In looking at the Senate bill alone, the $871 billion Patient Protection and Affordable Care Act, approved early on Christmas Eve in a historic 60-39 vote, would greatly restructure the roughly $2.5 trillion per year healthcare sector in just over a decade’s time. Much of this restructuring involves payment reform.
President Barack Obama and Democratic members of Congress praised the Senate vote. “We are now incredibly close to making health insurance reform a reality in this country,” Obama said after the vote.
The Senate legislation, as an example, would create a pilot hospital value-based purchasing program in 2013, where a percentage of reimbursement would be tied to performance. If successful, it could be expanded. Inpatient rehabilita- tion facilities and long-term-care hospitals will also move toward such a system. The bill is loaded with other pilot programs and system studies. Under one, hospitals in 2013 could volunteer to receive payments for an entire episode of care rather than under the piecemeal inpatient prospective payment system, or IPPS. The bundled payment system will also be expanded to other provider types as well.
The bill creates a so-called “Independent Payment Advisory Board,” which would hold sway over Medicare payment formulas. The board would make annual recommendations to the president, Congress and private organizations on actions they can take to improve quality and constrain the rate of cost growth. Its Medicare recommendations are nonbinding in years where Medicare growth is below the targeted growth rate. The board will develop its first recommendations in 2013 for implementation two year later.
Hospitals also face new penalties. In 2012, for instance, hospitals would see their reimbursement cut for certain types of readmissions.
The bill also aims to boost health insurance coverage. The Senate’s package is expected to extend coverage to 31 million Americans who currently go without it. Much of the cost of extended coverage would come from reductions in federal dollars to the Medicare and
Gage: Senate bill could fall short of coverage expectations.