CMS chief optimistic Supreme Court will uphold heathcare reform

By Diana Manos
10:21 AM
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With the Supreme Court's decision on the Affordable Care Act (ACA) expected by the end of this month, more and more policymakers, healthcare experts and stakeholders are becoming vocal about their predictions of the outcome.

Marilyn Tavenner, acting administrator of the Centers for Medicare & Medicaid Services (CMS), speaking at a June 7 session of the Accountable Care Organization Summit, said she was optimistic the ruling will support the ACA. As such, the agency is not making any plans to slow down on its implementation of current programs and pilots. "We are full steam ahead," she said. "We think the Supreme Court will make the right decision."

Eric Zimmerman, a healthcare attorney and a partner at the Washington, D.C., law firm McDermott Will & Emery, predicts that if the individual mandate and perhaps even the Medicaid portions of the law are struck down it will have a negative financial impact on healthcare providers.

[See also:Tavenner touts ACOs as CMS alignment with private sector.]

"It's a very big deal for a lot of reasons," Zimmerman said in a May 31 webinar on the subject. "But I say that it's probably the least stressful of the potential outcomes that healthcare providers could face."

There was a deal made with the Obama administration and with Democrats in Congress, who controlled Congress at that time the ACA was passed, Zimmerman noted. The deal was that the hospital community particularly, would absorb approximately $150 billion in reimbursement cuts – mostly Medicare reimbursement cuts – in exchange for the expectation that they would get $30 million new insured lives, insured lives that they are presently providing services to without any expectation of compensation.

"With these citizens now becoming insured whether it's through private insurance or through Medicaid, hospitals would expect starting in 2014 to start to be paid for these services," said Zimmerman. "So if the individual mandate and/or the Medicaid portions of the law are struck down, that is a violation of the deal, if you will, and all of a sudden hospitals and other service providers are providing these services, having absorbed the cuts without the expectation of the additional revenues."

[See also: States move ahead with Medicaid medical homes.]

Joel Michaels head of McDermott Will & Emery's health advisory practice, said states could move forward in a substantive way if parts or all of the law is struck down. "I think the states will take a crack at it," he said. "They could do that through the creation of exchanges. There are already some states that have done that."

Douglas Hastings, partner and chair of the board of directors for the law firm of Epstein, Becker & Green in Washington, D.C., was a speaker at the Accountable Care Organization Summit. He says that ACOs are unrelated to what's being challenged in the Supreme Court decision. "The underlying issues driving us to accountable care will be the same as they were before," he says.

He warns, however, that without federal support behind the development of ACOs, as is provided under the healthcare reform law, payment between the private sector and federal payers could become misaligned. Private payers are saying they don't have the capabilities to reinvent the wheel. They need the federal government to lead the way on ACOs.