Sir_Excellence

Unit 1: Week 1 - Chapter 2 Outline

CHAPTER TWO: THE AFFORDABLE CARE ACT

LEARNING OBJECTIVES

After completing this chapter, readers will be able to:

1.       Discuss how the Affordable Care Act came to be and the factors leading to its passage.

2.       Discuss the content of the Affordable Care Act of 2010.

3.       Identify and discuss the impact of the Affordable Care Act on long-term care providers and consumers.

4.       Identify and discuss the issues still remaining in the Affordable Care Act.

CHAPTER HIGHLIGHTS

Introduction – provides an overview of the Affordable Care Act was and its components.

·         The stated aim of the ACA was “to increase the quality, affordability, and rate of health insurance coverage for Americans, and reduce the costs of health care for individuals and the government.”

·         The act requires individuals to have insurance coverage and businesses to provide coverage or pay fines.

·         Health insurance exchanges will be set up in in each state to provide a marketplace where individuals and small businesses can buy insurance (with a government subsidy if eligible).

·         The law also requires insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or sex.

History/Passage of the Law

·         The bill passed without a single Republican vote and thirty-four Democrats also voted against it.

·         Republican attempts to filibuster the bill were defeated by Senate President Harry Reid (D-NV) who used a budgetary process called “reconciliation” to pass the bill with only 51 votes..c2.

·         Various public polls at the time (and since) showed that more than 60% of Americans did not approve of the law.

Constitutionality of the Law

·         .c3.The constitutionality of the Act was challenged, specifically targeting one provision of the Act known as the “individual mandate.” That provision requires most individuals to purchase health insurance or pay a penalty.

·         On June 28, 2012, the United States Supreme Court upheld the constitutionality of the Affordable Care Act based on the argument that Congress has authority to impose the mandate under its power to tax and spend and that the individual mandate was, in fact, a tax.

Implementation

·         .c3. The act was designed to be implemented over several years.

·         The administration chose to begin with some of the more popular portions (requiring policies to be issued regardless of any medical condition, allowing people under age 26 to be covered by their parents’ insurance, etc.). Those sections were implemented first.

·         Other more controversial regulations (increased taxes, expansion of Medicaid, etc.) were designed to be spread out over later years. Implementation of some sections have already been postponed by the Obama administration.

.c3. Regulations

· Various estimates are that the ACA has spawned anywhere from 10,000 to 30,000 pages of new regulations.

· Only a portion of those regulations apply to long-term care.

· Each section and provision of the law we cover has associated regulations.

.c2. Funding of the ACA

· The ACA is funded by a combination of taxes and cost offsets (reductions).

· Major taxes include a much-broadened Medicare tax on incomes over $200,000 for individuals and $250,000 for joint filers, an annual fee on insurance providers, and a 40% excise tax on “Cadillac” insurance policies.

· Cuts in Medicare - to finance part of the new spending, spending and coverage cuts are made to Medicare, including:

·         Reduction in funding for Medicare Advantage policies

·         Reduction in Medicare home health care payments

·         Reduction in certain Medicare hospital payments.

Impact on Long-Term Care

·         .c3. The majority of provisions in the act, including many of the more controversial, are tangential to long-term care.

· Originally, it was thought that long-term care would be a potential cost-saver because this type of coverage would not be needed immediately and the government could build up its reserves.

· Many people are still unaware that long-term care is not included several years after passage of the ACCA. 

.c3..c4. Health Insurance Exchanges

·         The ACA included health insurance exchanges, online marketplaces for health insurance. Under this provision, people can use their state's Insurance Exchange (marketplace) to obtain coverage from competing private health care providers.

Shifting Focus Away from Institutional Care

· Much of the focus of the ACA is on redirecting long-term care consumers and services away from institutions such as nursing facilities and assisted living and toward less intensive home and community-based services, such as home health care, hospice, etc.

CLASS Act

· Considered by many the most important of these is the Community Living Assistance Services and Supports (CLASS) Act.

· It would establish a national long term care insurance program.

· . Its long-run sustainability came under scrutiny and it was suspended indefinitely on October 14, 2011.

Community First Choice Option

·         Option provides a six percent increase in federal Medicaid matching funds to states for providing community-based attendant services and supports within their Medicaid program.

Balancing Incentives Payment Program

·         Is another of the ACA provisions designed to keep long-term care consumers out of costly institutions. It is aimed at removing barriers to providing long-term care in people’s homes and communities.

Money Follows the Person Program

·         Designed to keep long-term care consumers out of costly institutions, the “Money Follows the Person” demonstration is extended by the ACA.

Spousal Impoverishment Protections

·         Extends mandatory spousal impoverishment protections to spouses of people receiving Home and Community-Based Services (HCBS).

No Wrong Door System

·         System supports state efforts to streamline access to long-term services and supports and simplify access to long-term care services for the elderly and individuals with disabilities.

Aging and Disability Resource Centers

·         Provide information and assistance to both consumers and professionals, and serve as the entry point to publicly administered long-term services, including those funded under Medicaid.

Health Homes

·         Designed to be person-centered systems of care that facilitate access to and coordination of the full array of primary and acute physical health services.

·         Seek to better meet the needs of people with multiple chronic illnesses and to improve health care quality, clinical outcomes and the patient care experience, while also reducing costs.

Dual-Eligible Initiative

·         The ACA created a new Medicare-Medicaid Coordination Office within the Centers for Medicare & Medicaid Services to coordinate care for individuals who are eligible for both Medicaid and Medicare

Other Provisions Impacting Long-Term Care

Improving Nursing Home Quality

·         The act requires increased disclosure of detailed information concerning ownership, staffing, expenditures and compliance.

·         This involves new and/or changed regulations and rules for providers to follow.

·         Other provisions relate to culture change and the use of information technology, improving quality and preventing elder abuse and neglect.

Pay-for-Performance

·         Provides financial incentives to health care providers to carry out such improvements and achieve optimal outcomes for patients.

Bundling

·         Payment is paid to a single entity for a defined episode of care rather than individual payments to individual service-providers.

·         The entity receiving the payment becomes responsible for all services required. It arranges for acute and post-acute care services to be available and the other acute and long-term care providers involved.

Accountable Care Organizations (ACOs)

·         ACOs function under a bundled payment methodology as described above.

·         They contract with long term care providers for postacute care and the ACOs will be held accountable for the quality outcomes associated with that care.

·         ACOs that impact long-term care providers are almost exclusively hospital-based organizations.

Medicaid Expansion

·         In the past, Medicaid eligibility was restricted to specific categories.

·         The ACA expands Medicaid eligibility to include all individuals and families with incomes up to 133% of the poverty level.

·         The expansion of Medicaid is controversial in many states because those states will bear increased costs ranging into the millions of dollars.

Asset Recovery

·         Medicaid permits the spouse of a long-term care recipient to keep some of the recipient’s assets to protect that spouse against impoverishment. The Affordable Care Act creates a new category of Medicaid recipients — adults with incomes under 133 percent of the poverty level - and changes income and asset eligibility rules for others who were already eligible.

Readmissions Reduction

·         The Medicare hospital readmissions reduction program (HRRP) assesses penalties on hospitals with high readmission rates for patients with certain medical conditions.

·         The program impacts long-term care providers to whom the patients are discharged.

Medicare Advantage Plans

·         With passage of the Affordable Care Act, there was widespread concern that the plans would be eliminated or made more expensive as a way of funding the ACA.

Medical Device Tax

·         The 2.3% medical device tax imposed by the Affordable Care Act was one of a number of revenue-raising provisions to finance the act.

Employer Mandate

·         Requires that all businesses with over 50 full-time equivalent (FTE) employees provide health insurance for their full-time employees, or pay a penalty.

·         Affects only larger long-term care providers.

Projected Staff shortages

·         The ACA promises to create millions of newly insured consumers. They threaten to overwhelm a delivery system that was already strained. Workforce shortages have existed for decades and are likely to get much worse under the ACA.

LECTURE OUTLINE

A.  Identify learning objectives for the session

B.  Introduce the lecture topic

C.    Define and explain the Affordable Care Act was and its components.

·         The stated aim of the ACA was “to increase the quality, affordability, and rate of health insurance coverage for Americans, and reduce the costs of health care for individuals and the government.

·         The act requires individuals to have insurance coverage and businesses to provide coverage or pay fines.

·         Health insurance exchanges will be set up in in each state to provide a marketplace where individuals and small businesses can buy insurance (with a government subsidy if eligible).

·         The law also requires insurance companies to cover all applicants within new minimum standards and offer the same rates regardless of pre-existing conditions or sex.

D.  Discuss the history/passage of the law:

·         The bill passed without a single Republican vote and thirty-four Democrats also voted against it.

·         Republican attempts to filibuster the bill were defeated by Senate President Harry Reid (D-NV) who used a budgetary process called “reconciliation” to pass the bill with only 51 votes.

·         Various public polls at the time (and since) showed that more than 60% of Americans did not approve of the law.

E.   Identify and discuss the various constitutionality of the Law:

·         The constitutionality of the Act was challenged, specifically targeting one provision of the Act known as the “individual mandate”, but the United States Supreme Court upheld the constitutionality of the Affordable Care Act based on the argument that Congress has authority to impose the mandate under its power to tax and spend and that the individual mandate was, in fact, a tax.

F.   Briefly discuss the implementation of the law:

·         The more popular portions were implemented first, while other more controversial regulations were delayed.

·         Implementation of some sections have already been postponed by the Obama administration.

G.   Discuss regulations created as the result of the law:

· The ACA has spawned anywhere from 10,000 to 30,000 pages of new regulations.

· Only a portion of those regulations apply to long-term care.

· Each section and provision of the law we cover has associated regulations.

H.  Discuss how the ACA is funded:

· A combination of taxes and cost offsets (reductions).

· Major taxes include a much-broadened Medicare tax on higher income individuals, an annual fee on insurance providers, and an excise tax on “Cadillac” insurance policies.

· Cuts in Medicare include:

·         Reduction in funding for Medicare Advantage policies

·         Reduction in  Medicare home health care payments

·         Reduction in certain Medicare hospital payments.

I.  Identify and discuss provisions that impact long-term care:

·         Health Insurance Exchanges

·         Shifting Focus Away from Institutional Care

·         CLASS Act

·         Community First Choice Option

·         Balancing Incentives Payment Program

·         Money Follows the Person Program

·         Spousal Impoverishment Protections

·         No Wrong Door System

·         Aging and Disability Resource Centers

·         Health Homes

·         Dual-Eligible Initiative

J.    Identify and discuss other provisions that impact long-term care:

· Improving Nursing Home Quality

· Pay-for-Performance

· Bundling

· Accountable Care Organizations (ACOs)

· Medicaid Expansion

· Asset Recovery

· Readmissions Reduction

· Medicare Advantage Plans

· Medical Device Tax

· Employer Mandate

· Projected Staff shortages

K.  Summarize the discussion, recapping the key points of the lecture.

VOCABULARY TERMS

· Accountable Care Organizations (ACOs) - contract with long term care providers for postacute care and the ACOs will be held accountable for the quality outcomes associated with that care.

·         Affordable Care Act (ACA) – Passed in 2010 to greatly expand coverage of millions, as well as adding many new mandates and regulations. Also known as “ObamaCare”.

·         Aging and Disability Resource Centers - provide information and assistance to both consumers and professionals, and serve as the entry point to publicly administered long-term services, including those funded under Medicaid.

·         Asset Recovery - The ACA creates a new category of Medicaid recipients and permits the spouse of a long-term care recipient to keep some of the recipient’s assets to protect that spouse against impoverishment.

· Balancing Incentives Payment Program - aimed at removing barriers to providing long-term care in people’s homes and communities.

· Bundling - payment is paid to a single entity for a defined episode of care rather than individual payments to individual service-providers.

· Centers for Medicare & Medicaid Services (CMS) - The government agency overseeing operation of the Medicare and Medicaid programs - formerly the Health Care Financing Administration.

· CLASS Program - would have established a national long term care insurance program.

· Community-based care - A term used to include noninstitutional long-term care, it usually includes services such as home health care, hospice, and respite care.

· Community First Choice Option - provides a six percent increase in federal Medicaid matching funds to states for providing community-based attendant services and supports within their Medicaid program.

· Congressional Budget Office - produces independent analyses of budgetary and economic issues to support the Congressional budget process.

·         Cost offsets – another term for cost reductions.

·         Dual-Eligible Initiative - ACA created a new Medicare-Medicaid Coordination Office within CMS to coordinate care for individuals who are eligible for both Medicaid and Medicare.

· Employer Mandate - requires that all businesses with over 50 full-time equivalent (FTE) employees provide health insurance for their full-time employees, or pay a penalty.

· Health Homes - person-centered systems of care that facilitate access to and coordination of the full array of primary and acute physical health services.

·         Health insurance exchanges - set up in in each state to provide a marketplace where individuals and small businesses can buy insurance (with a government subsidy if eligible).

·         Individual Mandate - requires most individuals to purchase health insurance or pay a penalty.

·         Institutional care - Health or personal care provided in an institutional setting, such as nursing facilities, and assisted living.

·         Medicaid - Title XIX of the Social Security Act. Passed in 1965, it provides health insurance for those who cannot afford it, the "medically indigent."

· Medical Device Tax - tax imposed by the Affordable Care Act was one of a number of revenue-raising provisions to finance the act.

·         Medicare - Title XVIII of the Social Security Act. It provides health insurance for the elderly, and some disabled people.

· Medicare Advantage Plans - plans offered by a private company that contracts with Medicare to provide all Part A and Part B benefits - managed care organizations.

· Money Follows the Person Program - designed to keep long-term care consumers out of costly institutions, the “Money Follows the Person” demonstration is extended by the ACA.

· No Wrong Door System - system supports state efforts to streamline access to long-term services and supports and simplify access to long-term care services for the elderly and individuals with disabilities.

·         Obamacare – another name for President Obama’s Affordable Care Act.

·         Pay-for-performance (P4P) -provides financial incentives to health care providers to carry out such improvements and achieve optimal outcomes for patients.

· Readmissions Reduction program - assesses penalties on hospitals with high readmission rates for patients with certain medical conditions.

·         Reconciliation - budgetary process used to pass the Affordable Care Act.

·         Spousal Impoverishment Protections  - extends mandatory spousal impoverishment protections to spouses of people receiving Home and Community-Based Services (HCBS).

REFERENCE BOOKS

Long-Term Care: Managing Across the Continuum, 4th Ed By: John Pratt

The Medicare Part D Drug Program, 1st Ed By: Fincham, John