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Health Care Reform Act — Where We Are

Politics is not an exact science.

Politics is the art of the possible.

— Otto von Bismarck

On March 23, and March 30, 2010, the President signed into law what is commonly known as the Health Care Reform Act. It is comprised of the Patient Protection and Affordable Care Act of 2010 (“PPACA”) as amended by the Health Care and Education Reconciliation Act of 2010 (“HERA”).

The consolidated Congressional print of the combined Acts takes up 907 pages.

A headline discussing an AP Poll that came out in late September stated that the health care reform law is making us “muddle-minded.” The poll’s questions included a true-or-false quiz asking whether each of 19 different items was (or was not) included as part of the Health Care Reform. Along with their answer to each of the questions, respondents were also asked how confident they felt in their answers. For the most part, majorities picked the right answers. But a sizable number also got things wrong. And right or wrong, people were unsure of their answers. By the way, I looked at the questions, and I’m not sure I could have answered them correctly.

Lawsuits have been filed challenging the constitutionality of those parts of the law that penalize individuals who fail to purchase health insurance, arguing that the federal government cannot tax or otherwise assess an economic penalty over individuals who refuse to participate in economic activity. In response to the government’s motion to dismiss one lawsuit that was filed in the Northern District of Florida, the federal judge ruled that the lawsuit could proceed. On the other hand, in a case filed in the Eastern District of Michigan, another federal judge ruled that “the Commerce Clause affords Congress broad power to regulate even purely local matters that have substantial economic effects,” finding that “by choosing to forgo insurance plaintiffs are making an economic decision to try to pay for healthcare services later, out of pocket, rather than now through the purchase of insurance, collectively shifting billions of dollars, $43 billion in 2008, onto other market participants.” It is expected that the constitutionality of this provision of the law will ultimately be determined by the U.S. Supreme Court.

In the meantime, regardless of the outcome of the court challenges, the law is likely to have a significant effect on healthcare providers as aspects of the law are implemented.

The Health Care Reform Act is comprehensive and affects, or is slated to affect, nearly all parts of the health care insurance and delivery systems. It includes insurance reforms, tax changes, Medicare and Medicaid coverage and payment changes, and establishes a number of entities to conduct demonstration projects on new ways to deliver health care or train those who participate in the health care delivery system.

Rulemaking is just beginning, and a number or proposed and final regulations have already been promulgated. The Health Care Reform Act is to be implemented over the next five years or more. The following is a list of some of what is scheduled to happen and when:

March 23, 2010 (Upon Enactment) — Fraud and abuse provisions are effective, such as overpayments, anti-kickback statute amendments, false claims act amendments, expanded subpoena authority, and Stark law disclosure requirements relating to the in-office ancillary services exception.

June 23, 2010 (90 Days After Enactment) — Temporary retiree reinsurance program and national high risk insurance programs become effective.

September 23, 2010 (6 Months After Enactment) — Coverage for adult children up to age 26, plans prohibited from rescinding coverage, pre-existing conditions prohibited for children under the age of 19, plans prohibited from rescinding coverage.

2011Medicare Advantage payment freezes pending restructuring of rates, and prohibition on physician ownership in hospitals.

2012 — Allow providers organized as accountable care organizations to share in cost savings achieved for the Medicare program; excess readmission provision goes into effect, and drug manufacturers must report information relating to drug samples.

2013 — Drug, device and supply manufacturers must begin disclosing payments to physicians and teaching hospitals, and hospital organizations must conduct community needs assessments.

2014 — No pre-existing condition limitations or annual limits on coverage, and the individual mandate begins, Medicaid expands eligibility, and health insurance exchanges commence.

2015 — Independent payment advisory board established to propose changes in Medicare payments.

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