How the Affordable Care Act Will Impact Small Healthcare Providers

How the Affordable Care Act Will Impact Small Health-Care Providers

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Ask a concerned citizen or public policy specialist about current healthcare law and they’ll likely bring up “the ACA” or perhaps “Obamacare.” That’s no surprise, since the Patient Protection and Affordable Care Act (PPACA) of 2010 so broadly redefines the contours of health insurance coverage and medical care in the U.S.

You don’t hear much about what Congress approved next—the Ambulatory Surgical Center Quality and Access Act of 2011. Enjoying bipartisan support, it amended the Medicare law in favor of the nation’s many outpatient care service providers (more formally known as ambulatory surgical centers, or ASCs) where procedures that are more intensive than those done in a doctor’s office, but not so intense that they require a hospital stay—think colonoscopies, hernia repairs, cataract removals and the like.

To Dan Nash, Healthcare Practice Leader, Zurich in North America, and his colleagues who specialize in risk management for healthcare providers, the 2011 law was about leveling a playing field. Very conspicuously, the surgical centers bill added a representative of the ASC community to the Advisory Panel Payment Classification Group. It is clear to Nash what that addition means: Someone who speaks for the medical professionals and administrators working outside of HOPDs (hospital out-patient departments) has a chance to plead with Medicare for appropriate payments covering the care provided.

“What we’re seeing now at the governmental and economic level are changes that tend to stack the deck against small providers,” says Nash. “These facilities and practices have served a longtime need in their communities, and Zurich has been privileged to support their efforts. New ways to continue to serve communities are needed, and we’re helping to develop them.” One new initiative is an Internet portal that smaller providers can turn to for help with their property, casualty and professional liability risk issues. In addition, the portal will provide assistance with Medicare reimbursement rules, and the provider’s possible recourse to perceived underpayment.

These days, more and more physicians are falling under the category of employee rather than independent contractor. “Hospital chains and even private equity firms are buying up medical practices at the same time they are buying up other hospitals,” says Nash. “Small providers are probably going to feel more vulnerable when the dust settles from PPACA and all its after-effects.”

This challenged segment of the country’s healthcare and wellness system does make vocal claims for its efficiency advantages. The Ambulatory Service Center Association (ASCA), the leading advocacy group for ASCs, quotes $2.6 billion as the amount Medicare saves each year due to independent ambulatory centers receiving reimbursement rates that are “on average, 58 percent of what an HOPD receives for a similar procedure.” Likewise, according to ASCA, Medicare could save another $2.5 billion annually “if just half of the eligible procedures were moved to the ASC setting from HOPDs.” Backstopping this claim is an appeal to have that 58 percent figure hold steady, or rise incrementally, “in order for ASCs to remain a viable alternative to the higher-cost HOPD setting.”

America’s new laws and regulations are based on one immutable fact: Medical care has to be delivered more efficiently and with higher productivity. As Nash points out, this same imperative gave us the HMO experiment of the 1980s and ’90s. In both eras, the marketplace itself has authored changes in a push for cheaper-better-faster healthcare. There are early reports showing that hospital consolidation and practice buyouts don’t necessarily deliver that outcome. The city of Boise, Idaho has been a flashpoint of sorts, with two hospitals in a duel to acquire medical practices and develop a superior economy of scale. “As these trends continue, patients will be turning to their doctors and saying, ‘My knee hurts,’ only to have the physician give them the phone number of the admin center that will manage their case,” says Nash. “When it’s time to be paid, smaller providers will need the tools to advocate for themselves.”

And despite the compact scale of these providers, exposure due to practitioner errors, faulty MRI machines and other endemic risks will be theirs to manage and mitigate. “These are businesses that could each benefit from having their own risk officer,” Nash contends. “Our approach will be to help fill that gap.”