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Healthcare Reform Puts a Squeeze on Revenue Cycle

Rene Letourneau, for HealthLeaders Media, June 26, 2013

Stephen Forney, vice president and chief financial officer at Lovelace Health System, a 606-licensed-bed integrated delivery network with a 210,000-member health plan based in Albuquerque, N.M., says one major concern he has about the PPACA is that patients who become insured through the exchanges may not have a full understanding of their liability because most will be moving off of state-run insurance initiatives that generally have no or low premiums and copays.

"These initiatives are going to be subsumed by the exchanges, and the new products are going to have significant patient liability and premiums. That is going to be a bit of a sticker shock for those individuals who have not been used to that in the past," Forney says.

This patient population, which has traditionally sought care through the emergency department, "is going to access care in nonacute settings in a fuller fashion," Forney says. "When the doctor refers them to the hospital for a CAT scan or a procedure, they probably won't have the ability to pay for that out of pocket. It will diminish some uncompensated care in the ER and shift it to other sites. … In a sense, what you are going to do is encourage utilization in nonacute sites by patients who can't pay the patient liability portion."

To minimize the impact to the revenue cycle, Forney says Lovelace is preparing to work with these patients to teach them about exchange products and help them know what to expect. "We are trying to anticipate what it will mean to the revenue cycle and how we can best integrate those individuals. … We'll be doing a lot of education with this newly insured population so that they understand how their products work and what it means to them before they get to our door so people can adjust and adapt."

Lovelace plans to educate patients about healthcare exchange products through an outreach campaign that will include printed materials, website postings, advertisements, and educational seminars.

When the Supreme Court ruled on the constitutionality of the PPACA in June 2012, it gave states the right to decide against expanding their Medicaid programs. To encourage states to cover more individuals through Medicaid, the federal government is covering 100% of the cost for newly eligible beneficiaries for the first three years, then gradually decreasing to 90% in 2020 and thereafter. Even with this inducement, some states have opted out.

In Texas, Republican Gov. Rick Perry has been a steadfast opponent of the PPACA—which he has referred to as an "Obamacare power grab"—and to the expansion of Medicaid in his state.

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