Healthcare Execs Ponder Financial Impact of Possible ACA Repeal

February 03, 2017 - With a possible full or partial Affordable Care Act repeal in the near future, healthcare executives called for some of the healthcare reform law’s provisions to continue, such as increased insurance coverage and the value-based reimbursement transition, a Vizient survey reported.

The survey of 222 healthcare and hospital pharmacy executives revealed that the top Affordable Care Act component C-suite leaders want to stay under a possible repeal was coverage protections for patients with pre-existing conditions with 89.5 percent of C-Suite leaders.

Other insurance coverage components rounded out the top three most favored Affordable Care Act provisions to be kept. Sixty-eight percent wished to see incentives for Medicaid expansion stay and 56.4 percent stated that subsidies designed to help individual pay for healthcare coverage should remain.

Continuing the value-based reimbursement transition was listed as number five with 51.7 percent of C-suite leaders favoring it.

While the survey gauged what healthcare executives wanted to keep, the C-suite leaders also shared Affordable Care Act provisions they would like to see go away under a potential Affordable Care Act repeal.

READ MORE: How the Affordable Care Act Impacted Healthcare Revenue Cycle

Topping the list with 38.4 percent of healthcare executives was some alternative payment models, such as bundled payment programs.

Even though bundled payment models were not popular according to the survey, CMS announced several compulsory bundled payment models in July 2016. One model targeted cardiac care occurring in 98 randomly-selected metropolitan areas and the other focused on hip surgeries in 68 areas.

Almost 38 percent of healthcare executives also wished for the individual mandate to be eliminated in a possible Affordable Care Act repeal. The mandate imposes a fine on individuals who do not obtain or maintain healthcare coverage.

Although, the individual mandate provision could already be relaxed under the Trump administration. The President signed an executive order earlier this month that gave federal agencies the authority “to waive, defer, grant exemptions from, or delay the implementation of” any Affordable Care Act provision that imposes financial burdens on healthcare stakeholders, such as the individual mandate.

Survey results indicated that healthcare executives are concerned that a potential Affordable Care Act repeal could hurt healthcare revenue cycles, especially if coverage gains and the value-based reimbursement transition are eliminated.

READ MORE: Understanding the Value-Based Reimbursement Model Landscape

About 15 percent of healthcare executives stated that potentially fewer insured patients troubled them in the post-election environment. The concern ranked second behind lower claims reimbursement rates with 36 percent of C-suite leaders.

Through some Affordable Care Act components, such as Medicaid expansion and health coverage subsidies, more individuals enrolled in health plans under the law. The healthcare reform law reportedly reduced the uninsured rate to just 8.6 percent of individuals.

With less uninsured patients coming through their doors, providers saw bad debt from charity care and uncompensated care costs drop. American Hospital Association (AHA) data from December 2016 showed that uncompensated care costs hit an all-time low in 2015, representing just 4.2 percent of total hospital costs.

Another June 2016 study from the Henry J. Kaiser Family Foundation also found that uncompensated care costs dropped 35 percent between 2013 and 2015 in states that implemented Medicaid expansion, whereas non-expansion states only saw a 1 percent drop in the same period.

Some healthcare organizations are worried that decreasing or eliminating coverage protections under a possible Affordable Care Act repeal could negatively impact healthcare revenue cycles.

READ MORE: Affordable Care Act Means Lower Reimbursement for Physicians

Healthcare executives in the Vizient survey also expressed concerns about possible policy changes that would make care delivery transformation investments irrelevant.

Value-based reimbursement models required healthcare organizations to make substantial care delivery and practice transformations. Many organizations invested in value-based necessities, such as health IT for quality reporting and population health management programs for better preventative care.

The tools necessary for value-based reimbursement success quickly ran up healthcare spending. For example, the Medical Group Management Association reported in August 2016 that EHR implementation typically cost practices up to $32,500 per physician in 2015.

Falling back on the value-based reimbursement transition could possibly diminish practice transformation returns on investment, the survey indicated.

“We believe there is broad consensus among hospital leaders that the traditional fee-for-service payment model alone is not sustainable,” Byron Jobe, Vizient’s President and Chief Administrative Officer stated in a press release. “There have been significant investments made in the migration toward value-based care, and hospitals require a coherent direction in order for these programs to deliver on their promise.”

Despite the Affordable Care Act’s uncertain future, healthcare executives still ranked value-based care model implementation as a top priority in 2017.

Only time will tell how Congress decides to change or repeal the Affordable Care Act, but in the meantime, Jobe advised healthcare executives to “focus on factors they can control. Addressing operational efficiency, reducing clinical variation and driving down costs will help executives ensure that their organizations can sustainably weather a changing and potentially leaner operating environment.”