Healthcare Industry on Pins and Needles: The Repeal of the ACA and What Comes Next01.19.17
The Affordable Care Act (ACA) has been one of the most sweeping, and most divisive, pieces of legislation related to healthcare in a generation. More ink has been spilled over enactment, constitutionality, and repeal than any other government healthcare program. With the election of Donald Trump, and a Republican-controlled Congress, the repeal of the ACA is all but assured. What isn’t assured, however, is what will come of the rush to repeal Obamacare, and what may come by way of replacement. In this post, and in a series of posts over the next year, we will examine the practical effect of the political realities, and the effect that the repeal of the ACA and potentially sweeping changes that come along with it may have on healthcare providers.
So, where are we now? Donald Trump is set to be sworn into office as the 45th President of the United States on January 20. Both the Senate and the House have passed the legislation necessary to pave the way for the repeal of the ACA. At the same time, the political winds may be shifting with recent concern for just what repeal would mean in terms of healthcare coverage for up to 18 million people currently utilizing options offered by the ACA. The next two months will be critical, as the final steps are taken to repeal the ACA and any proposed replacement takes shape.
The ACA was intended as a market-based option, which found its genesis in early proposals by former presidential candidate Mitt Romney to reform health insurance in Massachusetts.
Complaints about the ACA have run the gamut, from what many viewed as an inflexible expansion of Medicaid to the high cost of ACA compliant plans on the federal marketplace. Current discussions of what may replace the ACA seem to be coalescing around a combination of tax credits, Health Savings Accountsand the program advanced by Health and Human Services nominee Dr. Tom Price back in 2015.
What we do know is that any repeal of the ACA is going to have significant impact on the business of healthcare and beyond. The ACA is replete with provisions that go far beyond the expansion of Medicaid or the creation of insurance marketplaces. From a fraud and abuse perspective, the ACA instituted a 60-day repayment requirement for “identified” overpayments from government healthcare programs. Its repeal will do away with that specific requirement and all the litigation that has surrounded this provision. The ACA forced industry participants to abide by numerous new regulations such as prohibitions on new physician owned hospitals, mandatory bundled payment methodologies and enhanced hospital readmission penalties. And from a transactional perspective, the ACA drove much of the consolidation and acquisition activity in the healthcare industry over the past eight years. It’s unclear what, if any, of these changes will continue with any eventual replacement of the ACA. Those changes will be critical, and the need for industry participants to stay informed, and be prepared to adapt to this rapidly shifting landscape has never been more paramount.
Over the next few months, our attorneys and advisors will offer their perspectives on some of these change. We will endeavor to go beyond the policy and delve into the legal issues – regulatory, operations, and transactional – that any repeal and potential replacement of the ACA will bring. We hope you will join and follow us as we analyze and consider the legal issues of what could well be another fundamental shift to the healthcare industry in the coming months and years.