Robert Belfort, Project HealthDesign Regulatory and Assurance Advisory Group, Manatt, Phelps & Phillips, LLP
It is hard to escape the news coverage about the constitutional challenge to the Affordable Care Act (ACA), and the attention being paid to the case is understandable. The ACA is arguably the most far-reaching piece of domestic legislation that Congress has passed since it enacted Medicare in the 1960s. Although the focus of the legal challenge to the ACA is on the individual mandate, which requires that almost all Americans without health insurance buy individual health insurance policies or pay fines, there could be implications for patient engagement initiatives if the Supreme Court strikes down the law.
The Supreme Court heard oral arguments relating to the constitutionality of the ACA on March 26, 27 and 28. The Court’s decision is not expected until late June. The first issue confronting the Court is whether the individual mandate should be struck down because it represents an unconstitutional exercise of Congress’ power. If the Court does decide the mandate is unconstitutional, it will then consider what should happen to the ACA’s hundreds of other provisions. The answer depends on whether some or all of these provisions are deemed “severable,” meaning that they operate independently enough of the mandate to stand on their own even if the mandate falls.
The severability issue is a critical one. A number of the ACA’s payment and delivery reform provisions encourage patient engagement and care coordination, and, at least indirectly, could go a long way toward promoting the integration of patient-generated health information into care management and other health care delivery models. These include provisions:
- establishing a Medicare hospital value-based purchasing program that pays hospitals based on performance against quality measures;
- requiring the development of similar value-based purchasing programs for other types of providers;
- gradually reducing Medicare payments that would otherwise be made to hospitals to account for preventable hospital readmissions; and
- establishing rules governing the formation and operation of Accountable Care Organizations (ACOs).
Each of these provisions attempts to reform the current health care payment system by rewarding health care providers for coordinating care and delivering better patient health outcomes – as opposed to rewarding them for the volume of services they provide. The ACO program, for example, creates financial incentives for providers to work together to treat patients across multiple care settings, including physician offices, hospitals, and in the home. An ACO consists of a group of providers that have agreed to collaborate to coordinate care for patients enrolled in Medicare Parts A and B. ACOs are intended to be patient-centered organizations, driven by the goal of delivering integrated, efficient and cost-effective care. ACOs that achieve quality targets and succeed in providing care at a cost less than what would otherwise be expected will share in savings with the Medicare program. To succeed, ACOs will likely have to find ways to better engage patients in their own health and health care. Incorporation of patient-generated health information, like observations of daily living (ODLs), could be one way of achieving this goal.
It is currently unclear whether the ACO program and other ACA payment reforms will continue to exist if the Supreme Court strikes down the entire ACA. Some have suggested that without the ACA’s payment reform provisions, health care providers will have less incentive to engage in innovative care coordination strategies, including those involving patient-generated health information. We will continue to follow the legal challenge to the ACA with great interest, and with an eye toward how it may affect the goals that Project HealthDesign supports. Please don’t hesitate to post any questions or comments about these issues below.