The ACA Effect: As the Insurance Exchanges Open Enrollment, Experts Examine ACA’s Impact on Physicians

Like many of the issues that face physician practices, whether they be independently owned or owned and/or run by institutions, the changes that are forthcoming with regard to the ACA will require fairly extensive financial analysis. Many practices of traditionally looked at cost/benefit relationships without significant “drill down” into the data. The ACA will require more understanding, in advance, of the health insurance exchange and other related data to optimize the likelihood of financial success in dealing with the myriad of issues in the ACA.

Ready or not, here they come. With the October 1 open enrollment for the Affordable Care Act’s (ACA) health insurance exchanges, opening healthcare access to millions of uninsured Americans, there are seemingly just as many unanswered questions about ACA’s impact on physician practices in terms of costs, payer rules, quality of reimbursements, increased collections, and other issues associated with an influx of new patients.

While the initial wave of newly insured Americans will enter the healthcare market in January 1, 2014, three ACA provisions are emerging as the most concerning to physician organizations— Medicaid parity, Medicaid expansion, and the opening of the insurance exchanges.

These mandates will allow (or compel, under the individual mandate) millions of currently uninsured Americans to get health insurance, in some cases for the first time.

People without insurance constitute about 15% of the U.S. population, explains Bob Doherty, senior vice president, governmental affairs and public policy for the American College of Physicians. According to the Congressional Budget Office, 25 million people will gain healthcare coverage under ACA by 2020.

So it’s no surprise that many of the most urgent questions about ACA right now involve the increased patient pool that the act will provide. This report delves into the complexities of Medicaid expansion, Medicaid parity and opening of the insurance exchanges.

And while there is a great deal of attention focused on plan certification for the insurance exchanges,a plethora of unknowns remain.

Opening access to insurance
When it comes to healthcare insurance, it’s “the brave new world,” Doherty says.

“The vast majority of people will continue to get medical coverage the way they already do, through insurance through their employers,” he notes.

The exchanges, however, will be highly variable by state and in how many insurance products insurers participating in the exchanges will offer. For instance, he says, many insurers will take part in California’s state exchange, but just two so far will be active in Alaska.

A July 2013 Robert Wood Johnson Foundation report shows that Oregon, for example, expects 11 insurers to participate in its exchange, Colorado is planning on 10, Virginia nine, Maryland six, and Rhode Island, two.

Although insurers are likely to initially stay in markets they’re familiar with, there’s hope that more insurers will jump into the exchanges over time.

Growth could go either way, he adds. If there are many new insurers, it might add complexity without much benefit, and/or it might break some near-monopolies in certain states.

Another big uncertainty with health insurance exchanges, says healthcare consultant Frank Cohen, principal of the Frank Cohen Group LLC: “We don’t know what the rates are going to be.”

No fee schedules have yet been released by health insurance exchange-participating insurers. So, as of yet there’s no evidence that payments for the new influx of patients will be on par (especially over the long term) with those for the current patient pool.

“Insurance companies aren’t worrying about whether physicians are making enough money,” Cohen says.Just as concerning is the economic liability to physicians when it comes to collecting for services. In a letter to the Centers for Medicare and Medicaid Services (CMS), Susan Turney, chief executive officer of the Medical Group Management Association (MGMA), is calling on government regulators to re-evaluate rules around the 3-month grace period for individuals who have not paid their premiums.

“During the first 30 days, insurers must pay for claims, but in the last 60 days they will hold claims,” she says. “If the patient’s coverage is cancelled after 90 days for failure to pay premiums, issuers are not required to pay any claims for services furnished in the last 60 days of the three-month grace period, which creates a significant burden on physicians who must then collect the full amount directly from the patient.”

MGMA argues that as part of a real-time eligibility verification request, “it is essential for practices to have accurate, up-to-date information in order to work with patients and plan accordingly for potential liabilities associated with non-coverage.”

Some other challenges
In addition, some observers caution physicians that these “new” patients might differ in important respects from their typical, current patients.

The potential clinical issues are obvious, even if, as Doherty surmises, some of these “new” patients have already been seeing primary care physicians (PCPs), at least episodically.

The larger concern, suggests Michael D. Brown, a healthcare consultant based in Indianapolis, Indiana, comes from the facts that many patients who are going into the expanded pool possibly never had insurance before, and that the ACA is perceived by many among the public as “a free ticket to healthcare.”

Couple these with the common perception by patients that physicians are very prosperous, he says, and “it’s a disaster waiting to happen.” Even more so than usual, Brown concludes, practices have to emphasize educating patients about their payment responsibilities, and that means before they receive service.

The fallout if this doesn’t happen will be a hit to cash flow, which Brown says is already “the number one problem for primary care practices today” and which he says has never been worse than it is now. “Doctors these days already don’t do a good job of collecting money.”

Farther down the road, another potential problem is the collision between patients who aren’t necessarily accustomed to getting regular healthcare, and who therefore might not be adherent, and the ACA provisions that will eventually begin to tie payments to quality of care, as measured by various outcomes metrics.

Quality metrics are fine, but it’s important to have metrics that work, says Reid Blackwelder, MD, FAAFP, president-elect of the American Academy of Family Physicians (AAFP).

For example, hemoglobin A1C is a good marker for diabetes control, but as Blackwelder notes, “The problem is that we don’t treat A1Cs, we treat patients.” Aggressive treatment of A1C, he points out, risks low blood sugar, which is dangerous—and potentially fatal—in older patients.

A case for parity
Parity between Medicaid and Medicare payments, for specified primary care services provided by certain PCPs, kicked in last January and will be effective through 2014.

The theory behind Medicaid-Medicare parity was that it would make it easier for Medicaid patients (including new ones from Medicaid expansion) to get care, says Yul Ejnes, MD, MACP, immediate past chair of the board of regents at Coastal Medical in Cranston, Rhode Island.

And he thinks the theory will become reality: “We certainly expect the pool to increase,” he says. Although this ACA provision is already in effect, states had until the end of March to file their needed documentation with CMS, and CMS in turn had 90 days to review and approve these. Only a handful of states have been approved so far, but in every state the increased payments will be retroactive to the beginning of 2013.

The parity payment increase is “huge,” Doherty says. In California, for example, it will give PCPs a raise of 75%. The expansion of Medicaid—in those states that approve it—is expected to have a similar effect. As of June, 26 states were on board with Medicaid expansion. Doherty expects “a significant increase in the number of patients” enrolled in Medicaid, at least in the states that enact Medicaid expansion.

And he predicts that for internists, a substantial portion of the new patient population will be Medicaid patients, especially adults without children.

More might be better, or maybe not
So a tidal wave of new patients is gradually starting to arrive, and some of them might need more attention or education than a typical practice’s current patients. Sounds pretty straightforward. But all of this begs the question of whether the average primary care practice can even handle significantly more patients.

“Most internists are probably pretty much at full capacity right now,” says Doherty. He also notes that although uncompensated care might decrease, Medicaid patients might start showing up more often, posing a workload issue. Doherty adds that because the ACA won’t address the underlying physician shortage, “You’re still going to have this disconnect between supply and demand.”

Brown broadly agrees, saying, “Many, many primary care practices can’t take on more patients…My typical practice is running in the other direction.” Cohen is more bullish, predicting of the ACA that, “it’s going to increase access to health insurance for millions of people, but it’s not going to increase access to healthcare.” Some people already wait weeks to see a doctor, he notes, and “a lot of physicians are not going to accept those [new] patients.”

Other practitioners are more optimistic, however. Ejnes says that although he personally is not taking new patients for a while, except for family members of current patients, Coastal Medical has been planning to grow, if not through additional physicians, then through adding midlevels. One of the reasons to be cautious about adding capacity, Ejnes says, is that the Medicaid-Medicare parity is temporary.

Coastal Medical is also looking at ways to increase the number of patients “seen” without increasing the actual number of visits, such as through telephone care. The practice has been a Patient- Centered Medical Home (PCMH) for 3 years, Ejnes says, adding that the PCMH model supports payments for patient contact that takes place outside the office.

“‘Access’ doesn’t necessarily mean seeing more patients,” he says.

Blackwelder, too, is upbeat about primary care practices’ ability to adapt to an increased patient pool.

According to the AAFP’s most recent Practice Profile Survey, he says, “Seventy-three percent of our members are available for same-day care,” with a significant number available after hours.

“We have to learn how to transform our practices,” Blackwelder says, using models like the PCMH; technologies like electronic health records and patient portals, which help reduce the burden of faceto- face time; and team processes like having well-child visits handled by a midlevel.

Why it’s worth the effort
There’s an old saying that when you’re neck-deep in alligators, it’s easy to forget that you originally started out to drain the swamp.

This has been a snapshot of where some significant parts of ACA implementation stand as of mid-2013. But it also makes sense to step back for a moment and remember why all of this is happening. Blackwelder stresses that healthcare reform is “really important for the health of our nation” and that having healthcare coverage lets patients tap into “a routine source of care” and helps minimize “high-cost, poor-outcome care” in emergency departments.

“We’re just spending money smarter,” he sums up, and that helps the healthcare system work toward the triple goal of improved outcomes, decreased cost, and better coordination of care. “The purpose of the ACA is to get people health insurance coverage,” Doherty says, and that leads to better health outcomes.