Health Reform for Hospitals and Health Systems

April 14, 2010

On March 23, 2010, the president signed into law the Patient Protection and Affordable Care Act, Public Law 111-148 (H.R. 3590) (PPACA). One week later, the president signed into law a set of proposed changes to PPACA, the Health Care and Education Affordability Reconciliation Act (H.R. 4872) (the Reconciliation Act). These two pieces of legislation combined (referred to here as the law) constitute the current efforts to reform healthcare in the United States.

The law will have a profound impact on healthcare in the United States, and almost every provision will have some impact on hospitals and health systems, albeit indirect in many instances. Examples of provisions of the law having a significant, but indirect, impact on hospitals are those aimed at increasing insurance coverage across the uninsured and underinsured, expanding Medicaid programs, and improving healthcare workforce training and development.

Click here to read a full length article that identifies and briefly discusses those provisions of the law that directly impact hospitals and health systems. Many of the provisions solidify previous legislative and regulatory efforts, and involve concepts that are likely familiar to hospital executives. Others may involve initiatives not previously encountered and represent a change from business as usual. The discussion is divided into five key areas:

1. Hospital Finance and Governance

Hospitals Required to Publish Charges
Charitable Hospitals

2. Medicare Payment Changes

Medicare Hospital Value-Based Purchasing Program (VBP)
Medicare Penalty for High Rates of Hospital-Acquired Conditions
Hospital Readmissions Reduction Program
Disproportionate Share Hospital (DSH) Payments
Medicare Wage Index Improvement
Market Basket Updates

3. Medicaid Payment Changes

Medicaid DSH Payments
Payment Reductions for “Health Care-Acquired Conditions”

4. Care Delivery and Payment Reform

Accountable Care Organizations/Shared Savings (Medicare)
Bundled Payments for Hospitals, Physicians, and Post-Acute Care (Medicare)
Extension of Gain Sharing (Medicare)
Hospital and Physician Bundled Payment (Medicaid)
Global Payment System for Safety Net Hospitals

5. Residency and Medical Education

Distribution of Additional Residency Positions
Counting of Resident Time in Outpatient Settings and Jointly Operated Residency Training Programs
Counting of Resident Time for Didactic and Scholarly Activities

McGuireWoods’ Healthcare Department will continue to monitor the law and those provisions that are of importance to hospitals and health systems and will keep you informed of significant developments. We have also undertaken similar efforts in other segments of the healthcare industry including long term care, ambulatory surgical centers, and physicians and physician practices. If you have any specific questions about how the law will affect your organization, please contact a member of the Healthcare Department.

Visit the Healthcare Reform section for additional updates and resources.