With Liberty and Health Care for All

Use these links to jump to different sections:

• A Post-“Pre-existing Condition” Society
• Tips for Signing Up

Before petitioners in King v. Burwell brought their Obamacare legal challenge to the U.S. Supreme Court during the 2014-2015 session (and lost), and before Republican members of Congress voted to repeal Obamacare more than 60 times beginning in January 2011 (and never did), lawyers around the country were anticipating ways the Affordable Care Act might bump up against existing health insurance law. William Frumkin, an employment and labor lawyer from White Plains, New York, was one of them. For Frumkin, the existing law in question is the Employee Retirement Income Security Act. “ERISA, when it was passed in 1974, had a section called Section 5.10,” he says. “If you’re going to mess with somebody’s employment status to prevent them from getting a benefit, that’s a no-no.” The ACA, Frumkin knew, mandated that a company that employs 50 or more people must insure at least 95 percent of its employees who work 30 hours or more. “Guys like me that represent plaintiffs,” says Frumkin, “we’re thinking, ‘This is interesting. [What if employers] decide they only want to have 49 employees and have everybody work 29 hours?’ We figured that may happen. How’s that going to play itself out?” It’s now playing itself out in a class action lawsuit against restaurant and amusement chain Dave & Buster’s, which is alleged to have cut employee full-time hours as a result of the new ACA guidelines. Frumkin is one of the lead attorneys on the plaintiff side. “We filed the case,” Frumkin says, “they moved to dismiss, they lost the motion, we’re in discovery. That’s where we are now.” Where we are now is a key phrase when it comes to discussing the ACA. According to a study published in May by the Commonwealth Fund, a private foundation that promotes health care improvements, nearly 28 million Americans have gained a health plan or care plan through its various marketplaces or Medicaid. This year, between February and April, 61 percent of enrollees who sought medical care said they couldn’t have afforded it without the ACA. Even those with previous coverage often said the same. The ACA offers other benefits. Coverage can no longer be denied for pre-existing conditions, children can remain on their parents’ plans (if it covers children) until age 26, and patients have the right to appeal a denial of coverage. Many preventive care services are now free—including mammograms, immunizations, and screenings for depression, cholesterol and blood pressure—while insurance companies must cover outside-of-network emergency care. It’s the most significant overhaul of the American health care system since the 1965 passage of Medicare and Medicaid. Of course, with change comes complications.

Clinical Integration and Bundled Payments

Some of it is just basic math. Give 28 million more people access to medical care and you’re likely to wind up with a provider shortage. Jonathon Bashford represents health care providers at Lane Powell in Seattle, and he articulates the seeming paradox of the ACA. “The Affordable Care Act is supposed to save the government and save the citizens money, yet result in better care,” he says. “So that means that providers are being challenged to provide better care with less money. That’s tough.” This is being done, in part, by providers swapping the fee-for-service model for the bundled payment plan. The old model, says Francis Serbaroli, a health care lawyer with Greenberg Traurig in New York, had many problems “including financial incentives for physicians to order unnecessary tests and procedures instead of just those tests or procedures that the patient’s medical condition called for.” The bundled payment plan, he adds, is “basically imposing more risk on the various providers. Among other things, it provides incentives for quality and efficient care, but imposes penalties for poor quality or unnecessary care.” Explains Richard Watters, a health care attorney at Lashly & Baer in St. Louis: “The government will now essentially pay the hospital a flat fee for your hip replacement or your knee replacement, but that’s got to cover you from seeing your doctor to having your surgery to recovering thereafter—the physical therapy, any nursing home payment—everything is going to be included in that one payment. [The government pays] the hospital, and the hospital has to take on all those costs. So obviously the hospital now has to control what the doctor bills, nursing home bills, physical therapist bills, and what its own bills are, if it’s going to make any money off that regimen.” “It’s really a dramatic change,” Serbaroli adds. The push for better and cheaper care is also speeding up clinical integration: hospitals buying or merging with physician’s practices, or buying or merging with other hospitals. In theory, this puts general practitioners and specialists on the same page—or at least in the same computer system. It’s one-stop shopping. “They can all pull up your records and see your entire health care [history],” says Watters. “That’s going to continue, and that will overall have an improvement on care.” Unless, that is, the Department of Justice stops the mergers. “One of the things that’s happening now is trying to sort out where the Affordable Care Act goals end and the antitrust laws start,” says Eric Neiman, a health care attorney and managing partner at Lewis Brisbois Bisgaard & Smith in Portland, Oregon. “While the Affordable Care Act wants more efficient organizations and does encourage consolidation, it also wants lower cost. If you get too much consolidation, it drives cost up, because there’s no competition.” “There are hospital mergers that have been challenged,” adds Serbaroli, who writes a bimonthly column for The New York Law Journal. “The Justice Department has sought preliminary injunctions. In some cases, the courts have granted them; in other case the courts have denied them. And when they’ve denied them, some hospitals have gone ahead and completed their merger in the hope that even if the court sides with the Justice Department, the merger will not be able to be easily unraveled.” While health care attorneys are on the front lines of this shifting legal landscape, the ACA is affecting other areas of the law as well. Mira Mdivani, an immigration lawyer in Kansas, says that since the advent of ACA she has seen an uptick in one thing: questions. “In-house counsel and HR professionals are asking more questions about eligibility for their personnel,” she says. “But we have not seen any serious issues maturing into conflicts.” On the whole, Mdivani says the ACA has been good for her clientele. “Foreign nationals in the U.S. often face serious hurdles when they interact with the government. We can tell you Kafka-style stories of work-visa holders struggling to obtain driver’s licenses,” she says. Under the ACA, she adds, “A good effort has been made to clarify which immigrants and nonimmigrants are eligible to purchase insurance, which includes ‘lawfully present’ foreign nationals.” Caroline J. Berdzik, chair of Goldberg Segalla’s employment and labor practice group in New York, advises business clients. “A lot has calmed down now because compliance is pretty much done,” she says, adding that law practitioners are anticipating potential litigation down the road. Berdzik doesn’t want to hazard a guess as to what type of litigation but expects it will be similar to discrimination lawsuits. “It’ll certainly depend on how amenable certain states will be,” she says. “Businesses sometimes make decisions like, ‘All right, we’re going to have more of a part-time workforce.’ … Is that discriminatory on its face? Or is it simply a business decision that that’s how a company is going to move forward in staffing?” Many of these attorneys are also anticipating a rise in insurance rates during the next year. “The first year, insurance companies offered insurance products on the exchange, but they really didn’t know how much to charge. They were guessing at things like utilization,” says Ellen Stewart, a shareholder at Berenbaum Weinshienk in Denver and chair of the firm’s health care group. “So all those people who didn’t have insurance before … are actually using the services. The insurance carriers are having to pay out more in claims, and therefore the cost goes up in the subsequent year.” In fact, in August, Aetna became the third major insurer—after UnitedHealth Group and Humana—to pull back from participation in many of ACA exchanges, citing losses of $430 million since 2014. And then there’s fraud. “The ACA added … a number of measures to combat fraud and abuse,” says Stephanie Marcantonio, an attorney at Cadwalader, Wickersham & Taft in New York, who advises long-term care providers, senior housing lenders and pharmaceutical companies. “The ACA put measures in place that gave a little more teeth to what can be done on the investigation side.” As for the policyholder side, Bradley Levin, an insurance litigator for plaintiffs at Levin Sitcoff in Denver, continues to advise precision when filling out claim forms—in case things go wrong. “When you get to a point where you have to file a lawsuit, if there are discrepancies, if there are things that are contradictory between what it is that you put down on a claim form and what it is that’s reflected in the actual medical records,” he says, “those are the kinds of things that a judge, or ultimately a jury, will latch on to. That’s going to go to your credibility.”

A Post-“Pre-existing Condition” Society

But the biggest change since the ACA went into effect may be what insurance litigators like Levin are not seeing. “We used to see claims where there have been denials based upon pre-existing conditions,” he says. “In the last couple years, I haven’t seen any kind of claims like that.” Many of the attorneys we interviewed have felt this change first-hand. Neiman knows a 3-year-old born with a serious vascular brain condition requiring repeated surgeries. “Because of the ACA, the child has gotten the treatment he needs, and will keep getting it, and the family has avoided financial ruin,” says Neiman. Watters is the father of an adult daughter with a chronic illness whose insurability was previously questionable from job to job. “And now, because of that act, she can get insurance,” he says. “That’s something tangible that almost everyone can feel and see.” “When I hear people say, ‘I’m going to repeal every comma of Obamacare,’ I really think that that’s not considering the human side of it,” Neiman says. “I really wonder if some of the people who are talking about repeal are thinking about what it would do to hundreds of thousands of people in the country who are now able to get insurance and get treatment, who previously wouldn’t have been treated or would have been bankrupt.”

Tips for Signing Up

• Go to healthcare.gov and type in your ZIP code to see what plans are available.
• Deductibles, co-pays and other factors vary widely, so compare available plans to determine which works best for your needs.
• Make sure your preferred physician is on the list of available providers, or be prepared to choose one who is.
• You’ll be asked how you want to pay—monthly paper invoice, credit card, etc. Have that handy. And if you’re eligible for tax credits, keep your projected taxable income for the year in which the policy will take effect nearby as well.
• The application is generally confirmed within minutes via email.
• Once the account is set up, be certain the information regarding your primary care physician is correct, as that doctor must refer you to any specialists.
• Call the customer service number on your account if you have any questions.
• Updates must be made online or by phone for changes in marital or income status.