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Tue April 24, 2012
Shots - Health Blog

If The Health Care Overhaul Goes Down, Could Medicare Follow?

Originally published on Tue April 24, 2012 4:18 am

A growing number of health experts are warning of potential collateral damage if the Supreme Court strikes down the entire 2010 Affordable Care Act: potential chaos in the Medicare program.

"The Affordable Care Act has become part and parcel of the Medicare system, encouraging providers to deliver better, more integrated, better coordinated care, at lower cost," says Judy Feder, a public policy professor at Georgetown University and former Clinton administration health official. "To all of a sudden eliminate that would be highly disruptive."

Sara Rosenbaum, a professor of health law and policy at George Washington University, puts it a bit more bluntly: "We could find ourselves at kind of a grand stopping point for the entire health care system."

And it's not just Democrats warning of potential problems. Gail Wilensky, who ran Medicare and Medicaid under President George H.W. Bush, says she doesn't think it's likely that the court will strike down the entire health law. But if it does, she says, "it seems like it takes everything with it, including those aspects that are only very peripherally related to the expansion of coverage."

So why are experts so worried?

One reason is that the law changed the payment rates for just about every type of health care professional who treats Medicare patients. Every time Medicare sets a payment rate, it needs to cite a legal authority. And for the past two years, says Rosenbaum, that legal authority has been the Affordable Care Act.

So if the law is found unconstitutional, she says, every one of those changes "doesn't exist anymore because the law doesn't exist."

And the result? "You have agencies sitting on two years of policies that are up in smoke," she says. "Hospitals might not get paid. Nursing homes might not get paid. Doctors might not get paid. Changes in coverage that have begun to take effect for the elderly, closing the doughnut hole might not happen. We don't know."

And many of those facilities serve not just Medicare patients but the rest of the population, too. Hence, the spillover could affect the health care system as a whole.

That's what has the nation's community of health care providers watching nervously to see what the court does. Many would speak only on background or wouldn't address the subject at all.

One of the few groups willing to address the subject was the American Medical Association. In a statement, the AMA's president-elect, Jeremy Lazarus, says, "With the countless hours of work already done to implement this new law, it is hard to imagine the full impact of it disappearing."

At best, the situation would be legally murky, says Dan Mendelson. He's CEO of the health consulting group Avalere and oversaw health programs for the Clinton administration's Office of Management and Budget.

"In a lot of ways, it's a political never-never land," he says. "We have no idea really what this would look like because we don't have a precedent."

Actually, says Wilensky, there is a bit of a precedent: For the past few years, Congress' inability to fix a glitch in the formula for paying doctors for Medicare has more than once resulted in brief lapses in funding authority.

"So we've had these kinds of smaller-version 'what happens if Congress does or doesn't do something.' This would be much bigger. And it would be extremely disruptive," she says.

Rosenbaum says there could be an even bigger problem: Medicare might be looking at hundreds, if not thousands, of policies that are suddenly null and void. She says it's not at all clear that the agency has the authority to go back to the policies that were in effect before the law was passed.

"This is a conversation that's happening between the Supreme Court and Congress," she says. Medicare officials would "have to sit there and wait to see what Congress wants to do."

What makes it an even bigger potential mess, says Mendelson, is that the health law has fundamentally changed almost every aspect of the way the Medicare program now does business. And undoing that would be almost unimaginably difficult.

"I think it's more akin to Alice in Wonderland," he said. "That we're going down the rabbit hole and nobody really knows what it's going to look like inside."

But in the next few months, they may find out.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

RENEE MONTAGNE, HOST:

The outlook on Medicare hasn't changed much in the past year, according to the annual forecast released yesterday by the trustees who oversee the federal health program, which doesn't mean that Medicare is in the clear. There are growing concerns that Medicare could suffer if the Supreme Court invalidates the Obama administration's health care law.

As NPR's Julie Rovner reports, those concerns are coming from voices on both sides of the health care debate.

JULIE ROVNER, BYLINE: During oral arguments before the court last month, Deputy Solicitor General Edwin Kneedler tried to explain to the justices how striking down the Medicare provisions of the Affordable Care Act could create a mess for Medicare.

(SOUNDBITE OF SPEECH)

DEPUTY SOLICITOR GENERAL EDWIN KNEEDLER: Congress made many changes to Medicare rates that have gone into effect for the Congress - for the courts to have to unwind millions of Medicare reimbursement rates. Medicare has - has covered 32 million - preventive care visits by patients as a result of this act.

ROVNER: The justices didn't seem to pay much attention to Kneedler's plea about what it might mean to have to undo what's already been done. But outside the court, health policy experts are just now realizing how dramatic the impact on Medicare could really be. Sara Rosenbaum is a professor of health law and policy at the George Washington University.

SARA ROSENBAUM: We could find ourselves as sort of a grand stopping point for the entire health care system.

ROVNER: That's because the law, as Needler pointed out, changed the payment rights for just about every type of health care professional who treats Medicare patients. For example, just this year, there's a half-billion-dollar cut in payments to home health care providers. But all of those payment rates are based on the law. So Rosenbaum says if the law is declared unconstitutional...

ROSENBAUM: You have agencies sitting on two years of policies that are now up in smoke. Hospitals might not get paid. Nursing homes might not get paid. Doctors might not get paid. Changes in coverage that have begun to take effect for the elderly closing the doughnut hole might not happen. We just don't know. The list goes on and on.

ROVNER: And many of those facilities serve not just Medicare patients, but the rest of the population, too. Hence, the spillover could affect the health care system as a whole. At best, the situation would be legally murky, says Dan Mendelson. He's a health care consultant and former Clinton administration health official.

DAN MENDELSON: In a lot of ways, it's a political never-never land. We have no idea, really, what this would look like because we don't have a precedent.

ROVNER: Actually, there's a very small precedent, says Gail Wilensky. She ran Medicare and Medicaid for the first President Bush. Wilensky says for the past few years, Congress's inability to fix a glitch in the formula for paying doctors for Medicare has more than once resulted in brief lapses in funding authority.

GAIL WILENSKY: We've had these kinds of smaller version of what-happens-if-Congress-does-or-doesn't-do-something. This would be much bigger, and it would be extremely disruptive.

ROVNER: Wilensky says she thinks it's unlikely a majority of justices will vote to strike down the entire law. More likely, they'd limit themselves to the mandate to have insurance. But she acknowledges that if the whole law goes down, Medicare will be directly in the line of fire.

WILENSKY: It seems like it takes every with it, including those aspects that are only very peripherally related to the expansion of coverage.

ROVNER: And what about the new benefits for patients, like savings on prescription drugs and preventive care? Consultant Dan Mendelson says seniors probably won't have to give money back for things they've already gotten.

MENDELSON: Well, you can't take a benefit away from a beneficiary, or at least it would be very difficult to do that.

ROVNER: But those benefits would certainly end if the law is struck down. And an even bigger problem, says Law Professor Sara Rosenbaum, is that Medicare officials not only wouldn't have the legal authority to proceed with what they've been doing. They also wouldn't have the legal authority to go back to the pre-2010 policies. They'd have to wait for Congress to act.

ROSENBAUM: They have to sort of sit there and wait to see what Congress wants to do.

ROVNER: Mendelson says the biggest problem is that the health law has fundamentally changed almost every aspect of the way the Medicare program now does business. And undoing that would be almost unimaginably difficult.

MENDELSON: I think it's more akin to "Alice in Wonderland," that we're going down the rabbit hole and nobody really knows what it's going to look like inside.

ROVNER: But come later this spring, they may find out. Julie Rovner, NPR News, Washington. Transcript provided by NPR, Copyright NPR.