News Corner: Reflections on the Advancement of the American Health Care Act (AHCA) and the Potential Impact on Hospitals

By Ken Perez, Vice President of Healthcare Policy at Omnicell

After two tumultuous months since the Republicans’ first Affordable Care Act (ACA) repeal and replacement bill was introduced, the American Health Care Act (AHCA) is working its way through Congress, with passage by the House after numerous amendments accomplished, but surely critical consideration and significant revisions in the Senate forthcoming. The combination of the AHCA’s policy reforms and the uncertainties of the legislative process have left many in healthcare wondering what this means for our industry.

Here is what we know so far:

Legislative History

The AHCA was originally introduced in the House on March 20, 2017, followed by submission of 36 amendments, of which eight were accepted. The last four amendments were the most material—including the Upton Amendment that increases the Patient and State Stability Fund by $8 billion from 2018 to 2023—and made the bill more palatable to moderate Republicans. It is important to note that the AHCA includes about $140 billion in funding—not just $8 billion—to help people with pre-existing conditions.

Hospitals’ Point of View

While hospitals remain concerned about what will happen with Medicaid and are unhappy that the bill did not repeal the ACA reimbursement cuts (negative market basket revisions and productivity adjustments to the Inpatient Prospective Payment System), they should be pleased with the last four amendments to the bill, as they generally stabilize health insurance markets, increase coverage, lower premiums, cover out-of-pocket costs, and increase protections for people with pre-existing conditions—all of which should work to help minimize uncompensated care for hospitals.

Next Steps

The bill now goes to the Senate, which will be a bigger challenge for the Republicans. With 52 seats, they have a much narrower majority than they have in the House. With the fragmentation of the GOP—a tug of war between conservatives and moderates, with both groups wanting to fashion the bill to their liking—it is possible that the Republicans could lose some votes from their conference.

Some members of the Senate have already indicated they plan to significantly amend the House-approved bill. If the Senate passes such an amended bill, it will go to conference. This means that a council composed of senior members of the standing committees of each house of Congress that originally considered the legislation will attempt to draft a compromise bill that both houses can accept.

Evaluating Progress

The revised AHCA is a step in the right direction from a hospital finances perspective, relative to the initial bill that was proposed. However, it remains to be seen whether all the states can do a better job of managing their Medicaid populations under the AHCA than with the partial expansion under the ACA, and the broader coverage-versus-access debate remains unresolved.

As the Senate considers the latest proposal–-and makes modifications—check back here for further thoughts on what hospitals need to know and the impact on their organizations.

Related Articles:

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Healthcare Finance News

 

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