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Industry Groups Express Concerns Over Proposed ACA Repeal Bills

Several healthcare and physician organizations spoke out against the American Health Care Act, two recent Affordable Care Act repeal bills.

Many healthcare industry groups came forward to criticize the House's recent Affordable Care Act repeal legislation

Source: Thinkstock

By Jacqueline Belliveau

- Earlier this week, House Republicans started a potential Affordable Care Act repeal by introducing the American Health Care Act. But some industry groups recently expressed concerns that the legislation would inappropriately shift more healthcare costs onto providers.

The newly-introduced American Health Care Act proposes to undo some of the Affordable Care Act’s major provisions. For example, the legislation would curtail state Medicaid expansions, ending the state option to expand Medicaid coverage by Dec. 31, 2019.

The bills also spell out another major Medicaid change. Under the act, Medicaid would switch from open-ended entitlement to a per-capita formula for state funding allotment.

The potential restructuring of Medicaid, however, concerned many healthcare industry groups. The American Hospital Association (AHA) stated that the proposed Medicaid changes would result in significant program reductions that would impact vulnerable patient populations as well as providers who already receive substantially lower claims reimbursement rates under the program.

“[T]he legislation repeals much of the funding currently dedicated to provide coverage in the future,” Richard J. Pollack, AHA President and CEO, wrote in a letter to the House. “Furthermore, we object to eliminating the funding from some sources, but leaving in reductions to payments for hospitals services.”

READ MORE: The Progress and Challenges of the Affordable Care Act

“If coverage is not maintained at the current level, those resources need to be returned to hospitals and health systems in order to provide services to what will likely be an increased number of uninsured Americans,” he added.

Rather than per-capita caps on Medicaid funding, the industry group favored providing more flexibility to states to expand coverage through alternative means, such as the use of waivers.

The AHA also called on Congress to postpone formal considerations for the American Health Care Act until the Congressional Budget Office (CBO) releases its analysis on how the act will affect coverage.

America’s Essential Hospitals, a non-profit comprising 275 healthcare stakeholders, echoed the AHA’s plea for Congress to wait for a vote until the CBO can review the legislation.

“We are particularly disappointed lawmakers seem willing to consider this bill in committee without a Congressional Budget Office score and an estimate of how the bill might impact healthcare coverage,” the organization stated on its website. “A score is crucial, as this legislation could place a heavy burden on the safety net by reducing federal support for Medicaid expansion over time and imposing per-capita caps on the program.”

READ MORE: 74% of PCPs Prefer Affordable Care Act Changes Over Repeal

The Medicaid changes would disproportionately impact safety-net hospitals, the organization continued. Medicaid funding cuts would further strain safety-net hospital revenue cycles, which already operate on little to no margins. As a result, the hospitals may have to reduce services or eliminate jobs.

“Congress must work with all stakeholders to ensure that those who have coverage now do not lose it, that entitlement reform does not shift costs to states and providers, and that reform sustains a strong and secure safety net,” wrote America’s Essential Hospitals.

However, the organization did praise the act’s end to disproportionate share hospital payment reductions. Medicare and Medicaid provide hospitals that serve higher numbers of low-income and uninsured individuals with supplemental payments to cover uncompensated care costs.

Under the Affordable Care Act, CMS must reduce uncompensated care payments to providers by $2 billion by 2018 and another $8 billion by 2025.

In addition to Medicaid funding changes, the American Health Care Act would also replace the Affordable Care Act’s refundable tax credit methodology with one based on age rather than income.

READ MORE: How the Affordable Care Act Changed the Face of Health Insurance

Individuals who need healthcare coverage, but do not qualify for Medicaid or Medicare, would still look to the health insurance exchanges for private plans. Federal assistance, however, would be according to the individual’s age with tax credits increasing as age increases.

But the American Medical Association (AMA) called on Congress to reconsider the proposed refundable tax credit modification because it would lead to fewer insured individuals.

“We believe that credits should be inversely related to an individual’s income,” James L. Madara, MD, AMA CEO and Executive Vice President, stated in a letter to the House. “This structure provides the greatest chance that those of the least means are able to purchase coverage. We believe credits inversely related to income, rather than age as proposed in the committee’s legislation, not only result in greater numbers of people insured but are a more efficient use of tax-payer resources.”

Providers would not be the only healthcare stakeholders suffering under the new healthcare bill, other groups argued. The American College of Physicians stated on its website that the legislation’s scaling back of coverage, benefits, and consumer protections would lead to less access and higher costs for patients.

“We urge House Speaker Paul Ryan (R-WI) and the chairs of these two committees to reconsider the decision to move forward with mark-up, and instead allow the time needed for a thorough review of the bill to ensure that it meets our overarching principle, ‘First, do no harm’ to patients,” the organization wrote.

Another physician-focused group also voiced serious concerns with the proposed Affordable Care Act replacement. The Physicians for a National Health Program called the legislation a “major backward step in health policy, compounding the problems of uninsurance and underinsurance while handing over hundreds of billions of dollars to the wealthiest 2 percent of Americans.”

The group specifically criticized the legislation’s cost-sharing subsidies elimination, 30 percent premium surcharge for coverage lapses, health savings account promotions, and tax reductions for higher tax brackets.

With these potential changes, the American Health Care Act would be a “worse, more regressive version” of the Affordable Care Act, claimed the group.

Instead of the proposed Affordable Care Act replacement, the Physicians for a National Health Program called on Congress to implement a “single-payer, Medicare for All reform.”

The 123-page American Health Care Act is currently sitting in the House. The House Ways and Means and Energy and Commerce committees plan to go over the legislation this week, the New York Times reported.

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