Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Policy & Regulation News

King v. Burwell Opposition Means 9.3 Million Lose Subsidies

By Jacqueline DiChiara

- The King v. Burwell case will be formerly addressed within the US Supreme Court on March 4, 2015. The Supreme Court will hear arguments regarding the Affordable Care Act’s (ACA) future implications and if the Internal Revenue Service will extend the availability of tax-credit subsidies for consumers linked to the Affordable Care Act’s federal marketplace under Section 1321 of the Patient Protection and ACA.

As previously reported, Health and Human Services Secretary Sylvia Burwell refused to discuss contingency plans last December if an adverse rule is administered. Burwell also emphasized a strong focus on open enrollment.

If attacks against the ACA hold their ground, King v. Burwell could immediately affect millions of Americans’ health insurance subsidies.

The primary issue to be addressed is Congress’ authorization of tax credits on state-created health insurance exchanges in opposition to those established on behalf of states via the Department of Health and Human Services.

Subsidies advocates state they are legal since ACA’s intent is to provide the uninsured with health coverage and emphasize creation of a federal exchange if states do not create them independently.

Burwell’s new statement predicts damage in ACA overturn

In a February 24, 2015 letter, Secretary Burwell responded to the U.S. House with an overwhelming emphasis on the ACA’s unwavering content and solid organization.

“We are confident that we will prevail because the text and the structure of the Affordable Care Act demonstrates that citizens in every state would be entitled to tax credits, regardless of whether they purchased their insurance on a federal or state marketplace,” states Burwell.

A decision in opposition to the King v. Burwell Administration would create widespread havoc, according to Burwell. “We know of no administrative actions that could, and therefore we have no plans that would, undo the massive damage to our health care system that would be caused by an adverse decision, she continues.

The ACA has left ten million middle class families confident in the security of their affordable care and millions within the private market able to access coverage for vital preventive health care services such as the flu shot, Burwell says.

Future reimbursement implications

If the concluding decision pleases petitioners, 9.3 million people with moderate income levels could lose health insurance subsidies by 2016. This could potentially lead to as many as “9,800 preventable deaths a year” and individual premium increases of 43 percent, reports Health Affairs.

An excerpt from the Hospital Corporation of America (HCA) amicus brief defending healthcare reform with the Supreme Court in the case of King v. Burwell last January refers to hundreds of millions of dollars in Medicare reimbursement cuts under the ACA.

2014 brought an offset in revenue gains “as a result of newly insured patients on the federally- facilitated Exchanges,” HCA’s amicus brief states.

“The CMS Office of the Actuary has subsequently estimated the amount of these cuts to all providers as at least $283 billion over ten years,” ACA states. “For HCA, these ACA provisions have significantly reduced the reimbursements that would otherwise have been received from the Medicare program. Looking only at states with federally-facilitated Exchanges, the ACA has already cut revenues to HCA by approximately $600 million between 2010– 2014.”


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