Despite a host of technical problems, more than 2 million people have already signed up for health coverage under the Patient Protection and Affordable Care Act (PPACA) mandate. Although controversy surrounding the law continues, there is more reason to be optimistic than some realize, according to Ed Gaines, JD, CCP, chief compliance officer for Zotec Partners. “All you see in the headlines are two warring factions—those opposing the law and the supporters,” he says. “What you do not hear is the pragmatic reality of what is really happening.”
In fact, Gaines says, the expansion of health-care coverage could turn out to be positive for hospital-based providers, including radiology practices. He highlights three key aspects of reform that stand to benefit radiology in 2014: Medicaid expansion, increases in hospitals’ case volumes, and creative approaches to expanding coverage.
Gaines points out that prior to the passage of the PPACA, most states’ requirements for Medicaid participation were extremely stringent. “What often goes unreported, unfortunately, is that traditionally, you were required to have a number of qualifying conditions before you could get Medicaid,” he says. “You had to have a dependent or be disabled, in addition to being at a certain poverty level, so a childless couple at 133% of poverty, for instance, could not qualify for Medicaid.”
The problem is that 133% of poverty is still next to nothing—certainly not enough to afford a commercial plan, Gaines says. “That is why the PPACA made qualifying for Medicaid into a simple income test. A childless couple at the upper ceiling is still only making $31,000 a year. These are truly the working poor: folks who are underemployed or unemployed during periods of time when they are trying to improve their situations.”
Though some states have chosen to reject federal dollars for Medicaid expansion, those that have elected to expand the program have extended coverage to three key groups: working parents, nonworking parents, and childless adults. “Some people will say that Medicaid does not pay very well, and in many states it does not,” Gaines says. “It does pay something, however. Converting zero insurance into some insurance is a definite benefit to providers.”
Another often-overlooked aspect of the PPACA is its list of 10 essential health-care benefits that payors are now required to provide. “It is a bit of a double-edged sword, because it is being argued that this provision is the reason that so many existing policies got canceled,” Gaines says. “The net positive aspect, however, is that the benefits include things like ambulatory patient services, emergency services and hospitalization—and if those include imaging, it is covered as well. The insurers can no longer play games with offering plan benefits that do not include these mandated benefit coverages, and that is a very good aspect of the law.”
In fact, in Oregon and Massachusetts, which voluntarily expanded coverage even before the passage of the PPACA, emergency-department volume increased significantly, Gaines says, suggesting that the uninsured were avoiding taking advantage of hospital services that they could not afford. “There will be some benefit for imaging centers and primary-care–based radiology, but we do not yet have any data on that,” he notes. “On the hospital side, on the other hand, we can look at the examples of Massachusetts and Oregon and know that we are about to see increases in volume. A recent study regarding Oregon’s newly covered Medicaid recipients showed ED volume increases of approximately 40%.”
Gaines says that the PPACA has inspired some creative approaches to expanding Medicaid coverage. As an example, he points to Arkansas, which chose to use the federal dollars proffered for Medicaid expansion to buy private plans for its newly eligible Medicaid-covered lives. “It is a brilliant idea because at this level, earning a few dollars more an hour could mean that a person jumped to 150% of poverty and was no longer eligible for traditional Medicaid,” Gaines says. “With this approach, that person would still get to keep his or her policy, but it would switch from a Medicaid managed care policy to a commercial policy—presumably with the same health plan.”
Gaines predicts that even the holdout “red states” will eventually see the wisdom of a creative approach similar to that taken by Arkansas. “The feeling among the nonparticipating states is that they do not want to expand a broken program, but in Arkansas, Medicaid patients will get commercial policies, making it a private-market solution,” he explains. “The state government is using federal dollars to purchase private plans for the benefit of its working poor. That is very good for anyone working in hospital-based medicine, including radiology.”
In a similar way—but with different implications—some hospitals and health systems are now considering paying patient premiums (after subsidies are applied) for the newly insured accessing health insurance via exchanges. “They are realizing it will be of net benefit to them to pay for the patients’ insurance because at least they will still have insurance, meaning that they will be using hospital services,” Gaines says. “It is a somewhat controversial notion and could introduce legal and compliance issues, but hospitals are still considering it.” Gaines cautions that experienced health-care counsel should be consulted before a hospital or group decides to proceed with such a plan, as federal anti-kickback laws may be implicated.
Gaines stresses that the overall efficacy of the law remains to be seen. “I am not talking about how we, as a country, will pay for the PPACA, nor about what the outcome will be if adverse selection continues, with older and less healthy people signing up in the exchanges at much higher rates than younger and healthier people,” he explains. “We will not have those answers for years. In the meantime, however, there is no question that the number of uninsured patients is going to continue decreasing over time, and that is a net positive for radiology.”