Value, not Volume: Changes in LTPAC Reimbursements Under the Affordable Care Act (Part 1 of 4)

Affordable Care Act Value


As the Affordable Care Act (ACA), also known as Obamacare, grows from abstract concepts and lists of rules and regulations and enters its infancy, healthcare providers and LTPAC facilities are going to start seeing short-term and long-term effects of the plan, specifically with regard to the way that physicians and facilities are reimbursed for their services. This blog is the first of four that will identify some of the key changes affecting long-term and post-acute care (LTPAC) reimbursement and standards of quality and care.


As the ACA ensures that more patients are insured, LTPAC facilities may begin to see a rise in patients and in turn, service requests. While this may seem like a positive at first, there are a few changes that LTPAC facilities need to be aware of, specifically with regard to reimbursement requirements and new value standards.


One of the newest changes within the LTPAC industry involved paying physicians based on value, not volume.


Improving Long-Term Care Quality

In the past, LTPAC facilities have been plagued with problems. The ACA strives to protect residents’ health, safety, and welfare by rewarding the value of care that LTPAC facilities provide. One of the most revolutionary provisions of the ACA tethers physician payments to the quality of care that they provide and whether or not they are in compliance with new ACA standards and living up to goals.


In 2014, approximately 1.4 million people lived in some sort of LTPAC facility (CDC). According to the Kaiser Family Foundation, the LTPAC industry is valued at approximately $1.43 billion. However, LTPAC facilities had long been afflicted with problems, such as under qualified staff, unsanitary conditions, financial mismanagement, and even many cases of elder abuse and neglect.


As the number of LTPAC residents is expected to increase in coming years with the retirement of the baby boomer generation, the Affordable Care Act made ensuring the safety, health, and well-being of current and future patients a high priority.


Tethering payments to compliance

Physicians will see their payments modified so that those who provide higher value care will receive higher payments than those who provide lower quality care (HHS). As payments will now be based on performance-based measures, some of these performance-based measures include information on accountability and transparency. The American Hospital Association (AHA) has been a proponent of this measure, stating that they have “strongly advocated for an aligned, strategic approach to national quality measurement and pay-for-performance programs and believe such an approach is critical to the long-term success and sustainability of health care quality improvement efforts.”


Reimbursement based on transparency and accountability

Under the new ACA provisions and Centers for Medicare & Medicaid Services, LTPAC facilities must disclose detailed information about individuals and entities that have a direct or indirect ownership interest in or managing control of their operations, in addition to other parties that provide governance, management, administration, operations, finances, and clinical services.


The next several blogs will discuss some of the crucial components of this policy, including financial disclosure requirements, accurate staff reporting and qualifications, and demonstrating the benefits of information technology in LTPAC facilities.


LINTECH is fully committed to assisting our LTPAC partners in keeping compliant with the ever-changing state and federal regulations. For more information as to how LINTECH’s fully-integrated software applications and related services can assist your LTPAC facility, please contact us to learn how LINTECH can assist you.