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Reimbursement and the Affordable Care Act

For years, getting paid by Medicare and Medicaid wasn’t very complicated. After health care providers performed a service, they billed for it and got paid. But now that “fee for service” approach is under scrutiny by those who are looking for ways to reduce health care costs, and the biggest arrow in their quiver is the Affordable Care Act (ACA).

Section 3025 of the ACA authorizes the Centers for Medicare & Medicaid Services (CMS) to launch a pilot program involving “bundled” services. When services are bundled, the provider receives a flat fee for all services a patient should receive during an episode of care. The idea is that if there is a standardized cap on what providers will be paid for treating a patient, they will not have an incentive to provide and bill for unnecessary services. Some providers already have adopted the bundled services approach.

The ACA pilot program applies only to Medicaid. But if the program is successful in reducing costs, bundling could become the norm for both Medicaid and Medicare.

The ACA also reduces the per-patient payments that some hospitals receive from Medicare. In October, Medicare payments were reduced by as much as 1 percent for more than 2,000 hospitals. This was because Section 3023 of the ACA directs CMS to penalize hospitals that have excessive patient readmissions. The idea is to encourage hospitals to more effectively address the patient’s underlying health problem during the initial admission.

These changes signal that the Affordable Care Act may substantially change the system for providers that rely on government payments.  If you need assistance with reimbursement, contact an experienced New Jersey health care compliance law firm today.

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  • Posted on: Jan 7 2014