Many changes in the health-care system take effect in 2012. (Photo: AP)

The Henry J. Kaiser Family Foundation helpfully explains the provisions of “2010 Patient Protection and Affordable Care Act,” better known as health care reform, that will be implemented this year. A quick review is in order for those with affected clients, as well as advisors who are also small business owners themselves. Pay special attention to Nos. 2,  4, 5 and 8.

Provisions for 2012

1) Accountable Care Organizations in Medicare

Implementation: Jan. 1, 2012

According to the foundation, this provision allows providers organized as accountable care organizations that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program.

2) Medicare Advantage Plan Payments

Implementation: Jan. 1, 2012

This reduces rebates paid to Medicare Advantage plans and provides bonus payments to high–quality plans.

3) Medicare Independence at Home Demonstration

Implementation: Jan. 1, 2012

This creates the Independence at Home demonstration program to provide high-need Medicare beneficiaries with primary care services in their home.

4) Medicare Provider Payment Changes

Implementation: Begins calendar, fiscal, or rate year 2012, as appropriate

This adds a productivity adjustment to the market basket update for certain providers, resulting in lower rates than otherwise would have been paid.

5) Fraud and Abuse Prevention

Implementation: Jan. 1, 2012

This provision establishes procedures for screening, oversight, and reporting for providers and suppliers that participate in Medicare, Medicaid, and CHIP; requires additional entities to register under Medicare.

6) Annual Fees on the Pharmaceutical Industry

Implementation: Jan. 1, 2012

This imposes new annual fees on the pharmaceutical manufacturing sector.

7) Medicaid Payment Demonstration Projects

Implementation: Jan. 1, 2012 through Dec. 31, 2016

This provision creates new demonstration projects in Medicaid for up to eight states to pay bundled payments for episodes of care that include hospitalizations and to allow pediatric medical providers organized as accountable care organizations to share in cost-savings.

8) Data Collection to Reduce Health Care Disparities

Implementation: March 23, 2012

It requires enhanced collection and reporting of data on race, ethnicity, sex, primary language, disability status, and for underserved rural and frontier populations.

9) Medicare Value-Based Purchasing

Implementation: Oct. 1, 2012

This establishes a hospital value-based purchasing program in Medicare to pay hospitals based on performance on quality measures and requires plans to be developed to implement value-based purchasing programs for skilled nursing facilities, home health agencies and ambulatory surgical centers.

10) Reduced Medicare Payments for Hospital Readmissions

Implementation: Oct. 1, 2012

This provision reduces Medicare payments that would otherwise be made to hospitals to account for excess (preventable) hospital readmissions.