Obamacare and You


As you can tell from the fact that ads for Menard’s and Peter Francis Geraci have replaced those for Romney and Obama, the 2012 election is over.  Pundits will continue to debate the effect on the political landscape and the so-called “fiscal cliff,” but one thing seems pretty clear: the Patient Protection and Affordable Care Act – PPACA, aka “Obamacare” (a term now embraced by supporters as well as opponents) – will continue to be enacted essentially as planned.  It seems like a good time to recall what effect the law will have on pediatrics, and particularly pediatric specialty care.

Coverage:  The law already prohibits exclusion of children under 19 years of age for pre-existing conditions (this prohibition will expand to include all people in 2014).  Additionally, children up to 26 may be included on their parents’ family policy, even if they are married and otherwise independent.

Also beginning in 2014, all people must have health insurance or pay a penalty (this is the hotly contested mandate that was upheld by the Supreme Court this summer).  Achieving this expanded coverage occurs through 3 primary mechanisms.  First, all employers with more than 50 employees must offer insurance, with subsidies for those for whom their share of the cost would exceed a certain percentage of their income.  Second, each state will have a health insurance exchange – essentially an on-line insurance market – where individuals not otherwise provided with insurance can purchase it.  The idea is that individuals, by working through the exchange, will be able to have access to the lower costs usually associated with group purchasing.  Moreover, there are subsidies for individual purchasers who earn up to 400% of the poverty level.  Finally, there is a provision to expand Medicaid to cover all individuals up to 133% of the poverty level, with the federal government paying the full cost of expansion (at least initially).  There are also provisions to continue the CHIP program and streamline Medicaid enrollment.

Exactly what the impact will be for children here in Wisconsin is unclear.  We already have the second lowest rate of uninsured children (after Massachusetts, which as you know already has a state-level version of this law).  While Gov. Walker has not yet made a decision about whether Wisconsin will participate in the Medicaid expansion, children up to 133% of poverty level are already covered by WI Medicaid.  There is some speculation that some people may lose their employer-provided coverage (since some employers may find it preferable and less expensive to pay the penalty than to provide the coverage); this could lead to at least some of those children shifting to Medicaid, but given the already broad Medicaid coverage here, the magnitude seems likely to be small.  Similarly, Wisconsin has not announced whether it will create its own exchange or allow the federal government to do it; the deadline for a decision is Friday.  One way or another, though, we will have an exchange, and the benefit levels are likely to be similar regardless, so I doubt it will matter a whole lot to us providers.

Benefits:  Annual and lifetime caps on “essential health benefits” have already been removed.  This has been helpful to the practice, as patients with high cost conditions (e.g., cardiac surgery, medically-complex special needs) who previously had move onto Medicaid when they exhausted their benefits can now remain on commercial insurance.

PPACA also calls for preventive care, including periodic health maintenance visits and vaccines, to be covered with zero cost-sharing.

Payments:  The direct impact of PPACA on payments to providers is modestly positive.  There is a 2 year provision for Medicaid payments (including those made through Medicaid managed care) for certain primary care services to be covered at a rate at least 100% of the Medicare rate.  Among the services are Evaluation and Management CPT codes 99201-99499, which includes not only outpatient but inpatient and emergency E&M codes.  Interestingly, pediatric subspecialists are among those classified a primary care providers for this purpose.  However, the states are not necessarily required to increase capitation payments to HMOs to cover this, leading to the possibility that an increase in the payment rate for some codes may lead to pressure to reduce the rates for others.  Also, in many cases our payment rates are already at 100% of Medicare.

Workforce:  There are several provisions that promote the “medical home,” which provides us with interesting opportunities to partner with primary care.  Also, the law creates a new loan repayment program, with $50 million in annual funding, providing up to $35,000 per year for 3 years for people going into pediatric medical, surgical,  and mental health subspecialties.

Research: PPACA created the Patient Centered Outcomes Research Institute (PCORI), which offers opportunity for funding of clinical effectiveness studies, an area of active interest here, and important in advancing the quality of care.  Not only does PCORI remain, but so does its funding, which comes from a per-enrollee fee paid by insurers into the PCORI Foundation.

Those are the highlights.  If you are interested in more details, a summary from the AAP, and another from Foley and Lardner, are good starting points.  Overall, the impact on our practice – and our patients – is likely to be positive.  But as is often the case, the legislation is only a starting point; regulations implementing the legislation will determine much of what actually happens.  Now that the fight over the law itself is over, the fight over the regulations can begin.

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