Patient Protection Affordable Care

BWD Magazine, Winter 2011-12

What's Happening Next?

In March 2010 The Patient Protection and Affordable Care Act became law. It detailed comprehensive health insurance reforms intended to hold insurance companies accountable, lower costs, guarantee choice and enhance quality health care for all Americans. No matter what your political preference, all can certainly agree the Act imposes sweeping and significant tax and regulatory changes.

While many changes have already taken place and some anticipated changes have been modified, there are likely many changes yet to come. Let's take a look at some of the more impactful changes that have already occurred

Changes implemented in 2010

  • No discrimination against children with pre-existing conditions
  • Implementation of the Small Business Tax Credit
  • Elimination of lifetime limits on coverage
  • Extended dependent coverage to dependents under age 27

Changes implemented in 2011

  • Require health insurers to annually report share of premium dollars spent on medical care as opposed to profits retained and administration. When less than 80-85 percent of dollars are used for benefits, consumer rebates must be provided
  • Increase reimbursement for primary care physicians - provides for a 10 percent Medicare bonus payment to primary care physicians and general surgeons in underserved areas
  • Improving preventive health coverage - provides for a free, annual wellness visit for Medicare beneficiaries and requires new plans to provide low cost preventive services
  • Medicare premiums for higher income beneficiaries - Income thresholds for premium determinations frozen at 2010 levels
  • Participants in HRAs and FSAs* no longer receive reimbursement from their accounts for over the counter drugs not prescribed by a doctor

Key changes this year (2011)

  • 1099 Reporting – requirement repealed April 2011
  • W-2 reporting of health insurance costs – implementation delayed until 2013

Key changes for 2012

The lengthy implementation timeline may cause a false sense of security. But these changes are coming. Without any further delay, these significant aspects are scheduled for implementation in 2012:

  • Annual fees on the Pharmaceutical industry - new federal fees will be assessed to large pharmaceutical manufacturers which will likely be passed to consumers
  • Medicare value based purchasing - this establishes a reimbursement mechanism to pay hospitals and other institutional providers based on quality performance measures
  • Medicare payments for hospital readmissions - reduction of Medicare payments made to hospitals to account for excess and assumedly preventable hospital readmissions
  • Accountable Care Organizations in Medicare - allows for providers (e.g. physicians and hospitals) organized as Accountable Care Organizations to share in the cost savings they achieve for Medicare
  • Medicare Independence at Home Demonstration - creates the Independence at Home Demonstration Program to provide high need Medicare beneficiary with primary care services in their home
  • Medicare provider payment changes - adds a productive adjustment to the market basket update for certain providers. It is largely anticipated that it will result in lower reimbursements to providers
  • The Act's provisions have implementation dates extending out into 2018. It is anyone's guess as to how or what changes may occur due to upcoming elections. Stay tuned to Rehmann and BWD for future discussion on this hot topic.

*Health Savings Accounts and Flexible Spending Accounts

Any advice in this communication is not intended or written by Rehmann to be used, and cannot be used by a client or any other person or entity for the purpose of:(I) avoiding penalties that may be imposed on any taxpayer or;(II) promoting, marketing or recommending to another party any matters addressed herein. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Published in Healthcare

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