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Health Care Reform in the United States

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This presentation provides an overview (updated through December 2011) of the 2010 Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act (also known as health …

This presentation provides an overview (updated through December 2011) of the 2010 Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act (also known as health care reform).


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  • 1. HEALTH CARE REFORM IN THE UNITED STATESAn overview of the 2010 Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act By Craig B. Garner, Esq. 1 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 2. THE FIRST HOSPITALS IN THE UNITED STATESMany of Americas initial medical services grewfrom the desire of charity based organizationsto assist the poor and sick. In 1736, the NewYork City Almshouse designated six bedroomsas a “ward” that would eventually grow tobecome Bellevue Hospital, followed closely thatsame year by what would later be known asCharity Hospital in New Orleans, Louisiana. 2 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 3. MEDICINE IN THE NINETEENTH CENTURYThrough the 1800s, access to the delivery ofcare rendered by the few elite hospitals (totalingfewer than 200 in 1873) in cities such as NewYork, Boston and Philadelphia went hand-in-hand with status in society. The Medical Laboratory, University of Pennsylvania 3 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 4. At the turn of the twentieth century, hospitals were few and far between, and their amenities were sparse. With the l i m i t e d m e di c al t e c h n ol og y an d crowded, often unsanitary conditions available in the early 1900s, a hospital was not a place to be if you were sick. 4Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 5. THE BEGINNING OF THE TWENTIETH CENTURYBy the 1920’s, the hospital had become a nationalinstitution in America, with more than 5,000facilities appearing in towns across the country.This trend brought with it advances intechnology, more doctors, and greater quality ofcare.As conditions in health care improved, thepractice of medicine in the United States shiftedfrom home to hospital. People went to a hospitalto get better, benefitting from these advances. St.Vincent Hospital, Los Angeles 5 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 6. HOSPITAL AND COMMUNITY WORKING TOGETHERIn 1946, the Hospital Survey and Construction Act(the Hill Burton Act”) disbursed approximately $3.7billion to hospitals so they could meet the needs ofthe nation. The Hill Burton Act sought to create 4.5hospital beds per 1,000 people nationwide.The Hill Burton Act forced hospitals and theircommunities to work together, combining federalfunds with local monies to cover expenses. Lister Hill Harold H. Burton 6 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 7. By the 1960s, health care in the United States was at a crossroads. Access to treatment had increased, but so had the corresponding price tag. With the passage of Medicare in 1965, our nation solidified its commitment to government sponsored health care. 7Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 8. Since the creation of Medicare in 1965, health care in the United States has faced a multitude of challenges on virtually all possible fronts. Today, critics contend that health care is overregulated, underfunded, and the system fails to reflect the expectations and demands of modern society. 8Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 9. As health care expenses in the United States approach 18% of the nation’s GDP, as many as 50 million Americans are still without health insurance, and medical bills are one of the leading causes of individual bankruptcy today. After many failed attempts at reform over the decades, 2010 marked the year for change. 9Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 10. HEALTH CARE REFORM BY THE NUMBERS* On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law (followed by the Health Care and Education Reconciliation Act). The Cost: $940 billion over ten years. Would expand coverage to 32 million Americans who are currently uninsured. In 2014, everyone must purchase health insurance or face a $695 annual fine. There are some exceptions for low-income households. Expands Medicaid to include more families who did not previously qualify. * Estimated projections at the time of passage. 10 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 11. WHO PAYS?*Drug manufacturers would pay a total of $16 billion between 2011 and 2019.Health insurers would pay $47 billion over this same period.Medical device manufacturers would pay a 2.9 % excise tax on sales, beginning in2013.A 10% tax on indoor tanning services is expected to raise about $2.7 billion.Starting in 2012, the Medicare Payroll Tax will include a 3.8% tax on investmentincome for families making more than $250,000 per year ($200,000 forindividuals).Beginning in 2018, businesses will pay a 40% excise tax on so-called "Cadillac"high-end insurance plans worth over $27,500 for families ($10,200 forindividuals).* Estimated projections at the time of passage. 11 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 12. HEALTH CARE SPENDINGNational Health  Expenditure Accounts (NHEA) measurethe total annual dollar amount of our nation’s health careconsumption.This information also tries to identify the amountinvested in the future of health care (such as medicalstructures, equipment, research, etc.). Growth in U.S. National Health Expenditures (NHE) over the next ten years is expected to be slightly higherdue to PPACA.Average annual growth in NHE for 2009 through 2019 isexpected to be 6.3%.  NHE as a portion of the nation’s GDP is expected to Source: CMS, Office of the Actuary (April 2010).be 19.6% by 2019. 12 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 13. HEALTH CARE SPENDING (continued)The following information was compiled for fiscal year 2009:■ NHE grew 4.0% to $2.5 trillion, or $8,086 per person, and accounted for 17.6% of GDP.■ Medicare spending grew 7.9% to $502.3 billion, or 20% of total NHE.■ Medicaid spending grew 9.0% to $373.9 billion, or 15% of total NHE.■ Private health insurance spending grew 1.3% to $801.2 billion, or 32% of total NHE.■ Out of pocket spending grew 0.4% to $299.3 billion, or 12% of total NHE.■ Hospital expenditures grew 5.1% in 2009.■ Physician and clinical services expenditures grew 4.0%.■ Prescription drug spending increased 5.3%. Source: CMS, Office of the Actuary (April 2010). 13 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 14. HOW WILL PPACA SLOW THIS TREND IN HEALTH CARE SPENDING? 14 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 15. THE HEALTH INSURANCE EXCHANGE Under Health Care Reform, the health insurance exchange is a marketplace created to offer affordable, high-quality health insurance options. The exchange is designed to help families who have no insurance or do not get adequate insurance at work and cannot afford to buy it in the costly individual or small group market. It is also for small businesses that cannot afford small group health insurance. When federal guidelines were released in the summer of 2011, the comparison was made between purchasing health insurance online and employing the Internet to buy airline tickets and make hotel reservations. 15 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 16. THE HEALTH INSURANCE EXCHANGE (continued)In 2010, PPACA established temporary, high-risk pools in each state to provide health coverage toindividuals with pre-existing medical conditions and who have been uninsured for at least six months.By 2014, state-based health insurance exchanges should provide consumers with a variety of privatehealth insurance plans to consider. This would include comparisons of covered services, premiums, co-pays and deductibles, as well as out-of-pocket limits on expenses.Each exchange will focus on individuals and small employers with 50 to 100 employees.In 2017, states will have the opportunity to opt out of the federal requirements establishing an insuranceexchange if they can show the ability to provide coverage comparable to the new Federal law.Illegal immigrants will not be eligible to participate in any State exchange.. 16 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 17. THE HEALTH INSURANCE EXCHANGE (continued)FIVE CATEGORIES OF STATE EXCHANGESPlatinum, with coverage at 90% of the full actuarial value of the essential benefits package.Gold, with coverage at 80% of actuarial value.Silver, with coverage at 70% of actuarial value.Bronze, with coverage at 60% of actuarial value.Catastrophic, a high-deductible plan available to people under age 30 and to people who qualify for anexemption (because other coverage is not affordable). 17 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 18. CALIFORNIA’S PROPOSED HEALTH INSURANCE EXCHANGEThe Exchange will be governed by a five-member boardappointed by California’s Governor and the legislature.California will also set up the Small Business HealthOptions Program, which will assist qualified small employersin facilitating the enrollment of their employees in qualifiedhealth plans offered.California will be active in establishing a competitiveprocess to select participating carriers.California will require plans to make available to the generalpublic claims payment policies and practices as well asperiodic financial disclosures. California will also requirepublic disclosure of data on enrollment, dis-enrollment, anddenied claims, among other things. 18 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 19. HEALTH INSURANCE EXCHANGES IN OTHER STATES Utah’s e-Find system enables eligibility workers to search multiple databases through a state “data warehouse” to verify eligibility for health coverage. Louisiana renews coverage for a majority of children without requiring families to submit a renewal form and by checking available databases to verify continued eligibility. The percentage of children who lose coverage at renewal has dropped from 16 percent to less than 1 percent. Wisconsin is among the 32 states that allow individuals to apply for health coverage online. The state’s ACCESS system includes the ability to complete the application with an electronic signature and features a personal account function so beneficiaries can report changes and renew coverage. 19 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 20. HEALTH CARE REFORM -- COVERAGE UP TO AGE 26 Dependent (Adult/Child) Coverage to Age 26: For plans that provide coverage for dependents, the plan must now cover dependents (adults/children) to age 26 (this is generally tax free to the employee). This is effective for plan renewals beginning on or after September 23, 2010. This also applies to employers with cafeteria plans, as well as self-employed individuals who qualify for the self-employed health insurance deduction. “Grandfathered plans” are not required to cover adults/children to the age of 26 if the adult/child is eligible to enroll in another eligible employer- sponsored health plan. This limited exemption ends on the first plan renewal beginning on or after January 1, 2014. 20 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 21. NEW PROTECTIONS FOR INDIVIDUALS PPACA ensures that insurance companies and health plans provide simple summaries of what is covered and for what services individuals must pay directly. By March 2012 PPACA will require a uniform glossary of terms commonly used in health insurance coverage such as “deductible” and “co-pay.” Federal tax credits and cost-sharing reduction payments will also reduce the cost of insurance for low income individuals, leading to the expectation that more people will obtain coverage on their own. In some cases, this may reduce the need for employer provided health insurance. The Congressional Budget Office estimates that when PPACA is completely phased in, the premium tax credit will help 20 million Americans afford health insurance. 21 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 22. NEW PROTECTIONS FOR INDIVIDUALS (continued)The Reform Law is designed to make individual health insurance policies moreaffordable and available by: (1) mandating “community rating” so that individualrates can only vary based on location or rating area, age of the insured, andtobacco use; and (2) by barring the exclusion of coverage for preexistingconditions.In 2011, new federal regulations require health insurance companies to discloseand justify any rate increase of 10% or more.  For an insurer to increase rates inexcess of 10% for any insurance product sold to individuals (or small groups), itmust first file a “preliminary justification.” If state or federal officials disagree andfind the increase unreasonable, the insurer must then file a final justification. 22 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 23. THE INSURANCE MANDATE FOR INDIVIDUALS Individual Penalty for Not Obtaining Coverage: Individuals who do not obtain or retain qualifying health care coverage will be required to pay a penalty as part of their income tax returns. Many low income individuals who are not required to file income taxes are exempt from the mandate. In 2014, the penalty is $95 or 1% of the individual’s income, whichever is greater. By 2016, the penalty increases to $695 or 2.5% of income. For families, the maximum penalty is three times the per-person flat-dollar penalty. The penalty for dependent children without coverage is half the cost of the individual flat-dollar penalty. 23 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 24. THE INSURANCE MANDATE FOR INDIVIDUALS (continued) How Individuals Can Meet the Health Insurance Mandate: By enrolling in a government program such as Medicare, Medicaid, TRICARE, or Children’s Health Insurance Program (CHIP). By participating in qualified insurance offered by your employer. By purchasing a qualified insurance policy through a state exchange or directly from an insurer. To be qualified, a plan must cover certain “essential health benefits” at least up to at least 60% of actuarial value. 24 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 25. IS THE INSURANCE MANDATE CONSTITUTIONAL? Legal Challenges to the Individual Requirement are Pending: There is a split between the Circuit Courts of Appeal. The United States Supreme Court may soon render the final decision. Stay tuned. The mandate could be replaced with another means to encourage participation, as universal coverage through insurance is viewed as central to the program. 25 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 26. BE MINDFUL OF HIGH DEDUCTIBLE PLANSAs many as three million Californians are enrolled in health plans requiringdeductibles in excess of $5,000.For members enrolled in preferred provider organizations (PPOs), 28%reported plan deductibles in excess of $1,000, and in health maintenanceorganizations (HMOs), the number was 14%.Many Californians cannot afford higher-premium plans, but the alternative –high-deductible plans which may cost less initially – can cost thousands ofdollars when health care is needed. Catastrophic, a high-deductible plan available to people under age 30 and topeople who qualify for an exemption (because other coverage is notaffordable). 26 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 27. HEALTH CARE REFORM FOR BUSINESSES IN 2014 The new law does not require employers to offer health insurance coverage to their employees. For “large employers” (those with 50 or more full-time employees) the law imposes a penalty ($2,000 per employee) if any of their full-time employees qualify for and receive federal subsidies. The large employer penalty does not apply for the first 30 employees. For small businesses that are not required to provide health coverage, generous new tax credits will be available to those businesses with low-paid employees to encourage them to provide qualified health insurance for their employees. 27 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 28. HEALTH CARE REFORM FOR BUSINESSES (continued)Limitations on Pre-Existing Conditions and Plan Limits Currently, group health plans are not able to impose pre-existing condition exclusions on children under age 19.  Additionally, group health plans are not able to impose lifetime or restrictive annual limits on benefits under the plan.  Beginning in 2014, a group health plan will not be able to impose any annual limits. In addition, effective in 2014, group health plans will be completely prohibited from imposing pre-existing condition exclusions on plan participants. 28 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 29. HEALTH CARE REFORM FOR BUSINESSES IN 2018There will be a 40% tax on expensive heath care plans, dubbed "Cadillacplans."These high cost health plans are defined as having a value of $10,200 for asingle employee or $27,500 for a family.There are exclusions for high risk jobs and other special occupations. 29 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 30. SMALL BUSINESS HEALTH CARE TAX CREDITThe Health Care Insurance Reform legislation seeks to expand coverage by providinggenerous tax credits to small businesses with low-paid employees (which historically havenot provided employee health insurance).  This change has already led to a significantincrease in the number of such businesses providing insurance.  Must cover at least 50% of the cost of health care coverage for some of its workers based on the single rate. Must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible). Must pay average annual wages below $50,000. The credit is worth up to 35% of a small business’ premium costs in 2010 (25% for tax- exempt employers). On January 1, 2014, this rate increases to 50% (35% for tax-exempt employers). 30 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 31. HEALTH INSURANCE PLAN CHOICES FOR SMALL BUSINESSESIn November 2011, the federal government released a new tool for small businessowners to compare the benefits and costs of health plans, and even research locallyavailable products, so they can choose the best options for their employees.  At www.HealthCare.gov, small business owners can research: Insurance product choices for a given ZIP code, sorted by out-of-pocket limits, average cost per enrollee, or other factors. A summary of cost and coverage for small group products that shows the available deductibles, range of co-pay options, included and excluded benefits, and benefits available for purchase at additional cost. The ability to filter product selection based on whether the plans are Health Savings Account eligible, have prescription drug, mental health, or maternity coverage, or allow for domestic partner or same sex coverage. 31 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 32. CHANGES TO FLEXIBLE SPENDING ARRANGEMENTSEffective January 1, 2011, the cost of over-the-counter medicine or drugs cannotbe reimbursed from Flexible Spending Arrangements or health reimbursementarrangements unless a prescription is obtained.This does not affect insulin, even if purchased without a prescription, or otherhealth care expenses such as medical devices, eyeglasses, contact lenses, co-paysand deductibles.A similar rule went into effect on January 1, 2011, for Health Savings Accounts. 32 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 33. HEALTH SAVINGS ACCOUNTSAs of January 2011, more than 11.4 million people have health savings accounts(up from 10 million in January 2010).Health Savings Accounts typically include a tax-preferred savings account wheremoney is set aside by the consumer (employers can also contribute) to pay formedical expenses and prescription drugs.Health Savings Accounts also usually include a high-deductible health insuranceplan. In 2012, that deductible will be at least $1,200 for an individual and $2,400for a family (and as high as $6,050 and $12,100, respectively).Any adult with a high-deductible health plan and no other form of health carecoverage can establish Health Savings Accounts. 33 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 34. HEALTH SAVINGS ACCOUNTS (continued)Individual contributions into Health Savings Accounts are taxdeductible.Employer contributions into Health Savings Accounts are not taxableincome.At the end of the year, funds in Health Savings Accounts roll over, andeven stay with the individual if he or she changes employment.Health Savings Accounts can be used for general retirement expenseswhen a participant turns 65.The IRS determines what medical expenses qualify (i.e., the IRS recentlydropped over-the-counter medications from the list). 34 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 35. “OPTIONAL” EMPLOYER REPORTING REQUIREMENTSStarting in tax year 2011, the new law required employers to report the valueof the health insurance coverage they provide employees on each employee’sannual Form W-2.However, to provide employers the time they need to implement thesechanges, the IRS deferred the reporting requirement for 2011, making itoptional for 2010 filings. 35 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 36. THE FUTURE OF HOSPITAL REIMBURSEMENT?In April 2011, CMS published regulations that provided a roadmap forthe future of hospital reimbursement.Authorized within PPACA, CMS will start paying hospitals Medicare“bonuses” based upon overall performance, adherence to qualitymeasures, and patient satisfaction. This hospital value-based purchasing program is another step towardshifting the reimbursement infrastructure from cost-basedto  performance-driven. 36 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 37. THE FUTURE OF HOSPITAL REIMBURSEMENT (continued)Beginning in October 2012, hospitals can sharebonus money from an $850 million fund basedupon their performance scores.The following year, hospitals will face a 1%reduction overall on Medicare payments underthis system.By 2015, hospitals with poor performance ratingsmay be excluded from the bonus pool and faceadditional cuts in reimbursement. 37 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 38. THE FUTURE OF HOSPITAL REIMBURSEMENT (continued)Also effective October 2012, hospitals with the highest ratesof readmission can lose as much as 3% of reimbursements."The incentives were putting into place have created a whole new way tothink about hospital care." --Jonathan Blum, deputy administrator of CMS 38 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 39. HOSPITAL PERFORMANCE MEASURESHospitals must closely track their performance onvarious measures of quality, patient experience, andoperations. This includes the following examples: Readmission rates for cardiac cases Readmission rates for pneumonia patients Mortality rates for cardiac and pneumonia patients Average waiting time in the emergency department Patients who would recommend a hospital Patients who were happy with their levels of communication with doctors and nurses 39 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 40. Bundled Payments for Care Improvement InitiativeIn August 2013, CMS released the Bundled Payments for Care Improvement Initiative, a program designed toencourage a team of providers to work together to treat certain episodes of care for one bundled payment perpatient.Instead of separating Medicare payments for each service involved in treating a patient, a “bundled system” is a singlepayment for a defined group of services, irrespective of the nature of the entity providing the care (i.e., a singleentity, such as a hospital, or several different, multidisciplinary providers).CMS has defined four models of care: Model 1 (inpatient stay only) Model 2 (inpatient stay plus post-discharge services) Model 3 (post-discharge services only) Model 4 (inpatient stay only with a prospectively determined bundled payment rate) 40 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 41. HEALTH CARE REFORM AND THE HOSPITALThe federal government has enlisted individuals to help fight Medicare fraud, andMedicare beneficiaries are encouraged to report the following: If you spot unusual or questionable charges, contact your health care provider. It may just be a mistake. If your complaint is not resolved by your provider, report the questionable charges to Medicare. If you suspect Medicare fraud, contact the Department of Health & Human Services Office of Inspector General. If you think someone is misusing your personal information, contact the Federal Trade Commission. 41 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 42. HEALTH CARE REFORM AND THE HOSPITAL (continued)The trend of multi-hospital systems replacing freestanding community hospitals picked up speed after 1965. Thefive hospital consolidations noted in 1961 ballooned to upwards of 50 per year in the 1970s. By the 1980s, anestimated thirty percent of the hospital beds in the United States existed within hospital systems. In 2008, theAmerican Hospital Association estimated that almost half of the nearly 6,000 U.S. hospitals belonged to a hospitalsystem.Even many of the non-profit, faith-based hospitals directly descended from the original almshouses and charityhospitals of the 18th and 19th centuries have come to seek refuge in consolidation. By 1872, there wereapproximately 75 Catholic hospitals in the United States. Today, most of these institutions have been incorporatedinto regional “systems”. 42 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 43. HEALTH CARE REFORM AND THE PHYSICIANIn 2015, roughly 750,000 physicians in the Medicare programwill be asked to revalidate their individual enrollment recordsduring a massive anti-fraud effort mandated by PPACA.CMA intends to weed out only those people who should nothave billing privileges, but physicians are concerned thatlegitimate health professionals may face disruptions in theirpractices. 43 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 44. HEALTH CARE REFORM AND THE PHYSICIAN (continued) The new law also requires a value-based purchasing modifier that would adjust physician fees based on quality and efficiency measures. Although the adjustments will not start until 2015, CMS may start measuring physician performance in 2013. Although the adjustments will not start until 2015, CMS may start measuring physician performance in 2013. 2013: CMS may start measuring physician services to determine modifier adjustments in the future. 2015: CMS starts applying the modifier to specific physicians and groups. 2017: CMS starts applying the modifier to all physicians and groups. 44 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 45. ACCOUNTABLE CARE ORGANIZATIONSIn April the Federal Government released anticipateddetails defining Accountable Care Organizations (ACOs).PPACA encourages the formation of ACOs to monitor thecollective quality and efficiency of doctors and hospitalsalike, while at the same time creating an entirely new set ofstandards for compensation.The Pioneer Model released by CMS is designed for healthcare organizations that are already experienced incoordinating care for patients across such care settings. 45 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 46. ACCOUNTABLE CARE ORGANIZATIONS (continued)The original regulations faced a strong pushback from the health care industry, including concern that ACOs triggeredwell-established violations of law without the benefit of any new, expected safe harbor provisions or other comparableexceptions, especially in California where the corporate practice of medicine is prohibited.Additionally, proper formation of ACOs under the regulations necessitate a significant capital commitment,notwithstanding other financial burdens in the health care industry already:! Electronic health records! Seismic Safety Standards! State budget and Medi-Cal 46 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 47. ACCOUNTABLE CARE ORGANIZATIONS (continued)In response, the federal government published revisions governing formation of ACOs inOctober 2011. Some of these changes included: Rather than a retrospective assignment of patients, the modifications focus on a preliminary prospective-assignment method with beneficiaries identified quarterly (there will still be a final reconciliation after each performance year based on patients served by the ACO). 33 quality measures in 4 domains rather than the original 65 measures in 5 domains. Program establishment date is now January 1, 2012, with the first round of applications due in early 2012. In the beginning, ACOs will also have some flexibility within each of the performance years, rather than the original uniform 3-year agreement based only on a calendar year. EHR is no longer a mandatory condition of participation, although it is retained as an important quality measure. Flexibility on marketing guidelines for ACOs. 47 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 48. ACCOUNTABLE CARE ORGANIZATIONS (continued)In addition to modifications surrounding formation, other federalagencies have clarified issues of concern in the revised regulations: The Office of the Inspector General clarified the implications of physician self referral laws and the federal anti-kickback statutes. The Federal Trade Commission clarified that entry into the Shared Savings Program will no longer require mandatory antitrust review, and there will be an antitrust “safety zone” for ACOs approved by CMS to participate in the Shared Savings Program. The Internal Revenue Service clarified the ways in which a charitable organization can participate in the Shared Savings Program without compromising its tax exempt status. 48 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 49. HEALTH CARE REFORM AND PREVENTATIVE CARE “The Affordable Care Act helps stop health problems before they start.” --HHS Secretary Kathleen Sebelius PPACA is about: Pilot Programs Preventative Health Care Services Forward Thinking Research 49 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 50. HEALTH CARE REFORM AND PREVENTATIVE CARE (continued)Last summer’s regulations required all new private health plans tocover several evidence-based preventive ser vices likemammograms, colonoscopies, blood pressure checks, and childhoodimmunizations without charging a copayment, deductible orcoinsurance.PPACA also made recommended preventative services free forMedicare beneficiaries.Regulations also focused on preventative care for women to ensurea full range of recommended preventative services and screeningswithout cost sharing. 50 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 51. HEALTH CARE REFORM AND PREVENTATIVE CARE (continued)Beginning in 2014, employers may use up to 30% of theiremployees’ health insurance premiums for outcome-basedwellness incentives.Employees can receive rewards such as a discount orrebate on a premium, a waiver of a deductible orcopayment, or some additional benefit not included underthe plan. 51 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 52. HEALTH CARE REFORM AND PREVENTATIVE CARE (continued)PPACA also created the Patient-Centered OutcomesResearch Institute (PCORI) to produce groundbreaking,evidence based information pertaining to health care thatwill be easily accessible to both doctors and patients.PCORI will focus on several areas of interest, includingways to deliver health care “without bias” and identifyexisting gaps affecting women, low-income populations,minorities, children, and the elderly, among others. 52 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 53. HEALTH CARE REFORM AND PREVENTATIVE CARE (continued)This also includes the National Prevention, Health Promotion,and Public Health Councils, charged with the task ofdeveloping health care prevention strategies for large-scalefuture use.A report issued by the PPACA’s Prevention and Public HealthFund estimates that a $10 per person investment each year incommunity-based, preventative health programs could result inan annual savings of more than $15 billion over the next fiveyears. 53 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 54. HEALTH CARE REFORM AND PREVENTATIVE CARE (continued)Regardless of its emphasis on our nation’s future well-being, PPACA now finds itself in the crosshairs asCongress tries to repair America’s global credit score.How will the debt ceiling legislation impact thegovernment’s ability to fund health care in the future? 54 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 55. THE NATION’S HEALTH CARE HIERARCHY 55 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 56. OPERATING DIVISIONS WITHIN HHS■ Administration for Children and Families (ACF)  ■ Health Resources and Services Administration (HRSA)■ Administration on Aging (AoA) ■ Indian Health Service (IHS)■ Agency for Healthcare Research and Quality (AHRQ) ■ National Institutes of Health (NIH) and the National Cancer Institute (NCI)■ Agency for Toxic Substances and Disease Registry (ATSDR) ■ Substance Abuse and Mental Health Services Administration■ Centers for Disease Control and Prevention (CDC) (SAMHSA)■ Centers for Medicare & Medicaid Services (CMS)■ Food and Drug Administration (FDA) 56 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 57. HHS STAFF DIVISIONS■ Assistant Secretary for Administration (ASA) ■ Assistant Secretary for Planning and Evaluation (ASPE)■ Assistant Secretary for Financial Resources (ASFR) ■ Assistant Secretary for Preparedness and Response (ASPR)■ Assistant Secretary for Legislation (ASL) ■ Center for Faith Based and Neighborhood Partnerships (CFBNP)■ Assistant Secretary for Public Affairs (ASPA) ■ Departmental Appeals Board (DAB) 57 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 58. HHS STAFF DIVISIONS (continued)■ Office of Intergovernmental Affairs (IGA) ■ Office of the Inspector General (OIG)■ Office of Civil Rights (OCR) ■ Office of Medicare Hearing and Appeals (OMHA)■ Office on Disability (OD) ■ Office of National Coordinator of Health Information Technology (ONC)■ Office of the General Counsel (OGC) ■ Office of the Assistant Secretary for Health (ASH)■ Office of Global Health Affairs (OGHA) ■ The Surgeon General 58 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 59. HEALTH CARE OVERSIGHT IN CALIFORNIA 59 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 60. MAKING A HOSPITAL “GREEN”The EPA estimates that hospitals use twice (maybe 2½ times) as much energy persquare foot as regular buildings.Hospitals in the United States use 836 trillion BTUs of energy yearly (over 2½ timesthe energy intensity and CO2 emissions of commercial office buildings), whileproducing 28.575 million tons of CO2 and over 30 pounds of CO2 emissions persquare foot on an annual basis. 60 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 61. THE DIGITAL MEDICAL RECORDAs our nation continues to increase its drive toward electronic health care records,including the protections afforded under the Health Insurance Portability andAccountability Act (HIPAA), we must be mindful of the speed with whichtechnology changes, as well as the dilution of privacy expectations progressing fromgeneration to generation. 61 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 62. WHAT IS A MEDICAL EMERGENCY?* Possible Medical Emergency Potential Symptoms Heart Attack Chest discomfort; discomfort in other areas of the upper body, including one or both arms; shortness of breath. Uncontrolled Bleeding Just about all bleeding can be controlled, but shock or even death may result if left unattended. Altered Mental Status The individual may be unresponsive. This may include fainting, unconsciousness or any other sudden change in mental status. Commonly known as “respiratory distress,” this may include Difficulty Breathing sudden breathlessness and/or severe shortness of breath. In some cases, a person makes a sound, followed by unusual Seizures stiffening, progressing to possible jerking of the arms and legs. Serious or body-altering physical injury, including blunt force Physical Trauma trauma to the head, neck, spine and/or abdomen. *This list is not a substitute for an examination by a medical practitioner. If you are ever in doubt of whether a situation is an emergency, call 9-1-1 immediately. 62 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 63. CALLING 9-1-1 DURING A MEDICAL EMERGENCY*A few examples of medical emergencies when it is imperative to call9-1-1: Anaphylaxis (life-threatening allergic reaction) Stroke Chest pain Sudden blindness Drug overdose Serious burns Heart attack Bleeding that will not stop Shortness of breath Broken bones with an open woundA few examples of when 9-1-1 should not be called: For information To get a ride to a doctor’s appointment When the power goes out For paying tickets To report a broken fire hydrant For your pet When your water pipes burst As a prank *This list is not a substitute for an examination by a medical practitioner. If you are ever in doubt of whether a situation is an emergency, call 9-1-1 immediately. 63 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 64. Craig B. GarnerCraig is an attorney and health care consultant, specializing in issues surrounding modern American health care and theways it should be managed in its current climate of reform. Between 2002 and 2011, Craig was the Chief Executive Officerat Coast Plaza Hospital where he was responsible for administration and oversight of this general acute care hospitalproviding services to the City of Norwalk and surrounding communities in southeast Los Angeles County.Craig is also the founder of a health care sustainability non-profit, Not So Much Foundation (www.notsomuch.org). Lastfall, he published his book Hospital Stay: Health Care Made Simple, a guide for patients and family members who findthemselves in the confusing confines of a hospital environment.Craig serves on the advisory board for the College of Osteopathic Medicine of the Pacific, Western University of HealthSciences, the Board of Directors of the Los Angeles Opera, and the Board of Visitors of Seaver College at PepperdineUniversity.Craig regularly writes specialized articles for various health care publications, and in January 2012 he will be teaching aHospital Law course at Pepperdine University School of Law. 1299 Ocean Avenue, Suite 400 Santa Monica, CA 90401 T. (310) 458-1560 E. craig@craiggarner.com W. www.craiggarner.com 64 Copyright 2011 Craig B. Garner, Esq. All rights reserved
  • 65. Additional Resources http://www.healthcare.gov http://www.cms.gov http://www.dhcs.ca.gov http://www.cdph.ca.gov http://www.calhospital.org http://www.craiggarner.com 65Copyright 2011 Craig B. Garner, Esq. All rights reserved