Podiatrists and patients alike may experience some confusion with the deluge of information regarding the Affordable Care Act (ACA). This author discusses the insurance exchanges and what constitutes a “qualifying health plan” with the ACA, raises questions about potential obstacles with ACA and suggests proactive strategies to help ensure adequate reimbursement in the future.
With all of the news blasting on the television 24/7 about the Affordable Care Act, also known as Obamacare, do you think you have enough information to be ready for the changes in the way your patients receive their insurance coverage and be able to get paid for your services?
Unfortunately, many of the news stations are very biased in their coverage depending on the station you watch. Fox News blasts the plan at every turn while MSNBC tells its listeners that this law is the next best thing to sliced bread. I hope to give you all of the facts I have been able to compile to date and include my personal opinion as to what you need to do to continue being profitable with all of the changes you will see in regard to patients’ coverage and how you will be reimbursed.
Many of my sources include high-level healthcare consultants, insurers and government sources. Again, each of them presented the facts as the facts were presented to them but I still detected a definite bias in how they presented these facts. I will first list the definition of the many components of the law and what it means to the patients purchasing these plans. Then I will discuss the reimbursement issues that we will face and how we as podiatrists will be able to treat these patients in the years to come.
I am sure you have been aware of the government Web site for the federal exchange and its inability to allow access for patients to purchase these plans, but not much is being reported as to what will happen once people are finally able to sign up. To date, it is not clear whether the information the Web site obtains will actually result in patients enrolled in the various plans and whether their personal information collected will have adequate protection. It is also unclear on how the insurers receive subsidies for the money they outlay and how physicians get paid.
A Closer Look At The Insurance Exchanges
There are several types of delivery models that will allow patients to purchase insurance. These include the state health insurance exchange, the federal health insurance exchange and joint-run exchanges. In addition, many insurers have included their plans on their individual Web sites and through insurance agents as they were available before.
Affordable Care Act state health insurance exchanges can run a number of different ways. States can build a health insurance exchange on their own, partner with one or more other states, run a joint exchange with the federal government or have the federal government build and run the insurance exchange for them. January 1, 2014 was the deadline for all exchanges to be fully operational. Only states that build their own exchange receive full government funding.
States that set up their own exchange get to directly determine which companies can compete in their exchange and negotiate benefits and prices. In a federal exchange, the U.S. Department of Health and Human Services (HHS) does this for them. In a joint-run exchange, any carrier meeting the minimum federal and state requirements can compete in the exchange.
A health insurance exchange is a marketplace for purchasing health insurance. Accordingly, we could call them exchanges or marketplaces, and we would be talking about the same thing. The official term when talking about Americans using the exchange is a “health insurance marketplace.” Each state-run exchange has its own unique name.
The health insurance exchange is also known as the HIX, the Affordable Care Exchange, the Health Benefits Exchange, the Health Care Exchange, the Health Insurance Marketplace and Affordable Insurance Exchange. The terms are all interchangeable, just like Obamacare is also called Health Care Reform, the Affordable Care Act, ACA, etc.
The ACA health insurance exchanges allow all Americans above the poverty line to be able to buy health insurance through providers via an online health insurance marketplace. The health insurance marketplace works similar to a car insurance Web site that displays side-by-side cost and benefit comparisons of different tiered plans to help the shoppers purchase the best coverage for them and their family.
Each healthcare provider will try to attract customers by providing affordable quality healthcare packages.
People will be able to compare coverage options using an online calculator to figure out which plan is right for them.
By enrolling in the exchange, participants will automatically see prices that reflect their savings after tax credits. Please note only those making under 400 percent ($90,000) of the federal poverty level ($11,000) will be eligible for tax credits.
The Department of Health and Human Services administers the requirements for the exchanges and the health plans that can be sold on the exchange. This measure of quality assurance ensures that any plan people buy on the exchange meets certain requirements, increasing consumer protection.
A Guide To ‘Qualifying Health Plans’ For The ACA
There are four tiers of “qualifying health plans” patients or their employer can purchase on the exchange. They range from lower quality but more affordable “bronze plans” to “silver plans” to a more expensive plan with better coverage called a “gold plan.” There is also a “platinum plan,” which is the highest quality and cost plan. Lower premium plans will have higher deductibles, fewer benefits and larger out-of-pocket costs.
Qualifying health plans are plans that meet the minimum standards set forth by Obamacare. All plans sold on and off the ACA health care exchange must include the following to be considered a qualifying health plan:
1. Ambulatory patient services
2. Emergency services
4. Maternity and newborn care
5. Mental health and substance use disorder services, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness services, and chronic disease management
10. Pediatric services, including oral and vision care
Now the reason you are hearing about premium increases and individuals losing their coverage as plans dropped them is because the plans did not meet the criteria of coverage listed above. If you consider that everyone will be paying increased premiums to provide coverage for these additional services, the only way the insurer can be profitable is to reduce the size of certain networks and charge greater deductibles on these plans.
As I previously mentioned, patients earning less than 400 percent of the federal poverty level would possibly be eligible for tax credits. What this means is some patients who are under a certain income level would receive subsidized premiums but may pay more in out-of-pocket expenses with increased deductibles. Early reports have deductibles around $6,000 for individuals and $12,000 for families.1,2 I learned that the out-of-pocket expenses will include items that were not covered before such as pharmacy costs, etc., so the idea is the patient will reach these out-of-pocket levels sooner.
The insurers’ point of view is that because of the ACA, more people than ever before will have access to health insurance, thus adding increased numbers of insured individuals. Since there are no preexisting condition restrictions or lifetime maximum limits under the law, insurers feel we will be able to get greater access to these patients than we were before.
There is a threshold of coverage under the law that requires insurers to spend 80 percent of every premium dollar on actual care and refund providers if providers pay any greater amount. What I feel this actually means is in order to not go over the threshold, payments to providers will be reduced. In fact, the new networks forming under these exchange plans will receive a level around 60 to 70 percent of Medicare with smaller panels of physicians. We are already hearing of doctors getting deselection notices from plans in certain markets. One thing I can say for certain is doctors contracted as individuals will be terminated before doctors who are contracted in a group. Those of you who know me know that I was the developer of the original podiatric supergroup back in 1994. I believed the group concept was viable when managed care began and believe this even more now.
Out of the four available plans offered — bronze, silver, gold and platinum — the insurance companies are leaning toward the silver plan. According to some high level insurance executives, under the silver plan, the insurance company pays the co-insurance that the patient normally pays. In turn, the federal government reimburses the insurance company. The interesting thing about this is according to statements made by Congress, there is no mechanism to accurately determine how much reimbursement the insurers should receive so these payments are to be estimated and accounted for at a later date.
Pertinent Insights On Potential Problems With Health Care Reform
So what could possibly go wrong with this scenario? The feeling among insurers is we should be very happy with this arrangement since there is less that doctors would have to collect from the patient because the co-insurance goes directly to the doctors. What they fail to mention is the deductible will likely be higher so, in reality, we will probably have to collect more from the patient.
Patients can get information about various plans directly from the insurance company sites but can only get subsidies through the government Web site. Since the cutoff date for January 1, 2014 effective coverage was December 23, as this issue went to press, it is unclear how everyone would be able to obtain coverage with the government Web site not performing optimally. (As this issue went to press, uninsured patients would not face a penalty if they registered by March 31.) The reason the premiums are reportedly higher for younger patients is the ratio of premiums between young, healthy patients and older, sicker patients has gone from 7:1 to 3:1, which does reduce the costs for the older patients but increases the premiums for the healthier patients. This is also why you are not seeing a lot of younger patients signing up.
Many of these exchange plans will be considered health management organization (HMO) plans with primary care physician referrals needed and reduced networks of doctors. These plans will have no out-of-network benefits and reduced reimbursement rates to physicians and hospitals. Since many of the lower income individuals will shift to Medicaid plans, besides the reimbursement being lower, the patients will find difficulty in getting access to care since many physicians will not accept Medicaid patients.
For podiatrists, this may also be a problem since there are limited covered services for podiatry under Medicaid in many states. For example, in Illinois, podiatrists can only treat patients with diabetes and children under Medicaid. Many of the state run exchanges have developed their own managed care networks, which podiatrists will need to contract with to get access to these patients. In Illinois, because our group represents about 80 podiatrists, we have been able to contract with five of these networks and have been able to negotiate a greater reimbursement than the standard Medicaid rate. In these managed care networks, we are able to treat all patients for all services, even those that normally would be restricted under standard Medicaid contracts.
It is also unclear how doctors will actually see patients in accountable care organization (ACO) networks that hospitals are developing. In these networks, patients will be assigned to a specific hospital network, similar to how they sign up now to be in a particular HMO. Unfortunately, there is no provision in the law for podiatry inclusion in ACOs although the American Podiatric Medical Association (APMA) has been working for equality and inclusion. Hopefully, the exclusion of podiatry has been an oversight and is not purposeful.
The reimbursement under these ACOs will be based on a “quality” model rather than a fee-for-service model. How this works is anybody’s guess. I believe the way this will work is the hospital will receive a lump sum from the government and the hospital will determine how to distribute the money. The physicians would receive any remaining savings.
Keys To Overcoming Potential Hurdles With Reimbursement
Practices should take advantage of the extra funds and services that payers are currently offering in such programs because they may not last. For example, as physicians become more efficient in shared savings programs in ACOs, the base payment rate will decline. Ironically, the ACO that becomes more cost effective will possibly be responsible for decreasing reimbursement. The transition from fee-for-service to new payments might be bumpy. During the next five years, physicians will be living in two worlds — fee-for-service and the new payments — and it will be very, very confusing. This affects your whole revenue cycle.
The new payment methodologies will also require sophisticated IT systems, a great deal of data reporting and shared networks. Physicians will have to go through “a cultural transformation” to deal with the new methodologies. They have to learn how to work in a team and share clinical decisions with other caregivers. That is another reason I feel a unified group will better be able to deal with the increased demands for data as well as the ability to reduce overhead as a group due to economies of scale. For example, perhaps three offices can share a billing person rather than each employing one.
So what you should expect in the months to come and how should you gear your practice to be able to be profitable?
1. You need to get a handle on what it actually costs you to see a patient and determine your price per patient to see how you may be able to continue being profitable with reduced reimbursement.
2. You need to gear up your office to be able to perform more services for cash including office-based surgery for those patients who will have larger deductibles and may not be able to have procedures at the hospital or surgical center.
3. Review your collection procedures to collect a greater percentage of these increasing large deductibles upfront rather than attempting to collect after the fact.
4. Be more diligent in verifying benefits since it is not clear that the actual plan the patient signed up for will be listed on his or her card. Make sure you are aware of how you will get paid before performing the service.
5. Research the new managed care plans opening in your state to see if you can negotiate a contract before these plans close. Be assured that insurers will not contract with a great number of podiatrists per geographical area.
6. Gear your practice for a greater ability to have more cash-related services, (i.e. fungal nail laser, shockwave, in-office dispensing, etc).
7. Look to see if a podiatric supergroup is functioning or forming in your area.
My personal opinion of this law is although it will produce a greater number of insured patients, it will be impossible to actually reduce costs with the government having to “kick in” more tax dollars to subsidize many of them. The only way to truly reduce costs with increased utilization would be to cut payments to providers and reduce the size of the networks, which will ultimately result in rationing of care.
I believe the podiatrists who can maximize their efficiency and increase their non-insurance based services will survive in this new environment.
Dr. Frankel is a Fellow of the American College of Foot and Ankle Surgeons, and the American Society of Podiatric Surgeons. He is board certified by the American Board of Ambulatory Foot Surgery and the American Board of Podiatric Surgery. Dr. Frankel is in private practice in Chicago.
1. Available at https://www.blueshieldca.com/bsca/find-a-plan/health-plans/individual-fa... .
2. Available at http://www.uhc.com/live/uhc_com/Assets/Documents/VA-GSC25_50_20_3000_150... .
Editor’s note: For further reading, see “What You Should Know About Accountable Care Organizations” in the April 2013 issue of Podiatry Today, the November 2013 DPM Blog “Is It Time To Switch The Dial On Insurance Networks?” by Stephen Barrett, DPM, and “How Can We Adapt To Inherent Challenges In Healthcare Reform?” in the June 2013 issue.