New Health Care Law Brings Changes Access, Coverage to Expand; Medicare Payment Models to Be Tested Policy Analysis
Policy Analysis  |   April 01, 2010
New Health Care Law Brings Changes
Author Notes
  • Ingrida Lusis, director of federal and political advocacy, can be reached at
    Ingrida Lusis, director of federal and political advocacy, can be reached at×
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Regulatory, Legislative & Advocacy / Policy Analysis
Policy Analysis   |   April 01, 2010
New Health Care Law Brings Changes
The ASHA Leader, April 2010, Vol. 15, 1-7. doi:10.1044/leader.PA.15052010.1
The ASHA Leader, April 2010, Vol. 15, 1-7. doi:10.1044/leader.PA.15052010.1
The health care reform legislation signed into law March 23 dramatically changes the access to and provision of health care services over the next several years. These changes will affect how individuals can obtain insurance, affect the cost of health care services, and allow the Centers for Medicare and Medicaid Services (CMS) to investigate new methods by which individuals will pay for health care services.
The law extends the therapy cap exceptions process through Dec. 31, but does not address the Medicare Part B physician payment update. As a result, the 2010 Physician Fee Schedule went into effect April 1. Congress is expected to address changes to the payment system later this spring.
The law would establish a 15-member Independent Advisory Board that would submit legislative proposals on ways to reduce Medicare spending if the spending exceeds an identified target growth rate. This board may not submit proposals that would ration care, increase revenues, or change benefits.
The law also would create an Innovation Center within CMS to test, evaluate, and expand payment models that would reduce expenditures while improving beneficiaries’ quality of care.
In an effort to curb waste, fraud, and abuse in public programs, the law allows CMS to conduct provider screening and creates enhanced provider oversight for initial claims of durable medical equipment suppliers. CMS also could place enrollment moratoria in areas that have been identified to have an elevated risk of fraud, and would require Medicare and Medicaid providers to develop compliance programs to reduce risk.
CMS will be required to establish a national Medicare pilot program to develop and evaluate paying a bundled payment for acute, inpatient hospital services; physician services; outpatient hospital services; and post-acute care services for an episode of care that begins three days prior to a hospitalization and includes services provided for the first 30 days after release from the hospital. The goal of the pilot is to improve quality of services while reducing spending.
The new law will require most United States citizens and legal residents to have health insurance. Those without coverage would be required to pay a tax penalty, phased in over the next six years; at the end of that time, the amount of the penalty will be based on cost-of-living adjustments. The law exempts individuals who can show financial hardship or religious objections (or meet other exemption criteria) from the requirement for mandated coverage.
Health coverage could be obtained by purchasing health care insurance through an individual’s employer or through a state-based American Health Benefit Exchange. Individuals and families with income that is 133%–400% of the federal poverty level would be eligible for tax credits. The law also creates a separate exchange through which small businesses could purchase coverage.
Large employers (those with at least 50 employees, at least one of whom is a full-time employee receiving a premium tax credit) that do not offer coverage would be fined $2,000 per full-time employee. Employers with fewer than 50 employees would be exempt from penalties. Companies with more than 200 employees would be required to enroll employees automatically in the health insurance plan they offer; employees, however, may opt out of coverage.
Under the new law, Medicaid eligibility would be expanded to all individuals younger than the age of 65 whose income is up to 133% of the federal poverty level. Medicaid would be required to provide essential health benefits to all newly eligible adults. To finance this expansion, the federal government would provide states with 100% funding in 2014 through 2016. In 2017 the rate would begin to decrease progressively until it levels off at 90% in 2020.
The new law would create an essential health benefit package that provides coverage for a comprehensive list of services and requires insurance companies to cover rehabilitative and habilitative services and devices. The type and scope of services covered under the health benefit services will be determined through a federal rulemaking process, with an effective coverage date of Jan. 1, 2014.
Insurance companies must provide coverage for pre-existing conditions and may not place lifetime limits or unreasonable annual limits on the amount of coverage. The secretary of health and human services will be required to define the benefit package and update it annually.
To allow consumers to review coverage options of various insurance companies, the law requires the development of an Internet site; insurance companies also would be required to use standardized language in describing benefits and coverage.
ASHA’s advocacy efforts will now focus on the federal agencies that have jurisdiction over the implementation of the various sections of the health care reform law. ASHA and The ASHA Leader will keep members informed as rules and regulations are published.
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April 2010
Volume 15, Issue 5