The Patient Protection and Affordable Care Act along with the Health Care Education Reconciliation Act of 2010, known collectively as Health Care Reform, are thought to have made some of the biggest changes ever to the delivery and payment of health care services. The numerous provisions of Health Care Reform are extremely complex and will take years for health care providers to understand and implement. A snapshot into the future of Health Care Reform shows additional health insurance coverage for individuals as well as a focus on quality reporting and revised payment systems that will be tied to quality outcomes.

Health Care Reform provides for expanded Medicaid coverage so more individuals will qualify for Medicaid. This will benefit health care providers because patients who could not pay for services will now be covered by Medicaid. However, to pay for the expanded Medicaid coverage, Health Care Reform provides for a substantial amount of Medicare cuts. Health care providers may see an increase in their Medicaid revenue, but they will see a decrease in their Medicare revenue.

Another component of Health Care Reform is the introduction of value-based purchasing programs (VBP). Starting October 1, 2012, hospital Medicare payments would be tied to certain performance and quality measures for common and high-cost conditions as defined by the Health and Human Services Secretary. Hospitals that receive the highest performance scores will receive an increase in Medicare payments. Hospitals with the lowest performance scores will see a reduction in Medicare payments. If hospitals do not submit their quality data, they will be subject to a 2 percent reduction in Medicare payments. VBPs will be introduced for other subacute providers, such as long-term care facilities and home health agencies. VBP pilot programs will be developed for other types of providers.

Beginning in 2014, long-term care hospitals, rehabilitation hospitals and hospice programs will receive a
2 percent reduction in Medicare payments if not reporting quality measures based on expected quality measures that are to be published no later than October 1, 2012. Beginning in 2015, physicians receive up to a 2 percent decrease in Medicare payments if they are not participating in the submission of quality data. However, there is a plan to develop a system where physician payments will include a modifier that provides for an adjustment to Medicare payments based upon quality of care furnished compared to the cost.

If you look deep into the future of Health Care Reform, another concept introduced is the development of a national pilot program on Medicare payment bundling by January 1, 2013. The concept is to develop a program that would provide a Medicare-bundled payment to cover three days prior to admission, the acute care/hospital stay and 30 days of post-acute care, including physician services. Payment bundling would require significant effort and collaboration among physicians, hospitals and other subacute providers to provide a comprehensive delivery of care in which all providers would share the payment.

The future of Health Care Reform is still unknown, as several details in the legislation have not developed. However, what you can deduce about the future of Health Care Reform is that organizations that deliver health care services will have to change the way they do business. Health care organizations will have to be creative to focus on accountability, quality and collaboration with fewer resources available to pay for the delivery of care.