The Obamacare Report (#10)/Financial pressures change medical practices

September 10, 2013

health-care-lawThis is #10 in a series of Obamacare Reports. (See also postings by Mitchell Law Office

The ways in which physicians function in the Health Care System are being significantly changed by several factors, including financial pressures related to the Affordable Care Act (ACA); cuts in Medicare payment levels; and low payment schedules for Medicaid.

These same changes will affect how attorneys relate to the Health Care System.

Pressures on payments for services are widespread, and physicians are struggling to “push back”. The ACA is placing marketplace demands on insurance companies and creating new rate-setting mechanisms; Medicare payment restrictions and marginal Medicaid payment levels are also both contributing to financial pressures.

In response, two of the major advocacy efforts by the American Medical Association (AMA) are directed toward repeal of the Medicare Sustainable Growth Rate (SGR) formula and elimination of the ACA Independent Payment Advisory Board (IPAB).

The SGR formula reduces Medicare reimbursement rates for providers, and has become subject to short-term revisions and “fixes” during recent years to prevent these cuts from taking place.

The SGR formula has been attacked by the AMA over concerns that the resulting cuts in Medicare payments are unworkable and unsustainable. Congress continues to provide short-term fixes to the formula to maintain payments for Medicare-covered services. The AMA advocates “an array of payment models” that give “flexibility and options” to physicians.

There is an additional physician concern that a new ACA mechanism for rate-setting will also have a negative effect on reimbursement.

Under the ACA, the IPAB has the authority to cut payment rates for services based on conclusions about the efficacy of different types of care. The AMA has concerns about the “authority and lack of flexibility” associated with the IPAB, and is seeking its elimination.

Similarly, chronic limits on Medicaid reimbursement levels have become of even more concern, due to the ACA-related program expansion (in some states).

These financial pressures are making it more difficult for physicians to practice in individual and small-group settings, and are pushing physicians to join large organized systems for care that can apply significant resources to dealing with payment issues.

Thus, financial restrictions are helping reshape the arrangements for medical practice.

In turn, attorney practices are also being affected. Legal advocacy for patients more often involves dealing with large organizations, rather than with independent or small-group physicians and their insurers.

Attorneys who represent physicians often need to address physician-organization relationships.

And at the large-scale level, pressures on physician payments are leading to the need for legal countermeasures that can help protect provider interests. Attorney support is often relevant as efforts are made to cope with rate-limiting issues.

More on these and related topics may be found in a recent book by the authors that describes implementation of the ACA and its impact on legal practices.

Previous installments of “Obamacare Reports” address the various ways in which implementation of the ACA is affecting legal practices:

Report #1   Report #2   Report #3   Report #4   Report #5  Report #6  Report #7  Report #8   Report #9