Hospital highlights - Health reform items now in effect

New Year’s Day marked another major milestone along the path to full implementation of the Affordable Care Act. This act, commonly known as Health Reform, is the federal legislation that effects all Americans. The complete change is scheduled to take until 2014 but important provisions began reshaping healthcare last year.

Below are some of the items that became effective January 1, 2011. I am providing this information to keep you abreast of the changes. I trust it will be useful to all readers regardless of political view point.

- Preventive care for seniors: Medicare recipients get some free preventive services, including annual checkups and certain screenings such as colonoscopies and mammograms. No more cost sharing for those items. Seniors are also covered to receive personalized prevention plans. The intent is to improve seniors’ health while keeping costs lower by prevention and early detection of disease.

- Closing the Medicare drug coverage doughnut hole: Pharmaceutical companies are required to provide a 50 percent discount on brand-name prescription drugs to Medicare recipients who fall into the coverage gap in the Part D drug plans. In addition, federal subsidies are being phased in for generic prescriptions in the Part D coverage gap. This gap is to be closed within the next 10 years.

- Incentives in Medicaid for prevention of chronic disease: The plan includes $25 million for state grants aimed at helping Medicaid (low-income) recipients address chronic problems, such as tobacco use, weight control, and various health conditions.

- Community Based Care Transitions Program: The goal is to improve care for seniors after they leave the hospital, thereby reducing hospital readmissions. The program will coordinate care and connect patients to services in their communities.

- Changes to Medicare Advantage payments. Some Medicare recipients receive their benefits through private insurance companies, a system called Medicare Advantage. Experts say this has resulted in overpayments to insurers and increased premiums for all Medicare beneficiaries. Medicare Advantage payments will be set at increasingly smaller percentages of the traditional Medicare fee-for-service rates, eventually eliminating the discrepancy. The new law also sets 2011 payments at 2010 levels, and it bars Medicare Advantage plans from raising cost-sharing requirements for certain Medicare-covered benefits higher than what is required under traditional Medicare.

- The medical loss ratio provision: Health-insurance companies are required to spend 80 to 85 percent of premium dollars on medical care and quality improvements for patients, rather than on administrative costs. Those that fall short will be required to provide a rebate to their customers beginning in 2012.

- Medicare bonus for some physicians: Primary-care physicians and general surgeons will receive a 10 percent bonus payment for treating Medicare patients. This is to encourage physicians to practice in these specialties versus ones with much higher costs. It is also to encourage these physicians to accept Medicare patients; in some parts of the country some physicians do not see Medicare patients because of low reimbursement.

- New rule for tax-free savings accounts: Over-the-counter drugs not prescribed by a doctor are no longer eligible for reimbursement from flexible spending accounts.

- Center for Medicare and Medicaid Innovation: This is a new Medicare department that aims to test new ways of delivering care to patients that reduce costs but maintain or improve quality.

David E. Womack, CEO

Whitman Hospital & Medical Center