A Primer on the PPACA and Its Impact on Radiology

1. A Primer on the PPACA and Its Impact on Radiology Wes Angel, MD University of Tennessee Health Science Center, Methodist Program

2. Outline • Background of the PPACA • PPACA Provisions • PPACA’s Potential Impact to Radiology • Summary

3. Background: Reasons for PPACA • Rising healthcare expenditure1 • Large percentage of uninsured • Lack of access to healthcare for insured and uninsured alike • Rising drug costs Source: Kaiser Family Foundation http://facts.kff.org/chart.aspx?ch=202

4. Background: PPACA • Patient Protection and Affordable Care Act • AKA “Affordable Care Act” • Signed into law on March 23, 2010 • Number of pages2: 907 • Number of major provisions3: 92 Source: http://www.libertyhealthconsultants.com/surveyintro.html

5. PPACA: Major Tasks4 • Create consumer rights and protections • Guaranteed issue • Patient’s Bills of Rights • Expand insurance • Creation of insurance exchanges • Co-op insurance • Expand Medicaid • Start health insurance exchanges • Establish coverage requirements for small business

6. PPACA: Financial Structure to Increase Revenue3 • Start excise taxes on: • Health coverage • Medical devices • Indoor tanning • Increases Medicare tax base • Imposes annual fees on: • Branded drugs • Health insurance providers • Changes tax structure on flexible savings accounts

7. PPACA: Small Sample of Currently Active Provisions3, 14 • Insurance • Provides adult dependent coverage to Age 26 • Creates state option for Medicaid coverage to childless adults with income levels up to 133% of the federal poverty level (Section 1902) • Creation of consumer website to compare coverage options • Prohibits lifetime limits of insurance coverage • Cost reduction • Prohibits federal funding to states for certain hospital acquired infections and other provider preventable conditions • Aims to create a Medicare Independent Payment Advisory Board (IPAB) • Primary care • Provides 10% bonus payment for primary care services • Preventative medicine and public health • Allocates $5 Billion for 2010-2014 • Allocates $2 Billion Dollars each fiscal year after 2014

8. PPACA: Small Sample of Currently Active Provisions3, 14 • Revenue generation • Creates 10% excise tax on indoor tanning services • Graduate medical education • Increases GME positions • Funds ambulatory teaching health centers • Expansion of Drug Discount Program • Changes to Medicare provider rates

9. PPACA: Future Provisions 20122,3 • Creation of ACO’s (Accountable Care Organizations) for Medicare • Group of healthcare providers • Various reimbursement models: capitation and fee-for-service • Ties reimbursement to quality of care • Annual pharmaceutical fees • Medicare value based purchasing • Reduced Medicare payments for hospital readmissions • New fraud screening efforts

10. PPACA: Future Provisions 20132,3 • Closure of Medicare drug coverage gap • Increased Medicaid payments for primary care to match Medicare rates for 2013 and 2014 • Medicare tax increase • Increased wages tax rate by 0.9% • 3.8% tax on unearned high income • Medicare bundled payment pilot program • 2.3% excise tax on medical devices

11. PPACA: Sample of Future Provisions 2014-20162,3 • 2014 • Expand Medicaid base • Individual requirement to have insurance • Guaranteed issue • Health insurance company fees • No annual limits on insurance coverage • Reduced reimbursement for certain Medicare hospital acquired infections • 2018 • Tax on high cost insurance

12. PPACA’s Potential Impact to Radiology • Potential expansion of referral base • Establishment of ACO’s in Medicare • Creates potential for various roles of radiologists within ACO’s8,10 • Reimbursements • Increase in utilization rate of equipment from 50 to 90%5 • Increase in multiple procedure reduction rule from 25 to 50%5 • Decrease in professional component of 2-3%6 • Establishment of Center for Medicare and Medicaid Innovation • Potential impact on ordering and reimbursement of diagnostic imaging

13. PPACA’s Potential Impact to Radiology (continued) • New Self Disclosure Requirements9 • Requires physician to provide written notice to patients that they may obtain services such as CT, MRI, and PET elsewhere if physician has a financial interest (Section 6003) • Requires establishment of self referral disclosure protocol (Section 6409) • False claims9 • Allows federal government to prosecute anti-kickback violations under the False Claims Act (Section 6402) • Mandatory requirement to return Medicare and Medicaid overpayments within 60 days (Section 6402) • Maximum period for submission of Medicare claims to less than 12 months (Section 6404)

14. Summary • PPACA will continue to evolve with continuous changes to the law, its provisions, and its implementation • Implements multiple changes to Medicare and Medicaid • Provides near universal coverage by various means • Creates uncertain impact to radiology and the medical field as a whole • Interested in learning more?

15. References/Resources • Kaiser Family Foundation www.kff.org, Last accessed December 15, 2011. • Patient Protection and Affordable Care Act, http://docs.house.gov/energycommerce/ppacacon.pdf, Last accessed October 10, 2011. • Implementation Timeline, http://healthreform.kff.org/Timeline.aspx, Last accessed October 10, 2011. • U.S. Department of Health and Human Resources, http://www.healthcare.gov/, Last Accessed December 12, 2011. • American College of Radiology, Impact to Radiology as an Result of PPACA, http://www.acr.org/Hidden/Economics/FeaturedCategories/mps/mpfs/2011-Medicare-Physician-Fee-Schedule-FR/Impact-To-Radiology-As-A-Result-of-PPACA.aspx, Last accessed on October 10, 2011. • American College of Radiology, Aggregate Estimated Impact of Equipment Usage Assumption Changes for Advanced Diagnostic Imaging Services (Diagnostic CT and MR) on PE RVUs Using 2008 Constant Volume, http://www.acr.org/Hidden/Economics/FeaturedCategories/mps/mpfs/2011-Medicare-Physician-Fee-Schedule-FR/Impact-To-Radiology-As-A-Result-of-PPACA/Usage-Assumption-Results-DxCTMR.aspx, Last accessed on October 10, 2011 • Allen, B., Donovan, W. D., McGinty, G., Barr, R. M., Silva, E., Duszak, R., Kim, A. J., et al. (2011). Professional component payment reductions for diagnostic imaging examinations when more than one service is rendered by the same provider in the same session: an analysis of relevant payment policy. Journal of the American College of Radiology : JACR, 8(9), 610-6. doi:10.1016/j.jacr.2011.06.012

16. References/Resources (continued) • Allen, B., Levin, D. C., Brant-Zawadzki, M., Lexa, F. J., & Duszak, R. (2011). ACR white paper: Strategies for radiologists in the era of health care reform and accountable care organizations: a report from the ACR Future Trends Committee. Journal of the American College of Radiology : JACR, 8(5), 309-17. Elsevier Inc. doi:10.1016/j.jacr.2011.02.011 • Bloom, G. E., & Smith, G. R. (2011). Key provisions of the Patient Protection and Affordable Care Act. Journal of the American College of Radiology : JACR, 8(1), 69-70. doi:10.1016/j.jacr.2010.10.001 • Breslau, J., & Lexa, F. J. (2011). A radiologist’s primer on accountable care organizations. Journal of the American College of Radiology : JACR, 8(3), 164-8. Elsevier Inc. doi:10.1016/j.jacr.2010.08.005 • Greaney, T. L. (2011). Accountable care organizations--the fork in the road. The New England journal of medicine, 364(1), e1. doi:10.1056/NEJMp1013404 • Pentecost, M. J. (2009). Health care reform: what Americans want. Journal of the American College of Radiology : JACR, 6(12), 831. Elsevier Inc. doi:10.1016/j.jacr.2009.09.010 • Pentecost, M. J. (2011). Health care reform: the first anniversary. Journal of the American College of Radiology : JACR, 8(4), 221. Elsevier Inc. doi:10.1016/j.jacr.2011.01.002 • Consumers Union, The Affordable Care Act: The First Year, http://www.consumerreports.org/health/resources/pdf/ncqa/health-reform.pdf, last accessed on December 12, 2011.