The healthcare reform legislation, the Patient Protection and Affordable Care Act (PPACA), and other recent amendments impact hospitals and other medical providers in a variety of ways. A few of the key items in the legislation are as follows:
- In 2012, benchmarks will vary from 115 percent of spending in low cost areas to 95 percent of spending in high cost areas.
- Medicare Advantage plans will be required to spend at least 85 percent of revenue on medical costs. To the extent expenditures on profit and overhead exceed 15 percent of revenue, a rebate will be required to be remitted to Health and Human Services.
- Effective for fiscal year 2014, the legislation reduces disproportionate share hospital payments.
- The Market Basket reduction has been revised. These revisions impact inpatient hospitals, long-term care hospitals, inpatient rehabilitation facilities, psychiatric hospitals and outpatient hospitals.
- Certain exceptions exist for physician owned hospitals that treat the highest percentage of Medicaid patients in their county.
- Provides federal Medicaid matching payments for the costs of services to newly eligible individuals.
- Payment rates to primary care physicians providing primary care services will be no less than the Medicaid payment rates in fiscal years 2013 and 2014.
- HHS is required to develop a methodology for reducing Disproportionate Share Hospital allotments to achieve the mandated reductions.
Other provisions, benefits, and costs
- Makes key investments in training doctors, nurses and other healthcare providers.
- Invests in the National Health Services Corps’ scholarship and loan repayment programs to expand the healthcare workforce.
- Provides funds to build new and expand existing community health centers, and expands funding for scholarships and loan repayments for primary care practitioners working underserved areas.
- A two-year temporary credit subject to an overall cap of $1 billion to encourage investments in new therapies to prevent, diagnose, and treat acute and chronic diseases. The credit would be available for qualifying investments made in 2009 and 2010.
- Establishes a non-profit entity to identify priorities in patient-centered outcomes research and oversee analytics regarding effectiveness of treatments to assist doctors in treating patients.
- Tax-Exempt -501(c)(3) hospitals would be required to: conduct a community health needs assessment every three years; implement a financial assistance policy; limit charges to certain patients to amounts generally billed to insured patients; and follow certain debt collection practices.
- Establishes requirements for community mental health centers that provide Medicare partial hospitalization services.
- Applies an excise tax of 2.3 percent on the sale of medical devices by a manufacturer or importer.