Ways to Pump Up Your Bottom Line (Despite Healthcare Reform)

Leigh Page


October 25, 2012

In This Article


As key features of the Affordable Care Act (ACA) are phased in over the next few years, it will be essential for small practices to find new ways to protect their bottom line and make sure they are stable enough to withstand the changes in store.

"There are certainly some positives for primary care physicians, but there are still a lot of unknowns," says Laurie Morgan, a senior consultant at Capko and Co. in San Francisco, California.

Some aspects of the ACA provide new opportunities for practices. For example, the law removes copays for certain preventive services, such as vaccines, annual checkups, and diagnostic colonoscopies. Practices will also be able to test out experimental reimbursement models, such as patient-centered medical homes and Accountable Care Organizations. There is little evidence that small practices are interested in these voluntary models, but if the voluntary programs are successful, these practices may be forced to accept them at a later date.

It is unclear how the embattled law will fare after the next election. Mitt Romney has said that he will repeal the ACA, but he has also stated that he plans to keep certain parts of it, such as the requirement to cover preexisting conditions. If President Obama is reelected and the law is preserved, it still contains many unknowns for physicians trying to put their practices on a firm footing.

For example, the ACA is offering a temporary 10% Medicare bonus payment for office visits and certain other primary care services from 2011 through 2015. But if rising healthcare costs cannot be checked, the new Independent Payment Advisory Board created by the law may require cuts in Medicare physician fees beginning in 2015.

The new law will unleash a flood of some 30 million newly covered patients in 2014, but it is unclear how many of these patients will provide reasonable reimbursements. States' Medicaid rolls are expected to increase by 15 million, and Medicaid reimbursements would rise to Medicare levels in 2014 and 2015. However, the Supreme Court's decision on the ACA this June allows each state to establish its own rules on Medicaid funding.

In addition to the new Medicaid recipients, some 15 million more Americans will gain coverage in 2014 under the new health insurance mandate, which the Supreme Court upheld. Many of them will buy coverage in the new health insurance exchanges, which start in 2014. But in a recent assessment, the American College of Physicians says it is not clear whether the exchanges will have the effect of raising or lowering physician reimbursements.

Meanwhile, provisions in the federal stimulus act are putting practices under pressure to adopt electronic medical records and other healthcare information technology, including patient portals.

Here are 9 steps that small practices should consider to cope with the changes.