Health Care Reform

Supreme Court Upholds the Affordable Care Act with a ruling of 5-4 on the Question of the Individual Mandate Being a Tax
Thursday, June 28, 2012 at 10:15 am, the Supreme Court ruled by a vote of 5-4, that the Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional.

Per Bloomberg News, there were not five votes to uphold it on the grounds that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he or she refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding.

On the question of the Medicaid expansion, under the health care law, Medicaid eligibility was expanded to include adults with annual incomes up to 133 percent of the poverty level. The federal government will pay 100 percent of the costs of covering those eligible for the expansion in 2014, 2015 and 2016; 95 percent in 2017; 94 percent in 2018; 93 percent in 2019; and 90 percent in 2020 and thereafter.

The justices ruled it would not be unconstitutional for states to refuse to participate in that expansion and that they would not lose other federal funds for Medicaid by doing so.

In general, what does this ruling mean for AUGS members?

• The requirement to have health insurance will begin in 2014.
• Patients with pre-existing conditions will not be able to be denied health insurance.
• States will continue the plans for high-risk patients, such as those with pre-existing conditions.
• Private insurance plans will need to provide coverage for preventative services starting in 2014.
• The Patient Centered Outcomes Research Institute and its funding will continue.
• The bonus under the Physician Quality Reporting Program will continue till 2015 and then start the penalty phase.
• The Value Modifier adjustments for physician payments starting in 2015 will continue to be implemented based on a physician’s quality 
  score and cost score.
• Physician Feedback Reports will continue and be used in the value modifier.
• The demonstration project on Accountable Care Organizations and its funding will continue.
• The Centers for Medicare and Medicaid Innovation Center and the money to fund demonstration projects will continue.
• The Independent Payment Advisory Board (IPAB) is still in place.

Other provisions that were not covered under the Affordable Care Act that should be of interest to physicians is the future of physician payment and the 32% cut in Medicare reimbursements that physicians are facing on January 1, 2013 and the concerns with the implementation of the meaningful use of electronic medical records, as this program was started under the American Recovery Act.

What comes next is that states will have to decide whether to continue and for some start to set up insurance exchanges for 2014 and decide on whether to accept the funds for the Medicaid expansion. Or states can choose to wait till after the election and see what the outcome is.

For physicians, the next step is the publication of the 2013 Proposed Medicare Physician Fee Schedule which will continue the implementation of many of the provisions mentioned above and the need for legislation after the election to halt the 32% cut in Medicare physician payment before January 1, 2013.