The mandatory expansion of Medicaid was an important element of the Affordable Care Act as providing health care benefits to uninsured was intended to achieve equity.  The expansion of Medicaid rolls was also intended to reduce the cost of providing care for the uninsured and the need for disproportionate share hospital funding, which is an adjustment to account for the needs of hospitals serving a large number of low-income patients.  With the ability to opt out of the Affordable Care Act’s expansion of Medicaid eligibility (read more: The Federal Medicaid Apple:  Poison or the Cure?), the opt-out states may create financial problems for hospitals that depend on disproportionate share payments to cover part of their costs for providing non-reimbursed services to the indigent and uninsured.  The Affordable Care Act’s decrease in disproportionate share payments to hospitals is not changed by the Supreme Court’s ruling.

As the uncertainty about healthcare reform was extinguished by the Supreme Court in its 5-4 decision upholding the Affordable Care Act, with the provision that the Department of Health and Human Services may not withhold Medicaid funding from states that refuse to adopt the Medicaid expansion, all states, including Kentucky, now have important decisions to make about expansion of Medicaid to a projected 22.3 million uninsured eligible individuals.  Under the Affordable Care Act, the federal government will pay the full cost of covering the newly eligible Medicaid participants for three years from 2014 to 2016.  Thereafter the federal share will gradually decline until it reaches 90% in 2020.  For traditional Medicaid, the federal government now pays, on average, about 57% of a state’s total Medicaid costs.  With 826,941 Kentucky Medicaid beneficiaries in January 2012, and an additional 290,000 individuals that would be covered under the expansion, Governor Steve Beshear has announced that he is studying the issues and the costs.

As more nurses, pharmacists, physical therapists, chiropractors and other allied health professionals obtain advanced degrees that confer the ability to use the title “doctor,” physicians should be concerned that losing control over the term “doctor,” a word that has identified physicians for centuries, will create confusion for consumers and lead to a loss of control over the practice of medicine. With a shortage of physicians nationally as well as in Kentucky, mid-level practitioners are becoming the gatekeepers for health care.  Mid-level practitioners now make important medical decisions about diagnosis and access to care.  In Kentucky, the Kentucky Board of Medical Licensure (“KBML”) has taken an active role regulating the practice of certain allied health professions.  Professions that have their own licensing authority, however, have the ability to broaden the scope of practice of their profession and determine what title may be used.  The tensions between the professions may culminate in who gets to use the term “doctor.”

With a backdrop of rising health care costs, 50 million uninsured Americans, and a health care system that spends more per person but has lower quality than 37 other developed countries, Congress passed a comprehensive health care reform law with the vision of doctors and hospitals joining forces, coordinating care to hold down costs for the prospect of earning government bonuses for controlling cots.¹ While no one can foresee exactly how all the provisions of the new law will mesh with the current system, four of Kentucky’s largest hospital systems are negotiating mergers and many of the smaller systems are buying up other providers or seeking to enter into controlling systems, physicians and their groups are increasingly looking to hospitals as employers. It is a buyers market for hospitals with the financial reserves to buy physician practices, butnot every physician practice can be bought by a hospital nor does every physician want to be employed by a hospital. While this activity is being driven by decreases in reimbursement, it is also a product of the new health reform law, which encourages providers to create integrated health care delivery systems that can improve the quality of health care services and lower health care costs. Accountable Care Organizations (“ACO”) are the vehicles through which shared savings are to be passed along when certain quality performance standards are met. Hospitals and physicians must find ways other than employment relationships to align themselves as ACO’s.