Healthcare Reform Law: Issues Affecting Hospitals and Health Systems

The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (the Healthcare Reform Law), includes substantial changes that will affect how hospitals of all types are reimbursed under the Medicare program. These changes reflect a number of trends, such as (a) movement toward linking provider payment to quality, (b) encouraging growth in the primary care workforce, and (c) movement away from indirect payment mechanisms for treating the indigent through disproportionate share hospital payments, in light of the expected decrease in the numbers of uninsured. This LawFlash briefly summarizes these major payment changes and how they may influence hospitals.

Very few of the provisions in the Healthcare Reform Law will be self-implementing; many of the details will be fleshed out in further guidance and rulemaking. Moreover, the Centers for Medicare & Medicaid Services (CMS) will have a tremendous amount of discretion in developing the implementing rules. Therefore, continued monitoring of the implementation of these provisions by hospitals and health systems is warranted, and proactive involvement in the rulemaking process is recommended for most institutions in order to be as prepared as possible for the coming changes enacted by the Healthcare Reform Law.

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