A few months ago, Lawrence Lopardo’s No. 1 concern was uncertainty about the future, or lack thereof, of the Affordable Care Act.
Today, the top concern for Lopardo, executive vice president and general counsel at elder-care provider Avamere Health Services, is the future of Medicaid under the American Health Care Act, the U.S. House of Representatives’ version of the Affordable Care Act change bill. Under the bill, passed by the House May 4, the future of Medicaid is a little bleak—or at least $880 billion less funded.
As the Senate works behind closed doors to rewrite the bill from scratch in the hopes of getting it to a vote before its weeklong July 4 recess, uncertainty is still at the top of Lopardo’s list of concerns.
Avamere Health, headquartered in Wilsonville, Oregon, is a group of independent companies that provide skilled nursing, assisted living, therapy, home health and hospice to senior citizens in several Western states. Lopardo spoke with Corporate Counsel about some of the senior health care issues implicated in the reform efforts and the effects of the uncertainty surrounding the overhaul.
The AHCA changes Medicaid’s long-standing financing structure from an entitlement program to a grant program or per capita cap, a proposal with serious possible consequences for the nation’s elderly. Medicaid payments, for example, can account for 50% to 70% of a nursing home’s reimbursements, Lopardo said.
Such a proposal, he added, will pit all of a particular state’s Medicaid beneficiaries, including seniors, against each other in a “50-state battle for their fair share” of funding, which states may cut as they adjust to the substantial federal funding reductions.
A solution, Lopardo said, is to separate senior care from the other types of care provided under Medicaid, an idea floated here and there by some Republican governors but not addressed in the pending federal reform bill. “Certainly it’s something we need, but the early proposals don’t discuss that, so where does that leave the elderly?” he said.
This uncertainty over Medicaid funding affects areas of the elder health care industry beyond reimbursements, namely the acquisitions of other companies—or, specifically, the “chilling effect” on such deals, Lopardo said.
“If you’re a skilled nursing company, but so much of your reimbursement is Medicaid-oriented, how do you answer the question: ‘What’s my company worth?’ The turmoil of not knowing creates that problem,” he said.
But the outlook is not all doom and gloom. The current health care overhaul efforts provide an opportunity to influence the discussion and to have the industry’s voice heard within the new administration, Lopardo said. For this advocacy, he and his colleagues rely heavily on their Washington-based trade association, the American Health Care Association.
“It’s extremely important for all of the [general counsels] to make sure that their concerns are noted,” he said.
And even now, these efforts, Lopardo added, are not restricted to health care legislation. For example, members of the American Health Care Association have met with top administrators at the Centers for Medicare and Medicaid Services to comment on the seemingly nationwide increase in the amount and frequency of civil penalties issued by the agency over the past few months.
“We’ve been having an ongoing dialogue because we want to know: ‘What’s different? Why are you taking a different stance?’” he said.
— Check out Health Bill May Shut Out One-Sixth of Sick: CBO on ThinkAdvisor.