The Health Care We Are Left With0

This article, The Health Care We Are Left With, was first published in Corporate Compliance Insights on January 6, 2016.

iStock_000007436109_Medium“Ending a sentence with a preposition is something up with which I will not put.”  Winston Churchill

Since the inception of the Affordable Care Act (the ACA) six years ago, the nation’s struggle over the proper provision of health care has been fought on many fronts, with both sides remaining passionately true to their convictions. As is the case with many of our nation’s historic battles, the American people may be remiss to disregard the impact of these struggles upon the evolution of our current health care structure. Like the January 3, 1777 Battle of Princeton during the American Revolution or the October 8, 1962 Battle of Perryville in the Civil War, many smaller events that appear understated or unimportant often have a long term impact. Instances where both patients and providers initially underestimated would-be tenets of the ACA can offer as much insight as outright Congressional mistakes in crafting the law. On the cusp of the iron anniversary for health care reform, this article offers examples of both the ACA’s shortcomings and successes. After all, too much of the planet’s most common element (at least by mass) can cause cirrhosis of the liver or arthritis, while a deficiency in iron can result in anemia. The following are topics that were resolved in 2015, as well as those for which 2016 may bring some clarity.

Accountable Care Organizations

On page 277 of the 906-page ACA (Section 3022), Congress inserts the influence of the Medicare Shared Savings Program into the current climate of reform. These five pages from 2010 have evolved to become the Federal Government’s blueprint for the future of health care, although only 19 of the original 32 Pioneer Accountable Care Organizations (ACOs) remain, and the Office Inspector General (OIG) soon plans to conduct a risk assessment of the ways in which the Centers for Medicare & Medicaid Innovation has administered the internal controls of the Pioneer ACO Model.

As of January 1, 2015, only three of the 404 traditional ACOs still participate in the two-sided model (entitlement to shared savings with liability for losses to the Medicare program), notwithstanding the ACA’s directive that an “ACO shall be willing to become accountable for the quality, cost, and overall care of” its Medicare beneficiaries, nor the regulations from November 2011 limiting participation in the one-sided model (modified entitlement to shared savings without any risk) to no more than three years.

Only time will tell how the 7.3 million ACO-assigned Medicare beneficiaries fare in comparison to the remaining, 47.6 million non-ACO Medicare beneficiaries. However, the Federal Government has shown its unwavering determination to make the shared savings program a success by eliminating regulatory burdens such as those promulgated by the OIG (specific ACO exceptions to the physician self-referral prohibitions (the Stark Laws)), the Federal Trade Commission (FTC) (ACO exceptions to antitrust violations) and the Internal Revenue Service (IRS) (clarification that non-profit ACOs can receive shared savings payments), while also testing the innovative waters with the Advance Payment ACO Model (pay first, perform later).

Physician-Owned Hospitals

Initially dedicating less than six pages, though bolstered by multiple regulations published thereafter, the ACA continues to confirm that the Federal Government is not entirely sure how to proceed with the regulating of physician-owned hospitals. By limiting the “whole hospital” exception to the Stark Laws, Section 6001 of the ACA placed a vice grip on further expansion of hospitals falling under this category. Texas Spine & Joint Hospital in Tyler, Texas, experienced the resolve of the Centers for Medicare & Medicaid Services (CMS) when the $30 million expansion project begun by the hospital in 2008 was forced to end abruptly, as Section 6001 limited any increases in the number of operating rooms, procedure rooms and beds for which a hospital was licensed. Shut down by a sympathetic District Court Judge who, in granting summary judgment in favor of the Federal Government, acknowledged that the hospital’s argument was “sound in logic and reason,” the Fifth Circuit landed the fatal blow by vacating the matter in its entirety due to a lack of subject matter jurisdiction (failure to exhaust administrative remedies).

Given the Federal Government’s interpretation and enforcement of the limitations on expanding physician-owned hospitals, such existing facilities paid careful attention to the additional requirements set forth in Section 6001, including that which instructs a hospital to disclose its physician ownership on any public hospital website or in any public advertising material, at least until November 2015. In the most recent Stark-related regulations promulgated by the Federal Government, CMS clarified that “websites” do not necessarily include social media, electronic patient payment portals or even community outreach announcements. In fact, in some instances the hospital name itself may suffice, as in the example provided by CMS – “Doctors Hospital at Main Street, USA.”

CMS did clarify one final item regarding physician-owned hospitals that will undoubtedly cause issues across the nation. Past disagreements over the definition of physician owner and investor had been split between referring and non-referring physicians, and further queried whether non-referring status should be part of the physician ownership calculation. In a brief moment of clarity, CMS confirmed that physician ownership means physician ownership, irrespective of referral patterns. As CMS in the past had provided inconsistent information on this issue, the federal agency at least afforded hospitals an extra year (until January 1, 2017) to comply.

Logophiles, Glossophiles and the Mystic Art of Orthography

Over the past six years, debates surrounding certain health care related definitions befuddled the Federal Government, and at times threatened the very stability of the ACA. These challenges included distinguishing between a tax and a penalty, understanding what it meant to be a hospital patient for two consecutive midnights, defining “tobacco use,” agreeing upon the scope of preventative care services for women, and even whether or not state run health insurance exchanges should share the same tax credits as their federally-run counterparts. Indeed, some even questioned the intellect of Chief Justice of the Supreme Court John Roberts when his seminal opinion in National Federal of Independent Business v. Sebelius used the word “Congress’s” and not “Congress’”. As it turns out, the answer is not so clear, at least according to the Sixteenth Edition of the Chicago Manual of Style. Whether a plural possessive word should end with an apostrophe or with the letter “s” after the apostrophe depends in part on whether the final “s” is pronounced (Rule 7.17). Since Congress ends in “ss,” both positions may be correct.

As the ACA creeps upon its seventh year with opponents having little more than semantics on which to raise legal challenges, it seems to many that America’s current health care structure is here to stay. On the other hand, it took seven years from Medicare’s introduction in 1965 before Congress passed the first set of laws targeting Medicare provider fraud, overutilization and unnecessary referrals (The Social Security Amendments of 1972). The answers to these and other questions will be a direct result of the path the ACA’s evolution chooses to take, and that is but a matter of time.

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