Healthcare News & Insights

ACA replacement, bundled payments delayed

The healthcare climate became even more unstable for hospitals recently with two big announcements from the feds: Republicans have withdrawn their first attempt at repealing the Affordable Care Act (ACA), and the Centers for Medicare & Medicaid Services (CMS) has delayed the widespread adoption of bundled payments. 

With the ACA replacement bill, dubbed the American Health Care Act, the Trump administration was set to make big changes to healthcare reform, particularly the elimination of subsidizing insurance coverage based on patients’ income and expanding Medicaid for lower-income Americans.

From its initial announcement, the American Health Care Act was polarizing. Organizations such as the American Hospital Association criticized the bill, since healthcare experts projected that millions of patients (especially those currently covered by Medicaid) could lose coverage, which would likely lead to a spike in uncompensated care costs for hospitals.

In part due to such criticism, as well as opposition from both Republicans and Democrats in Congress, the American Health Care Act was withdrawn on March 24.

While many took this as a victory for the ACA, House Republicans are currently working on crafting another replacement bill, according to an article in the New York Times.

There aren’t any details about what the new legislation will contain. But it may address some of the concerns about a significant loss of healthcare coverage for Americans, as well as rising healthcare costs and certain mandates for payors regarding the plans they offer. This may soften the blow of any potential revenue hospitals could lose with a complete repeal of the ACA.

If an ACA replacement bill is reintroduced, House Republicans plan to act quickly because payors are already starting to submit their projected insurance plans for 2018. In the meantime, Democrats are also making moves, brainstorming ideas for improving on the ACA.

Latest on bundling

More hospitals were supposed to be reimbursed using a bundled payment model for certain procedures starting this summer, with a final rule set to be ready by March 21 (after being delayed in February). However, CMS just released legislation on the Federal Register that delays a final rule for the new bundled payment program, as well as the start date for the program itself.

The newest release delays the start of mandatory bundled payment programs for cardiac procedures and cardiac rehab from July 1 to Oct. 1. Widespread bundled payments for joint replacement will also be delayed until Oct. 1. A final rule governing these programs has been delayed until May 20.

In addition, CMS is currently soliciting comments on possibly extending the delay of these payment initiatives until Jan. 1, 2018.

Many hospitals may welcome the delay, since it gives them more time to adjust to the shift from the current fee-for-service model. And it also leaves room for more clarification about CMS’ expectations for facilities.

However, some healthcare experts say these delays may mean the new administration isn’t committed to implementing bundled payments as an element of value-based care. Per an article in FierceHealthcare, the newest Department of Health and Human Services (HHS) secretary, Tom Price, isn’t in favor of mandating bundled payments, and he’s directly opposed their implementation in the past.

We’ll keep you posted on any further developments regarding changes to the ACA or bundled payment programs. In the meantime, hospitals should start thinking about how these changes could affect their daily operations so they can create tentative action plans for going forward.

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