Obama Administration: Full PPACA Repeal Could Disrupt Medicare

WASHINGTON (AP) — Tossing out the Patient Protection and Affordable Care Act of 2010 (PPACA) would have major unintended consequences for Medicare’s payment systems, the Obama administration has informed the courts.

Some PPACA provisions have expanded Medicare enrollees’ access to prescription and preventive benefits for seniors. About 20 other PPACA sections have changed the Medicare provider system.

In papers filed with the Supreme Court, Obama administration lawyers have warned of “extraordinary disruption” if Medicare is forced to unwind the many transactions based on the PPACA payment system changes.

PPACA opponents argue that the whole law should go. The administration counters that, even if the Supreme Court strikes down the insurance mandate, the court should preserve most of the rest of the legislation, including the Medicare program changes.

Last year, in a lower court filing on the case, Justice Department lawyers said reversing the Medicare payment changes “would impose staggering administrative burdens” on the government and “could cause major delays and errors” in claims payments.

Medicare payment policies are set through a time-consuming process that begins with legislation passed by Congress. Even if Obama’s overhaul were completely overturned, the government still would have authority under previous law to pay hospitals, doctors, insurance plans, nursing homes and other providers.

“There is an independent legal basis to pay providers if the Supreme Court strikes down the entire law,” said Thomas Barker, a former U.S. Department of Health and Human Services (HHS) general counsel in the George W. Bush administration.

But reversing the PPACA payment changes from one day to the next would be a huge legal and logistical challenge, raising many questions. How would the government treat payments made over the last two years, when the overhaul has been the law of the land? Would providers have a right to refunds of cuts that had been made under the legislation?

Former program administrators disagree on the potential for major disruptions. Some private industry executives predict an avalanche of litigation unless Congress intervenes.

“Medicare cannot turn on a dime,” said Dr. Donald Berwick, the former head of the Centers for Medicare & Medicaid Services (CMS). “I would not be surprised if there are delays and problems with payment flow. Medicare has dealt with sudden changes in payment before, but it is not easy.”

In addition to scrambling the reimbursement level rules, complete PPACA repeal could affect Medicare’s efforts to pay doctors and hospitals based partly on the quality of the care provided rather than entirely on the amount of care provided.

Tom Scully, the CMS chief during former President George W. Bush’s first term, does not foresee major problems, but he said PPACA repeal would be a “nightmare” for CMS officials.