The College's health insurance plan was revised for the 2012-2013 academic year to meet the PPACA requirements for preventive care coverage, according to Assistant Vice President for Finance Patricia Spellman. The plan also eliminated the lifetime individual maximum for all benefits, which had been in place in previous years, she said.
Many of the changes implemented by PPACA were already part of the College's student plan, including a policy of non-discrimination based on preexisting conditions.
A 2010 provision that allows young adults to remain insured by their parents' health insurance plans until they turn 26 may have led to a decline in the number of students seeking coverage under Dartmouth's plan, Spellman said. The number of students on the plan dropped for the first time in nearly a decade of increasing enrollment from 3,800 students last year to 3,500 this year.
Spellman said the decrease in the number of students on the health plan has not raised premiums or impacted the benefits for students who have remained on the plan.
Although students can use their parents' insurance, Dartmouth's plan remains a competitive option with similar health and benefit criteria as stipulated in PPACA, College Health Services Director Jack Turco said.
"If there was mandatory insurance elsewhere, maybe Dartmouth wouldn't even have to have an insurance plan," Turco said. "I think the reason why we have an insurance plan certainly isn't to make money, but to make sure that students have affordable and good insurance when they are an undergraduate and graduate student."
As a self-funded student health plan, Dartmouth's insurance is not subject to regulation under PPACA. Student health plans that are fully insured by a contract with an insurance company must comply with the new regulations, while self-funded plans may be regulated by individual states.
The College has nevertheless adjusted its health plan in accordance with PPACA criteria, according to Spellman.
"We have revised our benefits to meet or exceed the regulation thinking that we may at some point be covered," Spellman said.
Despite being self-funded, health benefits for faculty and staff are subject to the new regulations, she said. The benefit plan for College employees has implemented PPACA's preventive care coverage requirements for adults, women and children. Among the requirements are the provision that insurance plans must cover immunization vaccines and various screenings for medical conditions and mental health issues.
New provisions will also impact DHMC. PPACA's newest provision aims to substitute the traditional fee-for-service model with bundled payments, for which health care providers are reimbursed based on standardized costs to foster cooperation among providers, DHMC chief medical officer Edward Merrens said.
"In this bundled care model, you have to do an excellent job, do it in a cost-conscious manner, but make sure that the patient doesn't get readmitted and their outcomes are excellent," Merrens said.
Since the 1970s, researchers at The Dartmouth Institute for Health Policy and Clinical Practice have explored whether increased spending on health care actually yields better outcomes. An article written by TDI researchers published in Health Affairs Journal in 2009 concluded "that greater health care intensity is not associated with better outcomes."
Merrens said the findings have influenced PPACA provisions and the movement to decrease health care costs nationally.
In 2012, PPACA established the Value-Based Purchasing program in hospitals around the country to improve clinical quality measures and decrease readmission rates. Hospitals with high rates of readmission are penalized one percent of their Medicare reimbursements. DHMC was a leader in demonstrating low readmission rates, with the best performance shown among patients with heart failure, heart attack and pneumonia, Merrens said.
"Here is where we hold hospitals and health systems accountable," Merrens said. "We want you to reduce costs but you cannot let the patient suffer. Readmission to a hospital is a marker that things didn't work well."
The Medicare program determined that of the 2,217 hospitals in the country, slightly over 300 should be penalized for high rates of readmission, according to the Kaiser Health News.
The third provision that went into effect in 2013 increases Medicaid compensation for primary care physicians in order to match compensation provided by Medicare. Prior to 2013, physicians were compensated less for care provided to Medicaid patients than for that provided to Medicare patients and privately insured patients. The increase in rates is funded by the federal government and will last through 2014, when Medicaid will expand to cover more patients.
Medicaid has been at the center of controversy in New Hampshire since DHMC and nine other hospitals brought a federal lawsuit against the state and accused it of reallocating federal Medicaid reimbursements to fund the other government programs.
The successful implementation of Medicaid expansion in the state will require addressing the litigation and understanding how Medicaid will be administered by the state, Merrens said.
In addition to the PPACA provisions, three tax changes will be implemented this year. The tax that will generate the most revenue is a 0.9 percent Medicare hospital tax hike for any individual who earns more than $200,000. Another tax change raises the threshold of eligibility so that individuals must spend 10 percent rather than 7.5 percent of their gross income on medical expenses in order to receive payment deductions. There will also be a 2.3 percent tax on the sale of medical devices.
DHMC Media Director Rick Adams said that administrators are working to understand the impact that the tax will have on the hospital.
"While the bill technically prohibits manufacturers from passing the tax on to providers, we are working now to understand and quantify what might happen should our supply community try to do so," Adams said.
