In March, Congress passed the Patient Protection and Affordable Care Act (PPACA) followed by the Health Care and Education Reconciliation Act designed to make corrections to the original bill after over a year of wrangling, infighting, lobbying, and extreme political posturing on all sides.
What we’ll be calling the healthcare reform bill for some time will affect long-term care providers by altering reimbursement coverage and adding a whole new source of revenue in the form of the Community Living Assistance Services and Supports (CLASS) Act. As employers, long-term care providers will also be affected by the requirement to provide health insurance coverage and to define what the nature of that coverage will be. All the provisions specifically focused on long-term care are concisely described in a new report produced by the National Academy for State Health Policy: https://www.nashp.org/node/1903.
The PPACA affects long-term care by introducing national long- term care insurance, by enhancing Medicaid options for services and supports, by mandating chronic care coordination demonstrations, and by increasing ownership transparency and staff background check requirements. In the limited space available here, I’ll focus on the CLASS Act and Medicaid expansions.
CLASS is a new federally administered voluntary long-term care insurance program that participating employers’ employees would have to choose
not to join rather than to proactively sign up. Many features are still to be determined including the premium which is to be set to ensure program solvency, but it will be a cash benefit that will vary as a function of disability level.
The state long-term services and support structure, including single state agencies, advocacy groups, and new State Disability Determination Agencies, will cooperate to stimulate services, employ personal care attendants, and establish eligibility standards. These benefits will necessarily be coordinated with Medicaid provider payments and some transfer from insurance funds to Medicaid is envisioned. Thus, unlike current private long-term care insurance which pays the beneficiary who is treated like a “private pay” individual, the CLASS Act payments may not be treated in the same way. We’ll all have to see how those details will emerge and what it will mean for the current “tiered” approach to pricing long-term care services for Medicaid recipients, Medicare beneficiaries, and individuals paying privately. Since this is a cash benefit, unless identifiable in some way, it will be challenging to differentiate CLASS Act beneficiaries from those with private long-term care insurance. Indeed, depending upon the premiums set for CLASS and how it is age-adjusted to be actuarially appropriate, the CLASS may “crowd out” the private long-term care insurance market which has never been that strong in the first place.
Medicaid reforms affecting all of long-term care are supposed to be adopted very soon. First, there will be further demonstrations of “money follows the person.” Second, structural reforms such as a single point of entry, case management, and standardized assessments of eligibility and need determination will be mandated all with the goal of making it possible for frail older persons to remain in their communities. The PPACA also broadens the scope of covered services that are available under the 1915(i) state plans in order to encourage more states to adopt these provisions. This should greatly enhance community services for older persons, however, since only Medicaid recipients or dual eligibles will benefit, unless states specifically focus on the near Medicaid, the way general Medicaid expansions have done, the number of individuals affected may be relatively small.
Two of the provisions that could have the greatest effect on long-term care providers specializing in post-acute care are the most distant and vague. However, the provision calling for a demonstration project to test alternative approaches to bundling acute and post-acute reimbursement could force skilled nursing facilities and home health agencies to negotiate with hospitals for a “piece of the post-acute” pie if all care is “bundled” under an omnibus payment for an episode, regardless of where the service is delivered.
Another approach mentioned is to create “Accountable Care Organizations” that would be responsible for the outcomes and expenditures of the Medicare beneficiaries who get their care from a given physician group which would be rewarded if their patients’ quality improved and they reduced expenditures. It should be noted that physician groups and hospitals are almost as nervous about such a development as are long-term care providers since in our current system no one entity is “accountable” for care across care settings.
Role as employer
One of the most immediate ways in which the PPACA will affect long-term care providers will be in your role as employers. Providers not offering health insurance will have to do so or pay a fine (if there are more than 50 employees). Providers that currently offer insurance will still need to live within the framework of their state’s insurance regulations unless the provider is self-insured. Over the next several years a number of provisions restricting health insurers’ underwriting behavior will be introduced, including no pre-existing condition exclusions and the requirement that workers’ children be covered through age 26, regardless of their college status. There is no way to know at this juncture whether these provisions of the legislation will result in higher or lower insurance costs than they might otherwise have been since they are supposed to greatly increase the number of insured individuals, particularly the healthier ones. The one thing we can count on, however, is that healthcare costs are likely to continue to increase since there is nothing in this version of healthcare reform that directly works to reduce either rising medical care prices or the volume of service use of the American public.
Vincent Mor, PhD, MEd, is Professor and Chair of the Department of Community Health, Brown University School of Medicine. He formerly served as the Director of the Brown University Center for Gerontology and Health Care Research. Dr. Mor has been on the faculty of the Department of Community Health since 1981, becoming tenured in 1987. He is one of the founders of the Department’s graduate program in 1986, and directed it until becoming chair in 1996.
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Long-Term Living 2010 May;59(5):22-25