Thursday, March 29, 2012

Impact of Striking Down Individual Mandate and Other Provisions of Affordable Care Act on Hospitals

In Hospitals Fear Loss of Insurance Payments if Coverage Mandate Is Struck Down, the Chicago Tribune reports that many hospitals, including nonprofits, have already begun to make numerous changes in anticipation of full implementation of the Affordable Care Act (the “Act”).   Some healthcare industry participants reportedly have viewed the individual mandate as a helpful method for increasing the pool of future patients who will be able to pay for hospital services.  If the United States Supreme Court holds the individual mandate unconstitutional and strikes only that portion of the Act, some observers fear that Congress will nonetheless implement cuts to reimbursements under Medicaid and Medicare programs, with the result that hospitals will be forced to raise charges imposed on others.  What if the Court invalidates the law in its entirety?  One nonprofit hospital executive is quoted as follows:

Paula M. Noble, chief financial officer at Children's Memorial Hospital in Lincoln Park, said the hospital is concerned that if the court strikes the law in its entirety, some of the hospital's patients would lose benefits that have already been implemented. Specifically, she fears that they would lose their private insurance coverage because of pre-existing conditions or if they exceed lifetime caps on coverage.  Instead, she said, those patients would be forced to rely on Medicaid, a chronically underfunded program that is facing "devastating cuts."

"This would create further challenges for Children's Memorial, other hospitals and the state of Illinois," she said.

But all may not be lost.   The article also quotes Mark Newton, president and chief executive officer of Swedish Covenant Hospital, who states that the Act helped motivate hospitals to enhance efficiency by coordinating patient care and automating health care records.  Says Newton,

"Even if (the court) throws the whole thing out, there are some residual positives that came out of this, and, if nothing else, it gives Congress a chance to go back and really look at what's working and what's not."

The latter point is important.  Whatever decision the Supreme Court reaches on the constitutionality of the Act (in whole or in part), meaningful health care reform can still occur if this country musters the political will to accomplish it.

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