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- One Year Out—What Do Anesthesiologists Need to Know About ICD-10-CM Conversion?
- One Year Out—What Do Anesthesiologists Need to Know About ICD-10-CM Conversion?
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- Will the Medicare Physician Value-Based Payment Modifier Affect Your Anesthesia Group?
- Before the Shoe Drops: Anesthesiologists Can Help Hospitals Prevent Certain Hospital-Acquired Infections
- What Anesthesiologists Should Know About Third Party Payer Performance
- CERT Errors of Interest to Anesthesiologists and Pain Medicine Providers: Will the New A/B Contractor CERT Task Force Make a Difference?
- Will Medicare Publish Information on Payments to Anesthesiologists and Other Physicians?
- Legislative Replacement for SGR is on the Horizon for Anesthesiologists and other Physicians
- Drug Manufacturers' Payments to Anesthesiologists are Now Reportable Under the Sunshine Act
- Revisiting Readmissions as a Quality Metric for Hospitals and Anesthesiologists
- Will the Health Insurance Exchanges Mean More Patients for Anesthesiologists?
- New PQRS Reporting Requirements in the Proposed 2014 Medicare Fee Schedule Rule—Limited Impact on Anesthesia
- Looking at Bundled Payments from an Anesthesiology Perspective
- Preventable Hospital Readmissions—Opportunities for Anesthesiologists
- Do the Payers Understand Nerve Blocks for Post-Anesthesia Pain?
- Lessons from Bundled Payment Initiatives for Anesthesiologists
- Anesthesia Group Communications and the Attorney-Client Privilege
- Update on the SGR for Anesthesiologists and Pain Physicians
- Is Your Hospital Ripe for a Merger or Acquisition? What Anesthesiologists Need to Know Now
- When is an Anesthesiologist “Immediately Available?”
- Anesthesiologist Compensation
- Insights for Anesthesiologists: Participating in Hospitals’ New Strategies
- Anesthesiologists and Pain Physicians: Make Sure You are Enrolled in PECOS Now
- Hospitals May Pay for Anesthesia and Pain Medicine EHRs without Violating the Self-Referral or Anti-Kickback Laws
- Proposed “Medical Necessity” Restrictions on Post-Anesthesia Pain Blocks
- PQRS, the Value-Based Payment Modifier and Large Anesthesia Groups
- PQRS Refresher for Anesthesiologists, CRNAs and Pain Physicians
- ACOs, Antitrust and Anesthesiologists
- New Ways for Anesthesiologists to Add Value to the Management of their O.R.s
- Do ACOs Matter to Anesthesiologists and Pain Physicians Yet?
- How Safe Are Anesthesia Practices From a RAC Attack?
- The Sun Shines on Payments from Drug Companies to Anesthesiologists and other Physicians
- What Anesthesiologists and Pain Physicians Should Know about Health Insurance Exchanges
- The Company Model Presents Risks for Anesthesiologists and for ASCs
- Update Your Anesthesia Compliance Program: The Final HIPAA Privacy, Security and Breach Notification Rules Are Here
- Medicare Locality Conversion Factors for Anesthesia Services Through 2013
- 2013 CPT Coding Changes Pain Management and Anesthesia
- What Anesthesiologists Should Know About Health Insurance Exchanges
- Rental Networks, Claims Repricers and Anesthesia Practices
- Anesthesia Managed Care Contract Rates
- Giving Thanks for Anesthesiologists
- The Fiscal Cliff and What it Means to Anesthesiologists
- Final Fee Schedule Rule for 2013 Cuts Conversion Factors, Allows Payment to Nurse Anesthetists for Chronic Pain Services
- Anesthesiologists and Payment for Acute Pain Services
- Sedation by Non-Anesthesia Providers
- The SGR and Anesthesiology — It’s That Time of Year Again
- Anesthesia Business Consultants to Aid Anesthesiologists in Securing the Benefits of Meaningful Use through Complete EHR with F1RSTUse
- Compensating Anesthesiologists for Attending Group Meetings
- The OIG Targets “Personally Performed” Anesthesiologist Services
- A Warning for Anesthesiologists and Pain Physicians about Increased Billings through Better Technology
- Value-Based Purchasing for Hospitals Starts Now—and for Anesthesiologists, in 2015
- Anesthesiologists’ Role in Helping Surgery Centers Meet Their Quality Reporting Requirements
- Protect the Privacy and Security of Your Anesthesia Patients’ Electronic HIPAA Information
- New Hardship Exception for Anesthesiologists to Avoid the EHR Penalty
- Effective Hospital-Anesthesia Group Contracting: Understanding the Relationships Between Finance, Operations and Compliance
- When Negotiations with Carriers Force Anesthesiologists to Go Out of Network
- Anesthesiologists’ Investments in ASCs
- Proposed Changes for Anesthesiologists and Pain Physicians Who Report Measures to the PQRS
- Payment and Quality Changes Affecting Anesthesiologists in the 2013 Proposed Fee Schedule Rule
- What Anesthesia Practices Should Do With Unclaimed Funds Belonging to Patients
- After the Supreme Court Decision: Anesthesiologists Must Proceed With a Perioperative Care Model
- What Does Medicare’s 3-Day Payment Rule Mean for Anesthesia and Pain Practices?
- Tips for Anesthesia Practices to Get the Surgeons to the OR on Time
- OIG to Anesthesia Practices: Think Again Before You Pay Your ASC for the “Franchise”
- Latest Government Fraud Reports and How They Affect Anesthesiologists and Pain Physicians
- As an Anesthesiologist, What Should I Do About Meaningful Use if I am a Medicaid Provider?
- Collecting Payments from Anesthesia and Pain Medicine Patients
- Anesthesiology Plays a Role in Coordinating Management of Knee Replacement Patients, Contributing to Better Outcomes
- What the Proposed 60-Day Overpayment Refund Rule Means for Anesthesia Practices
- A New Quality Tool for Anesthesia Departments
- Managing Compensation for Anesthesiologists, CRNAs and AAs
- Medicare ACOs Are Blooming (With or Without Anesthesiologists)
- The Affordable Care Act, the Supreme Court and Anesthesiologists – Just the Facts, Please
- ICD-10 Delay Will Benefit Anesthesia and Pain Medicine Practices
- Medicare Updates of Interest to Anesthesiologists and Pain Physicians
- Practice Management Companies’ Acquisitions of Anesthesia Practices
- What Anesthesiologists Should Know about Medicare Prepayment Reviews
- Performance Based Compensation: Benchmarking, Monitoring and Improving Quality
- Performance-Based Compensation in Contracts between Hospitals and Anesthesia Groups: Measures
- Demystifying “Meaningful Use” for Anesthesiologists
- The Anesthesia Conversion Factor and the Medicare Fee Schedule, 20 Years Later
- Postoperative Pain Management Procedures Can Still Be Reported Separately from the Anesthesia Service
- Hospital Value-Based Purchasing Program: An Introduction for Anesthesiologists
- 2011 Medicare Rates for Anesthesia and Other Services Extended Through February
- Texas Statute Requires Anesthesia Informed Consent
- Results of Survey Regarding a Network of Anesthesia Practices
- PQRS 2012 for Anesthesiologists and Pain Specialists
- Anesthesia and the Version 5010 Standard
- How Will the Affordable Care Act Affect Anesthesiologists After the Supreme Court Rules?
- Information Technology, Patient Safety and Anesthesia Practice
- Be Careful With What You Say About One Another
- Do the Finalized ACO Regulations Help Anesthesiologists?
- A Major Change to the Perioperative/Anesthesia IT Integration Landscape
- 1 Anesthesia Group + 1 Anesthesia Group > 2 Anesthesia Groups
- Federal Budget Proposals and Medicare Payments for Anesthesia Services
- E-Prescribing by Anesthesiologists and Pain Physicians: Web Portal to Request Exemption is Up and Running
- HIPAA Privacy Rule Update for Anesthesiologists
- Electronic Prescribing: Anesthesiologists Will Soon Be Able to Request Their Exemptions
- The Medicare Bundled Payment Iniative and Anesthesia Services
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- Medicare’s eRx and EHR Incentive Programs – Clearing Up the Confusion for Anesthesiologists
- Anesthesia and Social Media
- A Manual for all Anesthesiologists
- The IPAB Threat to Anesthesiologists and All Other Physicians
- Anesthesiology and the Proposed Rule for the 2012 Medicare Fee Schedule
- When is an Anesthesiologist's Signature Good Enough for Medicare?
- Health Plans Tighten the Belt – Around Anesthesiologists’ and Others’ Midsections
- Information from ASA on (1) Joint Commission Requirements and (2) Anesthesia Information Management
- Most Anesthesiologists Will Be Exempt from Medicare Electronic Prescribing Penalties ">
- Anesthesiologists' and CRNAs' Error Rates in Reporting PQRS Measures
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- Developing Leaders in Anesthesiology
- Anesthesiologists Visit Congress
- Compliance Update for Anesthesiologists
- Anesthesiologist and CRNA Participation Rates in the Physician Quality Reporting Initiative (PQRS), and New Compensation Data
- Preparing Your Anesthesia Practice for the 5010 Eletronic Transactions Standard
- ACO Proposed Rules–Will the Potential Waivers from Medicare Fraud Laws Benefit Anesthesiologists?
- Anesthesia Practice Cost and Revenue Data
- The Future As Seen From the Anesthesia Administration Assembly Conference
- What Should Anesthesiologists Know About the RACs?
THE AFFORDABLE CARE ACT, THE SUPREME COURT AND ANESTHESIOLOGISTS-JUST THE FACTS, PLEASE
April 2, 2012
The United States Supreme Court allocated more time to oral argument on the constitutionality of the Affordable Care Act (ACA) last week than it had to any other case in the past 50 years. Four distinct questions were before the Court during six hours of argument spread over three days. In chronological order of consideration, these questions were:
- Does the 1867 Anti-Injunction Act, which bars pre-enforcement litigation over a tax, prevent the Court from hearing the challenge to the insurance mandate?
- Can Congress compel individuals to buy insurance or pay a penalty (the “individual mandate”)?
- Can the rest of the ACA survive if the individual mandate is struck down?
- Can Congress pressure states to expand Medicaid coverage by threatening to withhold funds?
The Individual Mandate
The room was packed and buzzing with excitement. Some people clearly had slept outside last night. Even some of the attorneys general from the challenger states had to stand in line to get in. – Professor Mark A. Hall, Esq., Impressions From Inside the Courtroom, American Health Lawyers Association blog “Supreme Court: ACA Challenge,” March 27, 2012.
The question of whether the individual mandate to buy health insurance is constitutional is of paramount importance because much of the financial scheme of the ACA depends on increasing the insured proportion of the population. The outcome turns on the application of two clauses in the Constitution, (1) the Commerce Clause, which provides that Congress shall have the power “To regulate Commerce with foreign Nations, and among the several States, and within the Indian tribes,” and (2) the Necessary and Proper Clause, which enables Congress “to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers….” Without a basis in the Constitution, the mandate would be an impermissible infringement on individual liberty.
Does the individual mandate implicate “commerce,” i.e., regulate a market? The Court spent some time trying to define the market being regulated. The 26 states, the National Federation of Independent Business (NFIB) and the two individuals that have asked the Supreme Court to invalidate the mandate took the position that it was the market for health insurance products and that a compulsory purchase of a private product such as an insurance policy was unprecedented. Analogies to burial insurance, gym memberships, mandatory mortgage insurance and even a food market in which individuals were, hypothetically, required to buy broccoli were all explored. The Obama Administration, through Solicitor General Donald Verrilli, contended that the compelled-purchase examples were distinguishable in that everyone will at some point enter the market for healthcare services, in which “participation is often unpredictable and often involuntary.” By choosing not to buy insurance, he argued, the uninsured would be making the economic decision to shift the cost of their healthcare to others. Justice Anthony Kennedy, the critical potential swing vote, observed that the young adult who foregoes insurance nevertheless affects the insurance and health care markets as an “actuarial reality.”
Interestingly, the concept of the individual mandate first surfaced as a conservative alternative to liberal calls for government-sponsored universal health coverage. In the late 1980s, economist Mark Pauly at the University of Pennsylvania proposed a system of tax credits to ensure that all Americans could purchase at least “catastrophic” coverage, coupled with a mandate requiring everyone to obtain such coverage at a minimum to avoid the problem of free riders. Pauly’s proposal was developed further at the Heritage Foundation in the early 1990s and was incorporated into a Senate bill with 20 Republican co-sponsors. The bill fell by the wayside as the Clinton health reform plan collapsed. Bipartisan support for an individual mandate continued at least through the adoption of the healthcare reform legislation in Massachusetts in 2006.
The Anti-Injunction Act would bar the Court from hearing challenges to the individual mandate only if the mandate were a “tax.” Justice Ruth Bader Ginsburg pointed out that the litigation was not over the penalty for failure to buy insurance, but rather over the must-buy requirement.
There was considerable discussion over whether the statute is jurisdictional, or whether it can be waived by the Government to allow a lawsuit to proceed.
Neither side was seeking to have the constitutional question deferred until after the penalty or “tax” is first assessed in 2015. The Court had asked a neutral expert litigator to brief the issue. Although predicting the outcome of the case is dangerous, we can say that there did not appear to be much enthusiasm for applying the Anti-Injunction Act and postponing further deliberation until 2014 or later.
Severability: Can the ACA Survive Without the Individual Mandate?
Can the rest of the ACA work if the individual mandate is struck down, i.e., “severed?” Paul Clement, the former solicitor general representing the 26 states, argued that the Court would have to overturn the entire ACA. Because of (1) the “mandatory issue” requirement, which prevents health plans from denying coverage to people with pre-existing conditions, and (2) the “community rating” provision, which limits the premiums that health plans may charge based on pre-existing conditions, insurance companies would go out of business if coverage were optional. The phenomenon known as “adverse selection” would ensure that individuals would only buy insurance once they needed it. The insurers would not be able to spread the economic risk among a large pool including healthy low-utilizers and rates would have to skyrocket for health plans to be able to cover the costs of care. Thus the mandatory issue and community rating provisions would need to fall with the individual mandate.
It is worth noting that the ACA opponents have challenged the statute in more than two dozen federal lawsuits and lost most of them. Only one federal district court, in Florida, declared the entire statute unconstitutional. The Court of Appeals for the Eleventh Circuit, in Atlanta, also held the mandate unconstitutional but refused to invalidate the rest of the ACA.
Verrilli argued that the mandate was severable, as did H. Bartow Farr III, a private litigator appointed by the Supreme Court as amicus curiae. Farr cited a Congressional Budget Office study showing that ACA premium subsidies would encourage a significant number of individuals to buy coverage and thus temper the effects of adverse selection. Medicare Part B is an example of a successful system – from the beneficiaries’ and the government’s point of view, if not in the eyes of physicians staring down the barrel of the SGR formula – in which nearly all eligible persons participate even though it is voluntary, because it is affordable. The entire ACA should not be dismantled because even on a voluntary basis, it will “still open the insurance market to millions of people and lower premiums for millions.”
The 26 states claim that the ACA’s expansion of the Medicaid program unfairly coerces their participation. The expansion arguably violates the sovereignty of the states by effectively requiring them to spend more of their own money to cover more individuals or else forfeit all of the federal Medicaid money they now receive.
A new Medicaid eligibility category for individuals with incomes at or below 133% of the federal poverty level would expand Medicaid by 11.2 million adults. Most, but not all, of the costs added by the ACA would be borne by the federal government. Medicaid enrollment is expected to increase by 27 percent by 2019, but average state spending will increase by only 1.4 percent. (Washington Post, March 28, 2012, p. A18) The argument is that the sheer scope of the program and the funds already received would make it impossible for the states to “just say no” and opt out of Medicaid altogether.
This question was scheduled for the sixth and final hour of argument over the three days. In the view of many legal experts, the coercion theory was the weakest challenge to the ACA. If the Court ultimately rules that the ACA is unconstitutional, the decision will probably not be based on its expansion of the Medicaid program.
The Potential Impact of Declaring the ACA Unconstitutional
The nine Justices met behind closed doors on Friday, March 30, and in all likelihood reached a tentative set of decisions on the ACA. Positions may change, however, during the drafting of written opinions and before the final ruling is announced in late June. Some of the Justices’ views are clear already, but very few observers express confidence that they know how Chief Justice John Roberts and Justice Kennedy will vote.
If the Court holds the mandate unconstitutional and also non-severable, and the ACA falls in toto, it will be the first time since the New Deal that the Court has struck down a major domestic program proposed by the President and passed by the Congress.
If that happens, the Independent Payment Advisory Board (IPAB) created by the ACA will also meet its end. Anesthesiologists and other physicians will no longer need to fear fee-slashing by the unelected, unaccountable IPAB (see Alert dated March 12, 2012).
The 30 million Americans lacking insurance who are projected to obtain coverage under the ACA will remain uninsured. We will still have an uninsured population of at least 50 million and the concomitant familiar problems, including constrained preventive care and cost-shifting to others. According to Solicitor General Verrilli’s brief, “uninsured people consume $43 billion a year worth of emergency-room and other health care for which they do not pay, costs that are shifted to insurers and that raise insured families' average premiums by more than $1,000 a year.” (Critics of the law dispute these numbers.)
Groups that have benefited from ACA changes that are already effective, such as young adults who can remain on their parent’s health plan until age 26, may lose some members, but it is impossible to know how many health plans would exercise their right to revert to their previous policies.
If the individual mandate is severed and thrown out by itself, we are likely to experience the same sudden sharp increases in health insurance premiums and perhaps the demise of some health plans and further consolidation of others. The health insurance industry shakeout would be far less severe if the ACA’s restrictions on pre-existing condition exclusions and special underwriting were invalidated along with the individual mandate. The health insurance exchanges that every state is required to have in place by January 1, 2014 will probably counter the tendency toward contraction of the market; many more people are expected to be willing and able to afford insurance than is the case today, mitigating to some extent the adverse selection effect.
If the Medicaid expansion goes forward, the proportion of Medicaid patients in most anesthesiology and pain practices will likely increase. Lower than market Medicaid rates could become a larger issue.
The quality improvement and value-based purchasing initiatives codified in the ACA will survive in any event. These endeavors have a strong foothold in the private sector already and, at least as important, bipartisan support.
Many columnists and analysts have speculated on the possible political impact on the November elections of a decision either way. We are not going to join them. Instead we will wait with great interest for the announcement of the Court’s decision in June, and, if developments warrant, keep you posted along the way.
With best wishes.
President and CEO