Six years after the biggest overhaul of U.S. healthcare in half a century, the industry is bracing for more change under President-elect Donald Trump. There are a lot of policy questions and moving parts to follow. However, there is no question that the healthcare landscape will significantly change over the coming years.
Affordable Care Act
While Republicans have the majority in the Senate, they do not have a filibuster-proof majority. Thus, it’s unlikely they will be able to repeal the ACA as it was enacted as doing so would require 60 votes. Rather, Republican leadership is expected to pursue partial repeal of the ACA through the budget reconciliation process, which allows for expedited consideration, without being subject to a filibuster. It is likely Congress will pursue partial repeal under reconciliation, but then phase-in over three years a replacement plan.
Medicaid
Various plans have been floated over the years to reform the Medicaid system. The most popular amongst Congressional Republicans are plans to provide states with more flexibility in managing the Medicaid system in their states through block granting or per capita allotment. These changes would likely require legislative action. However, the incoming Administration is expected to offer states greater flexibility through the waiver process that is currently in place.
Medicare
Both Speaker Paul Ryan and HHS Secretary Nominee Tom Price support converting Medicare to a premium support model. Price told reporters earlier this month that he expects Congress to push for Medicare changes during the FY 2018 budget reconciliation process in the third quarter of 2017. However, many are skeptical there are 51 votes for that change in the Senate, as Senate Democrats are sure to stand firm against Republican-led efforts, and moderate Republicans have been skeptical of these plans in the past. Additionally, President-elect Trump has not shown any interest in dramatic changes to the Medicare program.
Impact on Physicians
Providers will want to ensure that any potential ACA replacement does not reduce insurance coverage for their patients or impede access to their services and does not result in dramatically reduced reimbursement from all payers. Consideration of major repeal or changes to ACA is both a potential threat and opportunity for providers. President-elect Trump and other Republicans have proposed significant Medicaid reforms by limiting the growth of federal funding for Medicaid while shifting greater control over eligibility and benefits to states. Such reforms—whether in the form of per capita allotments or block grants—might lead states to alter some combination of eligibility, benefits, and payment rates.
Greater flexibility could also spur innovation and structural changes on a state-by-state basis. For providers, such major changes may impact revenue, volume, and service offerings. There is no proposed replacement for the continuation of value-based payment models for a variety of providers subject to them under which they are rewarded or penalized in their Medicare reimbursements based on actual performance on a wide range of quality and outcome metrics—such as ACOs and bundled payments. Should efforts be advanced to temper value-based payment models, there may be an impact on the implementation of the Medicare Access and CHIP Reauthorization Act (MACRA).
However, many providers and other stakeholders might well voice a preference for value-based models as a cost control strategy over fee-for-service rate cuts. That viewpoint could encourage the new Congress and Administration to continue to support risk-based payment and pay-for-performance models.
Some proposals coming from Republicans, including medical liability reform and repeal of the Independent Payment Advisory Board (IPAB), will be welcomed by the provider community.
Miranda Franco is senior public affairs adviser for Holland & Knight LLP. Questions or comments related to this article should be directed to Miranda.Franco@hklaw.com. The information in this publication should not be considered legal or medical advice applicable to a specific situation. Legal guidance for individual matters should be obtained from a retained attorney.