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Healthcare Reform Developments

October 26, 2011 | No Comments
Posted by Frank Ciesla

Over the last several weeks different events have occurred which will have an impact on the new healthcare system under the Affordable Care Act (ACA).

There has been an acknowledgement and recognition by CMS officials that the portion of the ACA known as the CLASS Act is actuarially unsound and cannot be realistically implemented.  What is interesting is the continuing debate, as to whether or not, that portion of the ACA law should be repealed or retained as a part of the law without funding.  These discussions are summarized below:

The original calculation as to the economic impact of the CLASS Act found that it was projected to save $80 billion.  Obviously, that number is incorrect.  Of course, not having the CLASS Act implemented will continue to place a significant burden for long-term care upon the Medicaid Program.

In addition, another major development occurred last week with the publication of the final Shared Savings (ACO) Program regulations, as discussed in our blog post of last week.

A third event impacting the Medicaid Program is the appeal to the United States Supreme Court by both the State of California and the Administration regarding the fact that neither beneficiaries nor providers can challenge the adequacy of payments being made by the Medicaid program to providers for care being rendered to the beneficiaries.  Should the Supreme Court uphold that position, then a significant portion of the payments for care to be rendered under the Medicaid Program pursuant to the ACA will not be subject to challenge by either the providers or the beneficiaries.  In the State of New Jersey, Medicaid’s payments to physicians are already the lowest in the fifty (50) states.

Thus, the Medicaid Program will continue to bear the costs of long-term care that was originally supposed to be shifted away from the Medicaid program by the CLASS Act,  and access to physician’s services under Medicaid will continue to be a challenge, since neither individuals nor providers will be able to challenge inadequate payments to the providers.

On the Medicare side, ads are now being run by the American Medical Association in regard to the potential 30% reduction in payments made to physicians under the Sustainable Growth Rate (SGR).  The reduction is supposed to take effect January 1, 2012.

It is acknowledged that to correct this problem it will cost $300 billion.  This is a significant problem in light of the deficit reduction tasks being reviewed by the super committee.


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