The American Recovery and Reinvestment Act of 2009, signed into law by
President Barack Obama on Feb. 17, combines massive spending and tax cuts and
incentives to help stimulate the economy.
The act affects many industries, including
health care. The cost of the act is $787 billion,
with $138 billion of those dollars targeted to
health care initiatives.
“In the past, health care initiatives coming
out of Washington have typically affected
only a small portion of the population,” says
Gina Ginn Greenwood, attorney with the law
firm Baker, Donelson, Bearman, Caldwell &
Berkowitz, PC. “But with health care representing approximately 15 percent of the
gross domestic product, recent changes to
policies and reimbursement structures
should have far-reaching effects.”
Smart Business spoke with Greenwood
about the changes made in the stimulus act,
how these affect businesses and the legal
implications of this act on health care.
What changes have been made to health
care because of the stimulus act?
The act contains significant relief under
certain government run and/or government
subsidized health care medical payment systems. Some of these measures are Band-Aids
to get the country by until more thought can
be put into a complete overhaul of the health
care system. But these changes could make a
difference, particularly to hospitals that are
suffering from decreased revenue and
increased indigent care costs.
For example, the act continues Medicaid
eligibility for a limited time for individuals
who would lose coverage because of a new
job. States will also receive increased reimbursement for their Medicaid expenses to
ease their budgets and help with the increasing number of people who do not have jobs
and do not have and cannot afford or qualify
for health insurance.
The act also allows for federal subsidization
of COBRA insurance premiums and extension of COBRA benefits to help employees
who have been laid off afford the high cost of
their insurance premiums.
The act encourages the implementation of
electronic health records by providing more
than $17 billion in information technology
loans and/or increased reimbursement payments to hospitals and physicians. It also
establishes penalties for entities that do not
implement electronic records by certain
dates. Congress’ theory is that widespread
purchasing and adoption of electronic
records will stimulate the economy and
decrease the costs of duplicate testing and
medical errors and increase patient safety.
The act calls for changes to the Health
Insurance Portability and Accountability Act
of 1996 (HIPAA) Privacy Rule and Security
Standards. HIPAA changes will have a large
impact on health care providers and the companies they do business with. For example,
business associates — third parties who perform certain medical or billing-related tasks
for health care providers — will now become
subject to the same statutory and regulatory
requirements as HIPAA-covered entities.
They will also be required to implement
administrative, physical and technical safeguards on the use and disclosure of medical
and billing information, have written policies
and procedures covering these requirements,
and become subject to the same civil and
criminal penalties as HIPAA-covered entities.
There are also mandatory reporting requirements for breach of unsecured protected
health information — a big change for
providers and potentially a costly provision
to adhere to if a breach were to occur.
How does this act affect businesses?
Even if you are not eligible for government
subsidy or reimbursement, the health care
portions of the stimulus act will affect you,
your business and your children because
health care is a big business that affects all. In
the short run, hopefully the increase in dollars into the economy will directly benefit
your business by increases in the buying and
selling of services and product you offer. It
could also benefit your investments in the
stock market or real estate. The bad news is
that eventually individuals and businesses
will have to repay the debt that is being
accrued as the result of the increase in governmental spending.
What are the legal implications of these
changes?
This is one of the most significant acts to
ever be passed by Congress and will require
significant regulations to implement. Every
lawyer in the country should be reading this
act and finding ways to help clients take
advantage of the perks and avoid the pitfalls.
Companies and trade associations should
be proactive in the rule-making processes.
They shouldn’t wait to be victims but rather
should act now to let their voices be heard at
the administrative agency level. Most of the
provisions related to health care are complicated and will require high-end legal interpretations now, during comment periods,
and after the regulations are issued.
How can you learn more about these
changes?
Information about the act is available
online. Also, lots of advisories have been
released on various aspects of the act. Legal
questions should be addressed to attorneys
who are closely following this legislation and
its impact.
GINA GINN GREENWOOD is an attorney with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC. Reach her at (404) 589-0009 or
[email protected].
