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Election Leaves No Doubt About ACA, Will Allow Hospitals to Implement Reforms

Thursday, November 8, 2012

The re-election of President Obama brings strong clarity for hospitals that the Affordable Care Act will remain as law, experts and stakeholders told BNA, allowing them to continue on their agenda of implementing the law's mandated changes.

In interviews Nov. 7, hospital representatives and other Medicare experts said the renewed clarity should allow hospitals to move forward with ACA reforms such as the formation of accountable care organizations (ACOs), bundled payments, and value-based purchasing.

Although fiscal challenges such as sequestration remain in the mix, hospitals now have a clear agenda. “Any ambiguity has been erased,” Dan Mendelson, chief executive officer of the consulting group Avalere Health, said. “Now we're on the roller coaster. All the policies in the Affordable Care Act will happen. You can't get off once it's moving.”

Rick Pollack, executive vice president of the American Hospital Association, said the concerns hospitals had before the election--readmission penalties, implementation of value-based purchasing, costs of an accountable care organization infrastructure--have not changed.

The election “didn't change a lot,” Pollack said. “The fundamental agenda continues to move forward. How the reforms get rolled out will be a concern.” For example, he said, AHA will continue to press Congress and the Department of Health and Human Services to change the penalty for excess readmissions to differentiate between preventive and unrelated readmissions, as opposed to an “all cause” measure.

Strong Showing for Payment Reforms.

One of the ACA's major developments was its intent to transform the health care delivery system through the formation of ACOs. ACOs are intended to allow integrated networks of providers to share in the risks and financial rewards of keeping a select group of patients healthy.

ACOs aim to improve the quality and lower the cost of health care through several mechanisms, such as disease management programs, care coordination, and aligning financial incentives for hospitals and physicians. Many are focused on Medicare beneficiaries, but there are a growing number of similar arrangements in the private sector as well.

Blair Childs, vice president of public affairs at the Premier healthcare alliance, said there had been a recent noticeable slowdown of providers integrating to form ACOs. With the election over and the fate of the reform law no longer in doubt, Childs said he expects the movement toward ACOs and bundled payments “will now be back at full speed.”

“Every organization should be thinking about bundled payments,” Childs said during a Premier-sponsored call. He said preparing for the change from fee-for-service Medicare should be the main priority for hospitals now that they know nothing drastic will happen with the health care reform law. “It won't occur all at once, but it will be implemented, and you should be prepared for that.”

Moving Toward Accountability.

Brent Miller, director of federal government relations at the Marshfield Clinic, told BNA that the move toward accountable care would occur no matter what the outcome of the election was.

The health industry's movement to embrace the concepts of the Centers for Medicare & Medicaid Services' “triple aim” of better health for individuals, better care for populations, and lower system costs--as well as the engagement of more than 150 high-value integrated systems in various CMS shared savings programs, “indicates that many providers see the handwriting on the wall, and are acutely sensitive to the magnitude of the Medicare (and Medicaid) cost problems,” Miller said. “Commercial payers see this as well, and will probably move even more aggressively than public payers to occupy this space.”

Avalere's Mendelson said providers may not want to move toward bundled payments or ACOs, but they will see the inevitability of moving away from fee-for-service. Hospitals will need to “have the tools necessary to live in the world of bundled payment,” such as more capable health information technology systems and a strong post-acute care system.

“Hospitals need to anticipate this dynamic--ACOs, integration,” Mendelson said. “They need to understand the world of fee-for-service is going away.”

By Nathaniel Weixel  

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