Two Ways The Federal Government Is Lagging Behind In A Post-ACA World

Since it was enacted into law nearly five years ago, the Affordable Care Act (ACA) – for better or for worse – likely has forever changed our nation’s approach to health care coverage, access, financing, and delivery.  Yet, despite the profound impact the ACA has had on the nation’s health care system, there are numerous ways the federal government continues to operate in a pre-ACA mindset – to the detriment of patients/consumers and health professionals.

The Federal Trade Commission (FTC) and the Centers for Medicare and Medicaid Services (CMS) offer two leading examples of federal agencies responsible for regulating aspects of the post-ACA health care industry but which continue to maintain an antediluvian regulatory framework by which they do much of their work.

The FTC “is a bipartisan federal agency with a unique dual mission to protect consumers and promote competition.” It maintains responsibility for reviewing mergers between health/hospital systems and ensuring such combinations do not result in less choice/competition or an increase in price for consumers.

As envisioned, encouraged, and otherwise incentivized by the ACA, an increasing number of health and hospital systems are integrating, joining forces through formal collaborative agreements, and otherwise partnering to create economies of scale, provide the patients and communities they serve with holistic care, and undertake strategic efforts to engage in population health management.  These endeavors increasingly are bumping up against the FTC’s long-standing presumption – not yet updated for a post-ACA world – that an increase in market share will create harm for consumers in the form of increased prices for inpatient hospital care and services.

In thinking about the way the FTC should view the evolving health care industry, it is critical to acknowledge that in addition to expanding access to affordable health insurance, a principal goal of the ACA is to move the nation away from “volume” based health care delivery and payment to one of “value.”  The ACA seeks to promote efforts to achieve the “triple aim” in health care – improved outcomes, enhanced system access and efficiencies, and decreased costs.

The “triple aim” focuses on “patient-centered,” consumer-friendly care and requires a system focused on value and outcomes; such a system inherently creates competition between providers – pushing individual providers and health systems to up their game and do better for their patients.  One way in which the ACA seeks to advance the nation toward the triple aim is through the creation of “accountable care organizations” (ACOs) and a transition to “population health.”

Yet, the FTC’s enforcement policy remains grounded in a “traditional” economic perspective, premised in turn on the conventional “fee-for-service” (volume-based) payment system.  FTC regulators presume that providers increase their profitability by maximizing the prices they charge.  However, in an evolved pay-for-value marketplace, such an assumption is erroneous.  With population health and accountable care, providers are responsible for the total cost of care and all of the outcomes for patients (not just one specialty or care in one particular care setting).

According to my colleague Rob McCann “reducing inpatient utilization through improved health status, better management of chronic conditions, and use of protocols that reduce the duration of hospital stays is a central objective of population health management … if providers combine in the pursuit of accountable care, it is illogical to presume their primary motivation is to raise prices, as a mature pay-for-value market is more like a zero-sum game.”

As such, the FTC should update its worldview and acknowledge that the ACA has spurred innovation in health care delivery and that such new approaches require different resources, different organizational structures, and different regulatory yardsticks to assess their impact on patients/consumers.  This much-needed recognition should be incorporated into the filter the FTC is using to evaluate proposed health care mergers; otherwise, consumer-favorable combinations may fall victim to an outdated assessment tool; it is like trying to see the road ahead by looking in the rear-view mirror.

Like the FTC, CMS also has policy areas where it needs to recognize the direct and indirect impact of the ACA on the boots-on-the-ground delivery of health care.  With 10,000 people a day turning 65, the incidence and prevalence of chronic disease on the rise, and a current and anticipated national, regional, and local shortage of primary care and specialty physicians, Members of Congress from both sides of the Capitol and both sides of the aisle tout registered nurses, advanced practice registered nurses (APRNs), physician assistants, and other health professionals as integral to ensuring access to – and coordination and management of – health care.  Further, as ACOs and other population health initiatives have success in keeping people out of the hospital, the demand for home care is expected to grow.

APRNs long have had the authority to certify Medicare beneficiaries for skilled nursing facility care.  Yet, APRNs such as nurse practitioners and clinical nurse specialists are not considered to be eligible health care professionals who can certify Medicare patients’ eligibility for home health care services, creating a barrier between patients and the care they need and adding time, expense, and inefficiencies to the health care system.

According to a recent study, making this change for the Medicare program would save an estimated $7.1 million in 2015 and up to a ten-year savings of $252.6 million, while also reducing beneficiary admissions to – and lengths of stay in – health care institutional settings.  While Congress would have to make this change through statute (e.g., enactment of the Home Health Care Planning Improvement Act under the ACA, CMS has the authority to waive this requirement for its Pioneer ACOs and Medicare Shared Savings Program (MSSP) participants to test the patient and economic impact of the change; yet, to-date, the agency has not moved to do so.

With all eyes on the pending ACA-related Supreme Court cases, the FTC and CMS continue to proceed along regulatory trajectories that do not reflect the realities of today’s – and tomorrow’s – health care system – economic, systematic, and demographic realities that will endure irrespective of the high court’s rulings.



Ilisa Halpern Paul is President of the District Policy Group, a boutique health care policy and lobbying practice within Drinker Biddle & Reath. The views expressed are the author’s own and are not an endorsement of the legislation mentioned.

Morning Consult