SCOTUS Ruling on Obamacare: What Can we Expect or Not Expect as Time Moves on
By William B. Felegi, D.O., FACEP
Finally it dawned on me: SCOTUS isn’t a new government agency or a newly discovered virus. It’s the Supreme Court of the United States, and unless you live in a refrigerator box you know that SCOTUS has issued its decision concerning the Patient Protection and Affordable Care Act (PPACA or ACA), or as the Republican Party and press calls it – Obamacare.
The media focused on the law’s requirement – the “individual mandate” – that everyone must have health insurance. Part of the ACA plan called for insuring approximately 32 million uninsured Americans under a Medicaid expansion. In fact, this part of the ACA was far more important than the individual mandate that SCOTUS decided actually represents a “tax,” thus making it constitutional. The pundits, press and both political parties will continue to fight on the rhetoric and I’m sure it will be used as a theme in Republican campaigns for the November election.
Nonetheless, under ACA, anyone whose income does not exceed 133% of the poverty line is eligible for Medicaid – the combined federal/state program that provides health care for the poor.
An estimated 17 million presently uninsured Americans would have been brought into Medicaid under the ACA, compared to the 15 million who would be compelled to buy insurance (or face a penalty—er, tax) under the mandate.
In essence, the Supreme Court performed a tricky feat – deferring to the federal government while allowing much-needed running room to the states. The latter is especially true when examining the consequences in the planned expansion of Medicaid.
There are numerous issues with Medicaid. It is a federal program managed by the states, but in recent years, Medicaid has overwhelmed state budgets, with Medicaid spending accounting for 15% of state general funds and 21% of total state spending if federal funds are included. Because of the increasing financial burden borne by the states, various solutions have been devised to reduce Medicaid budgets:
- Reducing or limiting benefits
- educing prescription drug benefits
- Reforming delivery systems
- Expanding managed care
- Enhancing program integrity efforts
- Reducing waste and fraud
- Limiting eligibility
- Reducing payments to hospitals and other providers, including physicians.
We witnessed in Washington state the proposed denial of payment for certain ED discharge diagnoses regardless of the EMTALA requirements to conduct a medical screening exam. This was fought by the Washington chapter of ACEP and was stopped by the state’s governor earlier this year.
Many states are still dealing with balancing their budgets in light of the Great Recession, and many are unable to afford added Medicaid burdens. An unanticipated solution to the states’ burden was Chief Justice Roberts’ decision to uphold the ACA but giving states an “out.” The ACA requires states to accept the expansion to the 133% standard or lose all federal Medicaid funds. However, Roberts found this unfair, and under his ruling, states can reject the new standard and the funding that goes with it without losing current Medicaid funding.
Under the ACA, the federal share of the cost to cover this “expansion population” is 100% for years 2014, 2015 and 2016, after which the federal share declines gradually to 90% in 2020 and subsequent years, with each state then paying 10% of the cost of coverage.
When the original Medicaid program began in 1965, not all states participated. Hopefully, now states with Republican governors (NJ being an intriguing example) will seriously consider participation in the expanded Medicaid program. Since this is now a voluntary program, if a state does not participate, uninsured individuals will remain so, and the costs of caring for them will continue to be shifted to others and absorbed by hospitals and providers. Residents of those states that elect not to participate will still be paying federal taxes, and part of that money will go toward paying Medicaid benefits in other states.
State Medicaid spending increased by 20% in FY 2012 – following a 23% jump in FY 2011 – while federal Medicaid spending dropped 8% due to the expiration of the higher matching rates temporarily set by the American Recovery and Reinvestment Act (ARRA). What is overwhelming is that during the past decade, the growth of Medicaid spending has outpaced every other category of state spending – actually doubling the rate of states’ biggest expenditure – K-12 education!
Emergency physicians are well aware of the implication of expanding Medicaid. Historically, Medicaid has reimbursed physicians poorly. This is certainly true in New Jersey and New York, where emergency physicians are reimbursed at the lowest rates in the country (NJ is at approximately $27 per visit). While some argue that at least care is reimbursed, others counter that the reimbursement does not even cover the costs of malpractice, and operational costs for physician staffing and billing.
The federal government recognized that Medicaid reimbursed many physicians poorly. So under the ACA, Medicare rates—significantly higher than Medicaid schedules – would be applied to primary care services – internal medicine, pediatrics and family medicine – but other specialties would not be granted an increase. ACA provides states the extra funding in 2013-2014. It is ironic that when Massachusetts mandated insurance for all of its residents, ED visits actually increased for at least three reasons:
- Patients now had insurance and assumed that ED visits would be covered
- There was a shortage of primary care physicians to care for the increase in new patients
- Those newly insured patients who did find primary care physicians were frequently referred to EDs for rapid work-ups that could not be provided for in the primary care setting.
In an unanticipated move (and unrelated to the SCOTUS ruling), CMS interpreted the law mandating Medicare rates for primary care services for Medicaid patients to extend to approximately 43 subspecialties that included cardiology, GI, critical care, and even pediatric EM. The ramifications are enormous and would actually restrict reimbursement to EM physicians.
Under the interpretation of the proposed regulation, board-certified primary care physicians working in EDs would be reimbursed at Medicare rates for Medicaid patients, but board-certified EM physicians would not be when caring for the same patient. In addition, surgical specialists, including OB-GYNs, would also not be reimbursed at Medicare rates for Medicaid patients! This would make access for Medicaid patients needing surgical services even more difficult.
Make no mistake about it: the battle has only begun. Stay tuned.
William B. Felegi, D.O., FACEP, is a partner with Emergency Medical Associates. He is the associate director and vice chairman of the Department of Emergency Medicine and an attending physician at Morristown (N.J.) Medical Center. He is an assistant clinical professor of emergency medicine at Mount Sinai School of Medicine, New York City. He also serves as an oral board examiner for the American Board of Emergency Medicine. He is a fellow of the American College of Emergency Physicians (ACEP). Dr. Felegi received his degree from the University of New England College of Osteopathic Medicine in Biddeford, Maine, and completed his emergency medicine residency at Morristown Medical Center, where he was a chief resident. Dr. Felegi is a past president of the N.J. Chapter of the American College of Emergency Physicians (NJACEP) and he serves as a counselor to the college, chairman of STATPAC, NJACEP’s Political Action Committee, and advises the chapter on legislative and regulatory affairs. He is the recipient of the chapter’s Good Government Award in 2003 and the Distinguished Service Award in 2009. He also serves as chairman of ACEP’s Federal Governmental Affairs Committee, is a member of ACEP’s State Legislation and Regulation Committee, and is a past board member of ACEP’s NEMPAC, political action committee. He is an avid “Give-a-Shift” donor since ACEP’s inception of the program. He was the 2008 and 2009 ACEP 911 Legislative Network Member of the Year and is the only member to ever have been honored for two consecutive years. He also serves as a team captain and state leader for ACEP’s 911 Network. He has served at the pleasure of two governors as a commissioner on the N.J. Health Care Access Study Commission and N.J. Commission on Rationalizing Health Care Resources Subcommittee on Hospital/Physician Relations and Practice Efficiency. He currently serves on the State Advisory Council for Basic and Intermediate Life Support, which administers the EMT Training Fund (EMTTF).