The Business and Practices of Medicine Post the Affordable Care Act: What Challenges Lie Ahead for Nevada

By: Patricia Egan Daehnke & Kristin Marker

The Patient Protection and Affordable Care Act (“ACA”), enacted by Congress in 2010, has been the subject of heated political debate since it was passed. Determined to be constitutional in 2012 by the U.S. Supreme Court, states are now faced with the challenge of incorporating the federal health care mandates into existing state health care laws. Since its enactment, the ACA has triggered reactionary state legislation, presenting challenges to healthcare providers, businesses and consumers. The ACA aimed to increase the number of Americans covered by health insurance and decrease the cost of healthcare. Twenty-six states, including Nevada filed a petition with the U.S. Supreme Court challenging Congress’ power to require individuals to purchase a product (insurance) in the private marketplace or be penalized. The states also argued the ACA’s Medicaid expansion should be struck down because it unconstitutionally “coerces” state governments to expand Medicaid in order to continue to receive federal funding for it.

On June 28, 2012, the ACA of 2010 was upheld by a five-four vote by the U. S. Supreme Court. The opinion, National Federation of Independent Business v. Sebelius, Sec. of Health and Human Services (“Sebelius”) found the ACA constitutional and upheld the “individual mandate” provision requiring individuals to buy health insurance by 2014 or pay a penalty as a tax. The Court also concluded the ACA Medicaid expansion is constitutional but the federal government cannot penalize states by taking away existing Medicaid funding from states that choose not to expand.(http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf)

Gov. Brian Sandoval was recently reported to be assessing whether to expand Nevada’s Medicaid eligibility as a result of the June ruling. Sandoval’s official position is that the ACA “fails to reduce costs on small businesses, increases cost to states and is completely at odds with the transparency promised by our countries’ leaders. For Nevada, penalizing businesses and individuals who cannot afford to purchase health care and raising taxes billions of dollars will further harm the economy of our state.”(http://www.briansandoval.com/issues)

Proponents of the ACA believe itwill help health care providers by strengthening the healthcare system and providing a number of specific benefits. The decrease in the number of uninsured individuals may lighten the financial burden that the uninsured currently impose on the system. The ACA also provides benefits to young adults, who now can receive healthcare coverage through their parents’ insurers through the age of twenty-six, and to individuals with pre-existing medical conditions, who would not have previously qualified for healthcare insurance.(http://www.healthcare.gov/news/factsheets/2010/07/health-care-providers.html)

The U.S. Department of Health and Human Services has stated that the ACA has saved consumers an estimated 2.1 billion on health insurance premiums.

“The healthcare law is holding insurance companies accountable and saving billions of dollars for families across the country,” Sec. Kathleen Sibelius said. “Because of the law, our healthcare system is more transparent and more competitive, and that’s saving Americans real money.”(http://www.hhs.gov/news/press/2012pres/09/20120911a.html) According to the U.S. Department of Health and Human Services, 13 million consumers have received rebates worth $1.1 billion under the ACA’s medical loss ratio, or 80/20 rule.(http://www.hhs.gov/news/press/2012pres/09/20120911a.html) Proponents also cite to the creation of Accountable Care Organizations (“ACO”), which became a part of Medicare as of January 2012, designed to encourage increased accountability of participating healthcare providers for quality, cost and overall care of Medicare recipients enrolled in the traditional fee-for-service program. The ACO plans to achieve its goals through coordination of care, a reduction in volume incentives for health care providers and payers, and by providing primary care and condition management through care teams, thus reducing costs and improving quality of care simultaneously.

However, not all physicians believe the creation of ACOs is a benefit. In practice, the ACO incentive for Medicare recipients can effectively drive patients to favor organizations over individual doctors, and may have pushed many doctors to sell their individual practices to hospitals. Individual doctors do not have the startup capital it would take to establish an ACO, so many hospitals are starting ACOs and buying up private practices. (http://online.wsj.com/article/SB10001424052970204720204577128901714576054.html)

Critics further argue the ACA has already brought on a wealth of unintended consequences, and that there will be many more. The ACA contains provisions requiring increased hospital efficiency, including the use of electronic medical records and thus a streamlining of the billing process. Doctors and nurses must spend less face time with patients and more time working on medical records to increase efficiency, and less time treating patients.

Additionally, the ACA grants authority to Independent Payment Advisory Boards (“IPAB”s) to adjust Medicare to meet mandatory spending targets. However, the IPAB cannot change Medicare’s fee structure or the level of benefits received by senior citizens, so it will have to lower the reimbursement rates for doctors, nurses, and hospitals to meet spending goals. As a result, providers may be more likely to refuse care to or reduce the number of their Medicare patients for fiscal reasons.(http://www.pacificresearch.org/press/obamacare-diagnosed-as-quackery)

Increased demand for government-mandated healthcare may result in longer waiting times for medical care and surgery. A recent survey indicates that 60% of young doctors are pessimistic about the future of U.S. healthcare, largely due to the negative effects of the ACA. (http://www.pacificresearch.org/press/obamacare-diagnosed-as-quackery)

The long-term effects of the ACA are as yet unknown. Various factors, such as the results of the November 2012 Presidential election, may impact how the federal health care provisions will affect healthcare providers, businesses and consumers in Nevada in the long run.

Patricia Daehnke is a Shareholder of Bonne, Bridges, Mueller, O’Keefe & Nichols. She specializes in medical malpractice defense and healthcare litigation in Nevada and California. . Kristin Marker is an associate at Bonne, Bridges, Mueller, O’Keefe & Nichols, specializing in medical malpractice defense.

Bonne Bridges, www.bonnebridges.com