The Affordable Care Act (ACA) has brought the most sweeping changes to the healthcare delivery and payment systems in the United States since at least the Medicare Act of 1965, and probably even before that. Through its attempt to expand the rolls of the insured, it simultaneously, and perhaps in many instances unavoidably, created a sudden and drastic collection of changes that affect providers, patients and payers alike. Though these changes ultimately may result in increases to access to care, quality of care and cost savings, they also will likely bring years, if not decades, of litigation, as the marketplace and its participants realign under the new ACA paradigm.
We believe that most of the litigation, at least in the short term, will be disputes that stem from the new expectations and demands on patients, providers and payers. The current transformation in healthcare is not an easy situation for any of the stakeholders.
From a provider perspective, the operative question seems to be, “How do we adapt our financial model to provide quality care and still pay the bills?” Payers, in most instances health plans, find themselves squeezed by new regulatory requirements that expand coverage—including into areas that were never covered in the past—with the total elimination of the ability to medically underwrite their prospective membership. Patients, for their part, want coverage, especially if they haven’t had it in the past. But they also want access, value for their money and the ability to choose their doctors. In addition, they expect a meaningful care experience that they believe delivers on the promises the Administration made or, often, their own conception of what health insurance should provide and how it should function.
Many ACA Lawsuits Will Focus on Access to Care
Lawsuits almost always are born of nasty surprises, failed expectations, or some combination of the two. At least initially, lawsuits filed involving the ACA will be no different. Access to care will be the focus of many of them. It’s one thing to buy health insurance on an exchange but having insurance is meaningless unless there are providers who will accept it, who are geographically convenient, and who have the needed facilities and skills to treat the relevant medical conditions.
Already, the media has reported that newly insured patients are having trouble finding doctors in some areas and are receiving faulty information on which doctors are part of their new networks. In some instances, they also say that they are having some difficulty getting accurate information from their new plans.
We have heard reports of consumers purchasing insurance on the exchanges but finding that provider directories are either not available to them or are inaccurate. In other instances, newly insured patients are being introduced for the first time to newly formed “narrow networks.” Narrow networks are the result of payers attempting to keep costs down and, therefore, premiums affordable, by limiting the medical groups, hospitals and other providers who are “participating” or who are included as “preferred” providers. Further complicating the landscape, many of the newly insured never had private health coverage before and, therefore, are being introduced to an entirely new system--a system that itself is in the throes of change. Overall, again, the touchstone is access to care.
Finances Are in Flux, and Predictability Has Been Erased
The finances are now in flux as well. The traditional healthcare marketplace can be viewed as a triangular market, with economic interdependency between patients, payers and providers. Whatever you thought of the private healthcare market in the United States before implementation of the ACA, the market had achieved the maturity that enabled financial modeling to be undertaken with at least a reasonable degree of predictability. That predictability has been essentially erased by the dramatic changes to the private healthcare system.
Increasing the numbers of the insured is a good thing, but only if people can afford the coverage and only if they believe it meets their needs. Coverage isn’t worth anything if the insured cannot find willing providers to treat them, under their policies, in a timely manner. For that matter, insurance can’t be affordable if health plans are regulated into penury. And so on.
Moreover, the complexity of the new financial arrangements and combinations, such as Accountable Care Organizations, will create their own financial and clinical tugs-of-war among market participants, most likely over issues such as cost sharing, clinical and financial integration requirements, distribution of shared savings, validity of clinical practice guidelines, network adequacy, risk adjustment payment, and medical loss ratios. One could go on and on with the list of potential issues. Any market disruption causes financial tremors, and financial difficulties are lawsuit fertilizer, so to speak. Where there is financial uncertainty, the likelihood of lawsuits tends to grow.
Filling in the Blanks on What the ACA Requires
Finally, of course, there is the all-important question of what services the ACA requires. In some cases, there is much clarity that remains to be filled in around coverage. For example, “habilitative services” must be covered. Habilitative services are defined as medically necessary healthcare services and devices that assist individuals in partially or fully acquiring or improving skills and functioning and that are necessary to address a health condition, to the maximum extent practical. These services address the skills and abilities needed for individuals to function and interact with their environments.
Okay, but what does that really require payers to cover? One commentator suggested that, for juvenile diabetes patients, a stay in a summer diabetes-management camp might be required to be covered. Similarly, the ACA’s mental health parity requirement (and similar state laws) have already proven fertile producers of litigation—and provide another example of an area that may have traditionally been viewed as part of the governmental social services obligation but now is seen as an essential and required health insurance benefit. The upshot is that dispute is inevitable, until these (and many other) covered service requirements are fully defined.
These are exciting times to be in healthcare in the United States. Of course, at least in the short term, a lot of people may be forced, at least occasionally, to recall the old curse, “May you live in interesting times.”