Moving Into 2013: Major Issues Facing Long-Term Care Providers

February 19, 2013

Richard G. Stefanacci, DO, MGH, MBA, AGSF, CMD

Series Editor: Barney S. Spivack, MD, FACP, AGSF, CMD


Stefanacci RG. Moving into 2013: major issues facing long-term care providers. Annals of Long-Term Care: Clinical Care and Aging. 2013;21(2):16-19.

While 2012 was an active year of change for long-term care (LTC) providers, 2013 is expected to be even more turbulent as we get closer to the implementation of major provisions of the Affordable Care Act (ACA), which are scheduled to occur in 2014. As a result, 2013 will be focused on four areas: insurance expansion preparation, reimbursement changes, expansion of accountable outcomes, and increased use of electronic health records (EHRs). To avoid pre-election controversy, regulations in these areas, which were previously released at a trickle, have begun to be released at a record pace. As a result, we are now fully engaged in moving ahead with changes to our healthcare environment.

Because 2013 will be building on 2012 events, it’s important to understand what has already happened to fully appreciate where the healthcare environment is heading. This article provides a review of these events and outlines four major impact areas for LTC providers. 

2012 Major Events 

There were three major healthcare-impacting events in 2012: (1) a major US Supreme Court ruling on the ACA; (2) the Presidential election; and (3) a continued move away from uncoordinated, acute-care–focused, fee-for-service medicine to coordinated care models. The most significant of these events occurred on June 28, 2012, when the Supreme Court ruled that the mandate requiring almost all American citizens to have health insurance starting in 2014 was constitutional.1 

Although the Supreme Court did uphold the health insurance mandate, they did force one major change in the implementation of the ACA by stating that the Medicaid expansion would now be a decision for each individual state, rather than a federal mandate. This was the result of the Supreme Court deciding that a state’s total federal dollars could not be tied to a state expanding Medicaid to 133%. The Supreme Court ruled that this was an inappropriate application of federal powers and it severed the Medicaid expansion mandate as a condition of receiving total Medicaid funding. Now states are allowed to opt out of the Medicaid expansion, which could mean that many individuals with lower incomes may not have the expanded healthcare coverage intended for them. As a result, many states are now indicating that they will not expand their Medicaid program as planned by the federal government for 2014.

Also in 2012, the Center for Medicare & Medicaid Innovation continued to expand the number and magnitude of its pilot programs.2 These pilots included accountable care organizations (ACOs), patient-centered medical homes, and hospital readmission reduction programs. An Innovation Center was established under ACA for the purpose of testing, evaluating, and spreading best solutions from innovators around the country to achieve the following objectives:

• Patients always receive the right care, at the right time, and in the right setting.
• Constant improvement of the care delivery system (continuous innovation leads to higher quality care at a lower cost).
• Care is coordinated so that the transitions and communication between healthcare providers and patients are seamless.
• Providers are supported in providing safe, coordinated, seamless care.
• Prevention strategies to keep patients healthy are given as much priority as treating illness.
• Healthcare resources are used efficiently and effectively.
• Ensure rapid spread of the best clinical and delivery system practices.
• A full range of tools—payment, communication, health information technology, training, quality measurement, regulation, and more—are brought together so the system works better for beneficiaries, families, clinicians, and other healthcare providers.

With the help of the Innovation Center, the Centers for Medicare & Medicaid Services (CMS) is working to transform from a claims payer in a fragmented care system into a partner working to achieve better value for our healthcare dollars. The Innovation Center is working to create a healthcare system that provides seamless, coordinated care for beneficiaries, and these activities will continue to expand in 2013. Given that these models are primarily focused on Medicare, its implication for LTC providers will be significant. While many of these emerging models will be ACOs, the majority of them will more likely live just outside of the strict Medicare criteria of ACOs and instead be organized as clinically integrated organizations (CIOs). How this terminology is used may be confusing because ACOs are a very specific Medicare program and many integrated healthcare systems are using the term ACO to describe their non-Medicare programs as well. Instead, a more accurate term is CIOs, which describe entities that are clinically integrated providers typically sharing in risk for some accountable outcomes. The bottom line is that an ACO may not be a real ACO, but rather a CIO. 

One problem with true ACOs is that it requires that a physician be tied to only one ACO. This is especially problematic for LTC physicians given that nursing homes typically receive referrals from multiple ACOs. This could significantly affect the nursing home’s ability to participate in multiple ACOs, restrict the referral patterns of the existing physicians, put pressure on the administration and medical director to find qualified LTC practitioners from each ACO, and result in awkward coverage arrangements, to name only a few difficulties.3

While the healthcare system in 2012 saw continued implementation of the ACA, along with adjustments from the Supreme Court ruling, it also saw the failed initiation of one component of the ACA: the Community Living Assistance Services and Supports Act (CLASS Act).4 This act was to be a national voluntary insurance program for purchasing community living services and supports. The CLASS Act was designed to expand options for people who become functionally disabled and require long-term care services and support. Kathleen Sebelius, the Health and Human Services (HHS) secretary, was expected to define the CLASS benefit by October 2012, with enrollment to begin thereafter; however, the House voted to repeal the CLASS Act in part because Sebelius said she was unable to find a way to make the program financially solvent. As a result, this component of the ACA will not move forward as a program. Although the CLASS Act is not moving forward, there continues to be an expansion of home- and community-based waiver programs that can provide LTC services to Medicaid beneficiaries outside of the nursing home.

In 2012, the application of one specific part of the ACA—the coverage for preventive services—also caused confusion.5 The ACA requires private health insurers to cover recommended preventive services, such as colonoscopies, without any patient cost-sharing. The confusion arises when preventive services turn into treatment. Under ACA, many preventive services are now covered 100%, rather than at the historical 80% for Part B services, which had forced Medicare beneficiaries to pay the uncovered 20%. However, there has been confusion when older adults receive a bill for that 20% for what had been considered a preventive service. This is especially true for colonoscopies that begin as a preventive screening but turn into a treatment when a polypectomy is performed during the procedure. This procedure can turn a screening colonoscopy into a treatment, resulting in a co-payment for patients. It is important that Medicare beneficiaries understand the potential for out-of-pocket payments when undergoing preventive services to avoid surprises. 


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