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What's next for physicians after Affordable Care Act ruling

The decision lifts a cloud of uncertainty from the law but muddles expectations for use of Medicaid to cover more uninsured.

By , — Posted June 29, 2012

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The U.S. Supreme Court’s decision to uphold the Affordable Care Act has refocused stakeholder attention on the implementation of the law’s provisions but also re-energizes efforts by opponents to repeal parts or all of the statute.

“One of the most frustrating things has been having so much uncertainty about how we move forward,” said Glen Stream, MD, president of the American Academy of Family Physicians. Now “we can focus on the best possible implementation of the Affordable Care Act and its key provisions and work to fix the parts that need improvement.”

The ability of the ACA to move to this next stage came with the high court’s 5-4 decision on June 28 ruling the health system reform law constitutional. The court deemed valid the measure’s most controversial and targeted provision — that nearly all Americans obtain health insurance by 2014 or pay a penalty. This individual mandate is considered the backbone of subsidized coverage expansions that are projected to decrease the number of uninsured in the U.S. by more than 30 million people.

In what some legal observers called a surprising twist, Chief Justice John Roberts Jr. joined the four more liberal justices —­ Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor — in upholding the ACA. The court held that the mandate was not constitutional under Congress’ ability to regulate interstate commerce, but it said it was an acceptable use of Congress’ taxation powers.

The dissenting justices — Samuel Alito Jr., Anthony Kennedy, Antonin Scalia and Clarence Thomas — insisted Congress exceeded its authority, both from a commercial regulation and a taxation standpoint. All four held that the entire reform statute should have been struck down.

The ruling, among the most closely watched court decisions in recent history, is considered a significant victory for President Obama. But it will be political fodder for both parties as they move into the November elections, said Charles Geyh, a judiciary scholar and law professor at Indiana University Maurer School of Law in Bloomington. “What’s going to happen is the debate is going to turn away from attacking the court for [its decision] and toward attacking each other over whether it’s a good idea, and what we should do in the new administration.”

Republican presidential candidate Mitt Romney framed the decision as a political call to arms. “What the court did not do on its last day in session, I will do on my first day if elected president of the United States. And that is I will act to repeal Obamacare.”

House Republicans vowed to vote again to repeal the ACA on July 11, but they acknowledged that the GOP would need to take back the Senate and the White House before a full repeal would be possible.

Next steps for doctors

For physicians and other health professionals, the high court ruling means they can move full speed ahead on preparing for the law’s provisions. This includes getting ready for the accountable care organizations that are expected to help coordinate care for the newly insured, said Larry Vernaglia. He’s an attorney and chair of Foley & Lardner LLP’s health care industry team in Boston.

“For a lot of providers, it means they can continue to develop the business plans they were developing or were postponing” because of the impending court decision, he said. “Now everybody is able to get down to work on running their businesses knowing that health reform is here to stay.”

William N. Werner, MD, MPH, president of the Illinois State Medical Society, said physicians also will need to continue discussing their roles in the formation of health exchanges, insurance marketplaces through which many people will obtain coverage starting in 2014. He said doctors also probably will face confused patients who will want to know how the Supreme Court decision affects them.

“Our patients are going to have a lot of questions until it’s all really settled,” he said, with that time perhaps not coming until after the election.

For health insurers, the most pressing task will be to prepare to offer plans on the exchanges and comply with other law deadlines, said Marianne Udow-Phillips, director of the Center for Healthcare Research & Transformation. The center is a nonprofit partnership between the University of Michigan and Blue Cross Blue Shield of Michigan that promotes evidence-based care delivery.

Until the court ruling, many states were waiting to make decisions on whether they would sponsor state-run exchanges or let the federal government administer one for their residents, she said. Even if a state does defer to a federal exchange, it must decide what essential health benefits exchange plans will offer, within federal guidelines. Those decisions will affect what health insurers decide to sell on the exchanges.

Between now and 2014, insurers also will adjust their business models to place more emphasis on the individual consumer rather than employers who traditionally had been their most important customers, Udow-Phillips said. The ACA “makes the sale to the individual and small-group market very important. There was so much uncertainty about the individual mandate … insurers really will be moving very quickly to assume they will not be able to apply preexisting condition exclusions or consider health status as of 2014,” two major insurance guarantees that were made possible by the individual mandate.

The new Medicaid variable

The high court’s ACA ruling did not leave the reform statute unscathed. Justices ruled that the administration could not enforce a key provision in the law’s Medicaid expansion, which had been projected to cover an additional estimated 17 million low-income people — about half of all those projected to come off the uninsured rolls.

The court allowed the Medicaid expansion to stand, but it stipulated that the federal government cannot threaten to withhold all Medicaid funding from states that refuse to extend coverage to everyone earning up to 133% of the federal poverty level. The government can withhold only the additional federal dollars that are designated for that extended coverage.

The ruling means that states now will have the ability to opt out of the Medicaid expansion, which starts in 2014, without opting out of Medicaid altogether. Matt Salo, executive director of the National Assn. of Medicaid Directors, said each state would need to consider the “political, fiscal and policy calculations of whether or not this particular expansion makes sense.”

At least one chief executive among the 26 states that sued the Obama administration over the ACA indicated that his state might opt out. “Although I am continuing to review the ruling by the Supreme Court, I would resist any expansion of Medicaid that could result in significant tax increases or dramatic cuts to education, public safety and job creation,” Mississippi Gov. Phil Bryant, a Republican, said in a statement.

But any state that opts out of expanding Medicaid also would forgo the federal funding that goes along with it, which covers 100% of the added coverage costs for the first three years before eventually phasing down to 90%, said Jennifer Tolbert, director of state health reform with the Kaiser Family Foundation. “That’s a lot of money states would be walking away from if they reject the expansion.”

In his portion of the opinion explaining the Medicaid decision, Roberts acknowledged that state officials presented with a choice over such an expansion might be held “politically accountable” for opting out. Under the statute, people earning up to 133% of poverty would not be eligible for federal private insurance subsidies, which are only for those between 133% and 400% of poverty. So the poorest people in the states who opt out might be subject to the penalty under the individual mandate if they are unable to obtain hardship waivers.

Physicians still seeking changes

The Supreme Court decision does not put to rest all of the questions many physicians have about health system reform.

The wave of Medicare baby boomers combined with millions of new Medicaid recipients pose access-to-care concerns, said Atul Grover, MD, chief public policy officer with the Assn. of American Medical Colleges. “The question is: Who is going to take care of them? The challenge is trying to get enough physicians out there and making the delivery system more efficient. We still need more docs.”

Physicians also remain unhappy with some of the provisions of the law that stay in place thanks to the high court. The Medicare Independent Payment Advisory Board, for instance, would recommend spending cuts when the program exceeds certain growth targets. The American Medical Association and other physician organizations that supported the overall reform law strongly oppose the IPAB, which they say will lead to arbitrary doctor pay cuts.

Some physician organizations also have challenged an ACA provision blocking expansion of existing physician-owned hospitals and barring new facilities from opening.

Both of these issues are among the subjects of lawsuits pending before lower courts, the majority of which were put on hold until after the Supreme Court decision, said Jane Perkins, an attorney and legal director for the National Health Law Program based in Washington. “We’ll want to be looking at the effect of those cases as they move forward.”

Like many law proponents, the AMA praised the Supreme Court decision, but it noted that doctors want care to be taken in how the ACA proceeds.

“The AMA remains committed to working on behalf of America’s physicians and patients to ensure the law continues to be implemented in ways that support and incentivize better health outcomes and improve the nation’s health care system,” AMA President Jeremy A. Lazarus, MD, said in a statement.

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ADDITIONAL INFORMATION

How stakeholders reacted to the court’s ACA ruling

The 5-4 decision on June 28 by the U.S. Supreme Court to uphold the Affordable Care Act prompted responses from organizations throughout the health system, including doctors, hospitals, health plans and employers.

American Medical Association: “The AMA has long supported health insurance coverage for all, and we are pleased that this decision means millions of Americans can look forward to the coverage they need to get healthy and stay healthy. The AMA remains committed to working on behalf of America’s physicians and patients to ensure the law continues to be implemented in ways that support and incentivize better health outcomes and improve the nation’s health care system.” — AMA President Jeremy A. Lazarus, MD

American College of Physicians: “We hope that a day will come when the debate will no longer be polarized between repeal on one hand, or keeping the law exactly as it is on the other, but on preserving all of the good things that it does while making needed improvements. For instance, ACP continues to believe that there is an urgent need for more meaningful reforms to the medical liability system.” — ACP President David L. Bronson, MD

American Hospital Assn.: “The decision means that hospitals now have much-needed clarity to continue on their path toward transformation. But transforming the delivery of health care will take much more than the strike of a gavel or stroke of a pen. It calls for the entire health care community to continue to work together, along with patients and purchasers, to implement better-coordinated, high-quality care.” — AHA President and CEO Rich Umbdenstock

Federation of American Hospitals: “Hospitals are keenly positioned to witness firsthand the scope of our nation’s uninsurance crisis and how being uninsured creates intolerable burdens for so many patients and their families. [The] decision by the Supreme Court to uphold the Affordable Care Act will enable millions of Americans to soon obtain health insurance coverage. This outcome also sustains the ability of hospitals to continually improve health care quality and transform the health care delivery system.” — FAH President and CEO Chip Kahn

America’s Health Insurance Plans: “As the reform law is implemented, health plans will continue to focus on promoting affordability and peace of mind for their beneficiaries. The law expands coverage to millions of Americans, a goal health plans have long supported, but major provisions, such as the premium tax, will have the unintended consequences of raising costs and disrupting coverage unless they are addressed.” — AHIP President and CEO Karen Ignagni

U.S. Chamber of Commerce: “While we respect the court’s decision, today’s Supreme Court ruling does not change the reality that the health care law is fundamentally flawed. Left unchanged, it will cost many Americans their employer-based health insurance, undermine job creation and raise health care costs for all.” — Chamber President and CEO Thomas J. Donohue

National Federation of Independent Business: “Under [the ACA], small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses. We will continue to fight for the repeal of [the ACA] in the halls of Congress; only with [the ACA’s] full repeal will Congress have the ability to go back to the drawing board to craft real reform that makes reducing costs a No. 1 priority. The power and control of health care decisions should be in the hands of the consumer, not the government.” — NFIB President and CEO Dan Danner

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