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PPACA's Advance Poses Challenges for Rural Healthcare

 |  By John Commins  
   July 11, 2012

The U.S. Supreme Court's ruling last month upholding the Patient Protection and Affordable Care Act resolved constitutional questions about the sweeping law. Now states are left with the challenge of implementing it.

And reports show a huge variance in readiness from state to state, particularly as it relates to health insurance exchanges.

 


"There are a number of states, about one dozen, that have made significant progress on their decision-making and what they are going to do about exchanges," says Sandi Hunt, a principal at PriceWaterhouseCoopers. "They have passed legislation. They have begun the process of planning for the exchange. But even those that are taking very active approach have a huge amount of work to do to be ready to go by 2014 and there are large numbers of states that have to make the decision to either accept the federal exchange or develop the state exchange."

 

Hunt says the biggest challenge for most states is deciding "how active they want to be in the health insurance market and if they want to be active how to do that in a way that makes the whole insurance market work," she says. "There are some important decisions to make in terms of how active the states want to be, if they just want to allow the health plans to offer whatever plans they want, or if they want to guide the market to more delivery system reform."

Hunt says the core issues that every state has to think through when devising their exchanges include questions on eligibility and insurance market reforms. "But the decisions each state makes are going to reflect their own circumstances. They all have to think about the same questions, but how they answer them is unique to their circumstances," she says. 

For example, Utah is taking a free market approach with its exchanges and allowing relatively easy access to the exchange for anyone selling a health plan. "Other states want to provide more information to consumers and take more direction in how they offer products in the market," Hunt says.

Maggie Elehwany, vice president of government affairs and policy with the National Rural Health Association, says it's difficult to say what effect the health insurance exchanges will have in rural areas. "In theory it sounds good, but we don't know yet how it will play out," she says.

"Often if you look at rural areas, there isn't a choice. There are one or two plans. So this has the potential to expand options, which is great in theory. But we are concerned about a lot of the exchanges not doing the outreach to rural areas," she says. "We are intrigued with the co-op concept of different entities coming together to be able to have a plan. Dairy co-ops and wheat co-ops have been found to be effective in rural areas."

Elehwany says the nonpartisan NRHA did not endorse or oppose the ACA, but supported "building blocks" in the law that bolster access to healthcare in rural areas. The challenge now, she says, is to ensure that those building blocks are funded, particularly in critical areas that address provider shortages in rural areas.

"There was a significant expansion of the National Health Service Corps and a big investment in area health education centers which foster a program of growing your own physicians, nurse practitioners, that kind of stuff," she says. "We loved the redistribution of residency slots that targeted rural areas and the 10% bonus for primary care payments. Those were temporary. They may be funded for a short period and the funding will end."

On the Medicaid front, several states, including Florida, Wisconsin, Texas, Kansas, Maryland, and Louisiana, will also have to wait and see how the battle to expand their Medicaid programs plays out. The Republican governors of these states have said they will opt out of the ACA's call to expand Medicaid to insure more of their citizens. Texas Governor Rick Perry penned a letter to HHS Secretary Kathleen Sebelius, in which he describes Medicaid as "a system of inflexible mandates, one-size fits-all requirements, and wasteful, bureaucratic inefficiencies.

Nevertheless, even though the Supreme Court's ruling last month upheld the right to opt out of the Medicaid expansion, Hunt says the governors in those states will face mounting pressure to partake.   

"The pressure is going to come from two places," Hunt says. "First there are millions of people who will be left out of health insurance reform if the governors decide not to go forward with Medicaid reform. And second the providers have been relying upon the Medicaid expansion as a way to cover those large numbers of uninsured."

Elehwany says many people who are otherwise firm supporters of rural healthcare may resist supporting any provisions of the ACA for fear of political blowback. "They don't want to look like they are supporting any part of it. That has been incredibly frustrating," she says.

"The great thing about being a rural health advocate is we have friends who are Democrats, Republicans, and Independents. But because some of these provisions are in healthcare reform, it is tainting that relationship."  

The arrival of accountable care organizations creates another set of hurdles for rural providers. "ACOs are challenging to rural hospitals and rural providers because of the isolation and the low volume of patients they treat," Elehwany says. "They are worried the larger healthcare system might purchase them and they will lose their autonomy. Also per capita rural patients are older and sicker with a higher percentage of chronic diseases. The rural ACOs might not be able to demonstrate equally and be able to share in the savings that others envisioned in the ACOs."

On other fronts, the biggest single challenge to rural healthcare in the near term predates the ACA. Elehwany says it critical that Congress extends beyond the Oct. 1 expiration date the special funding status for about 200 rural Medicare dependent hospitals across the nation. "If they lose this Medicare reimbursement rate, we will be terribly concerned," she says. "We have heard a lot of facilities will close their doors if they lose this payment and that will cut off a lot of critical access to care for rural seniors."

Another antecedent of the ACA, the federal stimulus package, provides billions of dollars in funding to create or enhance access to healthcare information technology. Elehwany says that even with the incentive money for HIT improvements many rural providers are still hobbled by a lack of front-end capital, access issues and the aggressive timeframe for implementation. 

"We think that it is a very laudable goal. HIT can probably nationwide reduced medical errors and lead the way to telemedicine which we believe is a way to overcome a lot of access issues in rural areas," she says. "But a lot of these facilities are small and they don't have the resources to purchase the materials or they don't have the staff. Often your CFO is also your HIT guy. So it is a capital issue. It's a workforce training issue."

"Some areas don't even have the broadband capabilities to do this. It is a big, expensive burden for a lot of small rural health facilities to bear," she says.

"Yes everybody wants to be up-to-speed. We love the carrot and we see the stick coming, but we need to realize that not everybody is on a level playing field. Some folks are going to need a little more time and a little more technical help."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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