Navigating the Affordable Care Act Minefields

If you're able to predict the activity of Congress and the decision-making logic of the Supreme Court then you're probably in good shape for developing a strategy to prepare for the Affordable Care Act. In the absence of such knowledge, you may at the least want to focus on the following:

If you’ve buried your head in the sand with respect to healthcare reform for the past few years, it may be a good time to start shoveling out a bit. Don’t get me wrong. I don’t want to join the very loud chorus of doom and gloom and Armageddon that has characterized healthcare reform for more than 4 years. But I also don’t believe it’s a good time to stay isolated from the reality that this legislation brings as we prepare for a new year.

Two key events have taken place recently that give those who don’t like the law at least some hope of possible modification and/or repeal. The first was the dramatic election results that are widely regarded as public pushback on the Affordable Care Act and other government activity. The second is the decision by the US Supreme Court to hear a critical case that challenges the government’s authority to provide subsidies to individuals who obtain coverage in federal healthcare exchanges as opposed to state exchanges as outlined in the law.

If you’re able to predict the activity of Congress and the decision-making logic of the Supreme Court then you’re probably in good shape for developing a strategy. In the absence of such knowledge, you may at the least want to focus on the following:

Medicaid Expansion: One of the early impacts of healthcare reform was the drastic increase in the Medicaid population. For most providers, this means lower reimbursements, particularly in cases where those patients can displace higher-paying commercial patients. Now is a good time to have close knowledge of your payer mix as well as your practice’s policy on accepting new patients and scheduling existing patients.

Exchange Patients: If you haven’t seen patients from your healthcare exchange (whether federal or state run) you likely will in the near future. This may not be a bad thing as long as you understand the reimbursement you are receiving. In some cases, the exchange plans have utilized commercial networks to begin offering their coverage. This is necessary since the exchange plans started with no membership. But as membership grows, you can bet that there will be strategies to reduce the reimbursement to providers for these populations. Now is a good time to know your third-party networks and how they feed into your overall revenue cycle.

Patient Liability: I can remember when $2,000 was considered a high deductible. If you go to www.healthcare.gov and look at some of the products that are being offered, you can see deductibles as high as $10,000 and more. The market has experienced a seismic shift in terms of patient liability. What that means is that providers will have to get better at something they traditionally have not done a very good job with — patient collections. Now is a good time to review your pre- and post-service collections policies and procedures.

Health Coverage for Employees: If you do not offer group healthcare coverage to your employees, you may find this to be less of a disadvantage than you have in the past. If you do offer coverage, you may want to take a careful look at the costs and benefits of doing so. Because each practice is so different, there is really no way to assess this on a universal scale. Suffice it to say that now is a good time to review your strategy on group healthcare coverage and evaluate all of your options available in light of the changing market.

Compliance and Taxes: There are numerous compliance and tax implications relative to the Affordable Care Act that are scheduled to hit both employers and individuals in the near future. The implications are more invasive for larger employers (those with more than 100 employees in 2015 and more than 50 employees in 2016). However, there are also implications for smaller employers and individuals that need to be considered. Now is a good time to know how healthcare reform may impact your business as a whole, you as an individual, and your employees.

There is no doubt that healthcare reform has already had a tremendous impact on the industry as a whole. There have been cost increases directly associated with the legislation. The fear of the unknown has abounded, causing some groups to sell their practice and others to limit risk-taking. But as we head into 2015, there promises to be more activity than we have seen in the past 4 years combined. Whether that activity relates to further implementation, an elimination of the law or some combination of the 2 will become clear only with the passage of time. But if you’ve chosen to ignore the impacts of healthcare reform thus far, now is a good time to take note of how it could impact your practice in the future.

Brian Bourke is healthcare consulting manager at HKP, the workforce management affiliate of Honkamp Krueger & Co., P.C., a CPA and business consulting firm headquartered in Dubuque, Iowa. He works with medical providers and medical facilities on developing and improving operational efficiencies at their organizations. You can contact him at bbourke@honkamp.com.

Honkamp Kruger & Co., P.C is a proud member of the National CPA Healthcare Advisors Association (HCAA), a nationwide network of CPA firms devoted to serving the healthcare industry. Members provide proactive solutions to the accounting needs of physicians and physician groups. For more information contact the HCAA at info@hcaa.com.