Supreme Court Ruling on the ACA: Momentum Plus Opportunities for HIT

The widely awaited Supreme Court ruling on the Affordable Care Act (ACA) was like a lot of things in life: it wasn’t what was done but how it was done. Few foresaw the legal argument Justice Roberts would use to uphold the law. 

Regardless whether the Court upheld the law (on a surprising rationale), struck it down altogether or only upheld certain pieces, the whole exercise was largely immaterial for health information technology (HIT). Why? First and foremost, so many of the act’s provisions are already being implemented — all depending on health information technology (HIT). This has created considerable momentum going forward that would be difficult to stop, regardless of the decision handed down. In addition, new HIT opportunities would be created through the marketplace with an assist from the ACA’s provisions. For example:

• Insurance Exchanges. The ACA helps create a competitive private health insurance market through the creation of health insurance exchanges. These new entities will function as a marketplace for the uninsured and underinsured by offering health plan and coverage choices for those needing insurance or seeking better coverage or lower cost. Some 23 million uninsured people are expected to gain coverage through exchanges, according to the Congressional Budget Office. As of June 5, 2012, 41 states and the District of Columbia have either created exchanges or introduced legislation establishing a state exchange program. HIT will be critical in sharing administrative and other data within and across plans and exchanges, as well as communicating information to enrollees and explaining offerings to potential buyers. In addition, pharmacy benefit managers handling the drug benefit for these plans will depend on ePrescribing functionalities to ensure beneficiaries are prescribed drugs that are on the myriad formularies that will evolve. Formulary compliance will be critical to keep costs down for plans and patients alike.

• Medicaid Expansion. While it is not clear at the moment which states will move forward with the act’s Medicaid expansion (which was unexpectedly made optional under the court’s ruling), large-scale increases in Medicaid programs will only heighten the need and urgency for revamping and expanding Medicaid HIT. With an influx of new Medicaid beneficiaries officials will be looking to HIT to help bend the cost curve while improving the quality of and access to care. The ACA’s financial incentives will encourage use of medical homes, home health services, and telehealth to care for Medicaid beneficiaries, requiring significant changes to the Medicaid HIT infrastructure. Medicaid also must create infrastructure to enable health data exchange within and outside the state to a variety of stakeholders—especially connectivity and data exchange with health information exchanges, which were created by the ACA and upheld by the court. Such infrastructure changes will need to be in sync with changes the states are already making as they replace or update their antiquated Medicaid Management Information Systems (MMIS).

• ACOs. The ACA called for the creation of Medicare accountable care organizations (ACOs), which are networks of physicians and other providers that work together and share risk while improving the quality of health care services and reducing costs for this defined patient popula­tion. So far, 150 are up and running, but it doesn’t stop there. Even without a legislative requirement, ACO formation is forging ahead in the private sector as well. According to a June 2012 report (http://news.leavittpartners.com/newsrelease-cid-1-id-43.html), there are 221 ACOs in 45 states, nearly double from six months ago. About two-thirds are sponsored by single-provider organizations while 19% percent are sponsored by multiple-provider organizations, 8% are insurer-sponsored and 6% result from insurer-provider coalitions. In order to meet their cost and outcome targets, minimize shared risk and maximize shared savings, ACOs will depend heavily on HIT and an HIT infrastructure. These will be needed, for example, to facilitate population health and chronic care management; provide decision support, business intelligence and predictive analytics; optimize revenue cycle management; and share administrative, clinical and claims data across multiple providers to support these functions.

These are just the tip of the iceberg. The ACA also put in place many other programs that also depend on HIT. These include quality reporting, quality measure development, health IT interoperability standards and protocols, availability of Medicare data for performance measurement, and administrative simplification. Implementation of these programs is well under way; much of it is being done through regulations that would be difficult to change or scuttle.

Despite the sound and the fury surrounding the ACA, it creates a foundation relying on the use of HIT to implement the law’s major reforms regarding healthcare access, delivery and payments.   The momentum and opportunities it creates in the public and private sectors will definitely carry forward.