The Supreme Court has issued its opinion in King v. Burwell, the much anticipated case regarding whether Affordable Care Act subsidies are available to purchasers of insurance on the Federal Exchange or whether the plain language of the Act restricted such subsidies to only those purchasing insurance through an “Exchange established by the State.” The Court, over strongly worded dissent, determined that the Act permitted payment of subsidies for insurance purchased through the Federal Exchange, leaving Obamacare, as it is known, intact. Had the court ruled as the dissent held, then millions of people would have effectively been exempted from the requirement to purchase health insurance (the “individual mandate”) because their health insurance cost, when not supplemented by a subsidy, would have exceeded 8% of income. The outcome of such a decision could have led to the “death spiral” for the Act, since the underlying financial assumptions that keep insurers in business are directly related to the effectiveness of the individual mandate.
The Court’s decision will provide certainty in the healthcare marketplace. King v. Burwell was widely seen as the last, and best, chance for opponents of the Act to obtain a judicial veto of the Act. Opponents of Obamacare now realize the Court will make every effort to uphold the Act in future cases.
President Obama signed the Medicare Access and CHIP Reauthorization Act of 2015, on Thursday April 16. The Act repeals the long complained about Sustainable Growth Rate formula for computing Medicare reimbursement rates, which had resulted in the annual “Doc Fix” legislation for the last 17 years. The Act also begins the conversion from the Fee For Service system, which has been the way Medicare claims have been paid for 50 years, to a “value-based payment” system. The value-based payment system is designed to promote efficient care by shifting the burden and benefit of efficient care to physicians. There is much debate about the possible effects and side effects of the shift in payment.
The Act, known as MACRA, raises Medicare premiums on persons with incomes over $133,500 ($267,000 per couple), starting at 50% increases up to 80%. The willingness of Congress to index premiums to income in a bipartisan bill (it passed the Senate 92-8) is seen by many as a sign that compromise is possible on both long-term Medicare sustainability and in the event the Supreme Court uses the King v. Burwell case this summer to strike down portions of the Accountable
To gain a broader understanding of the Sustainable Growth Rate and Value-Based Payment impact of MACRA, please see the presentation linked here. Recent Developments In Healthcare
On June 13th, 2014 Senate Bill 670 was signed by Governor Rick Scott. The new law will change and amend several aspects of the existing law pertaining to skilled nursing facilities. The changes are of particular importance to passive investors and those indirectly involved with skilled nursing homes. From now on:
Passive investors are not liable for damages under this law; Only the licensee, licensee’s management or consulting companies, and direct caregivers are subject to suit without an extra hearing; and Punitive damages are harder to obtain and require an extra hearing.
This law should make Florida a safer place for passive investors and companies that are indirectly involved with skilled nursing home facilities. The law in its entirety can be found here: http://laws.flrules.org/2014/83.
The United States House Energy and Commerce and Ways and Means Committees and the Senate Finance Committee have released bipartisan compromise legislation that would
repeal the Sustainable Growth Rate (SGR) formula for physician payments and transition Medicare towards a value-based payment system.
The legislation “not only fully repeals the broken sustainable growth rate formal, but puts in place real reforms that move Medicare away from a fee-for-service model that promotes greater spending to one that encourages better results,” Sen. Orrin Hatch said in a press release announcing the legislative moves.