This week the Supreme Court will hear oral arguments in the case of King v. Burwell, where the continued existence of the Affordable Care Act (ACA) is once again in jeopardy. Regardless of the merits of the case, I think we can all agree that media coverage of the ACA has exclusively been focused on its emphasis to extend affordable health coverage to uninsured Americans. In actuality, the impact of the ACA is much broader.
The ACA gave birth to new innovation models (also known as demonstrations), which tie Medicare payments to quality or the value of care: the Accountable Care Organization (ACO) Models and the Bundled Payment for Care Improvement (BPCI) Models. Along with the Hospital Value Based Purchasing and Hospital Readmission Reduction Programs, they are driving a revolution in how Medicare pays for care delivery to its 50 million beneficiaries. Regardless of the outcome of King v. Burwell, the forces of change that have been unleashed by the ACA will not be diminished.
These forces of change are forcing Medicare providers to efficiently delivery, high-quality outcomes and reduce the cost of care. The old world where providers were reimbursed based upon the volume of care delivered (i.e. fee-for-service) is being replaced by a world where care providers must demonstrate evidence-based value, or their Medicare payments will be reduced.
On January 26, at a meeting of two dozen leaders representing consumers, insurers, provider and business leaders, Health and Human Services (HHS) Secretary Burwell set forth the new agenda for HHS,
“Whether you are a patient, a provider, a business, a health plan, or a taxpayer, it is in our common interest to build a health care system that delivers better care, spends health care dollars more wisely and results in healthier people...”
Secretary Burwell has set a goal of tying 30 percent of fee-for-service payments to one of the innovation models I mentioned above, by the end of 2016 and tying 50 percent of payments to these models by the end of 2018. Her second goal for HHS is for "virtually all Medicare fee-for-service payments to be tied to quality and value; 85% in 2016 and 90% in 2018." The pace and significance of this change is astonishing. Physicians, hospitals and post-acute care providers must accommodate this new reality, or face extinction. It is not hyperbole to assert that the changes wrought by the ACA are as significant as those brought about by the creation of the Medicare and Medicaid programs in 1965.
So, as you watch the coverage of Wednesday’s oral arguments in the Supreme Court, keep in mind that the extension of affordable health coverage to all Americans is only the tip of the iceberg when it comes to the ACA.
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