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    Affordable Care Act affects reimbursements

    While Medicaid rates go up, payers pull away from fee-for-service model

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    For primary care physicians (PCPs), the Supreme Court's decision mostly upholding the Affordable Care Act (ACA) has made their reimbursement picture clearer—but only slightly. Most PCPs will still find themselves juggling their patient mix to attain a balance between patients who are covered by Medicare and Medicaid and those covered by private insurers, who generally reimburse at higher rates.

    What is certain is that the law makes many more Americans eligible for some kind of health insurance, either through expanded Medicaid coverage, health insurance exchanges and their accompanying tax credits, or the individual mandate. Using data from the Congressional Budget Office, the Commonwealth Fund, a think tank focused on healthcare delivery, estimates that by 2016 about 32 million additional nonelderly Americans will have healthcare coverage as a result of the ACA.

    Probably the most significant part of the ACA where PCPs are concerned, experts say, is the millions of previously uninsured adults who will be eligible for Medicaid coverage. Recognizing the financial burden that increase could pose for many physicians, beginning in 2013 the law increases Medicaid reimbursement rates to make them equal with Medicare rates—but only for 2 years.

    Complicating the Medicaid picture is the part of the Supreme Court's ruling that effectively neutralizes the federal government's authority to financially penalize states that choose not to expand Medicaid coverage to their residents. When and to what extent you feel the full effect of the ACA ruling, in other words, may depend on where you live.

    MEDICARE REIMBURSEMENT BONUS

    When it comes to Medicare, the picture is a little brighter. The Commonwealth Fund estimates that ACA includes a 10% Medicare payment bonus for practices in which at least 60% of the charges are reimbursed under primary care codes recognized by the Medicare physician fee schedule. The bonus went into effect at the beginning of 2011 and is scheduled to expire at the end of 2015. But hanging like a sword over the heads of PCPs is the threat of a 32% reduction in Medicare reimbursements scheduled to go into effect January 1 under the sustainable growth rate (SGR) formula.

    Robert Zirkelbach, vice president of strategic communications for America's Health Insurance Plans (AHIP), the trade association representing the health insurance industry, says implementation of the ACA will accelerate two trends already under way in healthcare delivery. The first is a push toward greater cooperation and coordination of care among providers.

    The ACA contains several provisions encouraging the formation of accountable care organizations to provide care for Medicare patients. ACOs offer the potential of financial rewards to physicians who are able to hold costs down while meeting quality metrics.

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