What does withdrawal of the AHCA mean for the health care sector?

Mar 27, 2017 | Healthcare Industry News

In a surprising turn of events, the American Health Care Act, was withdrawn from Congressional consideration by its creators on March 24, 2017. This legislation, proposed by House Speaker Paul Ryan and Republican party leadership to repeal and replace the Patient Protection and Affordable Care Act, could not gain enough guaranteed support to ensure a successful vote in the House of Representatives, according to The Washington Post.

Proponents of the Obamacare replacement failed to garner the necessary support for its passage.

Becker's Hospital Review reported that leading figures in the health care sector expressed largely positive opinions regarding this outcome, with little to no outright negativity. These responses came from the heads of industry advocacy groups such as the Federation of American Hospitals and CEOs of massive hospital systems like Beth Israel Deaconess Care Organization in Boston. The consensus appears to be that while the ACA retains provisions that some insurers and providers consider problematic, the AHCA was not an appropriate solution.

With Obamacare remaining in place for the foreseeable future, industry leaders remain hopeful that their input will be considered if and when Congress attempts another effort at ACA reform or replacement. Issues such as health insurance claims management, the emergence of value-based care, coverage requirements and many others are likely to enter the conversation. Understanding how the AHCA process went wrong and how its failure affects the sector will be extremely beneficial to professionals managing the financial well-being of health care organizations, so that the way forward – to better operations and, ultimately, better patient care – is clear. 

What does withdrawal of the AHCA mean for the health care sector?Leaders of hospitals and other health care providers largely reacted positively to the AHCA's withdrawal.

Partisan politics did not halt AHCA passage 
Given the prevailing trend of recent political history, it's reasonable to assume that partisan ideological differences stopped the passage of the AHCA. Yet a separate Washington Post report confirmed that although Democratic lawmakers were united in opposition to the bill, many of its most adamant critics belonged to hard-line conservative voting blocs, like the Freedom Caucus. These representatives wanted provisions held over from Obamacare, such as the maintenance of health benefits for mothers, newborns and substance abusers seeking treatment, as well as continued Medicaid funding, to be cut from the new bill.

While Ryan offered some compromises to Freedom Caucus members before the bill's originally scheduled vote on March 23, the group's frustration and determination held fast. This, combined with the aforementioned Democratic resistance and additional opposition from moderate Republicans, motivated the speaker to withdraw the bill from House debate the following day, after he spoke with President Donald Trump and concluded that success was impossible.

According to the news source, the rushed nature of the repeal-and-replace efforts, coupled with GOP lawmakers' lack of agreed-upon measures a new health care bill should contain, effectively sealed its fate. For example, many wanted tax provisions of the ACA and its individual mandate eliminated but sought to keep the legislation's requirement of pre-existing condition coverage – which was guaranteed due to those taxes.

Insurance leaders' views diverge
Many health insurance providers did not publicly comment on the AHCA. In the recent past, companies including Aetna and UnitedHealth Group stopped offering their plans on the ACA's public exchanges, suggesting a dim view of Obamacare. The New York Times reported hat staunch opponents of the AHCA, such as Dr. J. Mario Molina and his company Molina Healthcare, were not as common as those expressing ACA-related reservations. In fact, Molina Healthcare itself acknowledged that it might not be able to offer its plans via state exchanges.

"If we hope to get [health care] legislation right for the country, we should be working together across party lines and truly involving the experts"

However, Scripps Health President and CEO Chris Van Gorder, according to Becker's Hospital Review, criticized the rushed process to write and pass the AHCA, stating that it prevented providers and other leading figures in the health care sector from offering feedback on the bill and making suggestions for its improvement.

"Health care is truly complicated and personal," Van Gorder said in a statement to the news source. "If we hope to get this legislation right for the country, we should be working together across party lines and truly involving the experts – health care providers. At some point for all of us, health care will become the most important thing in our life. That's why good legislation will not come out of back-room deals and forcing a vote in a short period of time."

The Scripps CEO's statement came before Ryan announced the bill's withdrawal. After that news broke, he released another statement expressing hope for future ACA improvement and reform due to the "pause in the partisan firestorm in Washington."

Other health care organizations thinking positively
Jeffrey Hulburt, CEO of Beth Israel Deaconess, told Becker's Hospital Review that because the AHCA would have seriously jeopardized value-based care, he was glad the bill didn't come to a vote. Meanwhile, RxAdvance CEO Ravi Aka and CMO John Sculley saw no value to the AHCA due to its failure to address what they characterized as "$750 billion in waste" stemming from inefficiencies in how pharmacy benefit partnerships are managed.

Two reasons for AHCA opposition were widely expressed by industry leaders to whom Becker's spoke. First, cuts to Medicare and Medicaid funding were a major point of contention. Also, because Ryan and his cohorts did not speak with health care experts at any great length to gain their input regarding the AHCA's cost and potential adverse effects, some believed this meant the value of expert advice fell behind partisan political goals.

No matter the ultimate fate of Obamacare, health care organizations must streamline their accounts receivable management and other financial processes so they remain stable in the face of an ever-changing sector. As such, the role of outsourced collections and claims processing will remain a vital one.