The healthcare reform initiatives sweeping the nation are sure to have an impact on the senior living industry, and they won’t all be positive, lobbyists say.
Although President Obama’s Affordable Care Act (ACA) was scored by the Congressional Budget Office as achieving cost savings of $100 billion, the bill is expected to cost trillions more down the road, said Jordan Bernstein, executive vice president at government relations firm Cassidy & Associates, during the Assisted Living Federation of America’s 2013 Conference & Expo.
“They have the ability to backload things,” Bernstein said of the Department of Health & Human Services, noting a $500 billion cut to Medicare spending in a 10-year span contained in the ACA.
While those “savings” are most achieved by reducing reimbursements to healthcare providers as opposed to Medicare beneficiaries, it will still affect senior living residents.
The Balanced Budget Act of 1997 included a Medicare Sustainable Growth Rate to control spending on physician services. However, Congress has suspended or adjusted the control mechanism for the last 16 years, known as the ‘doc fix.’ If there’s a year when the SGR conversion is not repealed, doctors will see 30% less reimbursement for Medicare patients, according to Bernstein.
“Fewer doctors will be interested in taking Medicare residents” if there’s no doc fix, he said. “They don’t want to cut doctors’ pay, but think that if they cut hospital reimbursements there’s no impact. That’s not true.”
Already, providers are indicating their residents are having difficulty finding primary care physicians who accept Medicare beneficiaries, Bernstein noted after informally polling session attendees.
What’s going on, he said, is essentially “death by a thousand cuts” in Medicare. Hospitals, doctors, and skilled nursing providers are all impacted along with the senior living industry at large.
“They think there’s going to be no impact, but you’re going to see it in your communities with your residents and their access to healthcare,” Bernstein said.
As a result, he believes the role of nurse practitioners and physician’s assistants will grow larger as states start changing what they’re allowed to do. Nurse practitioners will be able to provider services similar to what doctors do now, he predicts, while PAs may take on more of a nurse practitioner role.
Cuts won’t be the only thing wrought by healthcare reform: the law contains additional expenses for employers, too.
“[Providing health insurance] for employees will affect [senior living providers’] bottom line,” Bernstein said, adding that NASDAQ and Wall Street will feel the pain as employers’ costs go up.
Medicaid expansion is “huge” issue, says Donna Denison, vice president, Cassidy & Associates.
“How will healthcare reform implementation work when some states are expanding their Medicaid program, while others aren’t?” she said. “We’re a long ways from [knowing]. In the meantime, employers will have to figure that out: whether they’ll cover employees, or whether employees will opt-out.”
Even though Senator Max Baucus (D-Mont.), one of the Affordable Care Act’s authors and main supporters, predicts the implementation of the reform law will be a “huge train wreck” if it’s not set up and administered properly, it’s extremely unlikely the law will be repealed, Denison said.
“It’s a scary time,” said Bernstein of all of the Affordable Care Act’s unknowns for senior living providers. “We keep hoping for the eureka moment.”
Written by Alyssa Gerace