An 18-Month Perspective on PPACA

Many PPACA changes have already been implemented or proposed, including major insurance reforms, healthcare provider/supplier payment revisions, new delivery model demonstration programs and program integrity provisions.  Consolidation in provider/supplier markets is occurring.  Hospitals are merging and health systems from the Gulf Coast to the Tennessee border are acquiring physician practices.  A recent New York Times article (“Whatever Court Rules, Major Changes in Healthcare Likely to Last,” November 14, 2011) noted that although “the law does little to reduce the costs of care, its passage touched off myriad efforts to pare widespread waste.”

As Bob Dylan sang 40 years ago “the times they are a’changin.’”  Regardless of the Supreme Court’s decision, Mississippi healthcare providers’ and suppliers’ and regulatory agencies’ planning for “changing” times began at least 18 months ago.  Outcomes, efficiency, cost reduction and quality have been and will continue to be the mantra of consultants and regulators.

Supreme Court Review Issues

Acceptance of multiple issues for review portends a range of Supreme Court decisions.  Issues include:

• the constitutionality of PPACA’s individual mandate,
• the surviving PPACA provisions if the mandate is found “unconstitutional,”
• the constitutionality of expanding state Medicaid programs’ eligibility criteria,
• whether the Anti-Injunction Act prohibits the mandate’s review prior to the actual “tax” assessment. 

The Court could uphold PPACA’s constitutionality in toto, strike the individual mandate and some or all of PPACA’s remaining provisions or kick the can down the road – to 2014.  Any decision causes major political and economic impact.

Different Mississippi Perspectives

Regardless of the Court’s decision about PPACA’s constitutionality, healthcare in America and in Mississippi has changed in ways not easily undone.  Consider Mississippi developments, particularly by the Mississippi Insurance Department and the Division of Medicaid.  Supported by Governor Barbour, the Insurance Department’s preparation to operate a health insurance exchange pre-dated PPACA.  Immediately following PPACA’s enactment, the 2010 legislature approved a Health Insurance Exchange Study Committee.  Since then, the Department’s forward motion has been steady and studied. 

A Department of Health and Human Services’ grant of $1,000,000 (Mississippi’s Health Insurance Exchange Planning Grant) enabled the Department’s and Study Committee’s work and underwrote market research by Leavitt Partners, LLC and its subcontractor, Cicero Group.   A second HHS award supplied $1,000,000 for health insurance premium review (Cycle I Grant).  The Study Committee and Department drafted legislation to establish the Mississippi Health Insurance Exchange.  That legislation was proposed and died in the 2011 legislative session when differing House and Senate versions could not be reconciled.

Undeterred, the Department selected the Mississippi Comprehensive Health Insurance Risk Pool Association (MCHIRPA), a non-profit Mississippi legislatively-created entity, to develop and manage the Mississippi Health Insurance Exchange.   Grants received since June 2011, including a $3,783,208 Cycle II Health Insurance Premium Review grant and a $20,143,000 Cooperative Agreement to Support Establishment of State Operated Health Insurance Exchanges, will assist the Exchange’s forward progress.  The $20.123 million grant will enable development of the Exchange’s governance and infrastructure developmental needs. 

In October 2011, applications for appointments to the permanent Health Insurance Exchange Advisory Board and Subcommittees were solicited and on November 16, 2011, the MCHIRPA issued a Request for Proposal for Phase 1 development of the Health Insurance Exchange Portal, the Internet-based, user-friendly marketplace where individuals and small groups may shop, compare and purchase health insurance products. 

PPACA has presented a mixed bag, however, to the Mississippi Division of Medicaid.  The 2014 expansion of Medicaid eligibility, even during the extensive Congressional negotiations, was not embraced by Mississippi or most states.  Governor Barbour’s 2010 report to Mississippi legislators reflects states’ concerns, describing the “dramatic impact on Mississippi’s budget now and for years to come.” Division contractor Milliman, Inc. reported that, assuming full participation, potentially 400,000 new individuals would increase Medicaid rolls, costing Mississippi “an extra $225 million to $250 million a year on average” or a total state cost of $1.7 billion between 2014 and 2020. While the federal government will fund a portion of Medicaid’s expansion, states must cover administrative costs, estimated as between 3 percent and 6 percent of the cost of patient care services.

Favorably received, however, were several PPACA program integrity provisions, incorporated into the Medicaid Provider Policy Manual without statutory revision.  Policy Manual, Section 7.04, Fraud and Abuse, as revised, includes two PPACA requirements regarding payment suspension (PPACA § 6402(h)) and Medicaid recovery audit contractors (PPACA § 6411).  Effective January 1, 2011, the Division of Medicaid may suspend a provider’s payments on five days’ notice when a pending investigation evidences “a credible allegation of fraud” unless good cause exists. Payment suspension will not likely be eliminated and, in any event, could be legislatively incorporated into the Mississippi’s Fraud Control Act. 

Effective January 1, 2012, the Medicaid Recovery Audit Contractor program commences.  If Medicaid RACs’ recovery efforts resemble Medicare RAC program monetary recoveries, this Division benefit not likely be relinquished by the Division despite a Supreme Court ruling overturning the entirety of PPACA. 

No doubt the Supreme Court’s 2012 decision will impact the political arena and will have economic effect particularly since implementation of PPACA’s healthcare reform components rely heavily on federal funding.  Elimination of some or all of that funding by a Court ruling (or a legislative enactment) would render significant portions of PPACA economically impractical. 

While the times “are a-changin’, reversing course could be difficult, as Dylan wrote, “for the wheel’s still in spin.” Mississippi healthcare providers must keep a vigilant eye and continue to identify efficient operating options and opportunities to collaborate.

Dinetia Newman is a partner in the Jackson office of Balch and Bingham LLP.  Ms. Newman, who leads the firm’s Healthcare Practice Group in Mississippi, is also serving the AHLA as President-elect for 2011-2012. Balch is a corporate law firm with more than 250 lawyers and lobbyists in offices in Atlanta, Georgia; Birmingham and Montgomery, Alabama; Gulfport and Jackson, Mississippi; and Washington, D.C.  For more information, please direct questions to Dinetia at dnewman@balch.com or visit her website at www.balch.com/dnewman.

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